Transition globalisation and labour in the bs ca region
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Transition, Globalisation and Labour in the BS & CA Region. 23-24 February 2009 Athens. Kiichiro Fukasaku Head of Regional Desks Development Centre. OECD and the BS Region. The BS region is a key component of OECD’s broader Eurasia initiative Regional focus and national strategies

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Transition, Globalisation and Labour in the BS & CA Region

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Transition, Globalisation and Labour in the BS & CA Region

23-24 February 2009


Kiichiro Fukasaku

Head of Regional Desks

Development Centre

OECD and the BS Region

  • The BS region is a key component of OECD’s broader Eurasia initiative

  • Regional focus and national strategies

  • 3 Main Objectives:

    • Improve the business climate by sharing OECD-country best practices and policy experiences

    • Peer review and peer learning

    • Assist partner countries in stimulating investment, creating jobs and supporting local businesses

An OECD Development Centre Economic Outlook


  • Focus on the BSEC-CA Regions

  • A cross-country comparative analysis of macroeconomic and policy developments of the BSEC-CA region, involving 12 BSEC and 5 CA countries

  • Black Sea and Central Asia: Promoting Work and Well-being

  • Recent economic developments in the BSEC-CA regions (Part I)

  • Work and well-being: policy challenges in the global environment (Part II)

Strong & Sustained Overall Growth



  • Over 2001-06, average growth rate for the 11 CIS countries was around 8 per cent, comparing favourably with Asian economies.

  • Substantial improvements in productivity have been the driving force behind this strong growth.

  • TRADE:

  • TheEuropean Union is the main trade partner for the region, accounting for over half of all trade for the six non-CIS countries.

  • Russia is the main intra-regional trading partner,

Specialisation in BSEC-CA Countries


  • No BSEC-CA countries have any form of specialisation in exports of food and animals (SITC 0), chemical products (SITC 5) or machinery and transport products (SITC 7)

Source: OECD Development Centre / Comtrade, 2008

Successive Waves of FDI Flows


FDI in USD Million

SEE: Second wave of FDI

Central Europe:

First Wave of FDI


Third wave?

Source: EBRD Transition report 2007, OECD DAF/PSD


(chapter 4)


  • Transition

  • Globalization


(chapter 5)


(chapter 6)

Labour Market Policies

in the Global Environment


Labour Market Outcomes


  • Transition in an open economy →

    • more severe recession than expected

    • ↑ volatility and job insecurity

  • During the 1990s labour market policy responses were limited

  • The Outlook describes how labour market policies evolved during the 2000s

    • but the context was also set by households’ responses during the 1990s

A heavy social cost: death rates in BSEC-CA countries

Social indic.

Source: OECD Development Centre / IMF

Households’ Coping Mechanisms


  • Short-term coping mechanisms

    • family and community support

  • Longer-term coping mechanisms

    • Informality*

    • migration

  • Vulnerable groups and coping mechanisms

    • gender roles, urban-rural gaps, ethnic relations, pensioners, children

* Jütting & de Laiglesia (2009), Informal Is Normal?, Development Centre Studies , OECD; and Parleviet & Xenogiani (2008), “Report on Informal Employment in Romania”, Development Centre Working Paper 271, OECD


Policy Responses

  • ILO Conventions and improving the labour market environment

    • employment protection, unemployment insurance, minimum wage legislation, reducing informality

  • Active Labour Market Policies

    • public employment, vocational training, microfinance, youth employment

  • Public redistribution

    • targeting social assistance

  • Facilitating private redistribution


Conclusions and Policy Recommendations

  • Investment on statistics

  • Regularising informal activities

  • Active labour market policies

  • Employment-oriented social polices and targeted assistance

  • Migration, remittances and migrant workers’ rights

  • Sustaining reforms for better job creation

From BSECAO 2008 to the OECD Initiative for the South Caucasus and Ukraine


  • GDP growth disparities across countries in the BS region

  • FDI levels and growth still relatively low in the BS region

    • Average FDI per capita up to 6 times lower than South East Europe or CEE

    • Average FDI growth a third lower than regions like South East Europe

    • Limited FDI diversification in most countries

Prioritise policies to improve the business climate and meet the skill gaps facing the private sector

The OECD Initiative for the South Caucasus and Ukraine - Key Dates for 2009 -

  • Preparatory meeting (2-3 March, Paris)

  • Ministerial conference (31 March-1 April, Paris)

  • Financial market development (4-5 June, Austria)

  • Investment climate policy and promotion (16-17 June, Berlin)

  • Human capital for financial and business services (October)

  • Advisory Council (November)

Thank you

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