Recent progress in NSSED implementation in Albania

Adrian Civici Ministry of Finance

Conference on labour markets, growth and poverty reduction strategies 28 May 2005 Thessaloniki

GPRS - November 2001

NSSED – December 2002

PRINCIPALS OF NATIONAL STRATEGY

• Objective harmonization / main agenda

• Prioritarisation of public actions

• Albanian ownership

Priority fields (i) improved health and education services and (ii) improved infrastructure

Pillars (iii) institutional reform (iv) economic growth

Conditions for implementation (v) macroeconomic stability (vi) social support

NSSED Institutional structure

Steering Committee (Chaired by Prime Minister)

Steering Committee (Chaired by Prime Minister)

Technical SectorWorking Groups in

line Ministries

Technical SectorWorking Groups in

line Ministries

Other Institutions involved in the process:(Bank of Albania, INSTAT, etc)

Other Institutions involved in the process:(Bank of Albania, INSTAT, etc)

NSSED M&Ein line MinistriesNSSED M&E

in line Ministries

MoF/ DoNSSED

Inter- Ministerial Group(Chaired by Minister of Finance)

Inter- Ministerial Group(Chaired by Minister of Finance)

Public expenditure in priority sectors, 2002-2004

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Agriculture Education Energy Health Housing and

communal services

Social welfare Transport and

telecommunications

Pro

port

ion o

f to

tal expendit

ure

(%)

2002 2003 2004

Capital investment in priority sectors, 2003-2004

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Agriculture Education Energy Health Housing and

communal

services

TransportProp

ortion

of to

tal e

xpen

ditu

re (%

)

2002 2003 2004

NSSED goals and achievements

Objective (unit) Actual Target

2001 2002 2003 2004 2006

Growth

GDP per capita ($) 1386 1557 1950 2604 2660

GDP growth rate (%) 7.6 4.7 6.0 6.0 6.0

Budget deficit as proportion of GDP (%) 6.6 5.6 4.4 4.6 5.0

Inflation rate (%) 3.1 5.2 2.4 2.9 3.0

Poverty

Absolute poverty headcount rate (%) 25.4 20.0

Extreme poverty headcount rate (%) 4.7 3.0

Unemployment rate (%) 16.4 15.8 15.0 14.4 12.0

Health

Infant mortality per 1,000 live births 17.4 17.5 15.5 15.1 15.0

Maternal mortality per 100,000 live births 22.7 25.9 21.3 12.0 15.0

Measuring progress in poverty reduction

The poverty monitoring system is built on the Living Standards Measurement Survey:• 2002 – Estimation of poverty indicators • 2003 and 2004 – No consumption module

Poverty trends in 2003 monitored through a model: how did variables correlated with consumption poverty in 2002 change in 2003?

Results of FAO research team suggest that poverty rate has fallen in 2003 – more so in urban than in rural areas

Labour market in Albania

Labour force participation according to the Census

1989 2001

Male Female Total Male Female Total

In thousand

Labour force (aged 15 years +) 842 758 1600 800 548 1347

As percentage (%)

Employed 71.5 63.8 67.7 60.8 35.6 48.0

Unemployed 5.7 9.0 7.3 14.0 14.1 14.1

Total active 77.2 72.8 75.0 74.8 49.7 62.1

Inactive 22.8 27.2 25.0 25.2 50.3 37.9

Total (aged 15 years +) 100 100 100 100 100 100

Age of population Pyramid

-250 -150 -50 50 150 250

0-4

'10-14

20-24

30-34

40-44

50-54

60-64

70-74

80+

Male

Female

-250 -150 -50 50 150 250

0-4

'10-14

20-24

30-34

40-44

50-54

60-64

70-74

80+

Male

Female

Labour market indicators

No Labour Force Survey Unemployment rate is estimated from the records of the registered unemployed at Employment Offices

Evidence from the Living Standards Measurement Survey confirms that unemployment is falling Men rather than women are more likely to benefit from new jobs

NSSED labour market policy objectives

Strategy of employment and vocational training

Build capacity of Regional Employment Offices8000 job mediations in 2004

Strengthen vocational training system by expanding capacity and modernising curricula

Two vocational training centres constructed in 2004, co-financed by the budget and the CARDS programme

NSSED labour market policy objectives

Strategy of employment and vocational training

Employment promotion projects

• Salary and social contribution subsidies over 5-7 months;

• The company has to keep at least 50-70% of subsidised persons as permanent staff

• 3385 jobs created in 2004 at a cost of $1,070 each

Current challenges for the NSSED

Link strategic priorities to the budget Harmonise and streamline existing planning

systems: poverty reduction, European integration, decentralisation;

Monitoring of progress and transparency;

Establishment of an integrated planning system

Future challenges for NSSED

Role of NSSED in Integrated Planning System

• identify pathways to national goals and set indicators

• oversee sector and crosscutting strategies,including indicative costing

• continue monitoring poverty for policy purposes

• advise on policy implications for MTBP

Future challenges for NSSED

• Revision of NSSED in 2006

• Ensuring sustainable growth supporting new sources of growth;

• National consensus building / assembly• Maintain Albanian Ownership and donor’s

coordination and development partners.