SOCIAL PROTECTION AND SOCIAL INCLUSION IN KOSOVO UNDER UN SECURITY COUNCIL RESOLUTION 1244

Transcription

1 SOCIAL PROTECTION AND SOCIAL INCLUSION IN KOSOVO UNDER UN SECURITY COUNCIL RESOLUTION 1244 European Commission Directorate-General for Employment, Social Affairs and Equal Opportunities Unit E2 Manuscript completed in October 2008 European Commission i

2 This report was financed by and prepared for the use of the European Commission, Directorate-General for Employment, Social Affairs and Equal Opportunities. It does not necessarily represent the Commission's official position. The Institute of Economics, Zagreb Paul Stubbs Amir Haxhikadrija If you are interested in receiving the electronic newsletter "ESmail" from the European Commission's Directorate-General for Employment, Social Affairs and Equal Opportunities, please send an to The newsletter is published on a regular basis in English, French and German. European Communities, 2008 Reproduction is authorised provided the source is acknowledged. ii

3 ACRONYMS CITED IN TEXT... v 1. ECONOMIC, FINANCIAL AND DEMOGRAPHIC BACKGROUND This report Governance, status and politics in historical perspective Main Macro-Economic and Fiscal Trends and Projections Main Demographic Trends and Forecasts Migration trends, Remittances and Refugees and Displaced Persons Main Labour Market Trends Labour market indicators The Informal Economy Education Pre-school education Primary and secondary education Higher Education Vocational Education Quality of Education Education and Exclusion STATISTICAL ANNEX References SOCIAL PROTECTION IN KOSOVO Social Protection in Historical Perspective Main Features of the Social Protection System Institutional and Legal Structures Overview of Types of Benefits and Services Social Protection Expenditures and Financing Strategies for Responding to Social Exclusion Sustainability of the System and Reforms Key Challenges and Assessment (EU objectives) STATISTICAL ANNEX References Poverty and Social Exclusion in Kosovo Researching Poverty and Social Exclusion in Historical Perspective Poverty Profile Trends in Poverty and Inequality Non-Material Dimensions of Poverty and Exclusion Regional Variations Vulnerable Groups at Risk of Poverty and Exclusion At risk of poverty trends Child Poverty and Exclusion Gender-based Exclusion Minorities and Exclusion The Impact of Social Transfers and Remittances on Poverty Alleviation Key Challenges STATISTICAL ANNEX References Pension Systems Pensions in Historical Perspective Overview of Existing Pension Systems A New Pension System... 53

4 4.2.2 A New Pension System Number of beneficiaries and contributors Main Reforms Adequacy of Pensions, Exclusion and Vulnerable Groups Sustainability of Pension Systems Public Awareness and Acceptance Future Trends, Key Challenges and Assessment (EU objectives) STATISTICAL ANNEX References Health and Long-Term Care Health Status of the Population Environmental Factors Affecting Risk Structure of the Health Care System Context - historical background Current Organization of the Health Care System Health Care Financing and Expenditure Current provision of health care services Quality of services Long-term care Health Care Reforms Key Challenges STATISTICAL ANNEX Key Challenges Evidence-based policy making Governance, Co-ordination and Involvement of All Stakeholders Children s Policy: a missing dimension An Holistic Social Inclusion Strategy Reference iv

5 ACRONYMS CITED IN TEXT GDP Gross Domestic Product ADL Activities of Daily Living AP Autonomous Province BPK Banking and Payments Authority of Kosovo CBR Crude Birth Rate CEDAW Convention on the Elimination of All Forms of Discrimination Against Women CEFTA Central European Free Trade Area CMR Child Mortality Rate CSW Centre for Social Work CVET Council for Vocational Education and Training DFID United Kingdom Government Department for International Development DLE Department of Labour and Employment DSW Department of Social Welfare EAR European Agency for Reconstruction EC European Commission ECFIN European Commission Directorate General on Economic and Financial Affairs ETF European Training Foundation EU European Union EULEX European Union Rule of Law Mission EUSR EU Special Representative Euro (currency) FDI Foreign Direct Investment FMC Family Medicine Centre HBS Household Budget Survey HDI Human Development Index HDIS Human Development Indicators Survey HIS Health Information System HP Human Poverty Index ILO International Labour Organisation IMF International Monetary Fund IMR Infant Mortality Rate IPEC International programme on the Elimination of Child Labour IPH Institute of Public Health ISP Institute for Social Policy JIAS Joint Interim Administration Structure KDSP Kosovo Development Strategy and Plan KFOR Kosovo Force KLA Kosovo Liberation Army KPST Kosovo Pensions and Savings Trust KSPP Kosovo Social Protection Project LSMS Living Standards Measurement Survey MD Managing Director MDGs Milennium Development Goals MDRI Mental Disability Rights International MEF Ministry of Economics and Finance v

6 MEST MLSW MOH MTEF MTS NATO NGO OECD OSCE PISG PTSD SFRY SOK SRSG UNDP UNFPA UNHCR UNICEF UNKT UNMIK UNSC VAT VET WHO Ministry of Education, Science and Technology Ministry of Labour and Social Welfare Ministry of Health Medium-term Expenditure Framework Moth Teresa Society North Atlantic Treaty Organisation Non-Governmental Organisation Organisation for Economic Co-operation and Development Organisation for Security and Co-operation in Europe Provisional Institutions of Self-Government Post-traumatic Stress Disorder Socialist Federal Republic of Yugoslavia Statistical Office of Kosovo Special Representative of the Secretary General United Nations Development Programme United Nations Population Fund United Nations High Commissioner for Refugees United Nations Children s Fund United Nations Kosovo Team United Nations Mission in Kosovo United Nations Security Council Value-added Tax Vocational Education and Training World Health Organisation vi

7 1. ECONOMIC, FINANCIAL AND DEMOGRAPHIC BACKGROUND 1.1. This report In June 2007, the European Commission Directorate General for Employment, Social Affairs and Equal Opportunities commissioned studies on Social Protection and Social Inclusion in Albania, Bosnia and Herzegovina, Montenegro and Serbia. Alongside this, a shorter report on social protection and social inclusion in Kosovo Under UN Security Council Resolution 1244 was also commissioned. This report is meant to analyse, as appropriate, the structure and perspectives of modernisation of the social protection system of Kosovo under UN Security Council Resolution 1244, against the background of current economic, demographic and social trends. It focuses on the three recently streamlined topics covered by the EU Open Method of Coordination social inclusion, pensions and health and long-term care. The report follows the same structure of the other reports. Chapter 1 explores the broad economic, political and demographic context and explores trends in labour markets and educational systems. Chapter 2 addresses social protection systems including social assistance, social insurance and social services. Chapter 3 analyses poverty and social exclusion as well as identifying the groups which are most vulnerable. Chapter 4 focuses on old age, survivors and disability pensions. Chapter 5 addresses access to health services and long-term care. Both chapters address issues of financing and sustainability as well as equity in the context of current and proposed reform efforts. Chapter 6 draws conclusions and notes the key challenges in terms of modernising responses to social exclusion and reforming Kosovo s social protection system. Even more than in the other studies, problems of data collection and validity are to the fore here, in part a product of Kosovo s complex history and in part a result of the stage of development of statistical systems and the absence of a recent reliable census Governance, status and politics in historical perspective Kosovo has a complex and contested history and status in relation to Serbia and the Federal Republic of Yugoslavia since it became formally part of Serbia after the London conference of After the Second World War, Kosovo was an integral part of the Republic of Serbia within the Socialist Federal Republic of Yugoslavia (SFRY). It had a mixed Albanian and Serbian population, with many ethnic Serbs encouraged to settle in Kosovo during this period. The relatively liberal 1974 SFRY Constitution granted Kosovo and Vojvodina the status of Autonomous Provinces (APs) within the Republic of Serbia. Whilst not being, formally, republics, the APs had many of the powers associated with the status of federal units. In Kosovo, this resulted in a much larger proportion of Albanians taking leadership positions in the province's politics and administration from this date. Despite considerable channelling of resources to Kosovo and other underdeveloped regions in SFRY, the province remained the poorest part of the federation, with relatively poor social and economic conditions (see section 1.3 and chapter 3 below). After the death of SFRY President Josip Broz Tito in 1980, the province experienced a number of political and economic crises with Albanian student protests in 1981 demanding full status as a Republic. Throughout the 1980s tensions grew, with a number of arrests made for allegedly subversive activities. Matters came to a head in 1989 with miners in the Trepça/Trepća mine complex organising an underground strike, originally in protest over not receiving their wages, but which also became the focus of political 1

8 demands. At the same time Serbian Party leader Slobodan Milošević used a speech on the 600th anniversary of the battle in which Serbia had lost Kosovo to the Ottoman Empire, to rekindle Serbian nationalism, following this with the introduction of 'emergency measures' and the abolition of Kosovo's status as an AP. The majority Albanian population, expelled en masse from positions in the political leadership and in public administration, declared a Kosovo Republic, under the Presidency of Ibrahim Rugova, withdrawing from Serbian institutions and declaring a parallel society and education system. As the wars of the Yugoslav secession began in 1991 and 1992, Kosovo was not the focus of international attention. By the time of the Dayton peace agreement in December 1995, which did not extend its focus to Kosovo, Rugova's policy of non-violence was increasingly being criticised from within as ineffective. In 1998, armed clashes occurred between the newly formed Kosovo Liberation Army (KLA) and Serbian security forces, and fighting spread from small rural areas throughout the province, leaving some 300,000 people, mainly ethnic Albanians, displaced. In October 1998, a ceasefire was agreed and an international monitoring mission of the OSCE was formed. As intensive fighting resumed in February 1999, the six-nation Contact Group persuaded both sides to attend talks in Rambouillet, France. The Rambouillet Agreement, signed by the Albanian delegation but rejected by the Serbian Government, granted Kosovo a kind of interim autonomy with the presence of a NATOled peace-keeping force and with Serbian forces allowed to patrol the border but, otherwise, either essentially demilitarised or withdrawn. The final status of the province was to be settled after three years. With Serbia continuing to use force after the collapse of the agreement, NATO launched a bombing campaign over Kosovo and The Federal Republic of Yugoslavia in March 1999, without specific authorisation from the United Nations Security Council (UNSC). Between March and June 1999, an estimated 800,000 refugees fled into neighbouring Albania, the Former Yugoslav Republic of Macedonia (henceforth Macedonia), and Montenegro, threatening wider regional instability. Some 200,000 people were internally displaced or homeless inside Kosovo itself. After 78 days Milosevic agreed to admit NATO-led Kosovo Force (KFOR) into Kosovo and to withdraw his forces. In June 1999, the United Nations Security Council (UNSC) passed Resolution 1244, mandating KFOR s presence and a UN interim administration (UNMIK) with a Special Representative of the Secretary General (SRSG). UNMIK s role was to establish and oversee Kosovo s institutions within a framework of Yugoslav sovereignty, pending a final settlement which was to take full account of the Rambouillet accords. Tens of thousands of ethnic Serbs and thousands of Roma fled Kosovo in the immediate aftermath, fearing reprisals as ethnic Albanians returned. The situation is further complicated by the existence of Serbian enclaves in which Kosovan Serbs do not recognise the UNSC 1244 bodies or where parallel structures exist with governance of security, health care, pensions, and education influenced by the Government of the Republic of Serbia (cf. OSCE, 2003). These enclaves are mainly in the North bordering Serbia but include parts of other municipalities also. In 2001, a Constitutional Framework was introduced, allowing for parliamentary elections, the appointment of a President and the establishment of provisional institutions of self-government (PISG). The framework reserved a number of key powers for UNMIK which were not to be transferred to the PISG. The PISG established in 2002 was set a series of benchmarks on human rights and rule of law, known as Standards before Status with significant progress needing to be 2

9 demonstrated before final status talks could begin. In November 2003, the Contact Group agreed that, subject to meeting these standards, final status would be reviewed in mid Renewed violence in March 2004 produced a new crisis, with Kosovo effectively partitioned between Albanian controlled territory and Serbian enclaves and border areas. The powers of the PISG were extended and the new SRSG made the beginning of status talks a priority. Kosovo remained in limbo albeit with assurances that there would be no return to the status quo of March 1999, no partition, and no union with another country. In October 2005 UN special envoy Kai Eide reported that the rule of law was insufficiently entrenched, the foundations for a multi-ethnic society had not been created, and that the Serbian authorities had undermined Standards implementation by orchestrating a partial Serb boycott of the provisional institutions. He proposed that Serb-majority municipalities have additional powers and links with Belgrade and concluded that there was nothing to gain in further delaying a process to settle Kosovo s status. The UN later appointed former Finnish president Martti Ahtisaari to lead process talks and in November 2005 the Security Council endorsed the Contact Group s Guiding Principles that no-one should be allowed to block the talks leading to a final settlement. Any settlement was meant to fulfil ten principles, namely that it should 1) comply with international legal standards and contribute to regional security; 2) conform to European standards and assist Kosovo and the region s integration into the EU and NATO; 3) ensure sustainable multi-ethnicity; 4) provide mechanisms for all communities to participate in central and local government, using decentralisation to facilitate coexistence and equity; 5) include specific safeguards for protection of Serb religious sites; 6) strengthen regional security by excluding Kosovo s partition or union with any other country; 7) ensure both Kosovo s security and not allow it to pose a threat to neighbours; 8) strengthen Kosovo s ability to enforce the rule of law, fight terrorism and organised crime, and safeguard multi-ethnicity in the police and judiciary; 9) ensure Kosovo s sustainable economic and political development and its effective cooperation with international organisations and international financial institutions; and 10) specify an international civilian and military presence for some time to supervise implementation of the status settlement, ensure security and the protection of minorities, and support and monitor Kosovo s continued implementation of standards. In December 2005, the European Commission absorbed the UN Standards into a European Partnership with Kosovo. In 2006, the EU Council advanced plans for a poststatus mission presence, and NATO decided in favour of allowing and overseeing the establishment of a small Kosovo-led Security Force. Some direct talks took place in Vienna between the two sides between February and September 2006, but no fundamental agreement was reached. In February 2007 Ahtisaari delivered his Comprehensive Proposal for the Kosovo Status Settlement to leaders from both sides. A revised proposal was presented to a final 10 March meeting. The report was forwarded to the UN Secretary General, with a brief annex defining Kosovo s political status. Secretary General Ban Kimoon forwarded these to the Security Council on 26 March 2007, expressing his full support for both documents. The Security Council dispatched a fact-finding mission to Serbia and Kosovo in late April The UN Security Council failed to agree on a resolution backing supervised independence, and the Contact Group began a new round of negotiations between the sides but, again, failed to reach agreement on a compromise status settlement. At their 3

