1.1 National policy and socio-economic context

Document Sample
1.1 National policy and socio-economic context Powered By Docstoc
					     Government of the Republic of Serbia




                   Draft
 OPERATIONAL PROGRAMME FOR
HUMAN RESOURCES DEVELOPMENT


              2012 - 2013

 Instrument for Pre-accession Assistance
              Component IV


                  2nd Draft
                  May 2011
                                                  OP for Human Resources Development, 2012-2013                                     2nd draft


Table of Contents
ABBREVIATIONS & GLOSSARY
INTRODUCTION & SUMMARY

1 CONTEXT, CONSULTATION AND COORDINATION ................................................................... 1
1.1 National policy and socio-economic context .................................................................................. 1
    1.1.1 Demographics ..................................................................................................................... 1
    1.1.2 Macro-economic context .................................................................................................... 2
    1.1.3 Income levels and poverty .................................................................................................. 9
    1.1.4 Employment and labour market....................................................................................... 18
    1.1.5 Education and VET ............................................................................................................ 42
    1.1.6 Social inclusion ................................................................................................................. 61
1.2 Community strategic framework .................................................................................................. 81
    1.2.1 Introduction ...................................................................................................................... 81
    1.2.2 IPA regulations ................................................................................................................. 82
    1.2.3 European Partnership ....................................................................................................... 83
    1.2.4 Community Strategic Guidelines (CSG) for 2007-2013 ..................................................... 84
    1.2.5 Europe 2020...................................................................................................................... 85
    1.2.6 Coordination mechanisms ................................................................................................ 86
1.3 Partnership consultation ............................................................................................................... 88
1.4 Ex ante evaluation ......................................................................................................................... 90
2 ASSESSMENT OF MEDIUM TERM NEEDS, OBJECTIVES AND STRATEGIC PRIORITIES ............... 92
2.1 Socio-economic analysis (including SWOT analysis) ..................................................................... 92
    2.1.1 General ............................................................................................................................. 92
    2.1.2 Employment & labour market .......................................................................................... 96
    2.1.3 Education and VET .......................................................................................................... 105
    2.1.4 Social inclusion ............................................................................................................... 114
2.2 Strategic priorities ...................................................................................................................... 121
3 PROGRAMME STRATEGY .................................................................................................. 126
3.1 Priority axes and measures ......................................................................................................... 126
    3.1.1 Priority Axis 1 – Employment and Labour Market .......................................................... 126
    3.1.2 Priority Axis 2 – Education and VET ................................................................................ 138
    3.1.3 Priority Axis 3 – Social Inclusion ..................................................................................... 149
3.2 Technical assistance ................................................................................................................... 159
    3.2.1 Priority axis 4 - Technical Assistance .............................................................................. 159
    Measure 4.1 - Programme management, information and publicity ......................................... 162
    Measure 4.2 - Preparation of studies, programmes and projects .............................................. 164
3.3 Horizontal issues......................................................................................................................... 166
    3.3.1 Equal opportunities for men and women ....................................................................... 166
    3.3.2 Environmental protection and sustainable development .............................................. 168
    3.3.3 Participation of civil society ............................................................................................ 169
3.4 Complementarities and synergies with other forms of assistance .......................................... 170
    3.4.1 Coherence with national programmes ........................................................................... 170
    3.4.2 Coherence with other IPA Components .......................................................................... 171
    3.4.3 Coherence with bilateral and IFI assistance ................................................................... 176
4 FINANCIAL TABLES ............................................................................................................ 178
5 IMPLEMENTATION PROVISIONS ........................................................................................ 181
5.1 Management and control structures .......................................................................................... 181
    5.1.1 Bodies and authorities .................................................................................................... 181
    5.1.2 Separation of functions .................................................................................................. 193
                                                 OP for Human Resources Development, 2012-2013                                     2nd draft


5.2 Monitoring and evaluation.......................................................................................................... 194
    5.2.1 Monitoring arrangements .............................................................................................. 194
    5.2.2 Management Information System ................................................................................. 196
    5.2.3 Monitoring system and indicators .................................................................................. 197
    5.2.4 Selection of operations ................................................................................................... 197
    5.2.5 Sectoral annual and final reports on implementation.................................................... 198
    5.2.6 Evaluation arrangements ............................................................................................... 198
5.3 Information and publicity............................................................................................................ 199
    5.3.1 Introduction .................................................................................................................... 199
    5.3.2 Partnership and networking ........................................................................................... 200
    5.3.3 Internet ........................................................................................................................... 200
                            OP for Human Resources Development, 2012-2013                2nd draft


