Invest in infrastructure to create jobs, Pranab urges G20

Finance minister Pranab Mukherjee on Friday suggested that the G20 countries should take the lead in promoting policies that create jobs; and try strongly to support investments in the infrastructure sector.

Speaking in Washington where he is attending the spring meeting of the International Monetary Fund and the World Bank, India's finance minister said credible action for both short and medium-term policies to create employment should be a cornerstone of the framework for the group comprising the world's 20 most influential economies.

Mukherjee said there is general concern over the global employment scenario, especially the falling labour participation rate in the economy and growing youth unemployment.

''Leaders had consequently tasked us to mainstream jobs and employment issues into the framework exercise. Persistent high unemployment tends to have significant long-lasting detrimental impacts on the economy; holding back economic recovery further, adding to social tensions and adversely affecting productivity and growth in the medium to long-term,'' he said.

The finance minister said the world has been pre-occupied with the problems in the financial sector, which is the immediate concern. ''However, keeping in view the emerging situation, some members have been stressing the need to step up efforts to support investment in the real sector, and especially in infrastructure, at a global level to help revive global growth and support demand and job creation.

''This route to reviving global growth has not received the attention that it merits. To the extent that much of this investment, including in infrastructure, will occur in developing countries, it would also help rebalance global demand, as also, redirect savings,'' he said.

Some developed countries also need to increase investment in upgrading their infrastructure, he added.

''While construction work would stimulate local growth and job creation, the large demand for capital goods created for modern infrastructure would also stimulate private investment and job creation globally,'' he said.