10 summit on 14 December 2007, EU leaders discussed preparations to proceed towards supervised independence based on the Ahtisaari plan and the deployment of an EU security and rule of law mission. Kosovo declared independence on 17 February 2008, confirming its acceptance of the Ahtisaari plan and willingness to allow NATO forces to remain and for the EU to deploy a new European Union Rule of Law Mission (EULEX). This Mission, including an EU special representative (EUSR) Pieter Feith with a civilian office, and a development and reform commission unit, was approved on 18 February 2008, and, when fully operational, is meant to have a staff of some 3,000 (including 1,900 international staff). Protests in Belgrade and in Serbian enclaves turned violent at times and on 10 March 2008, in large part as a result of the Kosovo crisis, the Serbian Government fell. As of early September 2008, independence had been recognised by 47 out of 192 member states of the UN, and 21 out of 27 EU member states. Status will remain uncertain, however, in the context of opposition to independence from two permanent members of the UN Security Council, China and Russia, and some EU member states. Currently, Kosovo is divided into 30 municipalities covering a surface area of 10,877 sq. km. Based on UNMIK Administrative Directive 2005/11, three pilot municipal units were established as part of the devolution efforts. Ahtisaari's plan calls for the establishment of even more municipalities Main Macro-Economic and Fiscal Trends and Projections Kosovo remained an underdeveloped territory throughout the history of SFRY. Notwithstanding difficulties of comparing calculations of social product with today s notion of GDP, Kosovo s growth rate was consistently amongst the lowest in Yugoslavia. Its per capita Social Product was 49.2% of the SFRY average in 1947, but had fallen to 26.3% by 1984 (SFRY Federal Bureau of Statistics, 1986; 205). (Tables 1.1 and 1.2). The respected Croatian economist Vojnić uses GDP figures which has Kosovo at only 26% of the average Yugoslav GDP by 1989 (Vojnić, 1995; 80). At the end of the Second World War, Kosovo was primarily a rural economy, with SFRY statistics showing that 83.3% of the active population engaged in agriculture, although statistics showing this reducing to 23.3% by 1981 should be treated with extreme caution. Other scholars had the proportion of the population in agriculture as high as 50.1% in 1977 (Singleton, 1979; 13). In 1952, the structure of Kosovo s industrial sector was heavily weighted towards mining, at 72.4% of the total social product of the AP. Again, statistics suggesting this had fallen to 25.4% by 1984, although still the largest sector of the Kosovan industrial economy, may not be completely accurate. In any case, this much lower figure is still higher than for any other sector (textiles and leather accounting for 19.3%) and more than double any other part of SFRY (ibid; 207). There are few reliable statistics for the period from the late 1980s to the late 1990s, although estimates suggest that output declined by over 50% in the early 1990s and by at least a further 20% during the conflict (World Bank, 2004). Whilst war and ethnic conflict certainly had economic consequences, these were compounded by broken trade links in what is a small, landlocked area, lack of investment, bad economic management, hyper-inflation, and sanctions. The energy and mining sectors, once the mainstays of the Kosovo economy, have been run down and now require major restructuring and investment. Thus far, growth has been stimulated by external assistance and infrastructure programmes. 4

11 Kosovo s per capita GDP is estimated at around 1,150 (UNDP, 2008; 6). The Kosovo economy s recent growth (at 3.9% in 2006 and 4.4% in 2007 after an increase of only 0.6% in 2005) is almost exclusively driven by the private sector and by private consumption. Public consumption showed a differentiated picture, as government wages grew in line with private household consumption, whereas growth in public consumption of goods and services was flat. Inflation is low, partly as a consequence of the Kosovo s use of the Euro (EC 2007 and 2008). The adoption of the euro as legal tender has helped authorities in Kosovo to reduce inflation and, as a result, to restore the credibility of macroeconomic policies. Fiscal policy in Kosovo can be considered as a unique case given that Kosovo does not have access to foreign borrowing and the budget deficit cannot be monetised. Therefore, the only way for the government to maintain a reasonable fiscal balance is by expanding the tax base and lowering expenditures, or to be subsidised by international donors. One of the benefits deriving from the adoption of the euro is the elimination of transaction costs related to foreign payments. Euro-isation in Kosovo implies the elimination of transaction costs with economic agents that also use the euro but, of course, it does not eliminate transaction costs with those using other currencies. Kosovo s private sector is mainly small-scale, often micro-enterprises. Agricultural productivity is extremely low as a result of small farm sizes, limited capital stock, and lack of technical expertise. Almost half (47.8%) of all businesses were in retail and wholesale, followed by food processing (9.3%), construction and other social personal services (both 5.3%). The informal economy remains sizeable, affecting the competitiveness of the economy (see below). Notwithstanding a significant growth in 2006 in the exports of mining and processed metal products, the export structure continues to be dominated by scrap metals. Exports are almost entirely to the EU and the South East Europe region. In 2006, the United Nations Mission in Kosovo (UNMIK) signed (on behalf of Kosovo) its accession to the enlarged Central Europe Free Trade Area (CEFTA), including Albania, Bosnia and Herzegovina, Croatia, Macedonia, Moldova, Montenegro and Serbia, which should serve as a catalyst for continued expansion of exports to the region. As the destination for 56% of Kosovo s exports and the origin of 48% of its imports, CEFTA members as a group are clearly the dominant trading partner (EC 2007). An IMF Mission in February 2007 was upbeat about progress in this area, stating that growth has become more sustainable as exports are rising briskly and domestic production is starting to replace imports (IMF, 2007; 1). The latest ECFIN report suggests that exports of goods more than doubled in the first four months of 2008 compared to the first trimester of 2007, with imports increasing by 20% in the same period, leaving the coverage ratio (exports as a percentage of imports) at 10.8% in April 2008, and the goods only trade deficit at 43.6% (EC, 2008; 33). By mid 2007, the privatisation process had yielded 315 million which is held in trust pending the adjudication of claims. Continued problems of the energy sector impede private sector development. Kosovo s power system is technically limited as a consequence of decades of under-investment, and consequently has trouble providing a stable and reliable power supply which meets Kosovo s demand. The electricity utility is reliant on government subsidies. This is only partly a consequence of widespread nonpayment of bills and non-technical losses. The improved performance of the private sector in 2006 was reflected in the trade balance: imports grew only modestly (5%), while exports marked a notable growth (54%), albeit from a very low base. Kosovo continues to suffer high external deficits and 5

12 has one of the lowest export/import coverages in the world (Table 1.3). The imbalance is largely financed by foreign assistance and diaspora remittances, leaving Kosovo highly dependent on foreign inflows. In addition FDI increased by 70% in 2007 compared to the previous year (EC 2008; 33).Wages in the public and private sectors remain among the lowest in Europe, with average nominal wages now at 240 per month (EC, 2008; 33) Fiscal policy is constrained by Kosovo s inability to borrow as other states can. Government revenues have shown a healthy increase from m in 2003 to m in 2005, growing by 2.9% in 2004 and 4.7% in Some 87% of all revenues are tax revenues but of these, 79% are from border taxes, including VAT on imports, excise and customs duties, and only 15% is from income taxes, of which 44% is from personal income tax and 27% from corporation tax (World Bank, 2007; 16). Whilst total expenditures increased considerably year on year until 2004, there was a significant decrease in 2005, in part as a result of a decrease in external assistance. Crucially, whilst in 2000, over 70% of public expenditure was executed by UNMIK, by 2005 the PISG accounted for some 88% (ibid; 17). A new Medium-Term Expenditure framework (MTEF) for (Govt of Kosovo 2008) was prepared ahead of an important donors conference held on 11 July 2008 pledging continued international assistance to Kosovo. It assumes an underlying growth potential of between 3% and 4% per annum, insufficient to reduce unemployment in the face of new entrants to the labour market, and sets four broad policy priorities: economic growth; implementation of the status agreement; good governance; and poverty alleviation and social stability. It notes the lack of a real macro-economic policy with only fiscal policy at the disposal of the government. In terms of economic growth it emphasises stability, investment and privatisation of the energy sector, improved transport infrastructure, education reform and agricultural investment. It charts a funding gap, cumulatively, of 1.44 billion in the period Economic affairs, mainly transport investments and energy subsidies, is set to account for 34% of the central Government budget in Main Demographic Trends and Forecasts According to a recent estimation from the Statistical Office of Kosovo (SOK), using administrative data from civil register estimations of 2000, at the end of 2007, the total population in Kosovo was estimated to be 2,126,708 (SOK 2008). In the absence of a full census, different estimates of Kosovo s population range from 1.7m. to 2.4m. Trends in population are complicated because the 1991 census, for a number of political reasons, is unreliable and previous censi appear to have under-estimated some groups in the population. Whilst Kosovo has a new census Law from 2003, no date has yet been set by the Assembly for a full census. Data collection on births, deaths and marriages is fairly complete, with gaps during the late 1990s, and survey data including LSMS and HBS data can be used to make broad generalisations. In addition, UNFPA in association with SOK and others, has undertaken two demographic, social and reproductive health surveys, one in 1999 and the second in 2003 (UNFPA et al, 2005) which contain some useful statistics. In terms of ethnic composition, Albanians accounted for 88% of the resident population in 2000 according to the LSMS, with Serbs making up 7% and other ethnic groups about 5%, including Bosniaks, Turks and Roma. The new SOK figures (SOK 2008a) suggest 6

13 that ethnic Albanians now make up 92% of the population in Kosovo, while Serbs account for only 5.3% of the population. As Table 1.5 shows, the proportion of the population which is of Albanian origin increased from the 1961 census onwards. While Europe s population is predominantly ageing and simultaneously shrinking, the population in Kosovo is still growing albeit by declining rates in last decade. The population is still very young, with about one third under 15 years of age and more than half under 25 years of age with a median age of around 23 years. Only about 6% of the population is 65 and older. The active population, between 15 and 64 years of age, is about 61%. Kosovo has, broadly speaking, a triangular population pyramid, despite a squaring at the base and a shortage of males aged 20 to 50, both of which are a result of out migration, discussed below. Overall, there are more women than men, about 50.5% 49.5%. In Kosovo, the dependency ratio is 39% (the dependency ratio, expressed as a percentage, calculates the part of the population aged 0 to 14 years and over 65 as compared to the population aged between 15 and 64). The last UNFPA survey found a decline in the age group, especially amongst males, and more women than men in the age group, again a result of out migration. The survey also found a male/female ratio of between and in favour of males between 0 and 19, which it suggests deserves further exploration. Table 1.6 shows that average household size and number of families in households is high in Kosovo, particularly in rural areas, reflecting the fact that, in Kosovo, households often consist of an extended family unit spanning three or more generations, with relatively few single person households. In terms of fertility and mortality it can be said that Kosovo was for a long time a fast growing population (with high fertility and decreasing mortality rates), but this trend is slowly changing and currently Kosovo is moving towards a slow growing population as we observe declining fertility rates and still low mortality rates. The UNFPA survey estimates Crude Birth Rate (CBR) at 20 per 1,000 population, and a Total Fertility Rate of 3.0, higher in rural areas (3.2) than in urban areas (2.5). This is lower than the number of children which women in the age cohort have, which is closer to 4, and up to 4.5 in rural areas compared to 3.1 in urban areas (ibid). Crude Death rate is about 6.4 per thousand (UNFPA, 2005), suggesting a natural population increase of about 14.6 per thousand population. There are some problems in calculating life expectancy and infant and child mortality rates, not least in terms of low reporting of infant deaths, with life expectancy still at 75 although the IMR (of around 23.7 per thousand) and CMR (around 42 per thousand), both high by European standards, with IMR of only 4.7 in the EU-27 in 2006, suggest lower overall life expectancy (ibid) Migration trends, Remittances and Refugees and Displaced Persons. There is still no reliable census data on migration in Kosovo. The UNFPA survey noted above collected information on those residing in Kosovo in 2003 who were residing abroad in Some 39,00 persons aged 5 or over returned from abroad between these two dates (see Table 1.7), mainly from Germany, followed by Switzerland, Serbia and Montenegro, and Sweden. In terms of absent family members, the 1999 survey found about 225,00 persons absent from Kosovo which, by the time of the 2003 survey, had reduced to about 168,900. The age and gender distribution of 7

