Agriculture remains the predominant sector, employing more than 80 per cent of the work force. In rural areas, 89 per cent of the work force comprised subsistence farmers or unpaid family workers. In urban areas, around two-thirds of the work force, work in the service or small manufacturing sectors, as foreign direct investment (FDI) grew in the early and mid-nineties. In contrast, only around 11 per cent of rural workers are in the service sector, mainly as Government employees.

Demographic pressures reinforce the urgent need for employment generation. It is projected that the labour force will grow by around 200,000 per annum by 2010. Already the growth in the size of the agricultural labour force has resulted in overall decline in agricultural productivity in recent years. The situation is exacerbated by growing uncertainty in the labour market outlook. FDI has declined in recent years. Although the tourism sector is showing promising growth, the prospects for the garment industry (a recent engine of job creation in urban areas) is somewhat fragile.

The uncertain labour market outlook means that mechanisms need to be put in place that increase the responsiveness of the education and training system. Already there are strong signs of demand for specific training (e.g. management, computing, accounting, foreign languages) in urban areas. These private sector and NGO run programs constitute more than 90 per cent of current technical education and skills training provision. Selective use of user fees and public subsidies for private training provision, linked to improved training/market research and information, is a key measure for reinforcing the market signal.

In the rural areas, better quality primary education, non-formal education and literacy programmes are pivotal to better farming productivity. In urban areas, specific skills training needs to be of short duration with highly focused programmes tailored to changing work force needs. Recent efforts to reposition vocational training institutions, with greater autonomy and employer participation, are proving successful in stimulating the demand-side of skills training. This will also allow for greater responsiveness to the needs of the informal and self-employment sectors.

The role of Government will be to selectively provide programs where public sector involvement is clearly justifiable (e.g. very specialised technology and technician programs). A second role of Government will be to strengthen regulatory and quality assurance for this growing public/private partnership. A third role for Government will be to stimulate and build capacity of both public and private training providers. The demand-driven National Training Fund, linked to selective micro-credit, is a positive example of well-planned Government intervention.