The need to reform social protection systems in the Western Balkans has become more evident given the impacts of overlapping global crises such as the COVID-19 pandemic, Russia’s invasion of Ukraine, and high inflation. Social protection – social assistance, social services, social insurance, and employment and labor market services and programs – helps the poorest and most vulnerable households cope with shocks, protect investments in human capital and to provide individuals with opportunities to escape poverty.
Millions of people in the region remain exposed to a range of well-known risks, with shocks and new sources of vulnerability exacerbating the urgency of reforms. The six Western Balkan countries are taking steps to improve their social protection systems to make them fairer, more sustainable, more efficient and better able to meet the needs of citizens.
Situational analyzes of social protection for Albania, Bosnia Herzegovina, Kosovo, Montenegro, North MacedoniaAnd Serbia discuss the complexity of social protection systems in the Western Balkans, while a policy brief on the Western Balkans provides a regional overview of common challenges and proposes four main areas for reform to reduce poverty and vulnerability:
1. Establish solid foundations so that social protection systems can better respond to crises
Governments in the Western Balkans can improve their social protection systems by analyzing their delivery systems to identify gaps in awareness, admission, registration and payment to improve efficiency and access for vulnerable populations. The development of a social register is essential to quickly identify beneficiaries in a crisis and expand social assistance coverage. However, governments should change their mindset and move towards identifying households in need, rather than relying on static demographic characteristics, to ensure that eligibility is not limited by strict categorical criteria . By prioritizing social protection reform, Western Balkan countries can make great strides towards reducing poverty and promoting inclusive economic growth.
2. Expand the coverage and effectiveness of programs targeting poverty to improve inclusion and support for vulnerable populations
To improve inclusion and support for vulnerable populations, there is a need for a serious commitment to poverty targeting, including increasing spending on last resort income support in the entire Western Balkans. Reforms in disability assessment and social services are also needed, including moving from a purely medical examination to determine disability to an assessment of the interaction of functional impairments caused by illness with the environment in which lives the person. To achieve a more effective and efficient delivery system, ongoing reform efforts should focus on creating case management systems for integrated needs assessment and supporting referrals between services and cash programs, promoting the capacity building at the local level and expanding the provision of long-term care. for old people.
3. Facilitate access to better employment opportunities and promote inclusion in the labor market
Employment services in the Western Balkans face challenges in supporting workers amid changes brought about by the pandemic and current global trends, such as growing skills gaps and job automation. Although employment service reforms enjoy considerable international support, the list of outstanding reforms in the Western Balkans remains long, including better tailoring of services to the needs of employers and jobseekers, capacity increased employment counsellors, specialist support for vulnerable groups and transparent monitoring. and evaluation systems. Furthermore, the gap between financing and service delivery is highlighted by relatively high social security contributions and low coverage of unemployment benefits. A review of the unemployment compensation system is necessary in all countries, as the benefits provided are not sufficient for those who are entitled to them, and many of those who need these benefits cannot access them due to coverage limited for those in formal employment.
4. Ensure the financial sustainability of social protection programs for long-term effectiveness
Social protection systems in the Western Balkans face challenges in terms of financial sustainability and effectiveness in reaching the poor and vulnerable. Pension spending is high, but low productivity and employment rates as well as population aging and emigration threaten the future viability of these systems. At the same time, spending on welfare, social services and employment support to reduce poverty is low, leading to intergenerational poverty and aid dependency social security of the government. A complete review of social protection policies is necessary, in particular by extending the effective working age, conditioning social pensions, implementing voluntary savings plans, extending coverage to informal workers, promoting productivity and employment and focusing on active ageing. Pension reform alone will not solve these problems, and government funding must be balanced between competing demands.
Summary note
Advancing social protection in the Western Balkans: opportunities for reform