Public Investment Programme of BiH

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LABOR MARKETS, GROWTH AND POVERTY REDUCTION
STRATEGIES -EDUCATION-
M. Sci. Azemina Vukovic, Head of EPPU - Office
for Monitoring and Implementation of BH MTDS
(PRSP) Thessaloniki, 26-27 of May 2005
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KEY DIRECTIONS OF ECONOMIC DEVELOPMENT OF
BHKey directions of economic development of
Bosnia and Herzegovina have been defined in
Mid-Term Development Strategy of Bosnia and
Herzegovina for period 2004-2007 (PRSP)

• Goals of the BH MTDS
• Create conditions for sustainable and balanced
  economic development
• Reduce poverty
• Accelerate EU integrations

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MONITORED AREAS

• Poverty monitoring
  
• Mid-Term Macro-Economic Framework
• Fiscal reform
• Private sector growth and structural reforms
• - Business climate and foreign investment
  attracting
• - Privatization
• - Financial sector
• - Labor market
• - Fight against corruption
• - Foreign trade and export support
• - Public administration reform
• - Statistics

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SECTORAL PRIORITIES

• Social protection
• Education
• Health
• Agriculture
• Forestry
• Water management
• Environment
• Energy
• Road and railway infrastructure
• Industry
• De-mining
• IT and communications

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I. REFORM OF THE LABOR MARKET

• Goals defined in BH Mid-term Development
  Strategy 2004-2007 (PRSP)
• 1.1. Increase mobility of labor force as
  important factor for strengthening of common
  market in BH
• 1.2. Reduce black labor market,
• 1.3. Re-organize employment brokerage system

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I.1 LABOR MARKET - PRIORITY ACTIVITIES
AND MEASURES FROM MTDS BH (PRSP)

• Strengthen the single economic space reduce
  market fragmentation in BiH
• Implement education reform promote continuing
  education
• Eliminate all forms of discrimination in
  employment women participating in the labor
  force is among lowest the region
• Reduce the rigidity of the wage-setting system,
  increase youth employment
• Stimulate workforce mobility the labor market is
  static
• Strengthen the monitoring of use of unemployment
  benefits the present system stimulates expansion
  of the informal sector
• Promote the activities and strengthen the
  efficiency of employment agencies the current
  system of funding employment stimulation programs
  is inefficient and nontransparent
• Strengthen the institutional framework and
  oversight of employment agency operations
• Expand and ease requirements for acquiring the
  right to unemployment benefits
• Strengthen the activities aimed at reduction of
  the informal sector
• Strengthen the existing system of social
  assistance to ensure more adequate support for
  those losing jobs due to acceleration of reforms

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I.2 BASIC INDICATORS OF BIH LABOR MARKET

• In December 31st 2004 there were 484,307
  unemployed persons registered in BiH, which is an
  increase by 7.28 in comparison with the
  situation as of December 31st 20031.
• The number of registered employed persons has the
  tendency of decline and as of December 31st 2004
  it amounted to 626,463, which, in comparison with
  2003 (634,046) presents a decrease by 7,583
  (1.20).
• Of the overall number of registered unemployed
  persons, 238,265 (49.20) are persons who are
  seeking employment for the very first time, and
  the majority of them are the young. The rate of
  unemployment at the level of Bosnia and
  Herzegovina, as of December 31st 2004, amounts to
  43.58.
•   
• 1 Source The Republic of Srpska Employment
  Institute, Federal Employment
• Institute and Employment
  Institute of Brcko District of BiH

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I.3 BASIC INFORMATION OF QUALIFICATION
STRUCTURE OF UNEMPLOYED PERSONS

• Qualification structure of the unemployment
  persons - the majority of registered unemployed
  persons are persons with a low level of education
  (non-qualified workers 162,331 or 33.52 and
  qualified workers 179,025 or 36.97), followed by
  persons with high school level of education
  107,542 or 22.21. 
• The lowest number of registered unemployed
  persons corresponds to persons with university
  level or junior college level professional
  qualifications - 13,797 or 2.85 for BiH as a
  whole
• The obvious conclusion is that more than two
  thirds of the overall number of registered
  unemployed persons in Bosnia and Herzegovina has
  a very low level of education, and therefore the
  possibilities for employment for those persons
  are limited.

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II. EDUCATION General approach from BH Mid -
term Development Strategy (PRSP)

• Our educational system is crucial for the
  development of the our countrys intelligent
  capital. Our young people must be confident that
  they can receive quality education that they
  require to open the door to the future here at
  home and our goals are
• Modernize and improve the quality of education on
  all levels, with special emphasis on information
  technology and the environment,
• Eliminate discrimination in education
• Reform primary education, ensure total inclusion,
  change the structure of and develop curriculum
  for secondary education that would allow student
  access to tertiary education and ensure
  harmonization with the European model
• Implement institutional and teaching staff
  reforms in tertiary education in order to ensure
  international recognition of university diplomas
  from BiH,
• Create conditions and capacities for easy
  retraining, as well as continuous modernization
  and update of knowledge, and adopt a lifetime
  learning approach
• Develop scientific research as a prerequisite to
  quality education and economic development of the
  country

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II. 1 THE MAIN CHARACTERISTICS OF THE
EDUCATIONAL SECTOR IN BIH

• the large number of laws regulating education,
• the highly politicized nature of education,
• education accounts for a significant portion of
  the GDP, however there is still insufficient
  funding for quality education,
• science and research, as a part of the
  educational process, are entirely neglected
  there is no legal framework regulating this
  important part of the educational process,
• a lack of educational standards,
• curricula that do not comply to European
  Community requirements,
• a shortage of teachers with certain educational
  backgrounds capable of responding to the needs of
  the labor market quickly and efficiently,
• the inadequate size of learning institutions,
• the inadequate student-to-teacher ratio, and too
  few teaching obligations of teaching staff,
  especially in the universities,
• initial teacher training does not meet the actual
  needs of teaching practices,
• adult education programs have not been updated in
  more than a decade, and there is a lack of
  appropriate infrastructure for adult training,
  re-training and acquisition of further
  qualifications,
• outdated and obsolete equipment.

