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Employment in Southeast Europe: Challenges and opportunities

Ben SlaySenior advisor, UNDP Regional Bureau for Europe and CIS

Skopje16 April 2015

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Employment: Particular challenge for Southeast Europe

35%

40%

45%

50%

55%

60%

BiH, FYRoM, MNE, SRB

Albania, Turkey

Western CIS

Caucasus

Central Asia

Share of population aged 15 and above

that is employed

World Bank data, UNDP calculations (unweighted averages).

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Probing deeper—Employment rates by ethnicity, gender

Serbia Montenegro Moldova FYRoM

42%39% 39% 38%

26% 27%

21%23%

13%

8%

16%

10%

National Roma Roma women

Sources: World Bank world development indicators, UNDP/EU/WB Roma database. 2011 data.

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Causes, consequences, questions

• Prof. Arandarenko offers four inter-linked causes and consequences:1) Emigration2) Informality3) Weak private sectors4) Public sector wage premia

• Questions:– Do these explain low employment, or other

development challenges (poverty, inequality)?– Don’t Central Asia, Caucasus have these problems

too (or at least (1), (2), and (3))?

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Challenges: No magic bullets—just necessary conditions

Growth policies

Employment policies

Employment programming,

projects

All three legs are needed

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Different parts of this triangle have been emphasized at different times

• Initial emphasis on “getting the growth framework right” (1st leg)– Macroeconomic stabilization– Liberalization of prices, commerce– Privatization/private sector development

• Anticipated result: “A rising tide that lifts all boats”– Often linked to post-conflict recovery

• BUT: resulting growth was often “jobless”

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This gave rise to growing emphasis on labour market policies (2nd leg)

• BUT: No agreement on “right” policies– At the level of declarations, every country wants to

support the demand for labour, to improve the quality and adequacy of labour supply, and to assist labour market integration and social inclusion of those who are most vulnerable. But, at the level of objectives and actions, there are significant disagreements. – Prof. Mihail Arandarenko

• Result: There’s no common approach for fixing the region’s labour market problems

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Opportunities: A new approach, based on two elements

• Greater focus on the third leg—programmes and projects in SEE that:– Are working– Can be scaled up– Can be replicated in other countries– Can be supported:

• Under IPA II • By national governments

• Strengthening the policy (second leg) role of:– Integrated approaches– Green economy, employment policies

Integrated approaches• Opportunities (and challenges) of:– Better measuring employment trends– More closely aligning active labour market

policies with policies for• Social protection, inclusion• Education• Regional development• Natural resource management• Disaster risk reduction

Economic growth

Social development

• Needed: institutional development Environmental

sustainability

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Institutional development agenda: Governance reform for partnerships

• Between state bodies:– Vocational training

institutions– Employment offices– Sub-national

governments• Private sector:– On-the-job training– Job creation

• Third sector (CSOs):– Civic engagement/

social mobilization– Project cycle

management expertise• Within the state sector

—getting right mix of: – Decentralization– Deconcentration– Recentralization

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Green economy, green jobs• Growing body of evidence shows employment

benefits of investments in:– Energy efficiency, renewables– Waste management– Ecotourism

• “Fiscal space” can be broadened by:– Reductions in fossil fuel subsidies– “Green procurement” policies– Higher taxes/fees on carbon emissions, water use

(“environmental bads”)• These instruments can also finance reductions in

taxes on labour—boosting employment overall

Thank you very much!

ben.slay@undp.org