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Breaking the Cycle of Poverty in Dominican Republic

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August 28, 2006—If you’re young and poor in the Dominican Republic, chances are slim you’ll finish secondary school and get a steady job.

And chances are good you’ll be caught in a poverty trap.

That’s the case for thousands of young people in this Caribbean nation that shares an island with Haiti, according to Andrea Vermehren, World Bank Senior Social Protection Specialist.

Nearly a third of young people aged 15-24 are unemployed – double the unemployment rate for adults in the country, she says.

At the same time, Dominican employers are having trouble finding employees—especially employees with management, administrative, and language skills, and secondary school education, according to a World Bank report.

Now the country is taking a step toward solving these problems with a new plan to train some 28,000 young people and expand its adult education programs over the next four years.

The World Bank is contributing US$25 million of US$33.8 million in financing to expand and improve an existing Youth and Employment Program (Programa Juventud y Empleo) and two complementary “second chance” education programs. Other finance partners include the Inter-American Development Bank and Spanish Agency for International Cooperation.

The program provides job and life skills training, internships and an opportunity to complete primary and secondary education.

It also offers disadvantaged youth who have dropped out of school a way back into the system, Vermehren says.

“Basically, what we’re trying to do is give them an equal chance in the labor market with kids who come from better off households.”

Private Sector Participation

The expanded Youth and Employment Program, run by the Dominican Republic Ministry of Labor, will target 16- to 29-year-olds from poor rural and urban areas to participate in job training developed in collaboration with private sector firms.

After training for three months the young people serve as interns as gardeners’ helpers, waiters, mechanics’ assistants, or assistant health workers, to name a few possibilities.

Instruction includes basic math skills and life skills, such as how to dress, behave, and deal with conflict in the work place.

“The link between the employer and trainers needs to be very strong,” Vermehren says. “In improving this program, we tried to strengthen this link.”

She says the program has succeeded in bringing the unemployment rate of the disadvantaged up to the average unemployment rate. Normally the disadvantaged youth unemployment rate is substantially higher, she says.

After completing the program, about 50 percent get a job and another 20 percent go back to school. In the Dominican Republic, they will be able to take Second Chance Education night classes to finish primary or secondary school.

“We’re very proud of the educational aspect of this program—as well as the Bank’s role in encouraging the Dominican Ministry of Education and Ministry of Labor to work together on the youth unemployment problem,” says Vermehren.

Link between Education and Poverty

The youth program is aimed at reversing the effects of an economic downturn that hit young people disproportionally hard.

A banking crisis in 2003 saw the collapse of one of the country’s largest banks and 100 percent depreciation in the Dominican peso. The country’s poverty rate increased by 15 percent, and the number of poor rose to 31 percent in urban areas and 45 percent in rural areas. Those in extreme poverty rose to 13 percent, according to a World Bank report.

Young people suffered malnutrition in greater numbers. They dropped out of school and were more likely to participate in crime and violence. Youth unemployment rose to nearly 35 percent.

At the same time, the school system remained one of the least effective in Latin America and the Caribbean, the report says.

About 8 percent of young people age 15 to 24 are illiterate. Census data from 2002 indicates 762,000 young people between 15 and 29—33 percent of the population—had not completed basic education. Some 913,000 of 20- to 29-year-olds—62 percent—had not finished secondary school.

Many drop out of school at age 12 or 13 because they need to earn money for their families, Vermehren says.

But, “they’re mostly idle, just hanging out, doing temporary work here and there” until their mid-20s, she says.

“It’s 10 years that are very important for these kids where they’re not really being challenged, where they don’t really have any prospects of where they are going. And they don’t have a sense of being important to their society.”

Equity and Competitiveness in Latin America

The Bank’s support for the Dominican youth programs is part of an overall effort to promote greater equity and competitiveness in Latin America and the Caribbean, say those involved in the program.

“The lack of opportunities is resulting in youth turning to risky behaviors which is affecting the Dominican Republic at many levels,” says Caroline Anstey, Bank Country Director for the Caribbean. “As in all countries in Latin America and Caribbean, there is an urgent need to create equality of opportunities for poor people.”

In the Dominican Republic, as in many countries, the educational system is not responding to the needs of employers and the labor market, Vermehren says.

“Dominican Republic is quite a sophisticated country. They have a lot of tourism, industry and so on, but they just don’t seem to have broad-based human capital to really cater to those possibilities that the country offers.”

Lack of education and relevant technical training is hurting young people throughout Latin America, adds Vermehren.

“The more these countries need to have a qualified labor source, the harder it is for those youth who don’t go through a good education system to integrate into those higher quality jobs.”

“In terms of globalization, it is noticeable now that without any good education or labor market experience, you’re not really getting anywhere. Before maybe you could find some employment in the rural sector, but as the economies are moving forward toward more sophisticated and specialized jobs, a lot of youth are just not ready for that.”

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