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Labour Markets and Employability Trends and Challenges in Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine

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Labour Markets and Employability Trends and Challenges in Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine CONTACT US Further information can be found on the ETF website: www.etf.europa.eu For any additional information please contact: European Training Foundation Communication Department Villa Gualino Viale Settimio Severo 65 I – 10133 Torino LABOUR MARKETS AND E [email protected] F +39 011 630 2200 EMPLOYABILITY T +39 011 630 2222 TRENDS AND CHALLENGES IN ARMENIA, AZERBAIJAN, BELARUS, GEORGIA, REPUBLIC OF MOLDOVA AND UKRAINE TA-30-10-487-EN-C HOWTO OBTAIN EU PUBLICATIONS Our priced publications are available from EU Bookshop (http://bookshop.europa.eu), where you can place an order with the sales agent of your choice. The Publications Office has a worldwide network of sales agents. You can obtain their contact details by sending a fax to (352) 29 29-42758. Europe Direct is a service to help you find answers to your questions about the European Union Freephone number (*): 00 800 6 7 8 9 10 11 (*) Certain mobile telephone operators do not allow access to 00 800 numbers or these calls may be billed. More information on the European Union is available on the Internet (http://europa.eu). Cataloguing data can be found at the end of this publication. Luxembourg: Publications Office of the European Union, 2011. ISBN: 978-92-9157-592-3 doi:10.2816/14590 © European Training Foundation, 2011. Reproduction is authorised provided the source is acknowledged. Printed in Italy © Cover photos: 1 ETF/A. Ramella, 2 & 3 ETF/A. Jongsma LABOUR MARKETS AND EMPLOYABILITY TRENDS AND CHALLENGES IN ARMENIA, AZERBAIJAN, BELARUS, GEORGIA, REPUBLIC OF MOLDOVA AND UKRAINE UMMUHAN BARDAK (ED.) WITH CONTRIBUTIONS FROM JESÚS ALQUÉZAR SABADIE, ANASTASIA FETSI AND Dr CONSTANTIN ZAMAN 3 PREFACE The European Union (EU) has established a policy framework called the European Neighbourhood Policy (ENP) to reinforce relations with its neighbours by means of greater political, security, economic and cultural cooperation and participation in various EU programmes and activities. The ENP provides for enhanced preferential trade relations and supports the prospect of a stake in the EU’s internal market in return for legislative and regulatory approximation. It covers, among other priorities, enhanced dialogue and cooperation regarding social dimensions, including socioeconomic development, employment, social policy and structural reforms (European Commission, 2004). The EU encourages its neighbours to reduce poverty, create employment, promote core labour standards and social dialogue, improve working conditions and enhance the effectiveness of social safety systems through the promotion of decent work (European Commission, 2006b). Significant internal developments within the EU include the recent launch of Europe 2020 (the successor to the Lisbon Strategy) with its integrated guidelines for growth and jobs, active participation in the Bologna (higher education) and Copenhagen (vocational training) Processes, and the European Qualifications Framework (EQF). Finally, a new policy initiative entitled New Skills for New Jobs aims to build better bridges between education and work and ensure a better match between skills and labour market needs through regular assessments of future skill and job requirements (European Commission, 2008a). Although all these were developed with the EU member states in mind, they increasingly have external implications for cooperation with neighbouring states. The Bologna and Copenhagen processes, for example, could act as voluntary cooperation frameworks for improving quality, transparency and the recognition of qualifications in the education and training systems of partner countries1. Through the ancient Silk Road and now the modern oil pipelines, the Black Sea has been and continues to be at the crossroads of trade and migration routes. This important cultural, political and economic triangle connects Europe, Central Asia and the Middle East. It moved ideologically closer to Europe after the dissolution of the Union of Soviet Socialist Republics (USSR). With the accession of Bulgaria and Romania to the EU in 2007, the Black Sea has become as much of a European border as the Mediterranean and Baltic Seas. The past 15 years have witnessed a great number of regional initiatives aimed at bringing together the countries in the Black Sea region. In 2007 the EU made an effort to streamline these initiatives, within the general framework of the ENP, through a complementary regional Black Sea Synergy cooperation initiative (European Commission, 2007a) for this distinct geographical area, which is rich in natural resources and an important hub for energy and transport flows, and which represents