What exactly is procurement, you may ask? If you google the word, you’ll likely find several different definitions.
Essentially, procurement is about buying things. That sounds quite simple, of course, but it becomes much more complicated at the level of government buying, especially when complex risks and variables must also be considered. So, is there a way to simplify government procurement?
Despite recent stability in economic growth in Bosnia and Herzegovina, with 3.2% growth projected for 2018, the country continues to experience an elevated level of unemployment, especially among young people.
To help address these alarming statistics, the governments in Bosnia and Herzegovina are investing substantial resources in promoting employment opportunities. These services comprise mostly job intermediation, such as counseling or job matching, and financial incentives to employers when they hire registered unemployed people. But given the magnitude and persistence of the unemployment problem, there must be other, more effective approaches that could be deployed to complement ongoing practices. One such approach is outsourcing selected employment services to private job brokers.
The World Bank’s recently completed Systematic Country Diagnostic highlights Romania’s vulnerability to natural disasters. Over the years, floods, droughts and earthquakes have cost the country thousands of casualties and billions of euros in damages to physical infrastructure. They have hurt the economy’s productive capacity and disproportionately affected the poor.
A vulnerable country
Countries around the world are already seeing evidence of the damaging impact of climate change, which is making past growth patterns unsustainable and reversing progress made on poverty reduction and shared prosperity.
One of my favorite memories from the past summer was discovering Saranda, located in the southern part of the ‘Albanian Riviera.’ I was fascinated by the city’s beautiful location - right on the Ionian Sea coast, with its deep blue waters and with the island of Corfu (Greece) visible on the horizon. I was far from being the only visitor as Saranda is full of people during the summer. In fact, while the usual population is around 35,000, in July and August, this figure can swell with an influx of tourists. During 2016, Saranda registered over 700,000 visitors.
Saranda is not alone in this regard. Over the past years in Albania, tourism has significantly increased, especially in places like Ksamil, Saranda, and Durres. From August 2017 to August 2018, according to the national statistical office, Albania hosted 2.1 million visitors - a 16.8% increase compared to the previous year. And most of these tourists came for the sun and beaches in the summer. These figures are expected to continue to grow in the coming years. On World Tourism Day, the Ministry of Tourism and Environment even indicated that Albania aims to attract 10 million tourists by 2025!
At the World Bank, we know that social inclusion is not only the right thing but also the economically smart thing to do. More inclusive societies are more likely to make the most of their entire stock of human capital. More open and inclusive cities are better placed to attract international capital and talent. More open and inclusive countries make more attractive international tourist destinations.
Jobs and wage growth have been the most important driver of poverty reduction globally, and Central Asia. In Tajikistan, for example, it has cut poverty by about two-thirds since 2003. In Kazakhstan, it accounted for more than three-quarters of income growth over the past decade — even among the poorest 20 percent. The other Central Asian nations have also achieved significant economic growth and poverty reduction in the past two decades due to income growth.
But poverty-reduction rates have slowed. In Kyrgyzstan, they began slowing during the global recession of 2008, as income growth faltered. Poverty reduction in Tajikistan leveled off in 2015, when wage growth slackened and remittances from Tajiks working overseas fell.
In Uzbekistan, more than 90 percent of the poorest households have identified lack of jobs as their most urgent priority. For these families, the prospect of increasing their income is slim, while the likelihood of transmitting poverty to their children is high.
So what should countries in Central Asian do to build on their past achievements and prepare their citizens for the jobs of the future?
Tajikistan achieved high rates of economic growth during the 2000s (about 8% per year, on average), which doubled GDP per capita and helped reduce poverty by almost half between 1999 and 2009. But over the following decade, the rate of poverty reduction began to slow – between 2012 and 2017, poverty fell by about 7.5 percentage points.
While employment and growing income levels continued to slowly drive poverty reduction, a fall in the value of remittances in 2014 began weighing on the country’s performance. Since then, the poverty rate has fallen by about just 1 percentage point per year.
So, despite continued growth, why has the pace of poverty reduction slowed in Tajikistan?
A massive storm system brought historic flooding across South Eastern Europe in 2014, causing more than $2 billion in damages in Bosnia and Herzegovina and shrinking Serbia’s economy by nearly a full percent. Two years later, in August 2016, thunderstorms in the Former Yugoslav Republic (FYR) of Macedonia dropped 93 liters of precipitation per square meter in just a few hours, sparking flash floods in the capital, Skopje, that killed at least 21 people.
In both cases, some of these impacts could have been reduced by improving cross-border monitoring and forecasting while strengthening early warning services at a national level. Fortunately, governments are now working together to improve information exchanges across boundaries and strengthening regional early warning systems through the South-East European Multi-Hazard Early Warning Advisory System.
The social, political, and economic transition of countries across Eastern Europe, the Caucasus, and Central Asia over the last three decades has been a long and arduous process, and many challenges remain. Among them, an imminent concern is the seismic threat faced by certain housing typologies that are believed to have outlived their design lifespan, and suffer from serious deterioration and disinvestment.
A young man sitting next to me on a recent flight from Almaty to Dushanbe told me, “I regret that I did not get a better education. I could have had a better job.” He is one of many Central Asian labor migrants doing low-skilled work in neighboring countries. He continued, “I’m telling my brothers and sisters to study hard if they want to have a better life.”
It was an important reminder about the responsibility we have as a society to ensure that young people like him get the education they deserve.
In light of the technological revolution we are witnessing today, the promise of education is becoming even more important. Emergence of robotics, autonomous transport, artificial intelligence and machine learning will transform the way we live, the way we work, and the skills we will need for work. Some jobs will disappear and some that don’t even exist today will become commonplace. What is certain is that education will be critical to succeed in the new reality.
While Central Asian countries inherited high-levels of adult literacy and education attainment from the Soviet period, the region has since experienced a visible decline in the quality of learning. Students here often lag behind in such basic skills as critical thinking, reasoning, and problem solving.