Creating Jobs for Equity and Prosperity - A sub-regional Conference on
Employment and Social Inclusion in the South East Europe and Turkey
Co-organized by UNDP and ILO
Skopje, FYR Macedonia, 16-17 April 2015
Summary of main findings and recommendations1
1. Introduction and Background
The countries in Southeast Europe and Turkey suffer from chronic low employment rates
and high levels of long term unemployment. These labour market challenges are usually
attributed to incomplete reform processes, the effects of which have been further exacerbated
since 2008 by the global and European economic and financial crises. The countries of the region
not only share similar employment challenges, they also share similar regulatory and social policy
frameworks. Moreover, they are all engaging in employment and social inclusion issues with the
EU, which, in its Europe 2020 strategy as well as its South East Europe 2020 strategy, highlights
the priority of stimulating quality employment creation and promoting the inclusion of
marginalized groups, both in member and accession states2. Overall, it is evident that if the
countries and the sub-region as a whole are serious about embarking on more ambitious,
sustainable, job-rich and inclusive growth patterns, they will need to adopt fresh and
comprehensive policy reforms and programmatic approaches, that embrace common European
(and global) values.
To help achieve these aims, a variety of employment and social inclusion policies and
programmes have been developed and piloted in the sub-region, in many instances benefiting
from UNDP and ILO support. While there is a significant body of literature now available on the
various policies and programmes which have been tested, this knowledge has not yet been fully
evaluated, systematized, or reviewed for lessons learned.
These issues were the subject of a two-day joint UNDP / ILO Conference on Employment
and Social Inclusion, held in Skopje on 16-17 April 2015. The aim of the conference was to
stimulate an open, evidence-based dialogue to facilitate exchange of experience, and evaluate
1
For further details on the conference agenda, participants, background papers and presentations, please see
http://jobs4prosperity.com.mk/
2
The EU’s Europe 2020 strategy has set a target of a 75% employment rate (among the population aged 20 to 64) by 2020. The
Regional Cooperation Council’s Southeast Europe 2020 strategy likewise calls for an increase in the overall employment rate (as
a percentage of the population aged 15 and up) from 39.5% to 44.4%.
the potential for replicating and scaling up innovative and successful labour-market and social
inclusion programming in four thematic areas, and linking these to holistic policy reform
processes:
i) Employment and social policies for the inclusion of all people into the labour
market3
ii) Vocational education and training and skills matching and successful
transitions from school to work
iii) Youth entrepreneurship
iv) Sustainable and green enterprises for job creation
The programming and policy context was provided by the EU’s regional and national IPA
II framework documents, and the Regional Cooperation Council’s Southeast Europe 2020
Strategy.
The conference thus provided a platform for reviewing the latest policy thinking, and
counter-positioned this with practical experiences in implementing the labour market and social
policy reforms for the creation of more decent jobs. The conference also represented the first
step towards the promotion of an effective framework for systematic sub-regional experience
sharing and peer-to-peer learning, to promote: i) the replication of good practice models; ii) cross
border cooperation; and iii) expanded potential for innovation. A last aim of the conference was
to foster partnerships with national and regional partners, cooperation with which is essential
for connecting UNDP programming with on-going national and regional policy and programming
platforms and narratives. The conference participants included4:
● Senior officials from ministries and technical level experts from line Ministries as well as
institutions responsible for delivery of employment services, technical and vocational education
and training and social assistance and services from Albania, Bosnia and Herzegovina, Croatia,
FYR Macedonia, Kosovo*, Montenegro and Turkey attended the conference.
● Development experts and practitioners from regional partner institutions, in particular the
Regional Cooperation Council (RCC), the European Training Foundation, DG Near and DG
Employment and national EU delegations;
● Staff from UNDP’s country offices in South East Europe (SEE) and Turkey, and from its Regional
Support Centre in Istanbul, plus ILO staff from the Decent Work Team and Country office for
Central and Eastern Europe, from its Geneva headquarters, and national coordinators;
3 Active inclusion as defined by the
EU refers to policies and measures that 'enable every citizen, notably the most disadvantaged,
to fully participate in the society including having a job. In practical terms, that means: i) adequate income support together with
help to get a job by linking out-of work and in-work benefits, and by helping people to access the benefits they are entitled to; ii)
inclusive labour markets – making it easier for people to join the work force, tackling in-work poverty, avoiding poverty traps and
disincentives to work; and iii) access to quality local social services which can help people to participate actively in society,
including by getting back to work. '
4
See http://jobs4prosperity.com.mk/ for full list of participants
Follow Up:
Apart from this summary report, the following actions are being taken as follow-up to the
conference:

a revised background paper, prepared for the conference, is available on the website. See
http://jobs4prosperity.com.mk/

Case Studies of best practices, most of which were presented at the conference, are being
documented, and will shortly be posted at http://jobs4prosperity.com.mk/
Partnerships:
The EU in partnership with the ILO is setting up an employment/ social inclusion platform for the
Western Balkan countries. It will come online at the end of 2015/ beginning 2016. UNDP will join
and contribute to this platform.
UNDP IRH and the ILO DWT/CO in Budapest have drafted a regional employment project proposal
and submitted to RCC/ EU for possible funding under IPA II (covers SEE countres, but not Turkey).
The project has four main components, namely (i) labour market governance: enhancing
capacities of public employment services, partnerships and user-centred approaches with a focus
on vulnerable and hard to employ groups; (ii) innovative programmes to tackle employment of
vulnerable groups, including the long term unemployed; (iii) stimulating social economy and
green jobs initiatives; and (iv) promoting convergence towards EU and global good practice
through peer learning and support. The latter component will have clear links to the EU/ILO
platform mentioned above.
ILO is implementing a programme on Formalization of the Informal Economy in South Eastern
European countries. The programme will strengthen the capacity and commitment of
governments and the social partners to design and implement policies and measures that
contribute to the formalization of the economy, thus improving the quality, decency and
productivity of jobs.
Moreover ILO is organizing, with UNDP participation, a conference on green jobs. The aim of the
conference is to increase understanding of how the creation of green jobs can play a crucial role
in protecting the environment while supporting national economies. Special emphasis will be
given to green jobs concepts, tools and current practices, as well as identify opportunities and
formulate proposals for green jobs promotion at country level in the Western Balkans by paying
particular attention to specific sectors such as waste management, energy supply alternatives
and the greening of enterprises.
UNDP and ILO have agreed to actively ensure synergies and complementary of activities carried
out at the regional and national level within SEE and Turkey.
UNDP’s IRH is preparing an employment/social inclusion workshop for the countries of the South
Caucasus and Western CIS (currently planned for 27-30 October). The lessons from the Skopje
workshop are being used in the design and structure of the Tbilisi event, and IRH will take the
lessons learned/ case studies from the Western Balkans to this workshop.
UNDP IRH announced at the Skopje workshop the creation of a Development Solutions Team
(DST) for employment. Details of this will come on line shortly. Representatives of five country
offices have joined the team (Albania, BiH, Croatia, Kosovo*, FYR Macedonia), as has one staff
member from the Istanbul International Centre for Private Sector in Development (IICPSD). The
DST will organize follow-up internal workshops on selected topics (the first one will be youth
employment in the Western Balkans and Turkey), and produce related knowledge products.
Details will go online in mid-July.
2. Main Findings
In the course of the conference discussions, it become clear that it was useful to summarize
findings, recommendations and lessons learned at three different but inter-linked levels. Firstly
the global level, where UNDP and ILO as global organisations, and importantly the EU at the
European level, could draw on their vast global knowledge repositories and recommend policy
approaches which could be applied to the employment/inclusion problems that the region is
facing. Secondly, the national level, which concerns employment strategies and inclusion policies
conceived and implemented within the region. (All of these have been designed against the
background of EU norms and requirements, due to the ongoing accession processes which all of
the countries are engaged in). The third, 'micro' level refers to conclusions/ lessons learned from
concrete programmes and projects being supported by international organisations, regional
governments and non-governmental organisations. This summary uses these three categories,
but inevitably there is some overlap.
2.a The ‘macro’ perspective

