Radio România Internațional

Tag: skilled

  • World Bank forecasts

    World Bank forecasts

    The World Bank has announced an upward adjustment of its estimates regarding the growth of the Romanian economy, with the new figures standing at 4.2% for this year, 3.6% for 2020 and 3.2% for 2021. Experts expect a slow-down in the medium-term economic growth, particularly in the context of a rise of employment rates among higher education graduates at the expense of job seekers with lower education, which is predicted to feed into rising inequality.



    The World Bank also says the government will have difficulties keeping the budget deficit below 3% of GDP. The newly passed Pension Law and the planned public sector salary increases will put pressure on the consolidated budget deficit and reduce the resources for investments. The institution recommends that the governments priorities should include reforms in public administration and state-owned companies, as well as policies addressing social and regional disparities.



    The World Bank also suggests renewed efforts to reduce unemployment among youth and low-skilled workers, which will help reduce the constraints on demand and contribute to sustainable economic growth. “In the medium term, the focus of fiscal policy should be rebalanced, from increasing consumption to mobilizing investments, especially from European funds, to support sustainable convergence to the EU and social inclusion. Reforms in public administration and state-owned companies, enhancing the predictability of regulations, as well as appropriate policies for addressing social and spatial disparities should be on the governments priority agenda, the institution added.



    Meanwhile, another World Bank report shows that nearly 40% of the Romanian emigrants are higher education graduates, and warns that this generally leads to problems in the field of skilled workforce and consequently to a slow-down of the economic growth in the countries of origin. According to the report, the share of immigrants in Europe has risen sharply over the past 4 decades, with 1 in 3 immigrants now going to Europe. Intra-regional migration is also high in Europe and Central Asia, with 80% of the people choosing to move to other countries in the same region. “Migration also raises concerns of ‘brain drain of skilled-labour from countries of origin, as people with more education tend to emigrate more often around the region, the report also shows.


    (translated by: Ana-Maria Popescu)

  • Migration and the labour market

    Migration and the labour market

    The EUs successive waves of eastward enlargement have also opened the community labour market for citizens of Central and East European countries. In 2004, as many as eight former communist countries joined the Union. Romania and Bulgaria followed suit in 2007, with Croatia being the last to join the community bloc in 2013. In search of safer and better-paid jobs, millions of Poles, Romanians, Hungarians and Bulgarians are working and paying taxes throughout the continent, from Sweden to Portugal and from Austria to Ireland.



    Their migration was a relief for their home countries, which no longer had to pay unemployment benefits to the numerous victims of the economic transition from a largely bankrupt centralised economy to capitalism, with its sometimes wild and unscrupulous facets. As a result, at present the labour market in Central and Eastern Europe continues to improve, with unemployment rates plummeting to the lowest level ever, although still above the EU average, a survey made by the well known consultancy firm Coface shows.



    Macroeconomic data show that over the past few years salaries have increased and inflation dropped, making household-generated consumption the main driver of economic growth. For instance, as of 2010, gross salaries have increased by over 30% in Romania and Bulgaria and by over 20% in Hungary and Poland, respectively, the survey reveals.



    Coface also notes that, in exchange, companies have been facing more difficult times, with increasingly demanding employees cautiously negotiating the level of salaries, and thus forcing them to accept higher labour costs. The low birth rate and the migration to Western Europe have also contributed to a workforce deficit, raising a barrier to business expansion. Even the companies that pay higher salaries are facing employment difficulties. Pay rises are currently exceeding work productivity gains, but regional labour costs are still three times lower on average than in the West.



    This disparity, which is a trump card for Central and Eastern Europe in terms of unit labour costs (the average cost of labour per unit of output produced) alongside the geographical and cultural proximity to the West, should bring significant competitive advantages to the region. However, these benefits might get compromised on medium term, if the migration of skilled young people continues, Coface warns in its survey. The labour force deficit might be reduced by encouraging migrants to return to their countries of origin, but this is rather unlikely. Thats why Coface recommends to the governments in the region to encourage the labour inclusion of ethnic communities, women and elderly people and to boost professional training.


    (Translated by: Diana Vijeu)