transition, globalisation and labour in the bs & ca...
TRANSCRIPT
1
Transition, Globalisation and Labour in the BS & CA Region
20 May 2010
Chisinau
Stephanie Char
Junior Policy Analyst
Black Sea and Central Asia Initiative
Development Centre
Colm Foy
Co-ordinator
Black Sea and Central Asia Initiative
Development Centre
2
DEV Policies for a better world
The European Commission participates in the
work of the Development Centre
Non-OECD members
2010 - 15 members
OECD members
2010 - 25 members
Egypt
South Africa
India
Thailand
Brazil
Peru
Indonesia
Senegal
Morocco
Mauritius Romania
Vietnam
Colombia
Israel Costa Rica
27
22
25
27 28
32
38
40
20
25
30
35
40
45
Development Centre
Membership
3
BSECAO 2008 An OECD Development Centre Economic Outlook
Focus on the BSEC-CA Regions • A cross-country comparative analysis of
macroeconomic and policy developments of the BSEC-CA region, involving 12 BSEC and 5 CA countries
Black Sea and Central Asia: Promoting Work and Well-being
• Recent economic developments in the BSEC-CA regions (Part I)
• Work and well-being: policy challenges in the global environment (Part II)
4
Stylised Map of the Region
5
Growth Trend
Regional GDP growth has been impacted by the financial crisis
GROWTH: • Over 2001-07, average growth rate
for the region was around 7.2 %, comparable to Asian economies.
• The crisis led to a regional recession of around 6 %
• Substantial variations in growth performance exist within each group of countries, LLM countries recovering slightly faster than UMU
TRADE: • The European Union is the main
trade partner for the region, with great importance for Moldova.
• Russia is the main intra-regional trading partner – embargo since 2009 on Moldovan wine
Growth in Real GDP (%)
Source: IMF, World Economic Outlook October 2009
-8,0
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Average Black Sea countries
Average Lower to Lower Middle income countries: Albania, Armenia, Azerbaijan, Georgia, Moldova and Ukraine
Average Upper Middle to Upper income countries: Bulgaria, Greece, Romania, Russia, Serbia, Turkey
6
Growth: LLM
Impressive growth performance until 2008, then great recession with the crisis
Growth in Real GDP (%) • The impressive growth performance in 2001-07 reflects gains in term of trade and an improvement in macroeconomic management, notably on the fiscal front.
• Regional economic growth fell from +6% in 2008 to -6% in 2009 as a result of the crisis. It is projected to reach 2.5% in 2010.
• These countries are highly exposed to international shocks, notably Moldova whose economy relies on remittances and trade with Russia
Source: IMF, World Economic Outlook October 2009
-20
-15
-10
-5
0
5
10
15
20
25
30
Albania Armenia Azerbaijan Georgia Moldova Ukraine
2007
2008
2009(e)
2010(e)
2011(f)
7
Finance Increased reliance on external funds
Source: OECD Development Centre / IMF
0
2
4
6
8
10
12
14
-20
30
80
130
180
230
280
330
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
External Financing before crisis: BSEC
External financing/GDP (right-hand axis) External financing
Capital inflows FDI Inflows
Workers' remittances and compensation of employees
USD Billion %
8
Finance Increased reliance on remittances
Source: OECD Development Centre / IMF
0,0
200,0
400,0
600,0
800,0
1 000,0
1 200,0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Moldova , receipts (BoP, current mln US$)
Moldova
Moldova heavily depends on Workers' remittances which was multiplied by five between 2004 and 2008 – from $221.4 mln to $1,046 mln
9
Exports Specialisation in BSEC Countries
Export specialisation (Balassa Index) average 2007-08
SITC group 1 2 3 4 6
beverages & tobacco
crude materials (ex.
