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Montenegro

Why Women Don't Work in the Western Balkans

Ellen Goldstein's picture
Finding and keeping a job, and even participating in the labor market, is harder if you are a woman than if you are a man living in the Western Balkans. This is a conclusion I can draw from my first year as Country Director for the Western Balkans, reminding us that gender inequality persists in many forms while another International Women’s Day passes. 

Only half of the working age population participates in the labor force in the Western Balkans. This is low by both European and global standards - but participation among women is even worse. This rate was only about 42% in Bosnia and Herzegovina, and a mere 18% in Kosovo in 2012 - the lowest in all of Europe and Central Asia. This participation gap persists throughout a woman’s life, contributing to low employment rates, and widens during child bearing years. In Bosnia and Herzegovina, the gap between male and female employment rates has reached a whopping 44 percentage points for those aged 25 to 49 years with a young child living at home.

Failure to address these labor market inequalities is a missed opportunity for faster economic growth, poverty reduction and increased shared prosperity in a region struggling to recover from the neighborhood effects of the Eurozone crisis.

South East Europe Six: Growth, please!

Željko Bogetic's picture

Just six months ago, in the previous South East Europe Regular Economic Report (SEE RER) covering the six Western Balkan countries of Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia (SEE6), we looked at the double-dip recession in this region, and structural policies needed for recovery.
 
Now, we are happy to report that recovery is, indeed, under way in each of these countries. In 2013, the SEE6 region is projected to grow 1.7 percent, thus ending the double-dip recession of 2012. Electricity, agriculture, and even some exports are helping with this rebound of output. Kosovo is leading the pack with a growth rate of 3.1 percent, with Serbia (which accounts for nearly half of the region’s GDP) expected to grow by 2 percent on the heels of increased FDI, exports, and a return to normal agricultural crops. (In 2012, by contrast, agricultural output in Serbia dropped 20 percent on account of a severe drought). Albania, FYR Macedonia, and Montenegro are all expected to grow by between 1.2-1.6 percent. Rounding out this group is Bosnia and Herzegovina – with expected growth of 0.5 percent.
 
So, are things finally looking up in the Balkans? Not exactly.

Figure 1: SEE6 Unemployment Rates, 2012



Source: LFS data and ILO. Kosovo’s tentative data suggest unemployment as high as 35 percent.

Three Pillars for Prosperity in Montenegro

Željko Bogetic's picture

Over the last decade Montenegro has trebled its gross national income (from $2,400 in 2003 to $7,160 in 2012), has reduced its national poverty headcount from 11.3 percent in 2005 to 6.6 percent in 2010, and enjoys the highest per capita income among the six South East European countries.

Despite this considerable progress, however, Montenegro remains a country in need of a new economic direction. The global financial crisis has exposed Montenegro’s economic vulnerabilities and has called into question the country’s overall growth pattern. The period between 2006 and 2008 was characterized by unsustainably large inflows of foreign direct investments (FDI) and inexpensive capital, which fueled a domestic credit consumption boom and a real estate bubble. When the bubble burst in late 2008 and in 2009 real GDP shrank by almost 6 percent, triggering a painful deleveraging and a difficult recovery that is not yet complete. With the base for Montenegro’s growth narrowing and the country’s continued reliance on factor accumulation rather than productivity, it has become clear that this old pattern cannot deliver the growth performance seen just a few years ago.
 
So, what kind of growth model can drive Montenegro’s next stage of development in the increasingly competitive environment of today’s global economy?
 
As spelled out in the recent report “Montenegro – Preparing for Prosperity” this country can go a long way toward returning to the impressive economic gains it was making just a few years ago by emphasizing three critical areas of development: sustainability, connectivity, and flexibility.
 

Women in the Workforce – a Growing Need in Emerging Europe and Central Asia

Sarosh Sattar's picture

Emerging Europe and Central Asia (ECA) is an interesting region because what you expect is not always what exists. Since this is written in honor of International Women's Day, discussing women’s labor market participation seems appropriate. The standard indicator used for this is the “female labor force participation” (LFP) rate, which is the proportion of all women between 15-64 years who either work or are looking for work. 

Since much of the region has a common socialist legacy, you would expect to see similar labor market behavior among women. However, the proportion of women who work ranges from a low of 42 percent in Bosnia and Herzegovina to 74 percent of adult women in Kazakhstan. And it wasn’t 20 years of social and economic transition that led to this divergence. Even in 1990, the range was about the same. The exception was Moldova which saw a 26 percentage point decline.

The Western Balkans – How Not to Waste a Good Crisis

Željko Bogetic's picture

With a double dip recession––after just two years of sluggish recovery––now taking hold across the Western Balkans it is time for policy makers to begin looking at ways the ongoing financial crisis can be leveraged to bring about lasting fiscal reform in these countries. After just two years of sluggish recovery, these countries as a group––Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia––are experiencing a drop in real GDP by 0.6 percent and it is now clear that the road to recovery in 2013 will be arduous.