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III. THE ROLE OF EDUCATION AND TRAINING
FOR THE JOB MARKET
Adequate and relevant education and training
measures are critical for reduction of the
poverty, sustainable social and economic
development and job creation opportunities. The
reform of education for labor market should
include

• Ensuring the competitiveness of the BH workforce
  that should be well-trained, highly skilled and
  productive.
• Re-establishing broad occupational categories for
  the vocational education and training system in
  order to raise quality and reduce costs
• Developing a broad, modern, flexible curricula
  that is consistent with European standards
• Ensuring that the curriculum is flexible so it is
  responsive to the changing labor market and to
  the social and individual needs of youth and
  adults

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• THE ROLE OF EDUCATION AND TRAINING FOR
• THE JOB MARKET
• Establishing a vocational education and training
  standards and assessment department within the
  existing Standard and Assessment Agency
• Strengthening specialized post-secondary,
  labor-market orientated training for adults and
  youth, including unemployed and displaced
  persons
• establishing a system for initial and in-service
  training of teachers through both mentor training
  programs and the teacher training institutions,
  and ensuring that teachers within vocational
  education and training institutions have access
  to high quality training and
• Establishing a group of mentors trained in the
  new curriculum and teaching methodology to
  provide concrete support and advice to teachers.
• The creation of a legal and financial framework
  that will enable schools to engage in commercial
  activities.

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In the area of Higher education the following
further elaborates on steps to be taken in line
with the Bologna Process and Lisbon Recognition
Convention

• Adoption of Framework Law on Higher Education on
  the State level
• giving universities autonomy in decision-making
  and ensuring accountability to their stakeholders
  for the quality of their teaching, the welfare of
  their students, the standard of their research,
  the professional development of their staff and
  the cost-effectiveness of their administrative
  and management operations
• improving the quality of university-level
  teaching and learning, with a view to achieving
  standards consistent with practices elsewhere in
  Europe
• fostering the ability of students and academics
  within BiH and abroad to transfer between
  universities
• promoting research that will improve the academic
  process and support social and economic
  development.

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IV. WHO IS RESPONSIBLE FOR THE EDUCATION
AND TRAINING REFORM

• BH Council of the Ministries - Ministry for
  Civil Affairs
• Government of District of Brcko
• Entity Governments (FBiH, RS) Ministry for
  education
• Cantons (10) in FBiH
• International community representatives
• - in July 2002, the OSCE Mission to BiH has
  assumed responsibility for the co-
• ordination and facilitation of the work of the
  International Community in the education
• sector in Bosnia and Herzegovina. Beside OSCE
  the main actors in the reform of
• education are
• European Commission
• Council of Europe
• World Bank
• Office of the High Representative
• UNDP
• Even though civil society organizations are not
  officially responsible for implementation of
  reforms process in area of education, their role
  is very significant especially in the sense of
  raising awareness about the needs of reform
  processes as well as in training activities.

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WHERE WE ARE NOW?

• Besides a large number of the actors and decision
  makers, the reform of education at all levels is
  very slow,
• Labor force in the formal sector has grown old,
  and younger workers have difficulties in access
  to jobs in the formal sector.
• There is still a large informal sector.
• The participation of women in the labor force is
  amongst the lowest in the region, but the
  differences in the level of pay between men and
  women are not high.
• New employment generation and job reallocation is
  weak.
• Mobility and flexibility of labor force are at a
  low level.
• The system of wage determination is rigid and it
  presents a serious obstacle to job generation and
  labor mobility.
• High taxes and difficult access to credits,
  together with administrative barriers, slow down
  the development of SMEs.
• Companies fail to report on the full amount of
  wages.

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SUCCESS IN IMPLEMENTATION OF MEASURES IN
IMPLEMENTATION OF MEASURES FROM MACRO-ECONOMIC
FRAMEWORK AND PRIVATE SECTOR GROWTH
Source Report on Implementation of Action Plan
of MTDS BH for period August 2003 March 2005
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SUCCESS IN IMPLEMENTATION OF MEASURES IN
IMPLEMENTATION OF MEASURES IN THE AREA OF
SECTORAL PRIORITIES
Source Report on Implementation of Action Plan
of MTDS BH for period August 2003 March 2005
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CONCLUSIONS

• In general, significant progress in all areas
  of life and work in the postwar period has been
  made, which is visible from the annual report on
  realization of measures from MTDS BH (PRSP).
• Reform of the labor market and education has
  also started and certain results are already
  visible.
• The processes are slower than expected due to
  very complex administrative structure of the
  country and politicization of certain issues.
• The role of the international community in the
  reform processes and provision of security and
  stability of the country has been significant.
• Civil society in BH has matured and its role
  in raising of awareness of local communities and
  wider about many important issues was very
  significant.
• Apart from all the above mentioned positive
  movements, it is necessary to accelerate all
  reform processes related to reform of labor
  market and education with the goal of
  establishing a common and flexible labor market,
  development of human capital and economic growth,
  the training market, skills development and its
  consequences to formal and informal labor
  markets.