The initial emphasis on ‘getting the growth framework right’ in anticipation that ‘a rising tide
will lift all the boats’ has disappointingly ended in jobless growth in the region. It is now
broadly recognized that policies aimed at stimulating economic growth (improvement of the
business environment, institutional development and investments in infrastructure, market
efficiency and competitiveness etc.) are necessary but not sufficient for making progress on
employment and inclusion targets.

In light of the above, during the first decade of 2000s, international organizations and policy
makers shifted their attention from the growth framework, to employment-rich and labour
market stimulation policies. However these often remained largely sectoral in their scope and
institutional responsibility; i.e. they lacked a comprehensive approach and were often either
only partially linked, or completely de-linked from national development strategies.

There has been a growing recognition that sustainable solutions require integrated
approaches, and alignment of economic and sector policies, employment policies and active
labour market measures with policies on social protection, social inclusion, improving the
quality of education, skills development, promoting regional development, natural resource
management, and disaster risk reduction.

Globally, there is growing recognition of the need for active labour market programmes to
target specific marginalized groups (e.g. the long-term unemployed, youth). These require
more institutional coordination between employment and social protection agencies.

Certain specific features of the region have not always been adequately factored into the
global or pan-regional solutions put forward by international/European organizations. While
issues surrounding jobless growth and job creation represent challenges common to other
parts of the world, solutions require coherent and contextualized actions implemented in
parallel at regional, national and even the sub-national levels. Four specific features appeared
to be insufficiently factored into diagnostics and solutions, namely (i) the implications on
supply and demand of the high levels of labour migration and remittances (which affect inter
alia household income strategies, labour market supply (quantity and quality) plus a likely
impact on raising the reservation wages for those in the originating country; (ii) the high levels
of public employment creating dual, if not triple, labour markets with the majority of “good”
and secure formal sector jobs being in the public sector, in capital cities or modern sectors,
and the other side being vulnerable employment, including the self-employed and unpaid
family workers; (iii) the large share of informal employment with a mix of persons unable to
move out of informal employment, as well as those with a reluctance to transit to formality,
(as employers and employees can collude on informal agreements or unregistered economic
units); and (iv) the weak private sector. (for more detail on this, see pp of the conference
background paper)

The comparative review suggests that beyond the consensus on overall diagnostics and broad
priorities, there is no consensus on actual remedies for the poor labour market indicators of
the sub-region, i.e. on specific objectives and actions of labour market policies. To reach such
consensus would require stronger evidence gathering and stronger dialogue between
countries and between government, social partners, and civil society.

Fiscal responsibility is an essential dimension to ensure that employment and social
protection systems are adequate and viable over the longer term. Getting the right mix of
income support and ALMPs is important, but it should be recognized that income support
measures may be more important in a recession situation, while activation measures can be
more effective in periods of economic recovery.

A three legged approach which combines general growth policies, employment policies and
a programmatic/project approach to unemployment and exclusion problems may yield more
results. In this context, it may be worth exploring more vehicles for cross-country peer
cooperation, to identify best practices, and assess potential for scaling up/ replication. (see
also micro-level summary)

Rather than concentrating on overall models or policy solutions, it may be worth putting more
emphasis on the programmatic and project components that are actually working, and
adequately coordinating between approaches, to increase demonstrative capacity; these can
then be scaled up and possibly replicated in other countries.

