Territorial Audit Vranje Municipality
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Territorial audit Vranje municipality 1. General information about municipality The city of Vranje is located in the southern part of Serbia and covers an area of 860 km2. Together with the municipality of Vranjska Banja and 108 surrounding settlements, it forms the administrative territory of the City of Vranje. Vranje is the administrative centre of the Pčinja District, located on the Pan-European Corridor X, close to the borders with Macedonia and Bulgaria. In terms of the development1 City of Vranje belongs to the second group of cities/municipalities according to a classification developed by the Serbian government. Municipalities in the second group are at 80-100% from republic level with regards to the level of development. It should be however noted that the entire region of South Serbia is characterised as underdeveloped, as most municipalities around Vranje belong to the underdeveloped/devastated category of municipalities (Bosilegrad, Trgovište, Preševo, Bujanovac, etc.) with the level of development that is below 60% of the national level. When the level of salaries is compared with the rest of Serbia Vranje lags behind. While the national gross average is RSD 67,857, in Vranje average is RSD 53,878 (net average is RSD 38,695 which is approximately EUR 322). While during sixties Vranje was a prosperous city that offered many employment opportunities in several large factories that produced and exported goods to the entire territory of former Yugoslavia, during nineties, most of these factories lost the market, went bankrupt or significantly decreased the number of employees. Currently, there are more than 2,000 companies that operate in Vranje and statistics indicate that certain recovery in terms of business activity can be noted. The dominant economic sectors are wood processing, clothing, footwear and furniture production and demand for the workforce is obvious. On the other hand, failed privatisation processes are still affecting the economy as once large companies are dismissing people (example Zavarivac, Javor, etc.). It, therefore, comes as no surprise that many of officially registered job seekers are in the older age group (50+), belonging to the category of redundant 1 The Government of Serbia adopted the Regulation by which all cities/municipalities in Serbia are categorised in 4 groups according to the level of development. Several criteria are used for categorisation including average salaries etc. 1 workers. Another, equally challenging issues remain the quality of the labour force as well as the quality of the employment offered. 2. Demographic data Vranje has 83,524 inhabitants. As a result of wars that occurred in the territory of former Yugoslavia, a large number of refugees and internally displaced from Kosovo has populated Vranje. Despite the influx, as indicated in the table below, migrations from Vranje are still higher than immigration, as every year approximately 1,000 people leave Vranje, while 786 settles in. Vranje has a significant number of returnees that returned to Serbia under the Readmission agreements that Serbia signed with some European countries. Estimated number of returnees in Vranje is around 100, and most of them belong to Roma minority. Table1: Number of inhabitants from 1981 to 2011 Administra % % tive Urban population Rural population No of Year territory of settlements in urban areas in rural households the City of settlements areas Vranje 1981 82,527 44,094 53.43 38,433 46.57 12,256 1991 85,591 51,215 59.84 34,376 40.16 16,516 2002 87,288 55052 63.07 32,236 36.93 26,799 2011 83,524 60,485 72.42 23,039 27.58 25,839 Source: Sustainable development strategy of the City of Vranje 2010 – 2019 When looking at the age of people residing in Vranje, the largest group is from 18-64 (65%) followed by the age group 0-17 (19%). This indicates that Vranje is in a bit better situation than the rest of Serbia which faces the problem of ageing population. Other characteristics of the population in terms of age structure are provided in the table below. Table 2: Population by age group, by gender, 2015 Age Women Men Children up to 6 years of age 2,641 2,841 (pre-school age) Children from 7─14 years of 3,419 3,631 age (elementary school children) Children 15─18 years of age 1,853 1,983 (secondary school children) Children (0─17 years of age) 7,444 7,943 Youth (15─29 years of age) 7,434 7,974 Working age population 27,398 28,676 (15─64 years of age) 2 Apart from Serbs that constitute a majority, there is a significant number of Roma (2,750 or 4.99%) residing in Vranje. Most Roma live concentrated, in several settlements that are located in Vranje. Graph1: Ethnical structure of the population in Vranje in % 1.74 0.31 0.71 5.57 Срби Роми Бугари Македонци Остали 91.67 Source: Republic Statistical Office, Census data 2011 3. Labour market data 3.1. Labour force The labour