NEW YORK — War-ravaged countries confront a double challenge: to create dynamic economies and to promote, at the same time, economic and social inclusion. Without both of these elements, national reconciliation will likely prove impossible.
Social exclusion imposes costs throughout society that policymakers must address with effective and targeted measures. Lack of jobs, for example, often leads people, particularly the young, away from work and into dependency on drugs and crime. Society, then, needs to pay for the costs of crime-prevention policies and the administration of justice.
A flexible labor market, as many suggest, will not in itself promote inclusion. Welfare programs in war-ravaged countries often aggravate joblessness by reducing work incentives and creating a culture of dependency. Minimum-wage laws and labor agreements often make the least productive workers unaffordable to law-abiding employers. So what these countries need are more employment opportunities and higher salaries in the private sector for these workers.