“Open Balkan” – incentive and pressure for faster reform of the labor market

Regional economic integration is extremely important for our economy. Taking into account our aspirations to become a full member of the European Union, the Open Balkans Initiative should enable a faster structural adjustment to deal with all the challenges that the open market brings.

In order to answer what will be the effects on the labor market from the Open Balkans initiative, and from the process of negotiations and accession to the EU, several aspects are significant. First, what is the current structure of the labor market, especially with regard to the shortage of certain categories of qualified staff, 2) what is the salary structure compared to the countries we are opening to, and 3) how determined and ready are we for structural changes.

In our study, we analyzed the demand and supply for labor force, according to registered unemployed persons in the Employment Agency. At the moment, we have 112,000 registered unemployed people and a demand from companies for 2023 of about 15,000 people.

The results showed that we have a polarized situation, that is, especially surplus gaps when the supply of unemployed people for certain occupations is drastically higher than the demand, and deficit gaps in other occupations. Thus, in the occupations with high skills, the surplus gaps dominate, reaching the maximum in the occupations that generate the teaching faculties, where we have up to 75 unemployed people for one open job. On the other hand, there is a deficit for workers in service activities and general workers in various occupations, especially support staff.

The advantage of regional integration and the possibility of labor movement is that labor shortages, especially in border regions, can be filled with labor from neighboring countries. But there are also risks that the deficit gaps with high skills will deepen, in the occupations for experts and technicians in the information-engineering areas, where mobility is also higher by default.

The second aspect is what is the wage structure and premium for a particular occupation between countries, for a person to decide to move to the labor market in a neighboring country. In the context of the Open Balkans Initiative, for occupations with low skills, these premiums are probably low or non-existent, taking into account that both our minimum and average wages are similar to the rest of the Western Balkan countries. However, for activities of a seasonal nature and cyclical need for workers, differences in wages may appear and this may cause additional pressure on the already existing shortage of workers.

In the medium term, the Open Balkans Initiative should be a stimulus and a form of pressure for a faster reform of the labor markets, so that through the accession processes to the EU we fully prepare to deal with the challenges ahead. Those structural reforms are in adjusting the educational policies according to the demand of the labor market, then preventing abuse of the system and a quick transition from a system of social support to a system of employment and dealing with the informal economy.

Meeting to exchange experiences in Albania

Our Blagica Petreski participated in an exchange of experiences between civil society organizations from Montenegro and Serbia with those from Albania and North Macedonia, entitled “The role of civil society in the EU accession negotiation process”, which took place in Tirana, Albania, 30 -31 March 2023, under the auspices of EU TACSO.

Workshops on the multidimensional child poverty

🎯 Finance Think in partnership with UNICEF MK conducted a series of 3 workshops with representatives from key institutions in the sphere of #education, #social protection and #health, in order to assess in detail the causes and effects of multidimensional poverty that also affects children.

💡 The meetings discussed how to better monitor poverty among #children in North Macedonia, how to determine the interrelated relationship between sectoral priorities and existing policies, including identifying gaps in current policies and potential additional measures to support vulnerable categories.

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New findings on the consequences of the energy and food crisis for households

Children must be the forefront of measures to reduce food and energy poverty

 

Skopje, 28 February 2023 – At an event to present the findings of a new analysis on the impact of the food and energy crisis on children and families, representatives of the government, civil society and development partners discussed policy recommendations to address the increase of poverty.

The new analysis presented by UNICEF and Finance Think, highlights that some 33 thousand people – ten thousand of which were children – have been pushed below the poverty line due to the food and energy crisis.  While the Government measures have been successful in ensuring that the number of affected families has not been higher, participants noted the need for more targeted interventions to support the most vulnerable households.