market in Vranje is characterised by low level of activity, unfavourable education/qualification structure of the unemployed and the mismatch between supply and demand of skilled labour. According to 2011?? Census data, City of Vranje has 34,579 economically active people who constitute 41.4% of the total population. Over 58% are inactive. Table 3: Overview of economically active/inactive population in Vranje Economically active Population Economically inactive Employed Unemployed City of 83,524 24,915 9,664 48,940 Vranje Source: Republic Statistical Office, Census Data In Serbia, the unemployment rate is not available for the level of the municipality so only official data that can be used to illustrate unemployment are data provided by the National Employment Service Local Branch office on the number of registered job seekers (around 7,000 in May 2017). It should be noted though that the unemployment rate for 3 the region of Southern and Eastern Serbia, to which Vranje belongs, is traditionally high when compared to the national unemployment rate. According to labour market statistics that are available for the Southern and Eastern region, the unemployment rate is 14.2% while at the national level unemployment rate stands at 13.8%2. The unemployment rate for young people from 19-24 years of age is highest in this region, reaching 32% while for comparison in Vojvodina region youth unemployment rate is 24.5%. 3.2. Social and human resources development The low education level of the working age population is the most significant challenge when talking about human capital in Vranje. Lack of qualifications is frequently accompanied by inactivity and/or long-term unemployment as it will be shown in the later section. The second group of challenges includes poor quality and low relevance of all levels of education, resulting in insufficiently developed competencies of the workforce. In addition, secondary education is not adapted to the needs of the economy and the educational system does not enable young people to acquire practical skills that are relevant in the labour market. For example, Vranje has about 10 shoe producing businesses that employ over 100 people each but does not have a VET school that offers education relevant for this economic sector. In previous times when Koštana, large shoe making factory that employed around 3,000 people operated, there were adequate educational profiles that supplied qualified workforce, which is now about to retire. With no educational profile that can supply the qualified workforce for the existing business individual employers are forced to find the way to train people on the workplaces. The third group of challenges includes low coverage by quality education, particularly concerning children from vulnerable groups (Roma, returnees, and children from low- income families, children with disabilities and children living in rural areas). Roma children are particularly affected as most of them complete only primary education and face significant difficulties in finding employment both due to lack of qualification and discrimination. 2 Republic Statistical Office, Labour Force Survey data for 2016 4 3.3. Employment statistics When observing the period from 2010 to 2017, the number of employed in Vranje had its peak in 2012, while in the subsequent years this number started decreasing, dropping from 22,444 in 2014 to 20,906 people employed in 2015. The highest number of people is working in processing industry (7,453), followed by trade and vehicle repair (2,725) and public administration (1,545) while the rest is employed in other fields. However, it is worth noting that informal employment is quite high so the presented figures related to employment do not catch a significant portion of employment. Having in mind that informal employment is estimated at 22% at the national level it is very likely that similar situation is in Vranje. Graph 2. Number of employed in Vranje from 2010 – 2015 3.4. Unemployment statistics At the registry of the National Employment Service (NES) - branch office Vranje, at the end of May 2017 there were 7,724 unemployed people, of which 3,941 women (51%). When comparing unemployment data from December 2016, the slight decrease in registered unemployment can be noted (7,896 registered unemployed in December 2016). The graph below shows the number of unemployed from 2010 until 2016 Graph 3. Number of unemployed in Vranje from 2010 – 2016 5 9200 9000 8800 8600 8400 8200 8000 Number of unemployed 7800 7600 7400 7200 7000 Jun-14 Jun-11 Jun-12 Jun-13 Jun-15 Jun-16 Dec-14 Dec-11 Dec-12 Dec-13 Dec-15 Dec-10 Note: Data in the table are capturing only those that registered with NES while the actual number of unemployed is higher The most prevalent problem in the City of Vranje is the unfavourable educational structure of the unemployed, most of which have no or low levels of education/qualification, combined with worryingly long unemployment spells.