an expanding market and great development potential2. Finally, an EC Communication and the official launch of the Eastern Partnership (EaP) in May 2009 established the EU’s commitment to its Eastern neighbours: to provide a regional framework that complements different bilateral relations and strengthens European support for the countries included in the Eastern Partnership – Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova3 and Ukraine (European Commission, 2008b, 2008c). This framework envisages a more comprehensive institution-building programme, a comprehensive free trade area, and mobility and security pacts, with special emphasis on support mechanisms for economic and social development. In line with these developments and the pressing employment challenges facing the six Eastern neighbours, the European Training Foundation (ETF) initiated its Black Sea Labour Market Review project based on the implementation of country reviews in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine, to be followed by a comparative regional study aimed at analysing the trends and challenges of labour markets and the employability of human capital. The overall objective was to improve labour market analysis and forecasting for evidence-based policies in reviewing human capital development systems in the light of new skills for new jobs. Other specific objectives were to raise awareness and exchange experiences among key stakeholders (particularly labour and education ministries) and among the countries, and to provide technical support to the European Commission. The end of the Soviet era and the transitional crises of the early 1990s produced a rapid deterioration in living standards and increasing political instability in the six Eastern partner countries. The first decade of transition was generally characterised by the destruction of infrastructures; a sharp decline in industrial and agricultural outputs, real income, consumption and capital investment; and widespread poverty. A decade of painful transition was followed by a recovery 1 While the Bologna process is about creating a European Higher Education Area through comparable undergraduate and postgraduate degrees organised within a three-cycle structure, the Copenhagen process is a voluntary cooperation framework for vocational education and training through a single framework for transparency, quality assurance, a credit transfer system and validation of non-formal learning. All Eastern partner countries (except Belarus) are part of the Bologna process, while the Copenhagen process is open only to candidate countries. 2 According to the European Commission’s communication COM(2007) 160, the Black Sea region includes Bulgaria, Romania, Greece and Moldova in the west, Ukraine and Russia in the north, Georgia, Armenia and Azerbaijan in the east and Turkey in the south. Although Armenia, Azerbaijan, Moldova and Greece do not literally border the Black Sea, history, proximity and close ties make them natural regional actors. 3 Hereinafter ‘Moldova’. 4 LABOUR MARKETS AND EMPLOYABILITY period (starting around the early 2000s) marked by real economic growth, increasing integration into the world economy and some progress in reducing poverty. However, despite the significant economic growth that was recorded prior to the recent economic crisis, all six countries have been weak in creating decent jobs, and have experienced a significant contraction of employment. The decline in industry and the increase in labour redundancies have led to the growth of an informal economy, and most newly created jobs are poor-quality and poorly paid service jobs. The weight of subsistence agriculture and small-scale self-employment in the economy has increased, as these represent coping strategies for poor people. In these circumstances, public investment in human capital has decreased, despite the fact that the training needs of individuals and enterprises have changed. The quality of the education systems has also deteriorated considerably. In addition to the problems relating to redundant industries/workers and the restructuring of economies, new graduates from the education system face significant obstacles in their transition from school to (decent) work. Many people have migrated to the economically attractive centres in their countries (rural to urban, mostly to capital cities) or abroad to seek better wages and higher standards of living. Consequently, remittances have become a significant income source for many households. This publication includes seven stand-alone chapters, each focusing on a specific theme from a cross-country perspective. Each chapter opens with a short summary and ends with concluding remarks. Readers can thus choose to read the chapters according to their interests. Overall, the chapters analyse key labour market trends and challenges and the employability of human capital in the six
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