Presentation on theme: "A SKILLED WORKFORCE FOR AVOIDING THE MIDDLE-INCOME TRAP IN BIH"— Presentation transcript:
1A SKILLED WORKFORCE FOR AVOIDING THE MIDDLE-INCOME TRAP IN BIH Vjekoslav DomljanCRES Mostar, BiHA SKILLED WORKFORCE FOR AVOIDING THE MIDDLE-INCOME TRAP IN BIH
2Overview Introduction Escaping income trap Mass unemployment Policy recomendation
3Key causes of economic problems IntroductionKey causes of economic problemsinternalexternalBad legacyRegional non-cooperationWar damagesGlobal crisisWrong privatizationWild liberalization
4Introduction Middle income trap Low to middle income country - industrialisationMiddle to high income country? -
5Introduction High income (> 12,196 US$) Middle income CountryGNI pcGreece28,630Slovenia23,520Croatia13,810CountryGNI pcMoldova1,590Kosovo3,240Albania3,950Macedonia4,400BiH4,700Bulgaria5,770Serbia5,990Romania8,330Turkey8,730
7Escaping middle income trap For moving up the value chain with knowledge and innovative-based products and services:investment rates >25-32 % of GDPinnovation-conducive policy frameworkbusiness environment
22Mas unemployment the labour market in BiH face many challenges: Activity rates are lowUnemployment rates are long-term, largely structuralVery few new jobs are createdUnderemployment is significantEmployment services have a very limited roleEducation programmes are not in line with labour demandYoung people are poorly prepared for labour marketYoung people do not consider entrepreneurship as an option for them.
27Mass unemploymentIssue of human capital development is a priority for faster, export-oriented and sustaining growthImproved skills will upgrading the skill content of exports (and reducing vulnerability to low-wage competition) lead to increasedproductivity andemployability... will also endogenize the creation of new enterprises through the creation of more entrepreneurs.
28Mass unemploymentmismatch between demand and supply of skills is a result ofA) supply side failureundeveloped private market for skills provision, and a small number of the (un)employed are willing to participate inlack of adequate government policies and strategies addressing the problemB) demand side failureVery few new jobs are created
29Mass unemployment wages are high relative to the product composition of exportsproductivity in a regional comparison
30Policy recomendations The policy recommendationFollow the export and competitiveness strategy (agro-food, metal, wood, construction materials and tourism)Introduce the private and develop public institutions mathing demand and supplyCreate a tertiary education strategyReview the secondary school curriculaCreate an adult education strategy frameworks/regulationCreate cluster training centres
31Policy recomendations 1. Increase talent baseReview the primary and secondary education system – shift approach from ‘rote learning’ to ‘creative and critical thinking’Increase emphasis on reintroducing technical and vocational training schoolsIdentify and nurture talent through a demand-driven processImprove autonomy and accountability of educational institutionsEncourage R&D collaboration between terciary education and firmsEnhance English language proficiency
32Policy recommendations 2. Re-skill the existingthe labour forceUpgrade skills of the bottom segment of the labor force through continuing education and trainingDevelop tranining centres at employment agenciesFormalise international quality standards and certification of skillsAllow wage levels to be reflective of the skill level
33Policy recomendations 3. Remove labourmarket distortionsconstraining wagegrowthProtect workers, not jobs, through a stronger safety net, while encouraging labour market flexibilityRevise legal and institutional framework to facilitate hiring and firingRaise pay through productivity gains, not regulation of wages
34Policy recomendations 4. Increase reliance on diasporaCreate a strategy for tapping into the country’s diasporaReview existing programmes to attract highly-skilled Bosnians-Herezgovinians overseas to return homeOffer permanent residence for ex-Bosnian and Herzegovinians and their familiesCentralise oversight of foreign labour and expatriates to enable coherent practiceBuild up critical mass of skilled professionals through simpler work permit and immigration proceduresLiberalise professional services through mutual recognition arrangements