Western Balkans should enhance its competitiveness and improve its market orientation to fight unemployment

21 February 2018

Employment and Social Affairs Platform (ESAP), http://www.esap.online/ (Photo: RCC)

Employment and Social Affairs Platform (ESAP), http://www.esap.online/ (Photo: RCC)

Sarajevo – Although the Western Balkans region suffered the dramatic employment fall in the period following the global economic crisis 2008-2011, “the situation recovered over the subsequent five years and by 2016 total employment had again reached 6.5 million, representing an increase of 8.9%”, reads recently published report ‘Labour Markets in the Western Balkans: Performance, Causes and Policy Options’ commissioned by the Regional Cooperation Council’s (RCC) Employment and Social Affairs Platform (ESAP) project.

“The main contributors to the change in employment between 2010 and 2016 in the WB6 economies are manufacturing, construction, education, professional and scientific activities, public administration, and agriculture. Moreover, employment is dominated by non-tradable sectors, which suggests that the region should enhance its competitiveness and improve its market orientation, as well as building and strengthening existing value chains”, said Nand Shani, ESAP Project Team Leader on the Report’s findings. 

Still, a number of issues remain, such as a high share of informal employment, high youth unemployment, a high share of long-term unemployment and a low rate of female labour force participation - implying large untapped pool of human resources that could be brought into effect to boost economic growth and prosperity, explains Shani.  

The Western Balkans economies have also witnessed substantial progress with institutional reforms for the labour market in recent years, by which the most of them reduced redundancy costs and increased the flexibility of wage negotiation systems but also increased the flexibility of their labour markets and made employment protection legislation less restrictive, finds the report. 

In 2017 the ESAP conducted a series of regional Public Employment Services (PES) benchlearning exercise in each of the Western Balkans six economies which included self-assessment and external assessment in crucial areas and aspects of PES performance fully aligned with the EU PES benchlearning model.

The results of those assessments showed that according to the region’s PES offices, transition from unemployment to employment in Albania in 2016 was 21%, with 25,158 outflows into employment out of 119,710 registered persons unemployed; in Bosnia and Herzegovina it was 25%, with 132,054 outflows into employment out of 521,357 registered persons unemployed; in Serbia it was 37%, with 265,111 outflows into employment out of 713,154 registered persons unemployed; in Montenegro 34%, with 14,645 outflows into employment out of 42,825 registered persons unemployed. The highest was in The Former Yugoslav Republic of Macedonia - 48%, with 51,683 outflows into employment out of 108,289 registered persons unemployed; while in Kosovo* 6,754 persons transited from unemployment to employment in 2016. 

The report ‘Labour Markets in the Western Balkans: Performance, Causes and Policy Options’ together with numerous other documents and publications, is published and available on the ESAP’s online platform, developed to promote the exchange of experience, good practices, data and information among target beneficiaries in the Western Balkans economies.

The structured, online regional Platform is one of the ESAP’s project goals aimed at enhancing regional cooperation. Communities of practice are linked within the platform to the main initiatives under the ESAP project: the peer reviews of employment policies and performance benchlearning among PES offices. This will enable participants to act as learning partners, which will stimulate collaboration and learning, as well as new knowledge generation. 

ESAP’s goal is to strengthen regional cooperation and institutional capacities of national administrations, employers’ and workers’ organizations, enabling them to develop and effectively implement employment and social policy reforms in their EU enlargement process. RCC and ILO implement targeted activities together with public administrations, employers’ and workers’ organizations. ESAP is a 3 million Euro project financed by the European Union and jointly implemented by RCC and ILO in the Western Balkan economies. The project is implemented over 3 years, from March 2016 to April 2019. Its team is based in Sarajevo, Bosnia and Herzegovina.


*This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.