ABBREVIATIONS AND GLOSSARY
AA         Audit Authority
ALMPs      Active Labour Market Programmes
BPMIS      Budget Planning and Management Information System
CAO        Competent Accrediting Officer
CARDS      Community Assistance for Reconstruction, Development and Stabilisation
CBC        IPA component II (Cross-Border Cooperation)
CC         Community contribution
CFCU       Central Finance and Contract Unit
CM         Case Manager
COCOF      Coordination Committee of the Funds
CSA        Cash Social Assistance (equivalent to ‘guaranteed minimum income’)
CSG        Community Strategic Guidelines on Cohesion
CSO        Civil society organisations
CSW        Centres for Social Work
CVEAE      Council for Vocational Education and Adult Education
CVET       Continuing Vocational Education and Training
CVR        Centre for Vocational Rehabilitation and Employment of Persons with Disabilities
DEU        Delegation of the European Union
DFID       Department for International Development
DIS        Decentralised Implementation System for EU Funds
DILS       Delivery of Improved Local Services
EBRD       European Bank for Reconstruction and Development
EC         European Commission
ERA        End Recipient Agreement
ESC        Evaluation Sub-Committee
ETF        European Training Foundation
EU         European Union
EUROSTAT   European Statistical Office
FAO        Food and Agriculture Organisation of the United Nations
FDI        Foreign Direct Investment
FMIS       Financial Management Information System
FREN       Foundation for the Advancement of Economics
GDP        Gross Domestic Product
GVA        Gross Value Added
HBS        Household Budget Survey
HOS        Head of Operating Structure
HRD        Human Resources Development
ICT        Information and Communication Technologies
IDPs       Internally Displaced Persons
IFI        International Financial Institution
ILO        International Labour Office
IMF        International Monetary Fund
IPA        Instrument for Pre-accession Assistance
IPARD      IPA component V (Rural Development)
IR         Implementing Regulation
ISDACON    Inter Sectoral Development and Aid Coordination Network
ISCED      International Standard Classification of Education
ISP        Institutes for Social Protection
IT         Information Technology
LEC        local employment councils
LFS        Labour Force Survey

      i
                         OP for Human Resources Development, 2012-2013   2nd draft


LLL      Lifelong Learning
LSG      Local Self-Government
LSMS     Living Standards Measurement Study
MC       Monitoring Committee
MICS     Multiple Indicator Cluster Surveys
MIPD     Multi-annual Indicative Planning Document
MIS      Management Information System
MoES     Ministry of Education and Science
MoERD    Ministry of Economic and Regional Development
MoLSP    Ministry of Labour and Social Policy
MoF      Ministry of Finance
NAO      National Authorising Officer
NCHE     National Council for Higher Education
NEAP     National Employment Action Plan
NEC      National Education Council
NES      National Employment Service
NF       National Fund
NIPAC    National IPA Coordinator
NGO      Non-Governmental Organisation
NPAA     National Programmes for the Adoption of the Acquis
NQF      National Qualifications Framework
OECD     Organisation for Economic Cooperation and Development
OIS      Operation Identification Sheet
OP       Operational Programme
OS       Operating Structure
OSC      Operation Selection Committee
PISA     Programme for International Student Assessment
PRAG     Practical Guide to EC External Aid Contract Procedures
PWD      People With Disabilities
R&D      Research and Development
RPI      Retail Price Index
RS       Republic of Serbia
RSD      Serbian Dinar
RSO      Republican Statistical Office
RTC      Regional Training Centre
SCF      Strategic Coherence Framework
SCFJB    SCF Joint Body
SCO      Strategic Coordinator
SEA      Strategic Environmental Assessment
SEC      Socio-Economic Council of the Republic of Serbia
SEIO     Serbian European Integration Office
SEA      Strategic Environmental Assessment
SIEPA    Serbian Investment and Export Promotion Agency
SIF      Social Innovation Fund
SILC     Survey on Income and Living Conditions
SIWG     Social Inclusion Work Group
SME      Small and Medium-sized Enterprise
SMC      Sectoral Monitoring Committee
SWOT     Strengths, Weaknesses, Opportunities and Threats
TA       Technical Assistance
TAIEX    Technical Assistance and Information Exchange instrument
UN       United Nations
UNDP     United Nations Development Programme


    ii
                           OP for Human Resources Development, 2012-2013     2nd draft


UNESCO    United Nations Educational, Scientific and Cultural Organisation
UNHCR     United Nations High Commissioner for Refugees
UNICEF    United Nations Children’s Fund
VET       Vocational Education and Training
WB        World Bank




    iii
                                     OP for Human Resources Development, 2012-2013                     2nd draft



