Transcript Beograd, 24. april 2008. Socijalna politika EU

Social development of Serbia in
process of transition
Vojin Vidanovic
Serbia
September 2010, ISS, Italy
Presentation plan
1.
Introduction: transition in Southeast Europe
1.
Period of social catastrophy 1990-2000
1.
Period of transition and recovery (2000-2008)
1.
Serbia and global crisis: actual trends
(Post 2008 development)
Conclusions: Actual structural problems influencing
development and development possibilities
Social development of Serbia
In process of transition
2
1. Introduction
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After the fall of Berlin Wall (1989) in most of countries
of East Europe, a transition from socialist to a capitalist
driven democracy has begun.
The process of transition is characterized by:
Change to plural democracy
Change to market economy
Subsequent privatization of gouvermental goods and
minimal state compared to command (socialist)
economy
But the process of transition should be understood
as general process of social change of existing
toward desired society including change of political
and cultural (value) system, not only change of
economy
Social development of Serbia
In process of transition
3
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Transitional social problems are at the same time part
of the change as well as limiting factor to social
development
As a change of institutional system of a country, it
includes political transition or change to multiparty
system, change the role of goverment and new role of
government in protecting rights of citizens
As economical change, it includes complex processes
of restructuring, market liberalization, economic
stabilization and privatization of goods and properties
Pre transition position
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When transition started in Southeast Europe, Serbia
was part of Socialist Federal Republic Yugoslavia (one
of the republics in Federation)
Starting position of Serbia was good, compared to other
socialist economies with 3 823$ and 760 DM salary. It
was 20% lower then best of the Republics of SFRY but
50% better then Bulgaria or 127% better then Romania
or Poland
However, instead of raise in development experienced
deep crisis as nationalism came to rise and beginning of
Yugoslav wars
Development in transition
1990 GDP is 100, upper line
– Central and Baltic Europe, middle ex Russian Republics, lower one Serbia
Transition in Serbia
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Started last (2000 compared to 1989/1990)
Has a pre-crisis context with Yugoslav wars, which in
Serbian context included (1990-2000):
Long term UN embargo that seized the development,
made a fall in production and stopped scientific,
regional and cultural development almost for a decade
Hyperinflation, unemployement and rise of poverty
1999 NATO bombing that further salvaged industry
Rise of social inequalities, urban crime and “gray
economy”
War envirovment (refugees, PTST …)
2. Period of crisis (social catastrophy)
1990 - 2000
Crisis indicators
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Sudden fall of income (1990 3 000$, 1992 1000$,
1993 lower then 500$ which is comparable to
Africa)
Fall of industrial production: In 1999 Serbia
produced 1/3 of what was produced in 1990
Sudden fall of average wages: 1990 760 DEM,
1991 224DEM, 1992 110 DEM, 1993 12 DEM,
with a slow increase to 80-160 DEM to 1999,
ending 87DEM 1999 in NATO airstrike year)
GDP per capita fall
Per capita BNP
3500 3240 3249
3000
2839
2500
$
2018
2000
1500
1880
1740
15401600
1450
1390 1430
1000
500
0
1989
1991
1993
1995
Godina
1997
1999
Rise of vulnerable groups (in risk)
4000
3000
2000
1000
0
Siromašni
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
1106 1447 1642 3046 2732 2513 2258 1709 1475 2559
Izbegli
0
200
400
650
415
300
200
100
150
503
Int. raseljeni
0
0
0
0
0
0
0
0
0
230
Yellow – Under poverty line, red – Refugees, blue – Internally displaced
Impact to society
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Rise of urban poverty
Hyperinflation, poverty and fall of the real income,
“grey economy” and “false employement”
Budget deficits and inablity to serve foreign debts
Fall of production and rise of unemployement
New forms of organized crime and rise of juvenile
delinquency
Raise of social inequalities
Complete block of process of transition
Impact to society
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2,8 million persons (1/3 population) below poverty
line
Inability of gouverment to provide social benefits:
child benefits were 2 years late and benefits to the
poor populations 3 years
Brain drain (loss of human capital) has taken a
complete generations: over 400 000 young and
educated have permanetly lost the contry
Decrease in quality of health care and education
Cultural and scientific isolation
Loss of the value system: rise of nationalism
Lost opportunities
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A decade of social regression instead of development
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From SFRY position of partner and observer member to some EEC trities,
restart of the small new democracies
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Loss of positive background of one of the liberal communist societies with
mixed system good diplomacy and trade acess

Creation of deep structural social problems that will affect heavily the next
“democratic transition” decade

One of the last societies to remain in some form of centralized economy
communism (transition to democracy started 2000)

Not parttaking the global economy, informational age etc. of the last decade
of 20th century

Through immigration: enormous loss of human capital and creating a deeper
population gap in country with low birth rate and high unemployement