14 those absent is noted in table 1:8, showing that over 56% of the absent population is between the ages of 20 and 40, and only 5% is aged 50 or over. Of course, if entire households migrated then these are not shown in these figures. This, combined with the fact that the total number of residents abroad in 1998 (39,000) exceeds the number claiming to be born abroad (27,800), suggests that migration levels increased steeply in this period. Whilst the survey is also not good in terms of timing of internal migration, it shows that more than 10% of the current population of the capital Prishtinë/Priština 1, were born elsewhere in Kosovo or abroad. Peja/Peć has also experienced significant inmigration, whereas the regions of Gjakovë/Đakovica, Gjilan/Gnjilane, Mitrovicë/Mitrovica and Prizren, have all experienced out migration. In terms of refugees and displaced persons, UNHCR figures suggest that whilst most Kosovo Albanians displaced in the 1999 fighting have returned to their homes, Kosovo s Serbs, Roma and other minorities displaced after June 1999 have been reluctant to return. Around 250,000 Serbs and other minorities were displaced from Kosovo in 1999 or subsequently, mainly to Serbia, Macedonia, and Montenegro. On 6 June 2006, a Protocol on Voluntary and Sustainable Return was signed by UNMIK, the PISG and the Government of Serbia (UNMIK, 2006), setting out clear commitments and procedures for sustainable voluntary return. Despite this, voluntary return is extremely slow. UNHCR figures indicate that as of February 2008, 17,938 displaced persons had returned. Between March 2005 and end May 2006, only 2,816 ethic minority persons returned to 25 municipalities in Kosovo (UNHCR, 2006). In 2007, only 1,756 voluntary returns were registered. At the same time, forced returns from Western Europe are ongoing, with around 2,000 people forcibly returned in 2007 (Human Rights Watch, 2008). There is a large Kosovan diaspora, assessed by some to be at least 1 million people (Balaj, 2001). Some 70 percent of this diaspora live in Germany and Switzerland. In Germany the Kosovar Albanian community numbers 350, ,000. In Switzerland the 160,000 Kosovar Albanians are the second largest foreign group after Italian nationals. Remittances home are recognised as an important part of household incomes of the Kosovan population. The Household Budget Survey shows that in 2005, remittances from abroad were the main source of income for 9% of Kosovo households In terms of the amount of income 10% of all income comes from family members abroad and 3% from pensions from abroad. There is a significant differences in terms of the highest level of education of households with 25% of those with only primary level education reliant on remittances from abroad compared to 8% of those with secondary education and 3% of those with higher education (SOK, 2006). World Bank survey suggest that remittances from abroad, including pensions have been rising rapidly, from 35m in 2002 to around 300m in 2006, with projections for a rise to 342m in 2007 (World Bank, 2007; 2). The 2006 figure is estimated to be around 13% of GDP, the third highest in the Western Balkans after Bosnia-Herzegovina and Serbia, and the 11th highest in the world (ibid; 32). Remittances are higher in rural than urban areas, are estimated to reduce poverty by some 7% and to lead to increased inequality. The most recent ECFIN report suggests that in 2007 workers remittances 1 All Kosovo municipalities have names which are different in Albanian and Serbian languages. Wherever possible, both names are given here, the Albanian first. 8

15 grew by 12% compared to 2006 (EC, 2008; 34) and IMF projections see remittances as over 14% of GDP in 2012 (Table 1:4). A more coherent response is needed to provide support for returnees and potential returnees in terms of housing, employment and welfare rights. In addition, there is a need for more attention to remittances as a motor for social development and employment creation, through individual and municipal schemes to advise those emigrants who would like to invest part of their income in Kosovo in order to make those investments sustainable and maximise their potential for job creation in the formal sector Main Labour Market Trends Labour market indicators Generalisations about the formal labour market situation in Kosovo should be treated with extreme caution, in part because of the significant level of informality and semiinformality in the system and in part because of the lack of reliable statistical data. Labour force surveys have been undertaken in Kosovo since 2001, with the 2005 and 2006 surveys using a refined methodology and undertaken in the same month of the year, September. All LFS data need to be set in the context of the absence of reliable population census data. Figures for employment and unemployment showed little change between 2005 and 2006, with perhaps the most interesting feature each year being extremely high gender differences. In the 2006 LFS some 29% of Kosovo s working age population was employed, although for males the figure was 46% whilst for females it was only 12%. 42% of the population was unemployed, 34.6% of males and 61.6% of females. Whilst total activity rates were just over 50%, 72% of males were active compared to only 32% of females (SOK, 2007). Whilst effective dependency rates are high overall with 100 employed for 284 not employed, the male rate is 100: 140 whereas the female rate is 100 : 835 (ibid.). Only 12% of the age group is employed, compared to 38% of the age group and 24% of the age group. Year on year, although rates are not strictly comparable, the overall level of employment in Kosovo has risen from 19.0% in 2001 to 28.7% in A recent World Bank report (World Bank, 2008) cited youth (15-24) unemployment, employment and participation rates as the worst in the whole of Central and Eastern Europe at 76%, 11% and 46% respectively. 44% of unemployed youth have been unemployed for a year or more. The overall registered unemployment rate rose from about 40 percent in 2004 to 42 percent in 2005 (SOK, 2006) - over 80 percent of the unemployed are in such a status for a year or longer. Long-term unemployment, of 12 months or more was at 83.5% in 2005, close to rates in Macedonia and Montenegro. For 2007, the unemployment rate was estimated at 43% (EC, 2008; 33). The downsizing of the international community presence is also likely to have an adverse impact on employment. The extent of subsistence agriculture in Kosovo is hard to gauge. In 2006, 21.4% of all those employed in Kosovo worked in agriculture, above trade at 16.4% and education at 11.7% (SOK, 2007). The 2006 Household Agricultural Survey showed that as many as 1.4 million people belonged to agricultural households although only some 97,600 worked full-time in agriculture. Significantly 13.9% of all farms in Kosovo are less 9

16 than 1 ha. in size (SOK, 2007a). Agriculture accounts for 21.4% of formal employment and 25% of GDP suggesting that subsistence agriculture remains important. Around 200,000 young persons are expected to enter the labour market in the next five years in Kosovo (EC 2007). Kosovo s labour market is unable to absorb this high number, therefore the government is planning to sign agreements with EU countries to send some of its workforce to work as seasonal workers. Even without government agreements, poor socio-economic conditions, high levels of unemployment, lack of economic activity - and a general culture of nepotism which militates against equality of opportunity for many young people in the labour market or trying to enter it will drive high levels of youth to migrate. A number of commentators point to the limited employment opportunities for minorities in Kosovo with an ETF report stating that most have to rely on opportunities created within the minority private sector. An ETF project is focused specifically on enhancing employment opportunities through education and training for minorities throughout the Western Balkans (ETF, 2006, 2007, 2008). The loss of well educated young people will adversely affect both local economies and the overall socio-economic prospects for Kosovo. At local level, this haemorrhage of young people will accelerate the process of economic decline and hollows out the social and community bonds which represent the primary condition for local development. Nationally, the brain drain will affect most levels of the economy and workforce and will deprive Kosovo not only of experienced skilled workers but of the energy, talent and creativity of its youthful generations. The current high poverty and unemployment rates continue to make migration an attractive option for many people, especially the young. Surveys show that about 50% of Kosovo s youth and the share is similar among all ethnic groups would emigrate if they could. The main reasons for seeking to migrate are greater economic opportunity and the chance for a better life in general (UNDP 2006). There are no reliable data or figures on migration. With most legal emigration routes to Europe virtually closed, illegal migration appears to many as the only option. New migration policy develops slowly. Key international agencies have committed themselves to supporting the Kosovo government to address youth employment and migration challenges, both by supporting Kosovo institutions in achieving the targets set by the Youth Employment Plan and by supporting youth through increasing their income generating opportunities and raising their awareness about the options and risks as regards migration. More information is necessary on the links between migration, education and training systems, and labour markets in Kosovo because there is no evidence-based knowledge of the overall consequences of migration in relation to education/skills and labour markets (ETF, 2008). The MTEF is largely silent on the question of employment creation, beyond a vague statement regarding re-training and active labour market policies, and a faith in the employment generating potential of small business. A Framework paper for the donor s conference held on 11 July 2008 by the UK Government s DFID (DFID, 2008) does address this issue. It notes that Kosovo s levels and nature of growth fails to stem the problem of long-term unemployment disproportionately affecting women (60% of the unemployed) and youth (70% of the unemployed). It suggests that 10

17 Kosovo could become an exporter of labour but also calls for broader based growth, public investment, an increase in both educational attainment and in quality vocational training, and an emphasis on employment in agriculture. Similar emphases are suggested by the UN Kosovo Team, together with a specific emphasis on youth employment programmes (UNKT, 2008) The Informal Economy There have been some recent attempts to estimate the size of Kosovo s informal economy, albeit utilising quite different definitions and methodologies. Utilising OECD definitions and a macro-economic household budget model, a recent report (EAR, 2007) calculates the informal economy to account for around 27-35% of Kosovo s GDP in the period Of this some 85% is the informal grey economy, basically work which avoids paying taxes and social security contributions and the other 15% is the informal black economy such as financial fraud or tax evasion. In addition, a black economy in terms of the profits of illegal activities accounts for around a further 300 m to 386 m per annum which, if included, would be about another 15% of GDP. Interestingly, the model puts pensions and remittances from abroad at some 14% of GDP, agricultural subsistence activities at 7.4% of GDP, direct foreign assistance at 9%, and labour remuneration at just under 40% (EAR/B&S Europe, 2007; 28). Interestingly, although the study only notes this briefly, these figures are quite close to other estimates for other Western Balkan economies. Quoting from unpublished World Bank and ILO studies, a Union of Independent Trades Unions of Kosovo report (UIT, 2005), suggests that 49% of active workers were working informally, in terms of not having a signed labour contract and working for a non registered entity. When not paying taxes and contributions is added, the figure rose to 67%. 50% of young people were in a similar position and an astonishing 73% of active young people were not having social security contributions paid. A recent World Bank report (World Bank, 2008) found 20% of all young people who were employed (aged 15-24) worked without an employment contract, almost one third of young people performed unpaid work, and the level of youth informality in terms of not having contributions paid amounted to 67% Education In the aftermath of UNSC 1244, Kosovo s entire education system had to be reformed and, to an extent, restarted. Prior to 1989, Kosovo boasted near universal higher education with enrolment in 8-year primary education as high as 95% (UNESCO, 2004; 80). Between 1989 and 1999, Kosovan Albanian children attended schools within a parallel system but numbers enrolled inevitably declined, by some 13% between 1989 and 1999 (ibid). Responsibility for education passed from UNMIK to the Ministry of Education, Science and Technology in the PISG with a large number of international actors active in education reform, reconstruction and capacity building. There are a great many strategic documents, but the key features of a coherent and comprehensive lifelong learning strategy approach are missing. The previous Kosovo government identified human capital development through education as one of the four priority sectors for Kosovo Economy, Energy, Education and Europe, or the 4 Es. The newly elected government has committed itself to continuing on the reforms already 11

18 started in the Kosovo education system. None of the activities in the operational plans accompanying the strategies have been implemented as foreseen. This is due not only to unrealistic planning but also to low programming and implementation capacities at all levels of the sector, central and regional. Furthermore, the strategies do not include continuing education or post-secondary and nonformal provision. Although social inclusion, integration and lifelong learning are the main guiding themes in each of the strategies, pre-school education, vocational education, science and technology are not addressed sufficiently. There is also little reference made to education outside of the school system (ETF 2008). The Kosovo authorities, supported by development partners, are in the process of reviewing all strategic documents. The process will be enhanced by the operationalisation of the findings of the feasibility study undertaken by the Ministry of Education, Science and Technology (MEST) with support from the Swedish International Development Agency (SIDA). This study, entitled Kosovo Road Map for Improved Education Sector Performance and Aid Effectiveness, should enable the Kosovan authorities to depart from fragmented strategic documents and move towards a strategic framework for lifelong learning as an overarching concept covering all contexts (formal, nonformal, informal) and levels (pre-school, primary, secondary, tertiary, adult, continuing) of education and training. Compared to the regional average, overall public spending on education in Kosovo is low, estimated by the World Bank at between 4.3 and 6.1% of GDP (World Bank, 2005). However, education spending should be higher in Kosovo, given the poor initial conditions and the demographic fact that Kosovo has a very young population with 50 % of its population under the age of 25, and some 33% under 15. In addition, although the share of GDP seams reasonable, Kosovo s GDP is very low, therefore the amount spent on education may not be as high as expected. If we look at trends in the share of government expenditure that went to education in Kosovo we find the education expenditure has increased from 57 million in 2000 to 105 million in 2004 (a 77% increase). However, as a percentage of total budgetary spending, education spending has fallen from 23.4 % in 2001 to 13.5 % of total spending in 2004 decreasing further to around 12% in The total municipal budget for pre-school, primary and secondary education increased from 69 million in 2003 (the year of full decentralization of services to municipalities) to 80 million in 2006 or an overall increase of around 15% (Haxhikadrija 2007) Spending is predominantly on wages/salaries for primary and secondary education, which comprises 65% of all government budgetary expenditures on education or 85% of the total municipal education grant. Furthermore, a brief look at municipal expenditures in 2005 and 2006 revealed that in 2005, 30 municipalities collected altogether 39,775,267 as their own source of revenues, of which only 2,114,619 (5%) were spent on education. This figure was even lower for the 2006 budget. In 2006, 8 municipalities (Shtime/Štimlje, Dragash/Dragaš, Rahovec/Orahovac, Deçan/Dečan, Zubin Potok, Zveçan/Zvečan, Shtërpcë/Štrpce, and Novobërdë/Novo Berdo) did not allocate any funds for education from their own source revenues. At the same time, most other municipalities reduced their share of expenditure on education. Only 6 municipalities increased their funding for education from their revenues 12