” Since the beginning of the energy crisis, the Ministry of Economy has continuously implemented measures to support citizens. In addition to the fact that the state subsidizes 80% of electricity for households and small consumers, last year when the energy crisis began, we created a special programme within the Ministry of Economy through which the measure for subsidizing the electricity bill for vulnerable categories of citizens was realized. The measure has been extended during this year as well.,” said the Minister of Economy, Kreshnik Bekteshi.

In 2022, compared to 2021, the Consumer Price Index in North Macedonia increased by 14%.  Food prices increased by 22% on average, while some categories of food increased by 36%.  These price shocks disproportionally affected families with multiple children and with lower incomes, due to the greater share of food and energy expenditures in their household budget. The most vulnerable segments of the population are left with little funds to meet their other basic needs.

Enver Husein, the Deputy Minister of Labour and Social Policy stressed that the Ministry of Labour and Social Policy is responding to the energy crisis through financial support to vulnerable citizens. For this purpose, and as proposed by the Ministry of Labour and Social Policy, the Government has developed a Law on financial support to socially vulnerable categories of citizens.

Enver Husein, the Deputy Minister of Labour and Social Policy
UNICEF/2023/Georgiev
Enver Husein, the Deputy Minister of Labour and Social Policy stressed that the Ministry of Labour and Social Policy is responding to the energy crisis through financial support to vulnerable citizens.

The assessment shows that one in three children experienced food poverty in 2022 – a 9 percentage points increase compared to the situation before the crisis. The situation is worse among families with three or more children. 44% of them experience food poverty.

“Public sector budgets must ensure that services for children are not affected even further by the rising costs and dip in public revenue. Children need to remain at the centre of all national development effort ensuring access of every child to basic social services such as education, health and protection, regardless of rising costs of electricity and heating for facilities,” said Patrizia DiGiovanni, UNICEF Representative.

Patrizia DiGiovanni, UNICEF Representative.
UNICEF/2023/Georgiev
„Public sector budgets must ensure that services for children are not affected even further by the rising costs and dip in public revenue,“ said Patrizia DiGiovanni, UNICEF Representative.

“The measures from the two Government packages of measures are estimated to be effective in the range of 30 to 60%, depending of which specific rate and which specific population group, that is, if it were not for the measures, the impact of the crisis on the welfare of households would have been 40 to 70% more intense in the negative sense,” said Marjan Petreski from Finance Think. “However, the analysis clearly shows that the measures helped all income groups, including those who could bear the impact of the crisis themselves, and this is important because of the narrow fiscal space, which then puts a lot of pressure on the need to borrow.”

Aleksandar Nikolov and Marjan Petreski
UNICEF/2023/Georgiev
Aleksandar Nikolov from UNICEF and Marjan Petreski from Finance Think present the findings of the new analysis.

The policy recommendations discussed at the event, focused on the need to provide more targeted support to reduce the burden on children, including:

  • Expand the energy subsidy to most vulnerable families and relax the eligibility criteria of the Guaranteed Minimum Assistance for key vulnerable groups of households.
  • More frequent adjustments of the cash benefits to align them with rising prices, to ensure that they preserve their value.
  • In the context of rising budgetary pressures at national and municipal level, protect basic health services, social protection and education by increasing efficiency, effectiveness and equity in social spending.
  • Introduce a free school feeding programme, which would not only improve access to healthy and nutritious food for school children but will also reduce poverty.

The new assessment was conducted by Finance Think in partnership UNICEF as part of a joint United Nations effort to identify systemic pathways for responding to the global food and energy crisis.   UNICEF together with UNDP and FAO, have been working together with national and international partners to find sustainable and long-term solutions that will respond to the needs of vulnerable groups and at the same time support growth and development, in conditions of high inflation. and modest financial resources.

Meeting of the Open Balkan working group in Belgrade

Finance Think is part of the regional working group for the Open Balkans Initiative, composed of representatives from Serbia, Albania, North Macedonia and Bosnia and Herzegovina, led by Libertarijanski Klub -LibeK-.

⏱ This weekend, the working group is holding a meeting in Belgrade to coordinate current and upcoming activities.