Complete loss of integrated ex-Yugoslav trade and economical space
3. Period of transition and recovery
2000 - 2008
Characteristics of transition in
Serbia
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Combined liberal approach (in economic
transition) and social democratic approach (in
keeping some of the wide basis of social rights)
has been used in this period
EBRD indicators have presented that
liberalization and privatization of the small
enterprises has been done quite quick and well
Characteristics of transition in
Serbia
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However, structural reforms have only been
partial: reform of the bank sector, price
liberalization etc. was success, but processes of
restructuring, selling large and public service
companies, reduction of gouvermental
spendings was significantly slowed down
Conclusion is that during this period of
transition economical reforms were success,
however deep social changes have been slowed
down due to political dependencies
Social impact
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Average salary has increased 4 times, from 86 to 331
euros
Purchasing power in goods has increased 3,5 times
Retirment benefits has increased from 50 to 160 euros
Foreign direct investments 2001-2006 over 9 billion USD
However, unomployement continued to raise at steady
pace of almost 5%, with rate of 20,9% in 2006
Constant raise of GDP at rate of 5-7% per year
Inflation recuded to below 10% per year
Social impact
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After 7 years of transition summary would be that
dynamical economical growth has decreased the “gap”
compared to other transitional economies
However, the 1990. levels were not yet reached:
production Gross product was 20% lower then 1990,
industrial production -50%,
Living stanard is still among lowest in the Europe
(purchasing power 37% of EU-27)
New social inequalities: rise of Gini coeficient to 0,31
Missed opportunities
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Not fully developed democratic society (civic society,
protection of minority groups)
Not conducted the full social wellfare reform to a new
neoliberal model with preparations
State expeditures not reduced
Pension and social security systems is ongoing reform
Denationalization Last country in Europe not to
return property right
Late EU acession (candidature send late 2008, not
accepted yet, SAA in force since 2008)
4. Serbia and global crisis:
actual trends
(Post 2008 development)
Global crisis
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Global crisis influences Serbian society since
2008.
It is considered to be the biggest economical
crisis, after the great recession of the 30s
It is interlinked not only with economical crisis,
but “ecological crisis” (effects of global
warming, resource depletion) as well as raise of
global poverty and prices of food
Crisis in Serbia
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Serbia is in process of demand of investments so
this was first influenced, alongside other crisis
effects producing negative growth of about 3,0%
Stability of local currency (Serbian dinar) was
harmed as sudden fall from 1:85 to 1:105
occured in period of 2008-Sept 2010, while
salaries in public sector were “frozen”
Response and effects
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Gouvermental reponse was mixture of reductionist
approach (increased taxes, less gov. Spending, frozen
employement and salaries) and “more spending”
approach (subsized credits for citizens and companies)
Economy partially stabilized in early 2010 with “no
negative growth”
Significant rise was in unemployement, but severely
affected sectors were investments, job creation, tourism
etc.
Increase in foreign debts: over 2,7 billion dollars of new
debts to IMF
Regional comparison
of crisis effects
GDP in
million
euros
2001
2008
2009.
Average
growth
2001-2008
Growth rate
2009.
Bulgaria
15 250
34 188
33 877
5,6
-5,0
Romania
45 537
137 035
115 869
6,2
-7,1
Hungary
59 521
105 244
93 086
3,4
-6,3
Croatia
25 501
48 183
45 143
4,5
-5,8
Slovenia
22 707
37 516
34 894
4,4
-7,8
Serbia
12 821
33 418
30 916
5,4
-3,0
Regional comparison
of crisis effects
Country
2008 2009 Index
Slovenia
Croatia
Hungary
Bosnia
Romania
Serbia
1391
738
460
408
373
400
Macedonia 260
Bulgaria
226
1439
737
458
410
349
338
103
100
100
100
94
85
325
237
125
91
Social effects
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Decrease in average salaries to 85%
In 2009. Further increase of unemployement to
16,6% (14% in 2008., 18,1% 2007.)
Below national poverty line of 80 euros 9,2%
population, about 700 000 in risk of poverty
Long term and structural unemployement
endured (65% of unemployed)
Slight recovery in 2010 (+2% GDP) but it will
level up to the period before crisis. A real GDP
rise (3-5%) is not expected before 2012
Conclusion
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Overall stability was preserved, maintaining 35th
place in HDI and GDP PPP
However,a period of recovery of at least two
years is expected, as well as old transitional
structural problems iherited needs to be resolved
at new social costs
120 000 persons were newly unemployed in last
five years, so job creation needs to be priority
5.
Actual structural problems
influencing development
and development possibilities
Development factors
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Political stability and ideology
Human capital characteristics
Economical development
Science and technology
Structural problems of Serbia
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Unemployement
Poverty and raising inequalities
Aging and depopulation
Regional differences – decentralization and
regional approach
Top bottom approach
• EU developments and influences (Lisabon
indicators, Leaken indicators, Europe 2020
strategy)
• UN Human development approach (MDG,
Global Compact, Review)
• Theoretical approach – developmentalism social
policy, PRSP, medium and long term social
planning
“Risk populations”
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Roma
Elderly
Children in risk
Youth
Refugees and IDPs
THANK YOU FOR ATTENTION
Contact:
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