Transcript Mihail Arandarenko - Creating Jobs for Equity and prosperity

Finding a recipe for job-rich
growth
Mihail Arandarenko
Creating Jobs for Equity and Prosperity
UNDP and ILO Conference, Skopje 1617 April 2015
Outline of the presentation
• Challenges
• Policy issues – how to break the vicious
circle of low growth without jobs
• New opportunities – learning from each
other, upscaling and replicating
programmes in the context of regional and
European integration
Labour market failure in the Western Balkans –
laundry list (Why did Rome fall)
Labour legislation, lack of FDI, underdevelopment, landlocked
countries, corruption, state capture, business environment, informal
economy, wars, conflicts, ethnic diversity, religious diversity,
emigration, aid dependency, international advice, cronyism,
irresponsive elites, institutional mis-configurations, delayed
transition, labour taxes, tax wedge, labour costs, employment
protection, hiring rules, firing rules, labour courts, severance
payments, unemployment benefits, social assistance, pension
systems, labour inspections, wage inequality, segmented labour
markets, low female participation rate, family solidarity, lack of trust,
low living costs, high non-labour incomes, education, training
systems, skill mismatch, over-education, under-education, school to
work transition, illiteracy, remittances, high reservation wages, trade
unions, minimum wage, collective bargaining systems, public-private
wage differentials, working time rules, barriers to firm entry,
monopolies, tycoons, agricultural over-population, disguised
unemployment, self-management legacy, de-industrialization, public
debt, austerity programmes, global economic crisis, lack of ALMPs,
consumption-oriented growth model, overvalued currencies, trade
Challenges: No magic bullets—
just
necessary conditions
Growth
policies
All three
legs are
needed
Employment
policies
Employment
programming,
projects
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. . . But different legs have been
emphasized at different times
• Initial emphasis on “getting the growth
framework right” (1st leg)
– Macroeconomic stabilization, price
iberalization, 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”, while crisis brought more job
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This gave rise to growing
emphasis on labour market
policies (2nd leg)
• Later: Growing focus on labour market policies
• BUT: No full agreement on which policies are
needed
• Result: There’s no common approach for fixing the
region’s labour market problems beyond broad
objectives and general principles
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South East Europe 2020
Integrated growth
deeper regional trade and
investment linkages and policies
enhancing the flow of goods,
investment, services and persons
Smart growth
Inclusive growth
commitment to compete on value
added, promoting knowledge and
innovation across the board
skills development, employment
creation and labour market
participation by all, including
vulnerable groups and minorities
Sustainable growth
Governance for growth
enhancing competitiveness,
entrepre-neurship and a
commitment to greener and more
energy-efficient development
improving the capacity of public
administrations to strengthen the rule
of law and reduce corruption so as to
create a business-friendly environment
Problem of SEE policy transition
• Departure point – highly idiosyncratic labour markets,
problems that require tailor made solutions (‘find what
fits’)
• Final destination and reference point – European Union
and European policy space (Europe 2020, 2030?
Strategy, EES, Empoyment package etc.)
• Even the annual governance cycle – European
Semester
• Secure that problems are always addressed based on
local diagnostics, but in a manner which secures the
convergence to EU policy framework and quantitative
targets
Avoid two types of strategic / policy
errors
• Start from European solutions and impose them
without regard for local situation
– Example – general shift from direct to indirect taxes
• Ignore the need for EU policy convergence
– Example – continue to rely on absolute poverty
measures
• Intermediate, technical goals are less important
than those related to human development
What to do?