There are many opportunities opening up to apply integrated approaches that go beyond
employment/ social inclusion policies to link up with policies associated with green economy
and green jobs creation. These have to be pursued more actively at all levels (macro, meso
and micro).
2.b The ‘meso’ level

The review showed that governments in all countries of the region are committed towards
improving employment indicators. In line with the Lisbon Strategy and later the EU 2020
Strategy, all countries in the region have developed national employment strategies, which
to various degrees address issues of specific concern for national labour markets. There is a
new generation of national economic strategies and policies as well as investment plans
which explicitly nominate employment as a central goal. Investments with high job creation
potential are being given priority.

In principle, national employment strategies include support for stimulating the demand for
labour, and aim to enhance the quality and adequacy of labour supply, and to assist labour
market integration and social inclusion of those who are most vulnerable. In practice, there
is often a lack of follow-up and cohesion between the different elements of the strategy

While national employment strategies are in place in all countries in the region, their design,
budgeting, coherence, impact and cost-effectiveness remain insufficiently assessed.
Programme evaluations are key in supporting the modification of key design issues in ALMPs.
For this purpose, fostering the culture of performance and impact evaluation of the ongoing
public policies and programmes is essential for further improvement of employment policies
and programmes.

Effective implementation of employment programmes is a cornerstone challenge, which
further emphasizes the importance of drawing up a comprehensive development agenda for
the relevant labour market institutions i.e. public employment service, VET centres, local
development bodies, as well as strengthening and rebalancing economic governance for
partnerships with the social partners and the civil society sector. Social partners (employers
and workers) can and should play a crucial role in promoting social dialogue and designing,
and implementing the right mix of employment and social policies that can promote both
competitiveness and social justice.

Modernization and restructuring of public employment services is vital for improving the
operational efficiency of the labour market. PES are increasingly expected to move from
passive (registration of job seekers) to active (service provision roles in mediation and
activation). Improving job matching, increasing efficiency of job search, ensuring effective
implementation of active labour market measures, reaching out and better targeting of the
most vulnerable and disadvantage are some of the tasks that will have to be taken on and
implemented by PES and other labour market institutions.

Implementation of employment policies is often the subject of criticism by the business
sector and the public at large. Criticism has centred on the insufficient policy coherence and
lack of inter-institutional coordination. Strengthening capacity for labour market
management and coordination with other stakeholders in the labour market (including more
data collection and analysis) needs to be given far more priority.

To foster governance and accountability of labour market institutions, it is important to
introduce a system of objectively verifiable indicators for monitoring the performance of
employment and social policies. The Balkan Barometer survey fielded by RCC in seven
western Balkan countries (Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia,
Kosovo*, Montenegro and Serbia) is one important instrument for capturing public and
business sentiments.

Monitoring is also an essential part of the SEE agenda and the reform process at the national
level. For this purpose, SEE 2020 envisages 150 quantitative and over 200 qualitative
indicators to track the policies and governance performance.

Problems of measurement and understanding what is happening at the labour market and
how they translate into problems of poverty, migration and exclusion remain. The EU-SILC
surveys should be implemented as soon as possible throughout the region. The transition to
new indicators of poverty and exclusion risk will help better inform inclusion policies in the
region and improve capacity for monitoring.

As the region moves forward, employment solutions and active labour market policies will
increasingly have to be sought within the sustainable development framework and aligned
with policies for poverty reduction, education, regional development and natural protection
(especially water) and disaster risk reduction.

A growing body of evidence shows the potential employment benefits of investments in
energy efficiency, renewables, waste management, ecotourism and greener forms of, and
skills for, production. Ensuring resource efficiency and transiting to green growth represents
a large restructuring challenge, which need not necessarily pose a threat to jobs, but on the
contrary requires informed management to ensure that the potential for job creation is
realized. For example, reductions in fossil fuel subsidies, higher taxes and fees on carbon
emissions and water use can broaden the fiscal space, and also compensate for reductions in
taxes on labour to stimulate demand and boost overall employment rates.