                            GLOSSARY OF OP TECHNICAL TERMS
Absolute poverty       Consumption needed to meet basic subsistence (food and non-food) based on a
line                   consumption basket calculated by the Republic Statistical Office corrected year by year
                       for changes in the price level (Purchasing Power Index). In transition countries, it is
                       generally accepted that consumption represents a better indicator of material well-being
                       than income as it shows greater stability over time.
Active inclusion       A comprehensive policy mix combining three elements, namely: (i) a link to the labour
                       market through job opportunities or vocational training; (ii) income support at a level
                       that is sufficient for people to have a dignified life; and (iii) better access to services that
                       may help some individuals and their families in entering mainstream society, supporting
                       their re-insertion into employment (through, for instance, counselling, healthcare,
                       housing, childcare, lifelong learning, ICT training, psychological and social rehabilitation).
Activity rate          Total number of all employed and unemployed people expressed as a percentage of the
(participation rate)   total working-age population.
Active Labour          The principal instrument to improve the functioning of the labour market through
Market Programmes      targeted support to the unemployed. ALMPs provide labour market integration measures
(ALMP)                 for the job seekers. The primary goal of active labour market policies and programmes
                       (ALMPs) is to support the transition from inactivity and unemployment to labour market
                       and work maximising the opportunities available in the economy.
At-risk-of-poverty     Percentage of individuals living in households where the total household income is below
rate                   60% of national median income, after social transfers. At-risk-of-poverty-rate allows
                       comparisons with poverty levels in the EU, where relative poverty line is calculated based
                       on income.
Carer allowance        Cash benefit intended for protection of persons who, due to physical or sensory
                       impairment, intellectual difficulties or deteriorated health conditions are in need of
                       another person's care and assistance in order to meet their basic needs. In contrast to
                       CSA, carer allowance is conditioned only by a health condition, not by the beneficiary’s
                       financial standing.
Case management        System of coordination of care services to meet individual personal needs and involving a
                       continuous cycle of assessment, service planning, service provision, monitoring and
                       review.
Cash Social            Means-tested cash benefit equivalent to the guaranteed minimum income for no or low
Assistance (CSA)       income households. The level of support granted is related to the number of family
                       members. It is activated when the individual or the family are unable to maintain even
                       the minimum living standard.
Child allowance        Cash benefit targeted to poor families with children. It is a conditional cash transfer i.e.
                       the entitlement to child allowance can be acquired for no more than four children in a
                       family, provided that they attend elementary or secondary school regularly and can be
                       extended beyond school age for children with disabilities up to 26 years if they are
                       covered by educational programmes or training for work. The threshold and entitlement
                       levels are equal for all children in the whole of Serbia and are indexed to the cost of
                       living. The threshold and entitlement levels are higher (an increase in the threshold by
                       20% and the amount of child allowance by 30%) for foster and guardian families, single
                       parents and children with disabilities in order to encourage alternative initiatives to
                       institutional placement.
Community based        A wide range of non-institutional services locally based, including supportive, health and
services               personal care, which help people in need of assistance lead a life as independent as
                       possible in their own homes or in a substitute environment of their choice.
Competence             The proven ability to use knowledge and skills and personal, social and/or methodological
                       abilities, in work or study situations and in professional and personal development. In the
                       context of the European Qualifications Framework, competence is described in terms of
                       responsibility and autonomy.


      iv
                                      OP for Human Resources Development, 2012-2013                     2nd draft


Consumer unit           Defined as either (1) all members of a particular household who are related by blood,
                        marriage, adoption, or other legal arrangements; (2) a person living alone or sharing a
                        household with others or living as a roomer in a private home or lodging house or in
                        permanent living quarters in a hotel or motel, but who is financially independent; or (3)
                        two or more persons living together who pool their income to make joint expenditure
                        decisions.
Curriculum              The set of courses, and their content, offered at a school or university. A curriculum is
                        prescriptive, and is based on a more general syllabus which merely specifies the topics to
                        be understood and the level to be achieved in order to obtain a particular grade or
                        standard.
Deinstitutionalisatio   Process of limiting admission to institutions and accelerating placements outside
n                       institutions with a view to closing those institutions.
Difficult to employ     Any person encountering particular difficulty in finding a job due to unfavourable life
population              circumstances such as poor health, insufficient education, disadvantaged socio-economic
                        background and/or place of residence, etc.
Drop-out rate           Percentage of children having abandoned school before achieving their first qualification.
Early school leavers    Percentage of the population aged 18 to 24 with no more than secondary education and
                        not engaged in further education or training (Eurostat).
Earmarked transfer      Funds allocated to an exclusive purpose e.g. for social welfare services, education, etc. In
                        Serbia, the State may earmark funds for transfer to local government units in order to
                        perform specific functions. The relevant Line Ministry determines the amount of money
                        earmarked and the criteria for transferring it to individual local government units as well
                        as the dynamics of transfer.
Employment rate         Total number of people in employment expressed as a percentage of the total working-
                        age population aged 15-64. An employed person is defined as anybody who performed
                        any work at all in the reference period for pay or profit (or pay in kind), or was
                        temporarily absent from his/her job for reasons such as illness, parental leave, holiday,
                        training or industrial dispute.RSO labour force surveys are carried out according to this
                        definition and capture therefore both formal and informal employment.
European                The EQF is a common reference framework for qualifications systems in Europe. It
Qualification           encourages countries to relate their national qualifications systems (general, higher
Framework (EQF)         education and vocational education and training) to the EQF so that all new qualifications
                        carry a reference to an appropriate EQF level in order improve the transparency,
                        comparability and portability of citizens' qualifications issued in accordance with the
                        practice in the different countries.
Fertility rate          The ratio of live births in an area to the population of that area; expressed per 1000
                        population per year.
Formal learning         Formal learning is always organised and structured, and has learning objectives. From the
                        learner’s standpoint, it is always intentional i.e. the learner’s explicit objective is to gain
                        knowledge, skills and/or competences. It takes place within education and training
                        establishments and leads to recognised certificates and qualifications
Gini coefficient        Coefficient measuring the inequality in income distribution on a scale ranging from 0 to
                        100, where 0 means perfect equality (where everyone has the same income) and 100
                        means perfect inequality (where one person has all the income, and everyone else has
                        zero income).
Gross value added       The value of all newly generated goods and services in basic prices less the value of all
(GVA)                   goods and services consumed as intermediate consumption. Gross value added is
                        compiled according to the industry that created it.
Inactivity rate         Number of persons who are neither employed nor unemployed and are not actively
                        seeking work, expressed as a percentage of the total working-age population.




