1. Transition, Globalisation and Labour in the BS & CA Region
23-24 February 2009
Athens
Kiichiro Fukasaku
Head of Regional Desks
Development Centre

2. 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

3. An OECD Development Centre Economic Outlook
BSECAO 2008
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)

4. Strong & Sustained Overall Growth
Over , 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:
The European 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,

5. Specialisation in BSEC-CA Countries
Exports
Specialisation in BSEC-CA Countries
Export specialisation (Balassa) Index
average
SITC group 1 2 3 4 6
beverages & tobacco
crude materials (ex. fuel)
mineral fuels
animal & vegetable oils
manufactured goods
Albania
1.9
3.4
0.3
0.1
Armenia
10.7
3.5
3.9
Azerbaijan
0.8
0.9
8.8
2.3
0.2
Bulgaria
2.5
0.7
1.8
Georgia
18.8
7.4
0.4
Greece
4.6
6.4
1.5
Kazakhstan
2.1
6.9
1.4
Kyrgyz Rep.
3.6
Moldova
33.3
2.8
8.7
0.6
Romania
Russia
5.3
1.1
Serbia
2.6
Tajikistan*
7.6
4.4
Turkey
0.5
1.2
Turkmenistan*
9.3
Ukraine
2.4
5.2
3.1
Uzbekistan* 10
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

6. Successive Waves of FDI Flows
Investment
Successive Waves of FDI Flows
FDI in USD Million
SEE: Second wave of FDI
Central Europe:
First Wave of FDI
SCU:
Third wave?
Source: EBRD Transition report 2007, OECD DAF/PSD

7. Labour Market Policies in the Global Environment
BSECAO 2008
Labour Market Policies
in the Global Environment
SHOCKS:
Transition
Globalization
Firms
(chapter 4)
Households
(chapter 5)
Governments
(chapter 6)

8. Labour Market Outcomes
BSECAO 2008
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

9. A heavy social cost: death rates in BSEC-CA countries
Social indic.
A heavy social cost: death rates in BSEC-CA countries
Source: OECD Development Centre / IMF

10. Households’ Coping Mechanisms
BSECAO 2008
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

11. Policy Responses BSECAO 2008
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

12. Conclusions and Policy Recommendations
BSECAO 2008
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

13. GDP growth disparities across countries in the BS region
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

14. 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)

15. Thank you