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A presentation held by prof Charles Woolfson at the seminar "After the Crises? Migration, Austerity and New Challenges to Social Sustainability in the Baltic States", hosted by Global Utmaning on the 7th of December 2012
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After the Crisis? Migration, Austerity and New
Challenges to Social Sustainability in the Baltic States
Professor Charles Woolfson REMESO
Institute for Research on Migration, Ethnicity and Society
Linköping University
Global Utmaning Workshop, 7 December 2012
Acknowledgments • Swedish Council for Working Life and Social
Research (FAS) Project Number: 2011-0338, Svensk modell och baltisk rörlighet: harmonisering eller social dumpning? En studie av arbetsmigration mellan Baltikum och Sverige.
• The Swedish Institute, Visby Programme grant 00749/2010 East-West labour migration, industrial relations and labour standards in a Swedish-Baltic context.
• Indre Genelyte, REMESO doctoral candidate prepared key empirical charts in this presentation
Where we are today
GDP per capita in PPS (Euros) 2010 Source: Eurostat, 2012
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
GDP per inhabitant and average monthly wage (2011)
Estonia
• GDP per inhabitant 11,900 EUR
• Average monthly wage 792 EUR
Latvia
• GDP per inhabitant Latvia 9,800 EUR
• Average monthly wage 633 EUR
Lithuania
• GDP per inhabitant 10,200 EUR
• Average monthly wage 576 EUR
Social protection expenditure as % GDP 2010
19.0%
30.5%
19.1%
17.8%
18.1%
The way we were – the ‘fat years’
The ‘Baltic Tigers’ GDP Growth Rates 2006
Global Property Guide, 2007
Market shares of Swedish banks in Baltic states
June 2009
Market shares public lending
Sources: Sveriges Riksbanken Bank reports and the Riksbank
Population 1.3 million
Population 2.3 million
Population 3.4 million
Sweden and Baltic household indebtedness as % GDP
Sources: Sveriges Riksbanken Bank reports and the Riksbank
A trend that cannot continue will not ….
‘Hard Landing’ – Taming the ‘Baltic tigers’
Real GDP growth rate compared to previous
year (%)
-20
-15
-10
-5
0
5
10
15
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (f) 2013 (f)
EU (27 countries) Estonia Latvia Lithuania
Baltic GDP 2009 % change compared with the same quarter of the previous year
Q1 Q2 Q3 Q4
Estonia -15.0 -16.1 -15.6 -9.5
Latvia -18.5 -17.0 -19.2 -17.1
Lithuania -15.3 -16.6 -14.7 -13.2
Source: Eurostat PEEIs http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-07042010-BP/EN/2-07042010-BP-EN.PDF
Unemployment rates in Baltic countries and
EU27
0
2
4
6
8
10
12
14
16
18
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
EU (27 countries) Estonia Latvia Lithuania
Real wages in Baltics year on year 2000-2010
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Estonia
Latvia
Lithuania
Source: harmonized index of consumer prices - Eurostat online database, nominal monthly salaries – Statistics Estonia,
Central Statistical Bureau of Latvia, Statistics Lithuania
Baltic household consumption expenditure 2009 % change compared to same quarter of 2008
source: Eurostat PEEIs
Q1 Q2 Q3 Q4
Estonia -16.5 -19.4 -19.9 -18.2
Latvia -18.3 -23.5 -25.6 -21.7
Lithuania -14.5 -16.9 -17.7 -19.0
Total Population: At risk of poverty % (Cut-off point: 60% of median equivalised income
after social transfers) Source: Eurostat
16.4 16.4 16.3
16.9
18.3
19.5 19.7
17.5
19.2
25.6 25.7
19.3
20
20.6
20 20.5
16.9 17.1
17.7
15
17
19
21
23
25
27
2005 2006 2007 2008 2009 2010 2011
EU 27
Estonia
Latvia
Lithuania
Poland
At risk of poverty, age less than 18 (cut-off point: 60 % of median after transfers)
2011 Source: Eurostat, 2012
0
5
10
15
20
25
30
35
Proportion of population at risk of poverty or social exclusion, 2010 (%) Source: Eurostat
20% of Lithuanians live on <240 Euros per month, 6% approx 90 Euros per month (2010)
Migration
Aggregate migration from Baltic states and Poland to Norway, Denmark and Sweden
1813
3573
4810
8069
9257
8737 7881
7135 7141
1116 2389
4439
9279
17305 18333
15172
21011
23418
3708
5098
8360
13725 15686
19146
9666 8741 9024
0
5000
10000
15000
20000
25000
2003 2004 2005 2006 2007 2008 2009 2010 2011
Sweden
Norway
Denmark
Cumulative outflows of EU8 citizens into EU15 Member States (2004-2007) Thousands of Emigrants
Source: Francesca D'Auria, Kieran Mc Morrow and Karl Pichelmann, Economic impact of migration flows following the 2004 EU enlargement process: A model based analysis.