• Stimulate Economic Growth
– Institutions & Infrastructure
– Financial & Goods Market Efficiency
– Efforts to diversify National production and export bases need
to be strengthened further
– National Economic Strategies and Policies need
to include Employment as a central goal
• Augment Labour Market Policy with a view to, above-all,
improve operational efficiency of the labour market
– Employment services
– Active labour market programmes - ALMP expenditure is low
by EU standards
– Ensure Labour Market (and other) Institutions are
complementary
– Bear in mind real changes rather than semantic ones
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Active Labour Market Policy and Programmes
• Active Labour Market Programmes:
Targetted programmes can be especially effective:
•e.g. Self-employment/business formalisation programme in
Macedonia targetting the long-term unemployed, youth…
•ALMPs which focus on marginal groups can be especially
effective
– Raise employability
– activate the unemployed and increase labour force participation
» But, can depress wages (and income inequality is rising in the
region)
» General limitations - Will not resolve major structural
difficulties with the economy
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Active Labour Market Policy and Programmes
• The Role of Evaluations
– Process evaluations – support the modificaiton of
key design issues in ALMPs – supports improvement
of programmes: What Works and What Does Not
(and Why?)
– Net impact evaluations – Are the programme
beneficiaries really better off? Does it pay to invest
in the programme?
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Opportunities: A new approach,
based on two elements
• Greater focus on the third leg—projects
and programmes that:
– Are working
– Can be scaled up
– Replicated in other countries
– Supported under IPA II
• Strengthening the policy (second leg) role
of:
– Integrated approaches
– Green economy, employment policies
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Supporting the inclusion of
vulnerable groups
• Large sections of the population at risk of social exclusion
• Social inclusion approach needed, and is compatible with SPFI. Provide minimum income guarantees through employment or
transfers. Set realistic minima, and reach out through for example
casework. Exclusion risk cannot be effectively tackled through
categorical programmes.
• Social inclusion approaches require a mix of approaches, and
require a recognition of and willingness to explore promotion and
transformative roles of SP.
• Three necessary elements for closer integration of cash and care 1)
re-thinking minimal elgibility criteria 2) the simplification of
assessment procedures and 3) the assignment of a case manager
• Social impact assessment and policy evaluations: especially of
ALMPs
• Sub- regional cooperation and mutual learning
Addressing inactivity and low work
intensity – good practice examples
• Women entrepreneurship programmes –
Montenegro
• Employment of persons with disabilities –
Croatia (including the re-orientation of
public works), Serbia
• Increasing orientation of ALMPs toward
vulnerable groups – FYR Macedonia,
Kosovo
Addressing the youth employment
crisis
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•
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Two main ways – supporting the school to work transition - often
government sponsored
A range of initiatives throughout the region to reach the most vulnerable
youth (dropouts, without qualifications, rural, SA beneficiaries, with
disabilities etc) – UN JP YEPs, 2nd chance programmes
Two types complementary
YEPs typically contain components of institutional development, creation of
information base, and a range of carefully designed small programmes,
monitoring and evaluation component
Successful experience with YEP-type programmes and 2nd chance
programmes
In Serbia – work practice programme scaled up and taken over by PES
In FYRoM, BIH, Albania, Kosovo1244 – majority of funds for youth ALMPs
through YEPs
In Turkey – successful inovative components related to skills development,
cooperation with private sector
Second chance programmes – developed under UN / IPA programmes,
countries taking over
Reforming vocational training
• Overcoming negative attitudes – both
supply and demand side
• The role of partnerships with private sector
– examples from Turkey, BiH
• Establishment of skills observatories
• Scaling up VET programmes should be
based on monitoring ( ideally tracing)
mechanism
• Scope for replicating – e.g. FYRoM
Policy implications of the greening
of the economy
• Coordinate environmental, economic and social concerns in national
development policies
• Coordinate investments in jobs and skills, improve flexibility (lifelong learning)
• Better match skill supply to labour market requirements
• Specific training and expanding opportunities for disadvantaged
groups
• Transforming informal pre-green jobs (e.g. in waste management)
into formal, decent green jobs – addressing multiple challenges in
Serbia
• Raise awareness and link it with skills development
A suggestion: OMC for the region
• Creating new instruments for exchange of
information, policy ideas and best
practices inspired by the EU OMC at the
regional level
• Mutual learning programme (peer reviews)
• SEE employment and social policy
observatory
• Joint policy platforms for policymakers
(Eurpopean Semester light?)