Education, social cohesion and a green recovery are top priorities for people of Bosnia and Herzegovina, says OECD Development Centre report
19/05/2022 – High-quality education, social cohesion and a green recovery were identified as the most important dimensions to create new opportunities and improve the quality of life of people in the Western Balkans region and in Bosnia and Herzegovina, according to the second edition of the Multi-dimensional Review (MDR) of the Western Balkans presented today in Sarajevo.
Bosnia and Herzegovina is at an important crossroads in its development trajectory. Bosnia and Herzegovina has made remarkable progress in improving the well-being of its citizens. Employment rates have been rising and, thanks to fiscal surpluses, there is fiscal space for financing social protection. Bosnia and Herzegovina has made important progress to strengthen domestic competencies. Many education authorities, at entity, canton and district levels, have started to integrate a competency-based approach into their respective curricula. To improve the quality of teaching, Bosnia and Herzegovina established a body to accredit education institutions and programmes for initial teacher education. In recent years, Bosnia and Herzegovina has already taken various measures across several dimensions to support a green recovery. In preparation of the 26th Conference of Parties (COP26) of the UN Framework Convention on Climate Change (UNFCCC) in 2021, Bosnia and Herzegovina adopted an enhanced Nationally Determined Contribution (NDC) including a more ambitious GHG emissions reduction target. In 2017, the Framework Energy Strategy of Bosnia and Herzegovina 2035 was adopted as the key strategic document for the energy sector.
However, socio-economic and environmental challenges in the economy remain pressing. Many groups, including women, young and ethnic minorities, are excluded in terms of economic opportunities. Too many jobs do not provide enough income to fully escape poverty. Access to pensions, social assistance and health insurance favours the employed and war veterans rather than those most in need. Lack of relevant skills is also an important obstacle. Student performance on the PISA 2018 assessment was among the lowest in Europe. Employer surveys continuously report significant difficulties in hiring due to skills gaps, ranging from technical to meta-cognitive skills. High unemployment and limited prospects in the labour market, especially among youth, limit incentives to invest in education and skills, and are a “critical push” factor for emigration and brain drain. When it comes to the green transition, despite important progress towards cleaner forms of energy, Bosnia and Herzegovina remains committed to a significant share of future electricity production from coal. Its enhanced Nationally Determined Contribution includes about 1 gigawatt of new coal-fired power plants to be built by 2030.
The Multi-Dimensional Review of the Western Balkans proposes priorities for enhancing the development prospects of Bosnia and Herzegovina.
Building key competencies of student and adults is a key to create opportunities for citizens. Much can be achieved through investments in early childhood education and care (ECEC) as a means to strengthen the foundational skills of children. Considering the decentralised governance structure of Bosnia and Herzegovina, more systematic engagement in the policy-making process by all relevant stakeholders would better support alignment of key objectives and activities across different government levels. Collaboration with the private sector should play a key role in this respect.
To foster social cohesion, ensuring women’s employability is of particular importance as it can unleash the full potential of the labour force. To this end, key priorities include improving the availability and quality of early childhood education and care, ensuring the flexibility of maternity leave and providing good quality elderly care. Low labour market participation among women and citizens from vulnerable groups, coupled with high long-term unemployment rates, also calls for well-targeted active labour market policies. While Bosnia and Herzegovina has in place a comprehensive set of social protection programmes, gaps in coverage and generosity need to be addressed to provide adequate social security to all. Building on recent policy efforts, further reductions of social security contributions in combination with in-work benefits would help reduce the tax burden for low-wage earners. To provide the most vulnerable with additional pathways to integrate into society, it would be important to improve the delivery of social services.
Finally, cleaner air and more access to sustainable energy is key for improving the quality of life in Bosnia and Herzegovina and to make it and an attractive place to live, work and invest in. A significant reduction in greenhouse gas emissions and air pollution requires the elimination of very high subsidies for coal-fired power and the development of a comprehensive strategy. Such a strategy must be backed by a legal and regulatory framework that is unified and harmonised at the state level, thereby replacing the current fragmentation between entities and cantons. Bosnia and Herzegovina needs stronger financial incentives and simplified administrative procedures for the deployment of intermittent renewables such as solar and wind, as well as for energy efficiency improvements in buildings. To integrate a growing share of intermittent wind and solar power into the electricity mix, transmission and distribution grids need to be upgraded to a higher level of flexibility. It is also essential that energy reforms be driven by domestic societal consensus and political will.
The Multi-dimensional Review (MDR) of the Western Balkans combines the assessments of five economies: Albania, Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia.
For more information, journalists are invited to contact the OECD Development Centre’s Press office: Bochra Kriout (email@example.com ; Tel.: +33 145 24 82 96).