        v
                                     OP for Human Resources Development, 2012-2013                  2nd draft



Inclusive education    Process of removing barriers in education and enabling all pupils/students, including
                       those from previously excluded groups (in particular, children with disabilities, and
                       children with special education needs), to learn and participate effectively within the
                       general school system.
Individual education   A document for planning additional educational and pedagogical support for children in
plan (IEP)             need (due to social deprivation, developmental impairment, physical disability or for
                       other reasons) and helping the removal of physical and communication obstacles
                       preventing their integration into the education system.
Informal economy       Informal economy (or sector) is business activity which is not monitored or taxed by the
                       Government (‘monitored’ being a euphemism for business registration, declaration of
                       activity and expenditure, etc). It includes (i) all employers, self-employed, and own-
                       account workers of non-registered enterprises; (ii) unpaid family workers; and (iii) all
                       employees without written labour contracts. (ILO Definition) The ‘black economy’ is a
                       subset (trade in illegal goods and services).
Informal               Any job where the employment relationship is, in law or in practice, not subject to
employment             national labour legislation, income taxation, social protection or entitlement to certain
                       employment rights (e.g. advance notice of dismissal, paid annual leave etc). It comprises:
                            -    Informal jobs in the formal sector e.g. where there is no explicit, written
                                 agreement, because the person is casually employed or not declared to the
                                 authorities;
                            -    Paid domestic workers by households; and
                            -    Informal jobs in the informal sector, which by their nature must be informal
                                 employment (even if there are written agreements, the enterprises operate
                                 outside legal boundaries).
Informal               The proportion of people employed informally out of the total number of people
employment rate        declaring themselves employed during the LFS.
Informal learning      Informal learning is never organised, has no set objective in terms of learning outcomes
                       and is never intentional from the learner’s standpoint. Often it is referred to as learning
                       by experience at work, at home or during leisure time for instance or just as experience.
International          ILO-developed tool for organising jobs into a clearly defined set of groups according to
Standard               the tasks and duties undertaken in the job. Its main aims are to provide: a) a basis for the
Classification of      international reporting, comparison and exchange of statistical and administrative data
Occupations (ISCO)     about occupations; b) a model for the development of national and regional
                       classifications of occupations; and c) a system that can be used directly in countries that
                       have not developed their own national classifications.
ISCED                  Instrument developed by the UNESCO for assembling, compiling and presenting statistics
                       of education both within individual countries and internationally.
Participation rate     See activity rate
Learning outcomes      Statements describing competences, skills, knowledge and attitude that learners have
                       achieved, and can reliably demonstrate at the end of a course or programme.
Licensing              The permission granted by the relevant responsible Line Ministry/designated Authority to
                       a service provider/individual practitioner to perform specific services.
Life expectancy        The expected (in the statistical sense) number of years of life remaining at a given age.
Lifelong learning      Lifelong, voluntary, and self-motivated pursuit of knowledge whether formal or informal
(LLL)                  for either personal or professional reasons. As such, it not only enhances social inclusion,
                       active citizenship and personal development, but also competitiveness and employability.
Long-term              People who have been looking for a job for longer than a year
unemployed




        vi
                                      OP for Human Resources Development, 2012-2013                    2nd draft



Minimum service         Simple statements that identify minimum performance required to comply with
standards               structural and functional requirements in social care provision.
National                Nationally accepted reference on occupations providing a standardised framework for
Occupational            organising the world of work in a coherent system.
Classification (NOC)
Non-formal learning     Non-formal learning may occur at the initiative of the individual but also happens as a by-
                        product of more organised activities, whether or not the activities themselves have
                        learning objectives. It takes place outside the main systems of general and vocational
                        education and does not necessarily lead to the award of a formal certificate.
National                A reference framework to facilitate the recognition of learning and to link better the
Qualification           education and training systems to the labour market and civil society. The process of
Framework (NQF)         building a NQF involves the organisation of qualifications and the definition of
                        requirements and standards through social dialogue.
Net reproduction        The average number of daughters a hypothetical cohort of women would have at the end
rate                    of their reproductive period if they were subject during their whole lives to the fertility
                        rates and the mortality rates of a given period. It is expressed as number of daughters
                        per woman. A net reproduction rate equal to 1 means that the population is being
                        replaced pro rata, and when the rate is below 1 it means that the population is not being
                        replaced, therefore a decrease in the total population can be expected.
Programme for           International survey coordinated by the OECD providing comparative data on the
International           knowledge and skills of students and the performance of education systems of
Student Assessment      participating countries.
(PISA)
Population growth       The average annual percent change in the population, resulting from a surplus (or deficit)
rate                    of births over deaths and the balance of migrants entering and leaving a country.
Qualification           A formal outcome of an assessment and validation process which is obtained when a
                        competent body determines that an individual has achieved learning outcomes to given
                        standards.
Relative Poverty        A conception of poverty which argues that people are poor when they are very much
Line                    worse off than other people in their society. In Serbia, relative poverty corresponds to an
                        average consumption below 60% of the median consumption per consumer unit.
Skills                  The ability to apply knowledge and use know-how to complete tasks and solve problems.
                        In the context of the European Qualifications Framework, skills are described as cognitive
                        (involving the use of logical, intuitive and creative thinking) or practical (involving manual
                        dexterity and the use of methods, materials, tools and instruments).
Structural              A mismatch between the supply of skills by the labour force and the needs of employers
unemployment
Supervision in social   A supportive and developmental activity of maintaining or improving professional
care                    capability in the provision of social care
Transformation          An activity of improving the quality of care provided within institutions or developing
                        community outreach services staffed by institutionally based personnel.