Entrenched employment patterns and duality are leading to increasing inequalities. Many of
those excluded from the labour market are not being helped by traditional ALMPs, due in
part to design, but also to chronic under-funding. Bearing in mind recent experience within
the region which shows that ALMPs which focus on marginal groups can be especially
effective in raising employability and increasing labour force participation, efforts needs to
be made to create an optimal ALMP mix, taking into account the needs of vulnerable groups,
as well as being effective partners for employers and job-seekers in general.

Most countries in Southeast Europe already have comprehensive social protection systems,
however gaps in coverage and sustainability exist. Social inclusion strategies need new forms
of social assistance and social service reforms to reach out not just to the traditional
categories of marginalized populations, but also to the long term unemployed.
2.c The micro level
This concerns lessons learned from implementing concrete programmes and projects in the four
key areas discussed in the conference sessions: a) improving employability of discouraged
workers and vulnerable groups; b) youth employment; c) vocational education and training
systems, life-long learning for addressing skills mismatch; d) promoting green jobs through social
dialogue and strategy development.

Peer-to-peer learning is an effective way to share information and experience related to
active labour market and social inclusion programmes in the region. Hence, it is important
to enhance the know-how, but also to “know who knows”, and to know partners with
whom certain policies and programmes can be effectively implemented;

While countries have unique challenges and there is no magic bullet to address
employment challenges, there is expertise, experience and commitment in the region and
repository of good practices of employment and social policies and programmes that have
yield results. In this regard, it is important to identify the “stars” among programmes and
projects that are working, demonstrate results, can be scaled up and probably replicated
in other countries either under IPA II or from national funds.

In addition, it is very important to create new instruments for peer learning, ideally under
the auspices of RCC and in cooperation with diverse development partners, including
exchange of information, policy ideas and best practices inspired by the Open method of
coordination of the EU applied at the regional level. These new instruments could include
mutual learning programmes i.e. peer reviews of best practices, SEE employment, skills
and social policy observatory as well as joint policy platforms for policymakers.

The recently launched dialogue on Employment and Social Reform Programmes could
also serve as a platform for promoting reforms in employment and labour market and
social policies in the pre-accession process, but also as a platform for exchanging
experience, good practices and evidence based policy dialogue among enlargement
countries.

Programmes targeting vulnerable groups with low activity and at risk of exclusion should
get a more prominent place in the portfolio of ALMPs, given the increasingly social
dimension of the challenges countries faced. Patterns of joblessness and exclusion are
particularly entrenched among certain ethnic groups, women, people with disabilities,
long-term unemployed prevent several generations to access labour market and ensure
greater inclusion. A well targeted ALMPs and social economy initiative provide
opportunity to tackle social challenges, also through business lens. Such programmes not
only contribute to creating jobs, but also promote the EU values and principles of
convergence, fairness and democratic change.

It is crucial, however, that programmes are financed by funds secured nationally,
reflecting the national hierarchy of priorities in which equity considerations come first.
Otherwise, due to often unstable and erratic funding flows, if external funding is
dominantly used to support the employment and inclusion of vulnerable groups, the
societal gains from these intervention can be limited and temporary.

Examples of good practices identified, included measures to support social
entrepreneurship and employment of persons with disabilities, as well as advances in the
overall function of ALMPs due to new service models introduced by Public Employment
Services, and to the introduction of programs ensuring coverage of vulnerable groups,.
There are several interesting peer examples related to the involvement of private sector
in the programmes targeting vulnerable groups, especially disadvantaged youth,
representing good examples of corporate social responsibility. Given the scarcity of good
private sector jobs in the region, these practices deserve to get more public attention and
institutionalized support. Also, the production of common tools and guidelines could
serve to provide benchmarks, and also allow countries to benefit from economies of scale.

Programmes targeting youth unemployment, supporting the school to work transition
and vocational training for the young have been widely promoted in the region. UN
agencies have supported these activities within ‘joint programmes’ in almost all countries
of the region. Joint programmes require extensive planning, careful design and they
tended to target the more vulnerable youth. Some governments have also invested
significant resources, but their focus was on school/university to work transition and they
have been less focused on vulnerable youth. A number of impact evaluations have already
been conducted, and show two valuable lessons: on the one hand, comprehensive
programmes reinforce each other, and on the other programmes including specific
targets on vulnerable youth tend to have stronger net impact.