19 (Malishëvë/Mališevo, Klinë/Klina, Leposaviq/Laposavić, Mitrovicë/Mitrovica, Skenderaj/Srbica and Kamenicë/Kamenica). Kamenicë/Kamenica has increased its own funds dedicated to education some ten fold (from 9,245 in 2005 to 92,512 in 2006) Pre-school education According to Ministry of Education statistics and others the number of children in Kosovo who attend pre-school institutions is very small. Before the armed conflict of 1999 in Kosovo, pre-school education was divided into kindergartens (age 3-5) and pre-primary education (age 5-6). Yet, only a minority of children had access to preschool institutions and these institutions were mainly located close to the bigger industries to serve workers' children (World Bank, 2005). In the reformed system, preschool in Kosovo includes childcare and kindergarten institutions for children from the age of 9 months to 5 years and also pre-primary services within primary schools themselves for children aged 5 to 6. UNICEF reports that less than 10% of 3-6 year olds have access to pre-school education despite a number of facilities being established in this period by the international organisations from international donor funds. The overall number of public kindergartens in 2006 was 43 (exclusive of kindergartens in the Serb-speaking territories or enclaves). These were mainly concentrated in the urban areas. Of 43 kindergartens, 19 are in one of the six main urban centres: Prishtinë/Priština, Peja/Peć, Prizren, Gjilan/Gnjilane, Gjakovë/Đakovica and Mitrovicë/Mitrovica). The only major exception is Istog/Istok, where the international donor community opened 7 kindergartens. Despite interventions from the donor community, nine municipalities in Kosovo still do not have kindergartens, and hence do not provide any preschool services for the children on their territory. Fourteen other municipalities in Kosovo run only a single kindergarten per municipality. Around 42% of children in Kosovo had not attended any form of preschool (0-5) or pre-primary (5-6) education before enrolling in the first grade of basic (primary) education in 2006 (Haxhikadrija, 2007) Primary and secondary education School enrolment rates in basic education are high in Kosovo. According to Human Development Indicators Survey (HDIS), 95.4 % of children of ages 7-15 were enrolled in primary education in The overall enrolment rate has not increased over the last four years, but the gaps by gender and income level have widened. The enrolment rate drops substantially at secondary level, with only 75.2 % of children of ages enrolled in secondary education. The school enrolment rates for children from non-serb minority communities remain even lower with only 77% of children between the ages of six and fourteen enrolled in school. One in two youngsters leaves school before turning 18. Two out of three youngsters leave the education system without any qualifications. An estimated 12% of pupils drop out of compulsory education and 28% do not finish secondary education. Especially with regards to girls education, Kosovo lags far behind the EU countries and trails most of its neighbours in the region. Continuation rates for girls of all communities between primary and secondary schools (upper secondary education) are lower than for boys (55% against 65%). With only one in two Kosovo Albanian girls continuing secondary education, secondary school enrolment of girls is one of the lowest in Europe. 13

20 It is important to mention that despite high enrolment rates, Kosovo faces serious problems in service delivery due to insufficient space and classrooms. The majority of schools work in two shifts and the ETF reports that 70 schools (about 10% of the total) work in three shifts (ETF, 2007), with some schools working even in four shifts per day. Another problem is the living distance from the school, which affects attendance at schools (especially in the rural areas). From the 2000/2001 school year, primary education started at age 6 with the first cycle lasting for 5 years followed by a second cycle, with subjects taught by specialist teachers, for four years (UNESCO, 2004: 16). The four year general secondary schooling continued as before. The introduction of new curriculum has been slow and schools remain divided along ethnic lines in many cases. UNICEF reports that only 10% of children with special needs have access to primary education, the majority of whom are boys. This is an issue which has led to a number of initiatives from International NGOs seeking to pilot programmes of integration and day and rehabilitation centres. Teachers salaries and opportunities for professional development are poor. The current salaries for teachers in Kosovo, which were introduced in 2000, are low and uniform across the profession. The salary consists of a single flat rate, originally 175 per month and later raised to 180 a month for all teachers, regardless of academic qualification or experience. The result is that there are a large number of poorly-paid teachers delivering poor-quality education without adequate physical resources or complementary services. The new management of MEST, supported by the World Bank, has put teachers certification and the salary regime as the main priorities to be addressed in the coming years, starting from 2008 (World Bank 2008) Higher Education In a sense, higher education suffered the most from the isolation of Kosovo and the parallel system in the 1990s. There are two public universities in Kosovo, the University of Pristine and the Serbian controlled University of Mitrovica. The University of Pristina began to change the academic course structure to three years of undergraduate study leading to a Bachelor s degree, two years leading to a Master s degree and three years leading to a PhD in accordance with the objectives of the Bologna process since 2002/03 to facilitate student mobility and credit transfer among institutions. There has been an expansion of private educational institutions in the last few years, including those specialising in education for minorities and multi-ethnic learning environments. There are some 19 private third level education institutions with just over 10,000 students. The enrolment of public university students shows a slight dip in 2007 after a steady increase from 2002 to Although in 2008 it has become a priority for the Kosovan authorities to enable and provide different incentives to increase the number of students enroled in public universities, the biggest change in this sector is the growth of private universities. In 2007 there were 7,797 students attending graduate and post-graduate courses in private universities, equivalent to 27% of the public university population (ETF 2008). The MEST recognises the urgent 14

21 need to undertake an official accreditation of higher education institutes in Kosovo. Overall, numbers in higher education have increased by 31.2% from 1999/2000 to 2004/5, with some 28,935 students enrolled (ETF, 2006). Problems of the sector include over-politicisation, a lack of ownership of reforms, low morale and salaries, such that most University professors devote themselves to other jobs, and an imbalance between supply of university places and demand. The average time from entry to graduation is 6 years (ETF, 2006). There are suggestions that, of the limited amount of public expenditure on education, a disproportionate amount goes to higher education (UNKT, 2008) Vocational Education At present, there is no higher level of vocational training provision (at ISCED Level 4A) to which students can progress after completing upper secondary school-based programmes, and there are no post-secondary technician education institutions in the VET system of Kosovo. The lack of a qualification framework and a perceived low quality of education are two main challenges of post-secondary education in Kosovo. In April 2006, the Law on Vocational Education and Training was passed in Kosovo to regulate formal vocational education. The objective of the reform was to gear vocational training to the future needs of the labour market and to EU standards. The VET law envisages a combination of school-based education with in-company training. The current structure of VET is divided into three levels each offering a different level of qualification. VET functions quite separately from general secondary education. There are in total 56 VET secondary education schools out of a grand total of 108 secondary schools throughout Kosovo. The VET system is predominantly school-based and is still not aligned with the emerging needs of a market economy. With the disappearance of public enterprises through privatisation, the vocational schools of the former Yugoslav system lost their traditional partners for workshop-based training, and the current curricula have been only partly revised to meet the new requirements. As a result of a lack of a sufficient enterprise economy, not enough practical in-company training is conducted and the private sector does not yet participate systematically in planning and implementing vocational training. On the basis of labour market analyses, vocational training qualifications were standardised and their number reduced. Cooperation between the government education authorities and the social partners was institutionalised with the VET law, which called for the establishment of a Council for Vocational Education and Training (CVET). At present, about 60% of students who complete elementary school do not gain a place in general secondary education (gymnasium). As a result of this shortfall in general education, significant proportions of students following VET are there only because of the lack of real choice in education. In 2006, 55% of secondary school students were enrolled in VET, yet the system is still considered a suitable option for low performers only. As mentioned earlier, no structured links exist between vocational schools and the local economic environment, and this undermines the entire notion of vocational education. The rate of participation in post-compulsory education and training is one of the lowest in Europe. The lack of adult education and continuing training provision is not only the concern of the VET system but, even more, a social problem. 15

22 Quality of Education Despite generally high education standards in Kosovo, educational underachievement has become a significant concern for parents, employers, community leaders and educationalists in different parts of the country. This is seen largely as a result of economic and social conditions associated with post-war and transition. Given the lack of obvious economic opportunity, pathways to employment or higher education, many young people are poorly motivated and fail to meet their educational potential. They leave school unprepared and without qualifications for the world of work. Often poor economic conditions make it a priority for young people to take up any available work in order to help provide for their families, placing education in a secondary position. Illiteracy is becoming more evident in some areas. Rural areas are particularly affected and educational underachievement is a particular problem for young rural women. Much more could be done within the school itself to tackle the problem of underachievement. The ongoing educational reforms will provide some opportunity to bring the curriculum up to date, i.e. greater emphasis upon practical application of theory in professional/vocational schools, a less overloaded curriculum, better text books, and greater student input. Even with these, schools will have to find special measures to identify and support at-risk students supporting family, community and youth outreach workers, to assist potential drop-outs to make the most of their educational experience, despite harsh economic and social conditions. If these conditions are met, the number of school drop-outs is likely to decrease. Improving arrangements for parents, pupils and teachers to work together for better and safer schools would help. In a number of cities, such as Mitrovica, the education authorities have supported innovative projects promoting informal approaches to basic skills acquisition (reading and writing) aimed at eradicating illiteracy. Lessons from these could be used to inform policy makers nationally. The ETF (2008) concludes that education is still supply driven with a lack of mechanisms for accreditation, performance standards, assessment and quality assurance Education and Exclusion Educational exclusion is significant, particularly in terms of the less-educated, young women, ethnic minorities and young people with disabilities. The MEST and the MLSW have made efforts to ensure equal access to education and vocational training, but a lot still needs to be done if they are to live up to their commitments, enshrined in laws and strategy papers. A Women s Literacy Programme launched in 2002 to combat female illiteracy in the countryside has not been built upon, for example. Public employment services under the MLSW have also failed to integrate women into their vocational training programmes and are not responsive to labour market needs. With two thirds of women out of paid work, there is a considerable amount of work to be done to reverse gender-based economic inequalities (UNICEF 2008). In terms of ethnicity, there has been insufficient targeting of social inclusion measures towards ethnic young women and towards rural areas with significant numbers of poor and discriminated ethnic groups. Little affirmative action has been specifically aimed at ethnic groups in secondary education despite evidence of their low educational 16

23 participation and attainment. There are very few projects relating to adult education and training of ethnic groups. The lack of relevant, up-to-date and reliable data on ethnic groups, a general problem in Kosovo, is particularly important in terms of the lack of baseline data on the participation of ethnic groups in vocational training; dropout rates; educational underachievement; and indirect discrimination and mainstreaming. This lack of data hampers the monitoring and evaluation of specific interventions and of national strategies and action plans in general. High expectations are put on the education sector, which is considered, in the complex historical, political and social context of the country, to be a key factor for building an inclusive and peaceful society while reducing poverty, promoting economic growth, and facilitating European integration (ETF 2008). Qualified teachers in minority languages are lacking. The education system for minorities in Kosovo also faces challenges as regards teachers qualified in minority languages, teachers nearing retirement, and physical access to schools recalling restrictions on the freedom of movement for minorities. In , the Faculty for Education for Minority Communities was inaugurated in Prizren. However, access to education in one s mother tongue continues to be sporadic throughout Kosovo. The lack of teachers in minority languages restricts education and training delivery to minority communities. As in other spheres, the education and employment system is characterised by parallel structures. All primary and secondary schools in areas where Serbs are in the majority use curricula, school books and diplomas from the Serbian Ministry of Education. Very little is being done to promote minorities employment and skills. Initiatives aimed at minority groups are scarce and lack coordination, and cross-ethnic community training initiatives are rare. With the exception of those members of minority communities who live in Pristina, and Serbs living in northern Mitrovica, minorities currently tend to live in rural areas, where their standard of living is lower than that of the majority Albanian community. Access to employment is limited. Employment services in Serb enclaves are linked to employment in Serbia, and the parallel systems for vocational guidance are not sustainable. However, as minority issues are weakly promoted in existing employment- and training-related policies and projects, this marginalisation is likely to continue to aggravate relations between ethnic groups. The inherited reality of ethnic segregation between Serbs and Albanians will continue to have an impact on ethnic co-existence in Kosovo in the future. 17

24 STATISTICAL ANNEX Tables and Figures Table 1.1 Kosovo in SFRY, % Avge Annual Growth rates Period SFRY BiH M gro Croatia Maced Sloven Serbia AP Kosovo AP Voj SFRY Federal Bureau of Statistics, 1986; 205 Table 1.2 Kosovo in SFRY, Level of per capita Social Product (SFRY = 100) Period SFRY BiH M gro Croatia Maced Sloven Serbia AP Kosovo AP Voj Ibid. In both tables, Serbia does not include the two APs 18

25 Table 1.3: Exports and Imports from/to Kosovo, July 2008 ( 1,000) Exports Imports COUNTRY Value % Value % Albania Macedonia Montenegro Serbia Turkey Switzerland Bosnia Croatia China EU Others TOTAL Source: SOK External Trade Statistics f Table 1.4: Some of the main macroeconomic indicators for Kosovo GDP ( m.) GDP per capita GDP Growth GDP per capita growth CPI avge Foreign assistance ( m.) Foreign assistance (% GDP) Workers remittances % GDP Source: IMF (2008) web: Aide_Memoire_Final-April-2008.pdf 19