Unemployment rate       The number of unemployed persons expressed as a percentage of the total active
                        population (employed and unemployed).
Working-age             All residents within the Republic of Serbia who are aged 15 and 64 inclusive.
population




         vii
                                   OP for Human Resources Development, 2012-2013             2nd draft



INTRODUCTION & SUMMARY
This document presents Serbia’s priorities for financing operations under component IV of the
Instrument for Pre-accession Assistance (IPA), in anticipation of the Republic becoming a candidate
country for European Union membership.

IPA component IV is designed to help aspiring member states to get ready for Structural Funds
(specifically, the European Social Fund), by preparing and managing Operational Programmes (OPs)
which are based on the same principles and practices, but with a tighter focus of eligible activities, a
smaller scale of resources, and the application of pre-accession implementing rules that safeguard
the financial interests of the EU.

Alongside the OP for IPA component III (economic development), which is intended to also equip
Serbia for future Structural Funds (specifically, the European Regional Development Fund), this
represents a new endeavour: the first time that Serbia has prepared a multi-annual, sectoral
programme to identify the most effective and efficient use of EU and national resources.

The OP itself covers the financial perspective 2012-2013, but under the EU’s funding rules, which
follow the Structural and Cohesion Funds model, the timeline for implementing the programme’s
activities extends in practice to 31 December 2016, which sets the mid-term outlook of the OP.

The potential scope of IPA component IV is four-fold:

     Employment and labour market: measures related to the improvement of labour force
      participation, the fight against unemployment and the integration of people at disadvantage
      in the labour market;

     Education and VET: measures related to the development of a skilled workforce, the
      promotion of lifelong learning and social inclusion and the modernisation of the education
      and VET systems in line with labour market needs;

     Social inclusion: measures related to the reduction of poverty, exclusion and discrimination
      and the promotion of disadvantaged and vulnerable groups’ full participation in society and
      economy.

     Technical assistance (TA) for preliminary studies, administrative capacity-building and
      preparatory, management, monitoring, evaluation, information and control activities.

This Operational Programme for Human Resources Development (OP-HRD) follows the programming
logic which is applied to Structural Funds in EU member states. This is about making informed
choices on the best use of inevitably limited funding (the principle of concentration), based on:
consistency with EU and national priorities; continuity from past investments, studies and project
preparation; and complementarities with existing and parallel activities, including national
programmes, other IPA components, donor and IFI assistance. Preparing the OP requires a regular
process of inter-ministerial coordination and consultation with partners which represent economic,
social and environmental considerations, including civil society organisations. It demands rigorous
scrutiny by independent evaluators during the process of OP development (ex ante), as well as by
the European Commission (EC). The OP also fits under the umbrella of the Strategic Coherence
Framework (SCF), which is the overarching reference document for the planning and coordination of


    viii
                                          OP for Human Resources Development, 2012-2013                       2nd draft


IPA components III and IV, and as such, provides the overall strategic structure and vision for the two
OPs.

The following table summarises the choices made in the OP-HRD, with regard to concentration of
resources:

Sector             Potential scope                       Concentration within OP      Rationale
Employment &       Active and preventive labour          Strengthening                Capacity building at local level is
labour market      market measures to raise the          employment policy at         required to improve employment
                   employability and adaptability of     local level; active labour   policy and follow up on labour
                   the workforce, combat                 measures for difficult-to-   market institutions strengthening
                   unemployment and increase LM          employ people, improved      carried out under IPA I. ALMP
                   participation; capacity building of   access of people with        targeting difficult-to-employ people
                   labour market institutions to         disabilities to              are needed to complement existing
                   improve efficiency of labour          employment, capacity-        LM measures and increase the
                   markets.                              building of labour           impact of employment policy; the
                                                         inspectorates and            recently adopted Law on Vocational
                                                         promotion of flexible        Rehabilitation and Employment of
                                                         forms of work                People with Disabilities (PwD) needs
                                                                                      to be enforced to improve the
                                                                                      labour market situation of PwD;
                                                                                      fighting against the growing
                                                                                      informal employment requires the
                                                                                      strengthening of labour
                                                                                      inspectorates and the promotion of
                                                                                      flexible forms of work with a view to
                                                                                      introducing flexicurity in the long
                                                                                      run.
Education &        Reforms in education and training     NQF development,             NQF is key to quality education and
VET                systems, in order to develop          support to VET reforms;      training systems; VET schools need
                   employability and labour market       development of adult         to upgrade their training offers and
                   relevance, increased participation    learning, promotion of       become more responsive to the
                   in education and training             pre-school education and     needs of the economy, a wider
                   throughout the life-cycle,            inclusive education.         range of adult education
                   integration of disadvantaged                                       opportunities is needed in order to
                   groups into society and economy                                    improve labour market participation
                   through education and learning.                                    and workforce employability and
                                                                                      adaptability; better pre-school and
                                                                                      inclusive education is needed to
                                                                                      improve access to education and
                                                                                      reduce drop-out rates among
                                                                                      children of disadvantaged groups
Social inclusion   Reinforce social inclusion and        Development of               Serbia is pursuing social welfare
                   integration of people at a            community-based              reforms centred on the
                   disadvantage, with a view to their    services providing cross-    decentralisation of services delivery
                   sustainable integration in            sectoral solutions to        and better linkages between
                   employment, and combat all forms      vulnerable and               education, health, housing and
                   of discrimination in the labour       disadvantaged groups         labour market policies to address
                   market                                and support to LSGs in       the needs of disadvantaged and
                                                         leading social inclusion     vulnerable groups and facilitate
                                                         policies. Support the        their transition to the labour
                                                         transition from welfare to   market.
                                                         work through active
                                                         inclusion measures.




