1. Employment in Southeast Europe: Challenges and opportunities Ben Slay Senior advisor, UNDP Regional Bureau for Europe and CIS Skopje 16 April 2015 1

2. Employment: Particular challenge for Southeast Europe World Bank data, UNDP calculations (unweighted averages). 2

3. Probing deeper—Employment rates by ethnicity, gender Sources: World Bank world development indicators, UNDP/EU/WB Roma database. 2011 data. 3

4. Causes, consequences, questions Prof. Arandarenko offers four inter-linked causes and consequences: 1)Emigration 2)Informality 3)Weak private sectors 4)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))? 4

5. Challenges: No magic bullets—just necessary conditions 5 Growth policies Employment policies Employment programming, projects All three legs are needed

6. Different parts of this triangle have been emphasized at different times Initial emphasis on “getting the growth framework right” (1 st 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” 6

7. This gave rise to growing emphasis on labour market policies (2 nd leg) 7 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

8. 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 8

9. 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

10. 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 10 Third sector (CSOs): – Civic engagement/ social mobilization – Project cycle management expertise Within the state sector—getting right mix of: – Decentralization – Deconcentration – Recentralization

11. 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 11

12. Thank you very much! ben.slay@undp.org