The urgency to revamp social protection systems in the Western Balkans has escalated in light of the simultaneous global crises of the COVID-19 pandemic, Russia’s incursion into Ukraine, and soaring inflation. Social protection, comprising social assistance, services, insurance, and employment and labour programs, plays a pivotal role in supporting the destitute and the most susceptible households in coping with adversities, safeguarding investments in human capital, and furnishing avenues for poverty alleviation.
A vast number of individuals throughout the area continue to be susceptible to various recognized dangers, with unforeseen challenges and novel forms of vulnerability heightening the significance of reform. The six nations situated in the Western Balkans are undertaking measures to enhance their social welfare structures to render them equitable, enduring, efficacious, and more capable of addressing the requirements of their populace.
The Social Protection Situational Analyses pertaining to Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia expound on the intricate nature of social protection systems prevalent in the Western Balkans. Additionally, a Western Balkan Summary Note furnishes a comprehensive regional outlook on the prevalent challenges and proposes four key reform areas to mitigate poverty and vulnerability:
- Establishing robust groundwork for social protection systems to enhance their responsiveness to crises.
The governments of the Western Balkans have the potential to enhance their social protection systems. This can be achieved by thoroughly scrutinizing their delivery mechanisms to detect any deficiencies in outreach, intake, enrollment, and payments. These measures will enhance efficiency and access to vulnerable populations. To ensure the swift identification of beneficiaries during crises and widen the scope of social assistance, it is essential to create a social registry. However, governments need to shift their approach from relying solely on fixed demographic characteristics to identifying households in need. This will ensure that eligibility is not restricted by strict categorical criteria. By prioritizing social protection reform, the countries in the Western Balkans can take significant strides in decreasing poverty and promoting comprehensive economic growth.
- Enhancing the scope and efficacy of poverty-focused initiatives to enhance the inclusion and assistance provided to marginalized communities.
In order to enhance inclusion and support for vulnerable populations, a serious dedication to poverty-targeting is required across the Western Balkans. This encompasses an increase in spending on last-resort income support, as well as reforms to disability assessments and social services. The latter should involve a transition from a purely medical evaluation of disability to an assessment of how functional impairments caused by a disease interact with the individual’s living environment. To ensure an effective and efficient delivery system, constant reform efforts should prioritize the establishment of case management systems for integrated needs assessment, facilitating referrals between services and cash programs. Additionally, local capacity development should be encouraged, and the provision of long-term care for the elderly should be expanded.
- Enabling access to enhanced employment prospects and advocating for labour market integration.
The employment services in the Western Balkans are encountering difficulties in assisting workers in adapting to the changes brought about by the pandemic and global trends, such as the increasing gaps in skills and job automation. Despite the significant international support for employment service reforms, there are still numerous necessary reforms in the Western Balkans, such as tailoring services to the needs of employers and job seekers, enhancing the capacity of employment counsellors, providing specialized support for vulnerable groups, and establishing transparent monitoring and evaluation systems. Furthermore, the financing and service provision are disjointed, demonstrated by the high social security contributions and limited coverage of unemployment benefits. A comprehensive review of the unemployment benefit system is essential in all countries, as the current benefits provided are insufficient for eligible individuals, and many individuals who require these benefits are unable to access them due to restricted coverage for those in formal employment.
- Securing the fiscal viability of social welfare initiatives for sustained efficacy over the long haul.
The social protection systems in the Western Balkans are encountering difficulties regarding financial sustainability and efficacy in reaching out to disadvantaged groups. The expenditure on pensions remains high, but the low levels of productivity and employment rates, coupled with the ageing of the population and emigration, jeopardize the future sustainability of these systems. Conversely, the expenditure on social assistance, social services, and employment support, aimed at reducing poverty, is inadequate, resulting in intergenerational poverty and dependence on government welfare. It is imperative to undertake a comprehensive assessment of social protection policies, which should include the prolongation of the effective working age, means-testing social pensions, implementing voluntary saving plans, extending coverage to informal workers, promoting productivity and employment, and prioritizing active ageing. It is essential to highlight that reforming pensions alone will not resolve these issues, and government funding must be equitably distributed amongst competing demands.