26 Table 1.5: Kosovo Population by Ethnic Origin Census Pop census year Total population Albanian Serbian Others Index , , , ,244, ,584, ,956, Source: SOK (2006) Kosovo and Its Population p2 Table 1:6 Household composition in Kosovo, 2003 No of members Urban Rural Total or more Total No. of households or more Total Source: UNFPA et al (2005);

27 Table 1:7 Country of residence 1998 for residents who had returned by 2003 Country Total Number Percent Germany 18, Switzerland 7, Serbia and Montenegro 3, Sweden 3, Macedonia 1, Holland 1, Turkey 1, France Other/not stated 2, TOTAL 39, Source: UNFPA et al (2005); 66. Table 1 :8 Family members reported absent abroad in 2003 by age and gender Age Males Percent Females Percent Total Percent group Total Total , , , , , , , , , , , , , , , , , , , , TOTAL 111, , , Source: UNFPA et al (2005) ;

28 References Balaj, B. (2001) Kosovo s Albanian Diaspora web: (accessed 21 July 2008). DFID (2008) Growth and Employment: a UK Framework for Policy Development in Kosovo. Web: (accessed 13 August 2008). EAR/B&S Europe (2007) Survey on the Extent and Prevention of the Informal Economy and Money Laundering in Kosovo web: (accessed 13 August 2008) EC (2007) Commission staff working document: Kosovo under UNSCR 1244, 2007 progress report, Commission of the European Communities, Brussels, EC ECFIN-D1 (2008) Candidate and Pre-Accession Countries Economic Quarterly, July web: (accessed 13 August 2008). ETF (2006) Kosovo: ETF Country Plan ETF (2007) Kosovo: ETF Country Plan ETF (2008) Human Resource Development: Kosovo. Government of Kosovo (2008) Medium-Term Expenditure Framework Web: (accessed 30 July 2008). Haxhikadrija, A. (2007) "Budget and legal analysis of early childhood education in Kosovo", Save the Children, Prishtina 2007 Human Rights Watch (2008) Kosovo Note web: (accessed 21 July 2008). IMF (2007) Aide Memoire of the IMF Staff Mission to Kosovo February, web: (accessed 7 July 2008). IMF (2008) Aide Memoire of the IMF Staff Visit to Kosovo April 21 29, web: (accessed 17 September 2008) Ministry of Education, Science and Technology (2003) Strategy for Vocational education, web: (accessed 30 July 2008) 22

29 OSCE Mission in Kosovo (2003) Parallel Structures in Kosovo web: (accessed 21 July 2008) Singleton, F. (1979) Regional Economic Inequalities, Migration and Community Response With Special Reference to Yugoslavia. Bradford Studies on Yugoslavia 1. SFRY Federal Bureau of Statistics (Savezni zavod za statistiku) (1986) Jugoslavia (Yugoslavia) SZS: Belgrade. SOK (2006) Private Income in Kosovo web: (accessed 21 July 2008) SOK (2007) Labour Market Statistics 2007, web: (accessed 13 August 2008) SOK (2007a) Agricultural Household Survey 2006, web: (accessed 16 September 2008). SOK (2008) Statistics of Birth in Kosovo 2007, Series 4: Statistics of Population, June 2008, Prishtina. SOK (2008a) Demographic Changes of the Kosovo Population , Series 4: Statistics of the Population, February 2008, Prishtina. Tyrbedari, A. (2006) Euroisation outside euro-zone: assets and challenges the experience of Kosovo, Banking and Payment Authority of Kosovo, Prishtina, UIT (2005) The Informal Economy in Kosovo: what role for trades unions? Web: my_kosovo.pdf (accessed 13 August 2008) UNDP (2008) Early Warning Report web: (accessed 13 August 2008) UNESCO (2004) Parallel Worlds: rebuilding the education system in Kosovo. Web: (accessed 21 July 2008). UNFPA et al (2005) Demographic, Social and Reproductive Rights Survey July web: (accessed 7 July 2008). UNHCR (2006) UNHCR s Position on the Continued International Protection Needs of Individuals from Kosovo. Web: (accessed 21 July 2008). UNICEF (2008) with Kosovan Stability Initiative Getting to Lisbon: Assessing Vocational Training Needs and Job Creation Opportunities for Rural Women 23

30 UNKT (UN Kosovo Team) (2008) Strengthening the Human Capital of Kosovo, web: (accessed 13 August 2008). UNMIK (2006) Protocol on Voluntary and Sustainable Return, web: (accessed 21 July 2008). Vojnic, D. (1995) Disparity and Disintegration: the economic dimension of Yugoslavia s demise, in P. Akhavan and R. Howse (eds) Yugoslavia: the former and the future. Washington: The Brookings Institute World Bank (2004) Kosovo Economic Memorandum. 17 May, ref KOS, web: M %20with%20amendments.pdf (accessed 21 July 2008). World Bank (2005) Kosovo Poverty Assessment, World Bank, June 2005 World Bank (2007) Public Expenditure and Financial Accountability Assessment Report, web: (accessed 7 July 2008). World Bank (2008) Youth in Jeopardy: being young, unemployed and poor in Kosovo. Report # XK, revised 2 September. 24

31 2. SOCIAL PROTECTION IN KOSOVO 2.1. Social Protection in Historical Perspective Few territories can have experienced more dramatic changes in terms of their social protection systems than Kosovo in the last thirty five years or so. From 1974 until 1989, Kosovo operated its own social protection system as an autonomous province, with legislation aligned with that of the Republic of Serbia and the Yugoslav Federation. Despite being the poorest and least developed part of the Federation, Kosovo was part of the Yugoslav welfare mix of insurance-based benefits, work place welfare, professional social work services in Centres for Social Work (CSWs), and limited social assistance for households with no resources. Contributory-based pensions and unemployment benefits, and means-tested child benefits were under strain, however, throughout the 1980s in the context of economic crises and political tensions. In March 1989, with the abolition of Kosovo's status as an autonomous province, Kosovo became subject to legislation from the Republic of Serbia and all benefit entitlements were incorporated directly into the Serbian social protection system. A number of ethnic Albanian staff administering the various social protection programmes were dismissed and replaced by ethnic Serbs (World Bank, 2001). Those dismissed from their jobs in the public services lost the right to unemployment benefit and ceased to build up pension entitlements. From September 1990, a parallel regime operated, effectively organising Kosovan Albanian society outside of Serbian and Yugoslav state authority (Clark, 2000; Cocozzelli, 2007). Under the guidance of Ibrahim Rugova's Democratic League of Kosovo (LDK) a civil-society based social assistance and social services network was constructed (Cocozzelli, 2007; 204) centred on the non-governmental Mother Teresa Society (MTS), operating semiindependently from parallel regime structures, and with branches throughout the province. According to one account: By 1998, the Mother Teresa organisation had over 7,000 volunteers and 1,700 doctors, with 92 clinics around the province. The society also operated a maternity clinic in Pristina, provided special services to the disabled and elderly and distributed food and clothing to over 30,000 needy families a year. Branches were established in Switzerland, Germany, Sweden and the US. (Demolli, 2002). The humanitarian work of the MTS and other associations complemented the basic social protection for Kosovan Albanians provided through strong extended family structures and bolstered by significant remittances from Albanian communities outside Kosovo. The formal Republic of Serbia social protection system and the network of Centres for Social Work worked primarily with non-albanian Kosovans. MTS continued to work during the massive humanitarian and refugee crisis from the time that the Kosovo Liberation Army (KLA) began its insurgency in 1998 and, in particular, during the period from the start of the NATO campaign on 24 March 1999 until the agreed withdrawal of Yugoslav forces. The passing of UN Security Council Resolution 1244 on 10 June 1999 established the mandate of the United Nations Mission in Kosovo (UNMIK), and an international civil presence whose responsibilities (see chapter 1) inter alia included: 25

32 b. Performing basic civilian administrative functions where and as long as required; h. Supporting, in coordination with international humanitarian organizations, humanitarian and disaster relief aid; (and) k. Assuring the safe and unimpeded return of all refugees and displaced persons to their homes in Kosovo. (UNSC, 1999). Cocozzelli (2007) suggests that, in practice, recent social policy formation in Kosovo can be divided into three distinct phases, to which we have added a, new, fourth phase, thus: Phase I (1998 to August 2000): an emergency crisis response, not well co-ordinated, in which a large number of mainly international NGOs, and local partners, usually the MTS but sometimes the local Red Cross or an ad hoc 'emergency committee', distributed humanitarian assistance, primarily food aid, to as much of the population as possible. From October 1999, donors reduced the level of food aid by 15-20% in the most severely affected war areas and by up to 40% in those areas with little war damage, necessitating the introduction of targeting and means-testing through a system of beneficiary classification which later became the model for differentiated social assistance benefits (Cocozzelli, 2007; 208). Phase II (August 2000 to late 2001/early 2002): a transitional phase in which UNMIK led a consortium of international NGOs and donors in establishing an UNMIKadministered social assistance safety net, dissolving UNMIK Pillar 1 responsible for humanitarian assistance, under the lead of UNHCR, and establishing a Department of Health and Social Welfare (DHSW), with an international civil servant as its first Director, within UNMIK s Joint Interim Administration Structure (JIAS). The DHSW quickly re-established the network of CSWs and launched, in late summer of 2000, an initial social assistance scheme combining vouchers redeemable for cash with some food aid. Phase III (2002 to late 2006): increasing local ownership of the social safety net, with the establishment of Provisional Institutions of Local Self-Government (PISG), the formation of a Kosovan Government in February 2002, and with a shift in localinternational roles within the relevant Departments, with internationals now acting as advisors to Kosovan officials. In September 2001, a Ministry of Labour and Social Welfare was created, organised into a Department of Labour and Employment (DLE) and a Department of Social Welfare (DSW). It should be noted, however, that Despite the elections and the formation of a government, the pattern of international domination over social policy making continued (Cocozzelli, 2007; 213), with regulations on pensions passed in December 2001 (see chapter 4) and on social assistance in August 2003, based on the scheme developed in phase 2, examples of this. Phase IV: (2007 to the present): the elaboration of a more holistic social protection system, with a somewhat clearer administrative structure appropriate for supervised independence, guaranteeing certain rights to minorities, allowing for decentralisation of the system, and building up community-based social services. Whilst international 26

33 consultants and advisors continue to play a role, the reforms are increasingly being led, at least in principle, by Kosovan policy makers. Whilst an important step, the declaration of independence in February 2008 is only part of this process in which key international financial institutions try to reframe their assistance to Kosovo through loans as well as grants. At the same time, through the EU partnership, Kosovo s social protection system is receiving more technical support from EU agencies and programmes Main Features of the Social Protection System Institutional and Legal Structures Currently, the institutional structure of social protection in Kosovo is essentially topdown with deconcentrated CSWs carrying out the policies of the Ministry of Labour and Social Welfare, through the Department of Social Welfare and the Divisions of Social Assistance and Social Services (figure 1). 27

34 Figure 2.1: The Ministry of Labour and Social Welfare: an organogram Ministry of Labour and Social Welfare Permanent Secretary Kosovo Pension Administration Department of Social Welfare Department of Labour and Employment Department of Institute of Social Policy Central Administration Services Division Department for War victims Budgetary planning and Poverty Assessment Division of Social Assistance Division of Social Services Division of Institutions Centres for Social Work Shtimle Special Institution Elderly Home - Pristina Children s Home - Shtimle Children s Home - Gracanica Other Residential Homes Source: DFID (2006) 28

35 The MLSW, DSW and its divisions and the ISP The DSW within the MLSW is responsible for all matters relating to social protection at governmental level. Reforms initiated in 2004, created three divisions within the DSW, responsible for social assistance, social services and institutions. The Institute of Social Policy (ISP) is a department existing alongside the DSW, tasked with carrying out research for all MLSW departments. Despite having a staff of 16, it is widely recognised as a weak institution, having had many different mandates and being subject to diverse international consultancy missions and internal political interventions since its re-establishment in According to the Social and Family Services Law of 2005, the MLSW is tasked inter alia with the overall organisation and strategic planning of social and family services, specification of professional standards, inspection, providing social services in exceptional circumstances, and establishing or approving residential services for those in need. The DSW has more specific responsibilities of advising the Ministry and Government on social and family services policy, collaboration and co-ordination with other bodies, and overseeing all aspects of the law, reviewing and approving municipal plans, and being directly responsible for foster care, adoption and guardianship matters. The Division of Social Assistance oversees Kosovo s Social Assistance Scheme discussed in detail below. The Division of Institutions oversees the operation of a number of institutions, also discussed below. The Division of Social Services is meant to oversee the work of CSWs which, in the future, are to become devolved units of municipalities. Centres for Social Work (CSWs) and Governance of Social Protection Centres for Social Work (CSWs) are the mainstay of social protection in Kosovo. After being re-established under international supervision they are responsible for the administration of the social assistance scheme and for assessment, placement and preventive services for those in need. Instead of delimiting roles according to professional boundaries (between social workers, lawyers, psychologists, and so on) as had been the case throughout former Yugoslavia, new generic social work officers have been created, working under a director and, usually, a team leader in, either, a unit for social assistance or a unit for social services (smaller CSWs have only one unit covering both functions). There are 31 CSWs in Kosovo with 506 approved staff in 2006, earning an average of 205 per month (DFID, 2006). An early, and quite contentious OSCE report on CSWs pointed to the gender imbalance in staffing out of 252 workers in CSWs in 5 regions, 160 were male and 92 female, and out of 24 Directors, only two were female (OSCE, 2003; 26). There is also a General Social and Family Care Council functional since 2006 with 21 members meeting monthly. Supported by the World Bank and DFID there is still a Certificate Programme in Social Work in Priština training a new cadre of social workers for CSWs and for NGOs. In May 2007, the PISG established the Inter-ministerial Committee on children's rights, chaired by the Prime Minister. It is composed of line ministries, the Office of Good Governance, UNICEF and three representatives from the Forum on Children's Rights. 29