Cumulative outflows of EU8 citizens into EU15
Member States (2004-2007) % Working Age Population of EU8 Countries
Source: Francesca D'Auria, Kieran Mc Morrow and Karl Pichelmann, Economic impact of migration flows following the 2004 EU enlargement process: A model based analysis.
Emigration rates (per 1000 inhabitants) from Estonia, Latvia and Lithuania (2001-2011)
Baltic emigrants by age group 2011 (% of all who emigrated that year)
Source: National statistic offices, 2012
15.5%
4.2%
13.9%
17.3%
13.5%
10.5%
8.6%
6.1%
13.2%
8.4%
19.9%
17.4%
9.7%
7.6% 6.9%
5.5%
10.5%
7.1%
21.8% 21%
12.7%
8.6%
6.5%
5%
0%
5%
10%
15%
20%
25%
0-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49
Estonia
Latvia
Lithuania
Emigration by gender (% of all emigrated that year) 2011
Source: National statistic offices, 2012
47.3% 48.3% 50%
52.7% 51.7% 50%
0%
10%
20%
30%
40%
50%
60%
Estonia Latvia Lithuania
Male
Female
Remittances
Remittances and earnings abroad* (EUR million)
Source: SEB Baltic Outlook April 2012
Latvia
Remittances and earnings abroad* –
share of household disposable income 2000-2010
Source: SEB Baltic Outlook April 2012
Remittances to Baltics and Poland % of GDP 2004-2011
Source: World Bank 2012
1.5
1.8 1.8
2.5
3.1
4.6
2
1.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2004 2005 2006 2007 2008 2009 2010 2011
Estonia
Latvia
Lithuania
Poland
Demographics and population loss
Life expectancy at birth 2010 Source: Eurostat
Life expectancy at 50 years of age (years) Source: Jagger et al the Lancet, 17 November 2008
Life expectancy at 50 years of age (years)
Natural increase/decrease in the Baltic states per 1,000 population
From Peteris Zvidrins ,Centre of Demography, University of Latvia, DEPOPULATION IN THE BALTIC STATES
Aggregate natural population increase/decrease 1990-2011
Source: SEB Baltic Outlook April 2012
Population reduction in Latvia (data 2011 compared to 2000)
Demographic projections for Baltic states 2010-2060
Source: Eurostat
Census 2012 3 007 700
Census 2012 2 041 763
‘Voice’, democratic representation and
social justice
Narratives of austerity
Riga January 2009 Largest mass demonstration since 1991
Riga street battles
Vilnius January 2009 Doors of the Lithuanian parliament
No Fear!
Teargas on Independence Square, Vilnius
Lithuania 1991 76% 2009 50%
Change -26%
Lithuania 2009 48%
Things are going in the right direction or in the wrong direction in your country? (% of positive) Source: Estonia HDR 2011
President Dalia Grybauskaite ‘State of the Nation’ address 2010
I do not think about (emigration) as merely an economic phenomenon. It is rather a reflection of the relationship between an individual and the state.
The decision to leave the homeland is a difficult one. We console ourselves by saying that it is a natural consequence of the downturn. However, the countries where our fellow citizens emigrate are also challenged by the crisis…
So, let us look the reality in the face and admit that people are emigrating not only for economic reasons. They are moving abroad because they feel alien at home.
Threats facing Baltic countries
1. Demographic decline threatens long-term fiscal sustainability, especially of pension systems.
2. Labour force high youth unemployment, shortage of skilled labour and skill mismatches, aggravated by high emigration.
3. Poverty and social exclusion even higher strains on public finances in the near future.
4. Social disenfranchisement and political alienation creating further migration ‘exit’
After the crisis: meeting the challenges of globalisation
1. Education: Investment in skills, vocational and higher education for ‘high road’ of competitiveness
2. Labour: Recruitment of non-Baltic labour forces to fill labour force gaps
3. Citizenship: ‘Dual citizenship’ and position of non-citizens in Latvia and Estonia
4. Migration policies: integration of return migrants
5. Democratic/cohesion issues: ‘voice’ in politics, community and workplace