       ix
                                  OP for Human Resources Development, 2012-2013          2nd draft


In accordance with programming logic, the OP takes the following structure:

   It takes the policy priorities of the Republic of Serbia and the European Union as its overall
    strategic context, all within the framework of preparations and negotiations for accession, and
    presents an analysis of the current situation, based on historic factors and recent performance,
    and describes the process of inter-ministerial and policy coordination, partner consultation, ex
    ante evaluation (chapter 1).

   It then projects forward the medium-term needs and challenges facing Serbia in the fields of
    employment and labour market, education and VET and social inclusion based on an assessment
    of existing, internal strengths and weaknesses and future, external opportunities and threats
    (chapter 2).

   To meet these medium-term challenges, the OP sets out its own strategy (chapter 3), which
    follows a hierarchy of objectives and outcomes, starting with an overarching goal, identifying
    objectives for each sector (employment, education and VET, social inclusion and TA), which
    define the strategic priorities, and disaggregating these priorities into subsidiary measures,
    whose combined effect will achieve the sector’s objective, as measured through results
    indicators. The measures are the key level of the OP for selecting and implementing operations,
    whose performance will be assessed through the achievement of output indicators (which in
    turn will achieve results at the level of the four sectoral priority axes). The operations
    themselves will be chosen or confirmed, and approved after agreement of the OP by the
    European Commission.

   Alongside the achievement of performance targets (defined alongside the indicators), the most
    important parameter for the OP is the financial table (chapter 4), which lays down the funding
    limits for each priority axis and each measure, and the prescribed mix of IPA grant (85%) and
    national co-financing (15%).

   The implementing arrangements for the OP (chapter 5) centre on the ‘operating structure’ of
    accredited bodies within Serbian ministries, which is responsible for sound financial
    management of the OP, maximising expenditure, minimising errors and irregularities, and
    ensuring its objectives and targets are fulfilled.

The relationship in the OP between context, analysis, strategy (goal, objectives and priorities) and
action (measures), and the role of partnership and synergies, is summarised overleaf.




      x
     OP for Human Resources Development, 2012-2013   2nd draft




xi
                                              OP for Human Resources Development, 2012-2013                  2nd draft


1 CONTEXT, CONSULTATION AND COORDINATION

1.1      National policy and socio-economic context
The following section provides an overview of the contextual factors which will shape the strategy
and medium-term perspective of the Operational Programme. It places a particular emphasis on key
events in the recent past for Serbia which provide the starting point and baseline for the OP’s
interventions from 2012 onwards. All data, diagrams and tables used in section 1.1 are taken from
the latest available official statistics1.

1.1.1 Demographics

Demographic trends are vital for understanding the challenges facing human resources development
in Serbia, as they have a direct impact on: the size and structure of the working-age population and
the non-working age population supported by employment and wealth creation; the potential scale
of entry to the education system at every level; and the characteristics of society, including groups at
most risk of social exclusion.

According to the Serbian Statistical Office’s official population data (projections based on Census
2002), Serbia counted 7,306,677 inhabitants on January 1st 20102. The country has lost 3.6% of its
population since 1998 when the figure amounted to 7,567,745. In 2010, the population ‘growth’ rate
was negative (-0.39%)3. The fertility rate, 1.4 children per woman in 2008, remains at a low level and
below the rate necessary to maintain the population level in the long-term. This fertility rate almost
corresponds to the EU-27 average, which amounted to 1.5 in 2007.

The decline in population reflects both low fertility rates and continued emigration due to the
hardships linked with economic transition and a shortage of work opportunities.

                                                  TOTAL POPULATION, thousands
                                                           1998-2009

                     7,600

                     7,500

                     7,400

                     7,300                                                              Population in the
                                                                                        middle of the year
                     7,200

                     7,100




             Source: Serbian Statistical Office

                                                           Figure 1

According to the latest estimate (31st December 2010), the population of Belgrade accounted for
22.3% of the total population.