The EU has also introduced a number of policy actions and initiatives, among which the
Youth Guarantee is the most prominent. The Youth Employment Package represents the
follow-up to the actions on youth laid out in the wider Employment Package and includes:
a proposal to EU countries to establish a Youth Guarantee – adopted by the Council in
April 2013. The Youth Guarantee aims to ensure that all young people up to the age of 25
– whether registered with employment services or not – receive a quality offer for a job,
continued education, an apprenticeship or a traineeship within four months of leaving
formal education or becoming unemployed. The European Alliance for Apprenticeships
also looks at the ways to reduce obstacles to mobility for young people.

Given the broad range of material and local experiences, and also the availability of new
instruments, it would be useful to organize a separate workshop dedicated to the topic
of youth employment, sharing experiences, lessons learned and process and net impact
evaluations of youth programmes in the region.

Poor skills are a major barrier to successful labour market outcomes. The prolonged
transition and economic restructuring caused the skill mismatch to become more
pronounced in the region than in the developed economies, contributing to high levels of
long-term unemployment. The challenges related to the skills mismatch were temporarily
side-lined due to the diminishing demand for labour as a consequence of the prolonged
economic crisis. However, employers’ surveys single out the lack of adequately-qualified
labour and skills as an obstacle for their growth. For example, the recently conducted RCC
Balkan Barometer, shows that 25% of companies have vacancies that are hard to fill, while
29% of companies consider that skills that the workers have do not meet their needs.
Employer surveys find the lack of soft skills to be the most pressing problem; however, in
the longer run, with the expected recovery in the demand for labour and diminishing
supply of new entrants, skills gaps will most likely widen for many occupations, especially
in the modern services sector and quite likely in some industrial sectors. This issue will
have be studied further in connection with the skills mix of migrants leaving the country,
and the reservation wage for those staying behind.

All SEE countries and Turkey have commenced some form of reforms towards a more
demand-driven and learning outcome-based VET system. VET systems have dual
objectives i.e. to deliver labour market demand and to achieve broader social policy aims.
In this, efforts fostering cooperation modalities with businesses and other stakeholders
for improving labour market information and expanding knowledge of future skills needs,
promoting entrepreneurial and on the job learning and career guidance and counselling
to enable efficient transition on the labour market are essential. VET reforms are also
instrumental to fostering inclusive labour markets and better targeting of vulnerable
groups (Roma and people with disabilities) in education and training system, which has
been be singled out as a key source of inequality.

The inspiring examples presented at the Conference on engaging the private sector in
skills development for better employability, represent valuable experiences which
deserve further attention and analysis to identify opportunities for replication and scaling
up in other countries of the region.

There is an increasing understanding that the transition to a greener business model is
not a ‘luxury’ any longer or an “optional”. Moreover, it has been shown that the switch
to more sustainable consumption and production patterns, and to more resourceefficient economies, can have positive impacts on growth, productivity and employment.

Examples within the region of efforts to create decent green jobs are still rather limited.
However, there are some emerging good practices, including UNDP’s experience of
building up a carbon neutral tourism sector, covering eco- and agri-tourism, energy
efficient transport and accommodation. ILO’s experience in promoting recyclable waste
collection in Serbia is another example. These provide only a glimpse of the untapped
potential for job creation from greening the economy. Green jobs provide the link in
addressing the dual challenge of environmental sustainability and social inclusion through
decent jobs and labour market participation.

Skills forecasting and investment in skills development will be necessary to ensure future
employment in green jobs, since the transformation towards greener economies will
entail re-skilling of existing jobs, substitution of employment, development of new skills
and additional jobs, but also the disappearance of obsolete ones.