Government adopts employment strategy

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In November 2003, the Bulgarian government adopted the country's first-ever employment strategy, covering 2004-10. The strategy was drawn up by a working group of representatives of the government and social partners, and seeks to deal with labour market problems such as low employment, high unemployment and negative demographic trends. The strategy is regarded as consistent with the EU's European employment strategy.

On 11 November 2003, the government adopted an employment strategy for the period 2004-10 - the first time such a strategy has been developed in Bulgaria. The strategy was drawn up by a working group of experts representing the government, employers’ organisations and trade unions as a response to the enormous problems faced the Bulgarian labour market during the period of economic transition. The main challenges that the strategy seeks to address are: the low economic activity rate of the population; the high unemployment rate; the low employment rate; the deteriorating structure of the workforce; and negative demographic trends. The employment strategy is considered to be consistent with the EU's s European employment strategy (EES) - Bulgaria is expected to join the EU in 2007 - and the International Labour Organisation (ILO) global employment agenda, as well as with national legislation.

The strategy has four main parts. The first part presents an analysis of the current labour market situation, which forms the basis for the planned employment and human resource development policies in the period up to 2010. The second part presents the strategic aims and goals for labour market development and the main guidelines for their implementation, which are further developed in the third part. The last part sets out the preconditions necessary for the strategy's implementation and evaluation, such as: 'capacity building' of the institutions necessary for the realisation of the strategy; financing; and monitoring system.

Main labour market challenges

The employment strategy's analysis of the labour market's current situation and tendencies, and its perspectives for development, highlights the main challenges facing social, employment and human resources development policy. It identifies a first group of problems, as follows:

  • low rates of economic activity;
  • a high unemployment rate;
  • a high number of people discouraged from seeking jobs (ie people who are unemployed but no longer bother to register with the labour offices);
  • the existence of disadvantaged groups on the labour market;
  • regional differences in employment and unemployment;
  • a high supply of labour accompanied by low demand;
  • the existence of informal/undeclared employment;
  • a discrepancy between the qualifications of employees and the needs of employers; and
  • insufficient vocational training, not corresponding to changes in technology.

In addition to these problems, the strategy identifies other long-term challenges which are expected to influence the development of the labour market. They can be summarised as follows:

  • unfavourable demographic tendencies. These will result in a decrease and ageing of the workforce, having a negative effect on sustainable economic growth and presenting an enormous challenge for the social insurance and pension systems. Given these demographic challenges, increasing the economic activity rate of the population is a strategic priority for the development of the labour market;
  • EU integration and development of a knowledge-based society. These developments will determine the main priorities of Bulgaria's structural reform, emphasising the necessity of active use of information technologies and high-technology activities and services in the economy. The strategic priority on the labour market is thus human resources development, and specifically the adaptation of education and training systems in line with the needs of a knowledge-based economy; and
  • changes in working life. As noted, the development of a knowledge-based economy presumes constant improvement of professional knowledge and skills. This requires a redesign of work organisation and of the possibilities for combining lifelong learning and everyday work. New technologies also require other changes in work, such as better working conditions, higher workplace safety and better social security. Therefore, another strategic priority for the development of the labour market is the establishment of a legislative and institutional framework that guarantees an optimal combination of flexibility and security of labour as a response to the changes in working life.

The strategy

The strategy develops further the main ideas in the current government's programme and especially that of its section on the labour market. The government's programme is based on the idea that 'people are the fortune of Bulgaria'. The vision of the strategy is defined as 'providing every person in active age with opportunities for freely chosen as well as efficient employment'.

In a medium-term perspective (2004-7) the main aims of the strategy are to increase employment and decrease unemployment. The long-term aim (2007-10) is to increase the economic activity and 'work potential' of the population, in order to:

  • increase the economic activity rate of the population by at least five percentage points;
  • constantly reduce the unemployment rate to a sustainable level under 10%; and
  • integrate at least 25% of long-term unemployed people in active measures and programmes.

The strategic goals are to: increase employment; cut unemployment; improve the quality of the workforce; increase labour productivity; achieve social cohesion; and reintegrate vulnerable social groups.

In accordance with the European employment strategy, the Bulgarian institutions will target their efforts at:

  • active and preventative measures for unemployed people and to increase the economic activity of the population;
  • an incomes policy that encourages employment;
  • encouraging entrepreneurship and small and medium-sized enterprises, in order to provide more and better jobs;
  • transforming undeclared work into regular employment;
  • encouraging longer working lives and implementing an active ageing policy;
  • promoting the adaptability of the workforce to address changing economic conditions;
  • promoting the development of human capital and lifelong learning;
  • developing an equal opportunities policy, aimed at creating a labour market open to all social groups;
  • developing an active labour market policy aimed at the social and economic integration of groups at risk; and
  • addressing regional employment disparities.

A key factor in the realisation of the employment strategy is regarded as the improvement of monitoring and an increase in the effectiveness of active programmes and measures. It is also important that the strategy proposes to introduce the Eurostat methodology for assessing labour market measures, as well as information systems to examine employers’ needs for qualified labour. The strategy also provides for early warning systems to monitor labour market changes at district and municipal level. The realisation of an effective labour market policy requires an adequate active policy that prepares people who are involved in programmes for future sustainable employment. There is also an option of combining several programmes so that unemployed people are able to find long-term employment (eg combining self-employment with training in entrepreneurship). The strategy provides for an assessment of the effectiveness of various active measures and programmes, in order to monitor negative effects and strengthen the sustainability of the measures.

The implementation of the employment strategy requires considerable financing. The resources are to be laid down in ministry budgets and the overall national budget, on top of which the government expects to use international sources to implement the strategy, such as EU funds (PHARE, SAPRD and ISPA), as well as contributions from employers, municipalities and non-governmental organisations

Commentary

The employment strategy adopted by the government is a positive step in facing up to the problems of the Bulgarian transition process. However, the strategy has some defects. The social partners noted some of these problems, but no solutions were found. For example, the strategy does not include specific measures for such major problem groups as: illiterate people; people discouraged from actively seeking jobs (these people are mentioned as a problem, but no measures are provided); Bulgarian people currently employed outside Bulgaria (including young people and specialists); and people faced with more than one disadvantage (eg a combination of factors such as being young, disabled, uneducated, orphaned or belonging to the Roma minority). Furthermore, the strategy does not state clearly the methods for transforming inefficient and marginal temporary employment into sustainable and efficient employment. There is a continuing tendency in the structure of job offers on the labour market for these to be mainly temporary unstable jobs, not requiring specialisation and needing a low level of education. Another problem in the strategy is that it does not stipulate research into, and monitoring of, informal employment, thus not helping its transformation into formal employment. Although the strategy stresses the connection between, and monitoring of, district and municipal levels, there is no connection between the strategy and the priorities of the national plans for economic development and for regional development. Finally, one of the main failings in the strategy is that it does not have a detailed finance plan. There is no distribution between the different sources of finance and no clear view of the amounts the various sources are going to provide. Thus there is no clear indication as to whether the strategy's ideas can be realised. (Bozhidar Arsov, Institute for Social and Trade Union Research)

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