1
  All data presented in the OP excludes Kosovo and Metohija, in accordance with UN Security Council Resolution 1244.
2
  Labour Force Survey (October 2009) shows a higher population base amounting to 7,528,262, because it includes Kosovo
according to UN Security Council Resolution 1244.
3
  Serbian Statistical Office, January 2010 vs. January 2009. Census 2002: 7.50 million.; 1991: 7.58 million




        1
                                          OP for Human Resources Development, 2012-2013                       2nd draft




                                            Population (2009), thousands


                   8,000
                   7,000                                                             Belgrade
                   6,000
                   5,000                                                             Vojvodina
                   4,000
                   3,000                                                             Central Serbia
                   2,000                                                             without Belgrade
                   1,000


                               working-age        Total population
                                population
                    Source: Serbian Statistical Office
                                                         Figure 2

The population of Serbia comprises 51% women and 49% men. The age structure of the population
in Serbia is very similar to the EU-27 average. Like these countries, Serbia is experiencing
demographic ageing4. 17.1% of the population was above sixty-five5, which is almost equal to the
EU-27 average in 20086.

Life expectancy is slightly lower in Serbia than in the EU-27 for both sexes. In 2009, it amounted to
71.1 years for men and 76.4 for women compared with 76.1 years and 82.2 years respectively in the
EU7. This is a slight improvement in comparison to 1998 when life expectancy was approximately
one year less for both sexes.

The population of Serbia is predominantly made up of ethnic Serbs (83%) with significant minorities
of Hungarians (around 300,000 persons or 3.9% of the total population), Roma (1.4% of the
population8), and Albanians (0.8% of the total population). The Serbian diaspora is estimated at 3.5
million people9.

1.1.2 Macro-economic context

The underlying context for socio-economic development in Serbia is a macro-economy which has
demonstrated strong year-on-year expansion since 2000, until the global economic crisis started in
2008 and hit hardest in 2009. The key headline facts and figures10 are set out below:

4
  According to Eurostat, the share of the persons of 80 years and over in the EU-27 is projected to grow from 4.1% in 2006
to 11.2% in 2050.
5
  Serbian Statistical Office, estimate in mid-2009
6
  17%, Eurostat, 2008
7
  Eurostat, 2007
8
  According to NGO estimates, the Roma account for 6.2% of the population
9
  The Serbian diaspora comprises all people who consider Serbia their homeland and who identify with Serbian culture and
language, regardless of whether they have Serbian citizenship or they belong to the second and third generation of
emigrants, whether they are living overseas or within our region, whether they are Serbs or national minorities who live in
Serbia. Most members of the Serbian diaspora are living in the USA and Canada, in the countries of Western Europe and in
the other countries of former Yugoslavia. Source: Ministry for Diaspora
10
   Unless stated otherwise, the historic data quoted below concerning macro-economic performance is taken from the
Ministry of Finance’s “Public Finance Bulletin” July 2010 and the MoFs “Basic Macroeconomic Indicators, updated October
7, 2010” up to August 2010, using whichever source provides the most recent data. These statistics will be updated in later




        2
                                        OP for Human Resources Development, 2012-2013                     2nd draft


        Serbia’s national output grew strongly and consistently through most of the last decade,
         with GDP almost trebling in value from €12.8 billion (2001) to €33.4 billion (2008). After
         inflation, Serbia enjoyed overall real GDP growth averaging over 6% at times over the
         period, which was marginally above the long-term trend rate. The global financial crisis
         started to affect the economy in the fourth quarter of 2008, leading to a 3.1% contraction in
         2009 to an estimated €30.0 billion, but is forecast to show a modest increase of 1.5% in
         2010, and to rise to 3.0% growth in 2011.

        The wealth of the average household also improved significantly from 2001 to 2008. Annual
         GDP per capita more than doubled from €1709 (2001) to €4547 (2008), due to high rates of
         real GDP growth. However, GDP per person remains low by EU-27 standards (the average
         being €25 100 in 200811), and even by comparison with other EU candidate and potential
         candidate countries. In line with GDP trends, per capita levels in Serbia fell to €4093 in 2009,
         and have slid further in 2010 to €4016. However, Serbia’s GDP per capita is forecast to
         recover in 2011 (€4388).

        Real GDP growth in Serbia has been partly due to falling inflation12, which was brought
         under tighter control in the 2000s through monetary and fiscal policy measures,
         management of the dinar-euro exchange rate, and economic reforms. Measured through
         the retail price index (RPI), the inflation rate reduced from 93.3% (2001) to 7.0% (2007). A
         temporary upward turn in 2008 (13.5%) was followed by a lower rate in 2009 (8.6%), and
         inflation measured through RPI continued to decline in 2010 (6.8%). However, the
         predictions for 2011 are bleaker (9.4%).

        Inflation rates have fallen despite a surge in household and investment spending, which has
         been the driving force behind GDP growth and which caused import consumption to rise
         three-fold between 2001 and 2008. While exporting also increased and over half went to EU
         countries, the total value of exports stood at only 45% of imports in 2008. A widening
         import-export gap has produced a growing trade deficit, which reached €9 billion in 2008,
         and a current account deficit13 of 21.6% of GDP in 2008, before improving in 2009 to €5.5
         billion (trade deficit) and 7.6% of GDP (current account deficit). The current account deficit is
         expected to have worsened in 2010 (9.3% of GDP), despite the surge in exports, exceeding
         the rise in imports, compared with the same period in 2009. The current account is expected
         to begin to improve in 2011 (8.2%), nNevertheless, the Serbian economy remains highly
         dependent on inflows of foreign capital (investment and credits) to achieve its balance of
         payments.