36 2.2.2 Overview of Types of Benefits and Services As a system essentially designed from scratch and under international supervision and support, Kosovo has a limited number of social protection benefits. Notably, there are no unemployment benefits, no maternity allowance, and no child benefits scheme although the basic social assistance scheme is designed to distinguish between those capable of, and not capable of, work, and those with or without dependent children, hence playing proxy to both unemployment benefits and child benefits. The schemes of pensions and disability pensions are discussed in chapter 4. Here, we limit ourselves to a description and analysis of three (or perhaps four) schemes: the Social Assistance Scheme (in a sense two schemes in terms of eligibility under Category I and Category II), the Disability Allowance Scheme, and the War Invalids Scheme. The Social Assistance Scheme The scheme is, to all intents and purposes, a revised version of the one introduced in 2000, as amended by a Law on Social Assistance in 2003 (Law 2003/13). It is the main poverty alleviation tool, funded from the general budget. It is paid to families (defined as no more than two generations living in the same household) including individuals living alone. Category I recipients are those families where no one is capable of work, and/or where the only adult capable of work is looking after an incapable person over 65, and which has no income and no more than half a hectare of land. Category II recipients include households where any member capable of work is registered as unemployed, and which has a child under 5 years of age or provides fulltime care to an orphan. In the case of lone parents, the child should be under the age of 10. In addition to income and land tests as for Category I, the family should not be in possession of any means of transportation including a tractor or vehicle and must have been on the list for food assistance in the month of September In a sense, Category II social assistance functions, then, as a kind of minimal proxy combination of unemployment benefit and child benefit. Amounts of benefit have remained unchanged from December 2003 and are 35 for a 1 person household; 50 for a 2 person household, rising by another 5 for each additional household member to a maximum of 75 for households with 7 or more persons. Claimants have to approach CSWs and their claim is assessed by social workers and by the Division of Social Assistance in the DSW. Recipient households have to re-apply every six months and may be required to submit proof of eligibility at any time. As can be seen from Table 2:1 in the Annex, the number of recipients, and the overall cost of the scheme, has declined from December 2004 to December A recent DSW paper (DSW 2008) states that, currently some 37,000 households or some 162,000 individuals receive social assistance, a further significant decrease, with average benefit per household of some 52. Although the figures do not show the breakdown between category I and II, it is likely that some category I families have been reclassified as Category II and that some category II claimants have lost entitlements as children reach the age of 5. In addition, as the legal status of land is clarified, more households are excluded under the land ownership rules. The impact of the scheme on poverty alleviation is discussed in chapter 3. Disability Allowance 30

37 This scheme was introduced in 2004 as a result of a Law on Disability Pensions in 2003 (Law 2003/23) after a careful assessment with international consultants establishing criteria in order to minimise possible abuse or fraud. The scheme allows for a disability allowance in the event of certified 100% incapacity defined as complete and permanent disability and lack of capacity to work. It is payable to adults who are permanent residents in an amount of 40 per month, unchanged since its introduction in DSW figures state that there are currently 17,675 beneficiaries so that its annual cost is in the region of 8.5 m. War Invalids and Relatives Benefits This scheme began in 2001 and is currently regulated by a 2006 Law. The benefit can be paid to four different groups of beneficiaries: those disabled as a result of military activity; civilian victims of war and the families of killed combatants (termed war martyrs in the Law); families of missing persons; and custodians of those disabled in war. The amount of benefit varies based on category, degree of invalidity, and number of dependants, effectively ranging from a minimum benefit of 54.60, for a civilian, through to a maximum of 351 in the case of a family with several members killed as a result of war activities (DSW, 2008). The number of beneficiaries and the cost of the scheme is shown in Table 2:2, which also shows that the scheme applies almost exclusively to ethnic Albanians. It has been criticised by both the World Bank and the IMF as non transparent and adding unnecessarily to social expenditures. Residential or Institutional Social Services Kosovo inherited a number of residential care facilities, some of which are total institutions offering low quality of care significant distance away from centres of population. The Department for Institutions in the DSW oversees the following facilities: Shtime/Štimlje Special Institution: This is a residential facility in the town of Shtime mainly caring for adults diagnosed with some kind of mental health problem. A considerable reduction in the number of clients in Shtime occurred in August 2006, with 55 users being transferred to facilities run by the Ministry of Health. As of December 2006, Shtime had 136 residents, equally divided between men and women, with 42% classified as ethnic Serbs, 40% Albanians and 18% others (SOK, 2007; 16). Shtime has long been the subject of concern by numerous international human rights organisations, notably Mental Disability Rights International (MDRI), forming a local branch and working to close the institution 2. Priština Elderly Nursing Home: A residential facility caring for older people with no means of independent living. Again, a reduction in numbers occurred in July and August 2006 as 15 users became the responsibility of the Ministry of Health. As of December 2006, the Home had 106 residents, 57% male, and the ethnic breakdown was: 77% Albanian, 10% Serb and 13% Other (ibid; 18). There have been similar concerns expressed regarding human rights issues in this home concerning those older people with mental health problems Social Protection Expenditures and Financing 2 (accessed 12 June 2008). 31

38 The most comprehensive overview of expenditures on social protection comes from the World Bank s Public Expenditure and Institutional Review (World Bank, 2006). It estimates public expenditure on social protection programmes at 127m in 2005, rising to 134m. in 2007 but falling as a percentage of GDP from 5.4% to 5.2% (World Bank, 2006; 113). This figure does not include a further 56 m. of direct and indirect subsidies, such as utility subsidies which, the report notes, lack transparency and may not be well-targeted. In part as a result of strict spending limits, the share of social protection expenditures as a percentage of government expenditures is low by regional standards, estimated at 12.68% in 2004 (ibid; 117). The social assistance scheme, reaching some 10% of the population, accounts for some 1.4% of GDP (World Bank, 2007). Table 3 in the Annex shows expenditure by the DSW in Whilst there are some inconsistencies in the table, a number of features are extremely important, including: The Social Assistance scheme accounts for most of the budget (82.5%) The budget for social services and CSWs is very small but still dominated by the budget for institutional care, suggesting that community-based social services provided by the central government are practically non-existent (DFID, 2006; 10). The share of salaries in the total budget (around 5.5%) shows the low administrative costs of the social protection system. As noted in chapter 1, budget decisions are constrained in Kosovo by its status under UNSC 1244 and by the inability of the Government, until recently, to borrow and qualify for international development loans. The budgetary allocation process means that slight underspends are more likely than overspends, although in the case of social protection, the issue of back payments can distort the process somewhat. Expenditures by local authorities declined in 2005 compared to Municipalities are largely dependent on central government block grant transfers Main Stakeholders (Including role of international organisations) In addition to the stakeholders noted thus far in this chapter (CSWs, the MLSW, DSW, ISP, and associated sub-divisions), three other significant stakeholders play a role, or are slated to play a significant role in the future, in the social protection system in Kosovo. The Ministry of Health (MoH): in the transition to the PISG the Department of Health and Social Welfare was actually divided into two Ministries, with social welfare combined with Labour issues. Nevertheless, the MoH works on issues which are closely connected to social protection although it does not have any direct responsibilities for the Shtime institution where the majority of residents are diagnosed with mental health issues, nor the elderly home in Priština. The key interface is in terms of Regional Community Mental Health Centres a number of which have been opened in the last four years with the support of a number of international organisations, notably the World Health Organisation (WHO). The 32

39 Centres employ professional staff some of whom divide their time between this work and work in CSWs (DFID, 2006). Non-Governmental Organisations (NGOs): a significant number of International NGOs, often working with local partners, continue to operate in Kosovo. Notwithstanding particular projects, there is little direct linkage between the MLSW and NGOs and, thus far, no system of contracting out social services on a sustainable basis. It is worthy of note that in the space of only a few years, Kosovo s social protection system has changed from being dominated by NGOs to being dominated by governmental provision. Municipal Departments of Health and Social Welfare: Every municipality has a small department responsible for social protection although staffing is low (usually only two officers focus on this issue), not chosen for their specific expertise in social work, and with few direct links thus far with the local CSW or with the MLSW. On an ad hoc basis, the Departments offer in-kind assistance, help in accessing other services, and some supervision of shelter facilities. Crucially, however, under the Family and Social Services law, municipalities will take responsibility for running CSWs and, thus, for providing or enabling the provision of, social and family services for those in need. 2.3 Strategies for Responding to Social Exclusion In the context of the specificity of Kosovo s social protection system and, in particular, the significant role that different international organisations and consultants have had in the planning and development process, until very recently it was not possible to discern a clear Government strategy for tackling social exclusion. Even now, strategic planning is not well developed in the context of the need to respond to emergencies, the limited room for manoeuvre in the context of legislative and fiscal constraints, and other priorities. Perhaps even more importantly, different strategic documents have been developed out of projects which have been financed by international organisations with diverse, if not competing, interests, mandates and agendas. One important recent attempt, in a sense, to move away from a narrow focus on safety nets towards a more European type development strategy, is the Kosovo Development Strategy and Plan, which has undergone a number of incarnations since first being mooted in The last version included a section on Poverty and Social Policy. Currently, the political status of the KDSP in steering development in Kosovo is somewhat uncertain. In addition, there are strategic documents on youth and proposed strategies on persons with disabilities but, thus far, no explicit guiding document on social exclusion. 2.4 Sustainability of the System and Reforms As noted on several occasions above, since the passing of UNSC 1244, a significant number of internationally funded and driven projects and programmes, including those on social protection, have been introduced in Kosovo. The World Bank/DFID Kosovo Social Protection Project (KSPP), a 4.2m USD (approximately 3.3m) project which 33

40 began in June 2001 and, after being extended twice, ended in August 2006, was a significant attempt to introduce an integrated social protection system, repair infrastructure, build CSWs, and train staff. Its overall objectives were 1. to design a basic safety net for the immediate future; 2. design a sustainable social welfare system for the medium term; and 3. develop administrative capacity for delivery of pensions, and invalidity and veterans benefits. Rated only moderately satisfactory in terms of meeting its outcomes (World Bank, 2007), the project was overly ambitious, consisted of often disjointed consultant inputs, had a very weak monitoring and evaluation mechanism in place, and did not take sufficient account of the hand-over from UNMIK to Kosovan control. In addition, training inputs including the delivery of a Certificate and later Masters course in Social Work were delayed and, ultimately in the case of the Masters programme, not sustainable. Reconstruction of CSWs, training of staff, and the elaboration of the basics of the system were, however, important aspects of the project. The World Bank currently has no active involvement in social protection. The KSPP was complemented by a database project funded by UNICEF. Work on decentralisation is crucial in terms of the next phase of reform, but is in its very early stages. A new DFID funded project aims to support decentralisation of health and social services and, in particular, to promote the contracting of non-state providers. At the recent donors conference held on 11 July 2008, a joint EU/World Bank Technical Background Paper on Social Sectors was tabled (EU/World Bank, 2008). In terms of social protection it sets out the following priorities: 1) Expand and strengthen the targeted social assistance programme. Reaping savings from elsewhere, the paper suggests increased spending on this programme, together with improved programme management. 2) Explore the potential for introducing Conditional cash transfers (CCTs). This is something which the World Bank appears to be wanting to pilot in Eastern Europe on the basis of experience in Latin America, involving tying cash assistance to health and educational commitments. This is a controversial idea with disputed benefits in terms of child development compared to, say, introducing child benefits. 3) Cost containment through capping and possibly means-testing of veterans benefits. This is also a common World Bank call throughout the region which is not always well received politically. 2.5 Key Challenges and Assessment (EU objectives) A number of key challenges can be noted in terms of social protection in the future in Kosovo, all of which are underpinned by the broader political, demographic and economic factors noted in chapter 1. In no particular order, these include: 1) the capacity of local municipalities to take over responsibility for CSWs and to develop mechanisms for social planning to deliver sustainable and appropriate social services, including community-based services. 2) the capacity to continue to develop social assistance safety nets which can perform poverty alleviation functions in the context of budgetary constraints, and to adapt these towards supporting the labour market and active inclusion. 34

41 3) the importance of determining minimum standards in the organization and delivery of social services and to guarantee a minimum basket of affordable services. 4) the need to improve co-ordination between social protection, health and employment and vocational services in terms of shared databases, joint working, and so on. In terms of the EU objectives, some progress has been made in terms of the active social inclusion of all, both by promoting participation in the labour market and by fighting poverty and exclusion (Commission objective 2), although the shift from a focus on poverty to one on social inclusion is not yet fully developed and, crucially, linkages between social protection and labour market systems is still rudimentary or crisis oriented. There are both political and economic limits to access for all to the resources, rights and services needed for participation in society, preventing and addressing exclusion, and fighting all forms of discrimination leading to exclusion (Commission objective 1). The existence of parallel social protection systems in the Serbian majority areas is one important aspect of this. In addition, whilst some systems work hard to combat discrimination, others such as the war veterans benefits are clearly targeted to one population group. There are real gaps in terms of ensuring that social inclusion policies are well-coordinated and involve all levels of government and relevant actors (and) that they are efficient and effective and mainstreamed into all relevant public policies (Commission objective 3), including a lack of strategic focus, a lack of popular involvement, and the absence of a focus on particular vulnerable groups such as children and people with disabilities. 35

