More long-term investment needed to solve employment issues – Putin

(Interfax – STRELNA, September 6, 2013) A comprehensive approach, including higher investment in the economy, is needed to tackle unemployment, Russian President Vladimir Putin said at a working meeting during the G20 summit.

“Employment policy cannot and must not be the concern only of the government bodies responsible for social policy. Clearly, real changes in the sphere of labor and employment require a systemic approach. You can’t resolve the task of creating quality jobs in isolation from the tasks of developing the economies of our countries. You have to take everything into consideration – macroeconomic, financial and social conditions,” Putin said.

“Our experts were unanimous in that a substantial decrease in volumes of investment was among the key factors behind the economic slowdown and stagnation in the sphere of unemployment,” Putin said.

Higher unemployment is driven by a whole range of problems, among them the “fragmentation of the European Union’s banking system, the contraction of the fiscal space, reduction in the credit potential of development banks and tighter financial regulation,” Putin said.

For all that has been done, unemployment in G20 countries remains above pre-crisis levels, Putin said. “Although the situation differs from country to country, there are some very acute problems that affect most G20 countries,” he said. They include high unemployment among young people, and so-called structural unemployment. The proportion of skilled specialists who cannot find the appropriate jobs is soaring, he said.

Other negative tendencies in the labor market include informal employment. “The spread of informal forms of employment is having a negative effect on the state of workers and their families: their standard of living and social safety net worsens. Tax and pension revenues decrease, resulting in increased budgetary restrictions,” he said.