These and other countries would benefit from emulating Jordan. Until recent reforms, Jordan made citizenship a requirement to work as an engineer. By liberalizing immigration, however, Jordan was able to attract firms such as Expedia, which now has two foreign managers and over 100 local engineers. Without those foreigners, the enterprise would not exist. The lesson is obvious: importing the missing complementary skills may be an effective way to increase demand for the skills that you do have.
Governments are right to focus on creating more good jobs, because work is the source of most people’s livelihood in every society. But in the majority of cases, the solution lies in policy areas that are not amenable to tools wielded by ministers of labor or education. A recent World Bank conference promoted the idea of jobs diagnostics to figure out problems’ real causes. Wherever the hole in the tire is, the point is to fix it.
Ricardo Hausmann, a former minister of planning of Venezuela and former chief economist of the Inter-American Development Bank, is professor of the practice of economic development at Harvard University, where he is also director of the Center for International Development.
©Project Syndicate.