42 STATISTICAL ANNEX Table 2:1: Recipients and Cost of Social Assistance Scheme Households (index) Family Members Cost (index) (index) ,911 (100) 184,508 (100) 32,479,078 (100) ,052 (93.6) 178,121 (96.5) 31,064,949 (95.6) ,569 (90.3) 174,131 (94.4) 30,362,481 (93.5) Source: Social Welfare Statistics in Kosovo, Kosovo Statistical Office, web: (accessed 11 June 2008). Table 2:2: Recipients and Cost of War Invalids Benefits Scheme Total (Index) December ,815 (100) December ,268 (106.7) December ,528 (110.5) Female Male Serbian Cost 4 (Index) 4,325 2, ,074 (100) 4,602 2, ,817 (109.5) 4,715 2, ,115 (115.3) Average (Index) (100) (102.7) (104.3) Source: Social Welfare Statistics in Kosovo, Kosovo Statistical Office, web: (accessed 11 June 2008). 3 Costs are annual, beneficiary figures are for December. 4 Annual costs are approximately 12 times these figures, hence: 2004: 4,644,88; 2005: 5,085,804; 2006: 5,353,

43 Table 2:3: Department of Social Welfare Expenditures for the Year 2005 (Source: DFID 2006.) Department Employees Salaries and Wages Goods and services Utilities Transfers Capital Total Distribution Social Assistance 10 24,600 31,396 3,600 28,668,000 28,727, Social Services 13 31,980 40,396 4,600 2,550,000 2,626, Institutions , ,362 50,596 80,000 1,202, Centres for Social Work 506 1,244, ,500 57, ,000 2,278, Total 780 1,918,800 1,042, ,296 31,218, ,000 34,835, Distribution %

44 References Clarke, H. (2000) Civil Resistance in Kosovo. London: Pluto Press. Cocozzelli, F. (2007) Kosovo, in B. Deacon and P. Stubbs (eds.), Social Policy and International Interventions in South East Europe. Cheltenham: Edward Elgar; Demolli, G. (2002) The Mother Teresa Society and the War in Kosovo, in Global Policy Forum web: (accessed 10 June 2008). DFID (2006) Devolution of Social Service Provision Kosovo. Birks Sinclair and Associates, mimeo. EU/World Bank (2008) Technical background paper: Social Sectors, 7 July, web: (accessed 13 August 2008) OSCE Mission in Kosovo (2003) Report on Centres for Social Work: Social services, web: 64C5M9-osce-kos-01mar.pdf/$File/osce-kos-01mar.pdf (accessed 13 August 2008) UNSC (1999) Resolution web: (accessed 10 June 2008). World Bank (2001) Kosovo: Economic and Social Reforms for Peace and Reconciliation World Bank 1 February, web: (accessed 10 June 2008). World Bank (2006) Kosovo: Public Expenditure and Institutional Review 19 September, Report # XK, web: /Rendered/PDF/326240XK.pdf (accessed 11 June 2008). World Bank (2007) Kosovo Poverty Assessment vol 1. : Accelerating Inclusive Growth to Reduce Widespread Poverty, October. Web: l1.pdf (accessed 11 June 2008). 38

45 3. Poverty and Social Exclusion in Kosovo 3.1. Researching Poverty and Social Exclusion in Historical Perspective Research on poverty and social exclusion was limited in Kosovo as in the whole of SFRY. Although a Household Budget Survey (HBS) was carried out since 1963, initially on a five-year cycle and, then, annually since 1983, data on poverty in the period until transition is very sketchy and virtually non-existent for the 1990s. Table 3:1 shows that the amount of resources available for Kosovan urban and rural households in 1983 was the lowest in SFRY (SFRY 1986). Table 3:2 shows that the Kosovan population tended to lack basic necessities more than elsewhere in SFRY. Kosovo was included in Yugoslav poverty surveys throughout the 1980s although the results may be questionable. One study notes that by 1989 Kosovo had 8.2% of the whole Yugoslav population but contributed only 2.2% of social product (Posarac et al, 1992). Poverty in Kosovo, measured by a consumption poverty line consistent throughout former Yugoslavia fell from 44.4% in 1978 to 39.8% in 1983, but then rose strongly to reach 81.9% in 1989, compared to the Yugoslav average of 23.5% (ibid). Surveys in the 1990s are not valid given the specific political circumstances. After the passing of UNSC 1244, three poverty assessments have been undertaken supported by the World Bank, with increasing involvement of the Kosovo statistical office (see box). Much of the poverty profile and description of trends and at-risk groups in this chapter come from the third report from In addition, extremely useful work on the non-monetary dimensions of poverty has been undertaken by the UN agencies, in connection with the compilation of Human Development, Early Warning and Millennium Development Goal reports for Kosovo, some of which have been disaggregated on a municipality by municipality basis. Together with academic work re-analysing HBS data, these are the main data sources used. Thus far, little work has been done on compiling EU compatible poverty and social exclusion indicators for Kosovo. World Bank/SOK Poverty Studies in Kosovo survey LSMS of 2,880 households. Poverty line adult equiv per month survey HBS of 2,400 households (Wave I 2002/3). Poverty line per month survey HBS of 2,400 households (Wave IV 2005/6). Same poverty line. Nb 2007 report compares Wave IV and Wave II (2003/4) mainly Poverty Profile Trends in Poverty and Inequality The latest World Bank poverty survey (World Bank, 2007) gives a headline figure of 45.1% of the Kosovan population living below the consumption poverty line, including some 16.7% living in extreme poverty in 2005/6. This is extremely high by regional standards, particularly in terms of extreme poverty defined as having difficulty meeting nutritional needs. The corresponding rates for 2003/4 are 43.5% and 39

46 13.6%. Even allowing for methodological changes and margin of error, it is clear that poverty in Kosovo has not decreased in the period under study. A shock that reduces incomes by 25 % could send an additional 18 % of the population below the poverty line. A similarly positive increase in the incomes of the population can lift as many out of poverty. This reflects the phenomenon that a large fraction of the population is just around the poverty line. It is noteworthy that the poorest fifth of the population experienced a consumption loss of 10% in the period. The poverty gap is around 13% and severity of poverty around 5%. Overall, poverty rates reduced in urban areas but increased in rural areas, as only the top income quintile in rural areas had increased consumption in the period. Most of the increase in extreme poverty is caused by a significant rise in extreme poverty in Serbian households which the report suggests is improbable (World Bank, 2007; 9). As noted above, the latest poverty assessment uses an absolute consumption poverty line of per month or 1.41 per day and a food poverty line of a month or 0.93 per day, a food share of 65.9% as compared to 53.97% in the 2001 assessment using the LSMS. Both assessments used an equivalence scale for children of 0.75, higher than both the original and modified OECD scales but more appropriate in capturing children s consumption needs in low income societies. Whilst the latest UNDP MDG report (UNDP, 2007) suggests that there is potential for eliminating severe poverty and halving relative poverty in Kosovo by 2015, the baseline data used, namely World Bank extreme and absolute poverty rates suggest that this is unlikely without significant economic growth and job creation and significant investment in a social safety net for the extremely poor. Overall, redistribution or, in clearer terms, an increase in inequality, appears to be the main cause of poverty rising in the period, cancelling out growth effects. Overall, the Gini coefficient rose from 0.27 to 0.30 in the period. Whilst it was stable at 0.31 for urban areas it rose from 0.25 to 0.28 in rural areas. The report states that some 60% of Kosovo s population live in rural areas whereas the rural population is only some 40% of the HBS sample. Trends in inequality between the top and bottom decile increased considerably for all, particularly in rural areas (see Table 3:3). Some idea of subjective welfare can be gauged from the latest UNDP Early Warning Report with data from a May 2008 survey (UNDP, 2008). 22.7% of respondents state that poverty is the paramount problem facing Kosovo, second only to unemployment with 32.1%. A total of 32.3% of respondents state that their family income has decreased in the past year, including 9-2% who stated it had decreased considerably, compared to only 11% who said their income had increased, including only 0.8% who reported a considerable increase Non-Material Dimensions of Poverty and Exclusion The latest poverty assessment explores the gap between the total population and the poor population on a number of non-material indicators (see Table 3:4). More significantly, a significant part of the population appears to suffer multiple deprivations, material and non-material. The reports reveals that 8% of the population are both poor and lack indoor water and sanitation, and 9% are poor and lack a 40

47 telephone and a bathroom. The report notes lack of access and poor quality of many services, especially in rural areas. The UNDP Human Development Report for 2004 reports that 48.12% of the rural population lacked access to piped water compared to just 6.08% of urban dwellers. Another significant gap emerged in terms of the percentage of people whose nearest health centre is over 5km away, being 14.23% in rural areas compared to 0.69% in urban areas. Health outcomes show a marked difference, too, with 18.26% of the rural population expected to die before age 60, compared to just 4.21% of the urban population (UNDP, 2004; 34) Regional Variations Over and above the rural/urban dimensions of poverty and exclusion, there is emerging evidence of regional patterns to poverty and exclusion. This is most clearly demonstrated in the 2004 Human Development Report which calculates the Human Development Index (HDI), as well as Human Poverty Indices for each of Kosovo s municipalities. With an overall HDI of 0.680, Kosovo is at the lower end of the medium human development scale. Within this, HDI varies from in Prishtinë/Priština to in Novobërdë/Novo Brdo. As Figure 3:1 shows, a pattern emerges in which the municipalities with the highest HDI are in the North and the East of Kosovo. Bearing in mind that the HDI combines income, educational and life expectancy indicators, the biggest differences emerge with regard to income, with ranking also significantly correlated with levels of unemployment and access to infrastructure and services. Importantly, higher numbers of pensioners is not correlated with lower HDI: rather, it is those municipalities with more income other than from salaries and pensions which rank lowest. There is a spread of life expectancy between the highest and lowest municipalities of some 10 years. Using two levels of poverty, roughly 1 USD per day (extreme poverty or HP-1) and 2 USD per day (HP-2), the report also shows how large households and households with more children appear to be at high risk of poverty Vulnerable Groups at Risk of Poverty and Exclusion At risk of poverty trends The latest World Bank report is somewhat limited in its treatment of the factors correlated with poverty risk. It focuses on four broad factors, over and above the spatial dimension discussed above, as follows: A. HOUSEHOLD SIZE AND COMPOSITION A.1 Larger households (with 6 or more members) have a significantly higher risk than smaller households (1-3 members) at 50% compared to 30%, but the poverty risk for smaller households has increased over time. The equivalence scale used is one which tends to produce this result since each additional child is aid to consume 0.75 of an adult equivalent. A.2 Dependent households, i.e. those with elderly and/or children appear to have a higher risk with households where there are only dependants have a poverty risk of 41

48 65%. The analysis is extremely deficient regarding the issue of child poverty and exclusion which is discussed at greater length below. A.3 Female headed households have a higher risk compared to male headed households, 49% compared to 44.8%. B. ETHNICITY B.1 Roma have a high poverty risk and there appears to be higher poverty risk in areas which are predominantly Serbian. The data quality and methodology is particularly poor here, so the issue of the relationship between ethnicity and poverty and exclusion is discussed at greater length below. C. RELATIONSHIP TO THE LABOUR MARKET C.1 The unemployed are more likely to be poor although as Table 3:6 shows, a significant proportion of the poor are employed and the risk of poverty amongst those employed has increased over time. C.2 There is, therefore, a significant working poor in Kosovo, consisting primarily of workers paid on a daily basis, the self-employed, and those in the mining sector appear particularly at risk. Whilst the risk amongst self-employed agricultural workers is close to the overall rate, they make up a significant proportion of Kosovo s poor (over 10%). C.3 Households with migrants and receiving remittances have significant higher levels of consumption of non-food items but do not invest more in education, for example. The population with migrants or receiving remittances has a poverty rate 7% lower than the rest of the population, rising to 13% on rural areas (World bank, 2007; 35) D. LEVELS OF EDUCATION D.1 Whilst those who completed primary and secondary education have an average poverty risk the risk is significantly greater for those who did not complete primary school (60.8%) and significantly lower for those with higher education (19.5%) although the differences are largely explained by type of employment and income. Overall, based on rather complex calculations, the report comes to the conclusion that three broad policies would have the greatest impact on poverty reduction in Kosovo: improving opportunities in lagging regions, improving access to secondary education, and creating employment Child Poverty and Exclusion Although the latest World Bank report does not address the issue, earlier studies show that children and young people under the age of 24 are disproportionately likely to live in poverty and in extreme poverty in Kosovo. The 2005 report has a much more comprehensive analysis of child and youth poverty (World Bank, 2005), showing that extreme poverty is particularly high for pre-school children (17.3%) and for children aged 6-14 (16.9%). Indeed, children aged 0-14 are said to account for 34.5% of all the extremely poor in Kosovo. Given the clear statement that the presence of children in households is a strong correlate of poverty (World Bank, 2005; 18), the absence of analysis of this phenomenon in the latest report is all the more problematic. 42