fuel)
mineral fuels
animal & vegetable oils
manufactured goods
Albania 2.1 8.1 1.3 0.2 3.5
Armenia 33.1 7.9 0.1 0.0 6.5
Azerbaijan 0.6 0.2 13.9 2.4 0.2
Bulgaria 4.6 3.4 2.2 1.3 3.4
Georgia 25.6 11.3 0.5 0.5 2.9
Greece 7.7 2.3 1.8 6.8 2.8
Moldova 30.4 5.2 0.0 14.0 2.0
Romania 2.1 2.8 1.3 0.9 2.6
Russia 0.5 3.7 1.7 1.1 3.5
Serbia 5.3 2.3 0.5 4.2 4.2
Turkey 1.1 0.5 0.2 1.2 1.8
Ukraine 1.8 1.2 0.8 1.2 3.6
Source: OECD Development Centre / Comtrade, 2008
• No BSEC-CA countries have any form of specialisation in exports of food and animals (SITC 0), chemical products (SITC 5) or machinery and transport products (SITC 7)
• Moldova has a clear specialisation in agriculture, with an index of 30.4, second after Armenia (33.1) and just before Georgia (25.6)
10
• Transition in an open economy – More severe recession than expected
– Increased volatility and job insecurity
• During the 1990s labour market policy responses were limited
• The Outlook describes how labour market policies evolved during the 2000s – but the context was also set by households’
responses during the 1990s
BSECAO 2008
Labour Market Outcomes
11
Social indic. A heavy social cost: death rates in BSEC-CA countries
Source: OECD Development Centre / IMF World Development Index 2008
0,00
2,00
4,00
6,00
8,00
10,00
12,00
14,00
16,00
18,00
20,00
2000
2007
Crude death rate is increasing in Moldova. It is expected to reach 13 per thousand in 2010-15; compared to 11.5 per thousand on average for the Black Sea countries for the same period Source: World Bank 2008
-
2,0
4,0
6,0
8,0
10,0
12,0
14,0
2000-05 2005-10 2010-15
Moldova
Av BS
12
Conclusions and Policy Recommendations
• Investment on statistics
• Regularising informal activities
• Active labour market policies
• Employment-oriented social polices and targeted assistance
• Migration, remittances and migrant workers’ rights
• Sustaining reforms for better job creation
BSECAO 2008
13
• Achieving transition requires more than shifting
wealth from the state to the private sector, it is
also about building markets and developing
certain state functions to support both the
private sector and the social indicators.
Prioritise policies to improve the business climate and meet the skill gaps facing the private sector
From BSCAO 2008 to the OECD Initiative for the South Caucasus and Ukraine
(2009-2010): BSCAI
14
• Armenia
• Azerbaijan
• Georgia
• Moldova
• Serbia
• Ukraine
Target Countries
15
• Black Sea and Central Asia Initiative (BSCAI)
team is composed of 11 persons located in
different countries as follow :
BSCAI team
Paris office - 5 persons
• OECD Development Centre
• Mr. Kiichiro FUKASAKU, Head of Regional Desks
• Mr. Colm FOY, BSCAI Co-ordinator
• Ms. Stephanie CHAR, Junior Policy Analyst
• Ms. Anna TCHOUB, BSCAI Communication (Russian speaker)
• OECD Directorate for Financial and Enterprise Affairs
• Mr. Barrie HEBB, Economist (under a joint project)
Local country experts – 6 persons
• Armenia – Mr. Armen Hovhannisyan
• Azerbaijan – Mr. Elkhan Kazimov
• Georgia- Mr. Alexander Khvtisiashvili
• Moldova- Mrs. Tatiana Lariushin
• Serbia-Mrs. Mirjana Radovic
• Ukraine-Mrs. Olga Kupets
16
• Macroeconomic overview
• Regional Trade and Co-operation
• Private Sector Development
• Access to Finance
• Foreign Direct Investment
• Human Capital Formation
• Social Development (MDG)
Target Issues
17
• Creation of comprehensive data base
• Co-operative policy formulation and advice
• Establishment of co-ordinated, regional development strategies
• Creation of Internet portal on the region
• Establishment of regional economic policy and research network
Objectives
18
Current Moldovan Business Development
19
Goal 1 Eradicate extreme poverty and hunger
Objective: Baseline Current data Target Halve the % of people
suffering from hunger Year Value Year Value Year Value
Undernourished people
(%) 2000 2008 2015
Goal 2 Achieve universal primary education
Objective: Baseline Current data Target
All children to complete
primary school Year Value Year Value Year Value
Net primary enrollment
ratio (%) 2000 89 2008 83 2015
Children reach grade 5 (%
of grade 1) 2000 2008 2015
Goal 3 Promote gender equality and empower women
Objective: Baseline Current data Target
Eliminate gender disparity
in all levels of education Year Value Year Value Year Value
Female primary ratio (as
% of male ratio) 2000 2008 2015
Female secondary ratio
(as % of male ratio) 2000 2008 2015
Millennium Development Goals (1)
20
Goal 4 Reduce child mortality
Objective: Baseline Current data Target
Reduce by 2/3 under 5
mortality rates Year Value Year Value Year Value
Under 5 mortality rate
(per 1,000) 2000 24 2008 17 2015
Goal 5 Improve maternal health
Objective: Baseline Current data Target
Reduce maternal
mortality by 3/4 Year Value Year Value Year Value
Maternal mortality ratio
(per 1,000 births) 2000 … 2008 … 2015
Goal 6 Combat diseases
Objective: Baseline Current data Target
Halt and reverse spread
of Tuberculosis Year Value Year Value Year Value
Tuberculosis case
detention rate (all forms) 2000 38 2008 79 2015
Goal 7 Ensure environmental sustainability target
Objective: Baseline Current data Target
Halve the % of people
without access to safe
water Year Value Year Value Year Value
Access to improved safe
water (%) 2000 92 2008 … 2015
Millennium Development Goals (2)
21
Transition is achieved through liberalisation, macroeconomic
stabilisation, restructuring, privatisation and legal and
institutional reforms.