49 According to UNICEF Situation Analysis of Children and Women in Kosovo, between 2000 and 2004, 3,461 children were either suspected or victims of criminal activity. Furthermore, the OSCE reported that approximately 180 juveniles were indicted for serious offences and that approximately 23% of all serious crime involved people under the age of 18. Almost 50% of the offences are related to theft. In terms of trafficking there are low numbers but have been increasing over past few years. IPEC report that only 40 or so official victims of child trafficking are being supported. Another factor that contributes to social exclusion of children is the lack of birth certification and birth registration, which will exclude them from being eligible for social welfare provision. This particularly affects Roma children. In addition, child labour is rife in Kosovo, especially in rural areas. Traditionally, child labour has been regarded as acceptable within cultural and social norms and as a means to integrate children into family and kinship network. Children are also today exposed to many forms of paid or unpaid work in Kosovo. In a survey conducted in June 2006 by the Ministry of Education, Science and Technology 5 with 334 school children of all ethnic groups, 89 percent of the respondents declared that they know children of their age who carry out some kind of labour. When asked about the main sectors where children perform their work (multiple choices), the three most often answered sectors/generic hazards were: street work (88 percent) carrying of heavy weights (61 percent) and manufacturing (33 percent). The vast majority of respondents (92 percent) declared that male children are the ones who are mainly involved in the child labour. Seventy eight percent of them stated that economic situation is the main cause of the child labour. Almost half of respondents declared that they have never debated about child labour in their school. The Child Labour Monitoring Team s study was conducted with 480 children from Prishtina, Mitrovica, Peja and Prizren. The main sectors where the child labour was found according to this report are: Agriculture; Construction; Services; Work in the Streets; Light manufacturing; and Scavenging in Dumpsites. According to a UNICEF report (UNICEF, 2004), the main sectors where children were employed in Kosovo were: selling items in streets/shops/markets (37 percent), housework (26.6 percent) and agriculture/herdsman/life stock (18.8 percent). According to the same report, there are differences between rural and urban child labour. Rural child labour in Kosovo is concentrated on agriculture and housework while urban child labour is focused on selling in streets, shops, and markets. On June 20, 2005, a Consultative Meeting to determine the process for preparation of the List of hazardous child labour in Kosovo was held in Prishtine. As a result of this meeting, the directive 5/166 of the Prime Minister s Office in Kosovo established the Kosovo Committee for Prevention and Elimination of Child Labour. One of the main priorities of the Committee and IPEC project is to bring Kosovo legislation in line with ILO Conventions 182 and 138, and in particular to develop a list of hazardous child labour, containing sectors and activities which should be prohibited or severely restricted. The list was approved by the Committee and is now waiting the adoption from the Parliament. 5 The survey was conducted by the Children s Rights Department in the Ministry of Education, Science and Technology in the following Municipalities: Gjakova, Mitrovica, Gjilan, Prishtinë, Prizren and Ferizaj. The survey was conducted in June 2006 with 334 school children, of which 159 were Albanians, 139 Turks, 25 Bosniaks and 11 Serbs. 43

50 Gender-based Exclusion Kosovan women have been at an economic, political and social disadvantage in comparison to their male counterparts for a long time. In the economic sector women remain very disadvantaged due to lack of education and training for women, traditional roles and perceptions in the society, limited access to credits and loans and to inherit land and some of the highest levels of maternal and child mortality in Europe. Some resulting indicators are the following - participation rates in the labour market are only around 35%, the lowest in Europe and the unemployment rate is significantly higher for women (69%) than for men (40%). In general, urban residence and Serbian ethnicity are positively associated with female employment and tend to reduce the male-female employment gap. Roma women have the lowest rates of labour force participation. Women own only 8% of real estate and 6% of businesses (Groves 2006). Only 41% of women of working age were active in the labour market, either employed or unemployed and actively looking for work, compared with 76% of men in In rural areas, 26% of women aged are considered relatively illiterate; of these, 9.5% were totally illiterate. In 2003, the ratio of girls to boys at the primary level was 0.89, which is lower than the ratio in any transition country in 2000 (ratio ranges around 0.94). At the secondary level, in Kosovo, the ratio drops to 0.87 (grades 6-9) and 0.82 (grades 10-12) Girls tend to abandon school earlier than boys. (Ibid). The poverty incidence is estimated to be higher by 4 % for female headed households compared to male heads of households. While unemployment among the general population is estimated at 40%, the unemployment rate among the female population is 60% (World Bank 2007). However, pushed by the international and national women organizations, the government in Kosovo has made progress in promoting equal opportunities for women through a set of policy documents. A National Action Plan for the Achievement of Gender Equality (NAP) and a Gender Law have been drafted through a broad consultation with women from parliament, government and civil society. Implementation of these policies is also included in the Standards for Kosovo. Enactment of Regulation 2003/13 on domestic violence, drafting of the antidiscrimination law and anti-trafficking regulation, and integration of the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) in the Constitutional Framework. The Kosovo parliament has created a gender committee and the Advisory Office for Good Governance, Human Rights, Equal Opportunities and Gender Issues is established in the Prime Minister's Office to coordinate efforts at the central and local levels. Gender focal points have been identified in all 10 Ministries and municipal gender officers are in place in all 30 municipalities. An Office on Gender Equality has also been established and is functioning at national government level. The existing legal framework in Kosovo, and in particular the Law on Gender Equality and Law on Discrimination, have established a basic legal foundation on which to build and promote full and equal inclusion of women into political, economic and social life. However, the implementation of these two laws has not yet proven 44

51 satisfactory or matched their intent. A quota system was set up for general elections to ensure women's representation. 30% of Kosovo s Parliament is composed of women, higher percentage than in any transition country. A quota system for municipal elections has meant that women s representation in municipal assemblies ranges between 25% and 32%. There are two female ministers and one deputy minister in the current government in Kosovo. These are clearly important political steps towards achieving gender equality. They will need to be monitored to ensure long term implementation as gender equality is far from being achieved in Kosovo and women are still significantly underrepresented in decision-making in all spheres and at all levels. The locally based Offices for Gender Equality are under resourced and ill equipped to take on the biased, discriminatory and abusive practices which are common behaviour in many places. It will require more focussed and determined effort from both central and local government to provide the resources both financial and human (skilled and experienced) and stronger institutional coordination to improve the situation for many women. Training and gender awareness programmes for public officials should be an integral and mandatory part of induction for public office and much greater prominence given to raising public awareness of gender equality rights in all public places. There is a special need for much better coordination between of government and justice institutions in order to effectively fight human trafficking, violence against women, and sexual harassment People with Disabilities Estimates suggest there are around 150,000 persons with disabilities in Kosovo living in poverty, isolation and stigma (UNMIK 2001). Comprehensive Policy Framework for Persons with Disabilities in Kosovo- December 2001). According to Handicap International and other active international organisations, the majority of people with disabilities are excluded. Legislation does not favour people with disabilities. Where legislation does exist there is a lack of implementation. In 2005, a law on disability pensions was adopted but it only provides entitlements to persons considered to be 100% disabled. This is not defined and is based on a medical model as opposed to a social approach. There is a general anti discrimination law but this is not implemented (Groves 2006). There are few possibilities for inclusion in schools or higher education establishments for children and young people with disabilities, and facilities are not adapted to the needs of people with disabilities. Furthermore, there are no laws regulating the employment of persons with disabilities and no adequate facilities for vocational training. The general population has a low awareness of disability issues and people with disabilities are often hidden away within the family home. In general people with disabilities face problems with accessibility to government and private buildings, including hospitals and other public services Minorities and Exclusion 45

52 The issue of minorities and poverty is, of course, of immense importance in Kosovo. The results of the latest HBS poverty survey are, however, as noted above, unreliable. Reinterpretation of LSMS data in a study by Bhaumik et al (2005) show that net per capita expenditure by Serbs was some 13% lower than Albanians, reflected in differential poverty rates of 45.5% for Albanians and 57.4% for Serbs. For both communities, educational level was closely correlated with poverty. The 2004 Human Development Report, using clustering methodology to decrease sampling margin of error, found that the Kosovo Serb community had the highest HDI (0.715), above Kosovo Albanians (0.692) and significantly above the Roma, Ashkali and Egyptian community (0.578). Others, referring to Bosniac, Turk, Gorani and others were close to the Albanian level at (UNDP, 2004; 29) 6. According to the 1991 Census, 40,000 people considered themselves to be Roma. These statistics are not disaggregated by age or gender which makes comparison of how different sub-groups suffer social exclusion difficult (Groves 2006). The World Bank survey shows a clear income and educational disadvantage among the smaller groups of ethnic minorities. In 2002, among them, the risk of extreme poverty was more than two times higher than that of the Albanians and the Serbs, while in 2003, secondary enrolment rates among them were two times below the rates of Albanians and Serbs (World Bank 2005: 59). Considerable political attention has been given to the Serb minorities and this has meant that the social exclusion of other minorities, such as the Turks, Bosniaks, Gorani and the Roma is often overlooked. For example, when the government of Kosovo was formed, 10 seats were reserved for minorities in Parliament but these were reserved for Serb minorities (even though other minorities constitute 5% of the population, with Serb minorities constituting only 2% more). Each government department is also required to have places for minorities, but these often go to Serbs. Furthermore, Serb and Albanian are official languages but the languages of other groups are ignored, which has implications for access to schooling and other services (Groves 2006). The Roma are a group of people facing tremendous exclusion. They suffer from low education and literacy, leave school early, particularly girls who rarely attend beyond the age of 12 years, due to early marriage. Poverty has been inherited from generation to generation and Roma experience discrimination at school, in employment and in accessing services. Lack of political representation is seen to be a key issue. The Roma communities have a far lower Human Development Index than the rest of the population (UNDP 2004) and experience a higher rate of unemployment at 58%, with 75% of male youth aged unemployed and 90% of women in this age group unemployed. Only 8% of working Roma hold legislative and managerial positions (no Roma woman holds such a position) in comparison to 13.94% ethnic Albanians, 16.19% ethnic Serbs and % of other minority groups (Turks, Gorani, Bosniaks) (UNDP 2004) The Impact of Social Transfers and Remittances on Poverty Alleviation As noted above, the social assistance programme is limited both in coverage and in payment. It reaches some 13% of the population. The 2003/4 HBS indicates that 90% 6 According to the Minority Rights Group (2006), 57,000 people consider themselves to be Bosniaks, 6,000 are Gorani, Turks are between 12,000 and 50,000; and Croats are living in two small communities. 46

53 of recipients are vulnerable or poor. However, the programme reaches only 33% of the poorest quintile and only 16% of the second poorest. Pensions are received by some 6% of the population, spread evenly by income quintile. Overall, the latest World Bank survey suggests that poverty rates without transfers would be some 6% higher and that extreme poverty would be 4-5% higher (World Bank, 2007; 30-1). Leakage to the non-poor is low and targeting good compared to programmes in other low income countries. As the World Bank report states, remittances are significantly higher than formal social transfers in Kosovo. A module on this issue was added to the 2005 HBS. Almost twice as many households (20%) reported receiving remittances compared to social assistance, with the geographical spread matching households which reported having family members abroad. In general, poor households receive significantly less remittances than the rest of the population. The population with migrants or receiving remittances has a 7% lower poverty rate. Table 3.7 shows that the poor and the extremely poor receive significant less remittances than other sections of the population Key Challenges Papers prepared for the MTEF and the recent donor s conference begin, for the first time, to recognise the importance of a coherent anti-poverty strategy in Kosovo. None refer, however, to the significant problems in monitoring poverty and exclusion and, hence, in providing the evidence base on which to develop and assess appropriate policies and strategies. There is an urgent need to work with the Statistical Office of Kosovo and with independent researchers and research institutions to develop statistical systems which are compatible with Eurostat and EU indicators on poverty and social exclusion. This is important as the World Bank (2007) recommendations regarding sample frame and other technical issues relating to the HBS. Not unlike its neighbours in the region, Kosovo has no trend- and panel- based data so that patterns of movement into and out of poverty and social exclusion, and long-term poverty risk, are extremely hard to discern. In terms of strategies, a combination of improving opportunities in lagging regions, improving access to secondary education, and creating employment, would appear to offer the greatest possibility of poverty reduction in the medium- and long-term. In the short-term, increasing the funding of the social assistance scheme would be an important policy measure, with a recent World Bank paper (World Bank, 2008) noting that funding increases would have more dramatic results than increased efficiencies and elimination of errors of inclusion which may, themselves, have unintended consequences. Clearer strategic and holistic policies are also needed in terms of steering work on poverty and social exclusion in Kosovo in a more European direction. In particular, the voice of poor people needs to be built into policy design in a much more systematic way.. 47

54 STATISTICAL ANNEX Table 3:1 Index of Standard of Living of SFRY population (4 person household) in 1983 (SFRY = 100) SFRY BiH Mon Cro Mac Slo Ser AP Kos AP Voj Urban Rural Source: SFRY 1986; 214 Table 3:2 Housing Standards and Appliances, SFRY Population 1983/4, % of households SFRY BiH Mon Cro Mac Slo Ser AP Kos AP Voj Electricity Water and Sewage Bath Refridgerator TV Washing machine Car Source: ibid, Nb in both tables, Serbia does not include the 2 APs. Table 3:3 Poverty and Inequality Trends in Kosovo HBS data % TOTAL URBAN RURAL 2003/4 2005/6 2003/4 2005/6 2003/4 2005/6 POVERTY Absolute Extreme Poverty Gap Severity INEQUALITY Gini p90: p75: Source: World Bank (2007). 48

55 Table 3:4 Some Non-material Dimensions of Poverty and Exclusion 2005/6 HBS % Total Poor Richest quintile Poorest quintile EDUCATIONAL ENROLLMENT Primary Secondary Tertiary HOUSING Electricity Safe Dwelling Indoor Water Tap Source: World Bank (2007) 49

56 Figure 3:1 Human Development Index by Municipality (UNDP, 2004; 37) 50