        Net foreign direct investment (FDI) in the period 2001-2008 amounted to more than €11
         billion, mostly directed into the financial, transport and processing sectors. This inflow
         reached a peak in 2006 of €3.3 billion, mainly from privatisation in the areas of
         telecommunications, banking, insurance, etc. Net FDI fell sharply from €1.8 billion in 2008 to
         €1.4 billion in 2009, as a result of the global financial crisis, while net FDI for the first 11
         months of 2010 (€0.8 billion) did not reach half the value of 2008.


drafts of the OP, as new data becomes available and estimates are confirmed. Estimates for 2010 and 2011 are taken from
the Government’s “Memorandum on the Budget and Economic and Policy for 2011, with Projections for 2012 and 2013”,
(August 2010)
11
   Eurostat, Compact Guides 2010
12
   Measured by consumer prices, as an average for the period; to allow comparisons with 2001, the COICOP methodology
is not applied to this data
13
   Excluding donations




        3
                                          OP for Human Resources Development, 2012-2013                         2nd draft


        By the end of October 2010, some 2405 socially-owned enterprises had been privatised with
         total employment of 340,899, achieving revenues of almost €2.7 billion, and investment of
         over €1.2 billion. In 2009, only 94 enterprises were privatized and 34 in the first ten months
         of 2010, which is well below the approximate average of 325 in the period between 2002
         and 2008.14

        The Government had adopted an expansionary fiscal policy before the international
         economic and financial crisis hit Serbia. Public expenditure by the whole of Government
         reached the equivalent of around € 12.4 billion15 in 2010, an increase in nominal terms of
         92% over 2005 levels. At the same time, public revenues amounted to around €11.3 billion 16
         in 2009, leading to a fiscal deficit of 4.8% of GDP reflecting in part the ‘automatic stabilisers’
         of lower tax and other revenues and higher welfare spending. The deficit is expected to
         narrow to 4.1% in 2011, as fiscal retrenchment measures take effect and the economy
         returns to healthier growth rates.

        While the Government has been running fiscal deficits since 2006, the proceeds from
         privatisation have helped Serbia to manage public debt successfully through the 2000s.
         Measured against national output, Serbia succeeded in reducing its public debt from 104.8%
         of GDP (end 2001) to 26.3% (end 2008). Debt has increased during the global crisis, and
         stood at 32.9% in December 2009, and 41.4% by December 2010 which, despite rising, is still
         in line with the Budget System Law that provides a limit of 45% public debt to GDP. In the
         first two months of 2011, public debt stood at 39.7%.

        However, Serbia’s overall external debt has been rising since 2004, due to rising private debt
         with foreign lenders, reaching 77.1% of GDP in September 201017, and is estimated to have
         reached 79.3% by end 2010, before falling back to 74.2% by the end of 2011.

        Strong output growth up to 2008 was largely achieved through productivity improvements,
         rather than higher levels of formal employment18. By 2008, official employment levels were
         just under 2 million on average, out of the working age population of almost 5 million 19. The
         crisis reduced formal employment levels by around 110,000 in 2009 (on average) or 5.5%,
         and have slid further in 2010 by 93,000 (a further 5% fall compared to the previous year). In
         fact, the number of people in work stood at less than 1.7 million in January 2011. The MoF
         expects employment to level off in 2011. At the same time, productivity is expected to have
         risen by 5.8% in 2010 and grow 3.0% in 2011.

        These figures do not take account of informal employment20, which raised the number of
         people who declared themselves to be working in 2008 to 2.6 million. This group was hit
         hardest by the recession, the number of informal jobs standing at just below 400,000 in
         January 2011, one third lower than the 2008 peak.



14
   Ministry of Finance, “Revised Memorandum on the Budget and Economic and Policy for 2011, with Projections for 2012
and 2013”, December 2010
15
   1359.9 billion dinars converted at the agreed budgeting rate of 110 RSD: 1 EUR
16
   1223.4 billion dinars converted at the agreed budgeting rate of 110 RSD: 1 EUR
17
   “Analysis of the Republic of Serbia’s Debt – September 2010”, National Bank of Serbia (December 2010)
18
   Statistical Office of the Republic of Serbia, Survey “RAD” (translation is “work”) - the establishment survey and the main
national source of data on formal employment
19
   Source RSO, Survey “RAD”. The RAD survey (translation is “work”) is the establishment survey and the main national
source of data on formal employment.
20
   Labour Force Survey, Statistical Office of the Republic of Serbia; 15-64 age group




         4
                                          OP for Human Resources Development, 2012-2013                       2nd draft


        Taking into account both formal and informal employment, the employment rate21 of the
         population aged 20-64 stood at just 54.2%22 in 2008, well below the proposed Europe 2020
         target of 75%, but has since fallen still further to 51.9% (April 2010).

        The employment data is matched by high levels of unemployment. While the rate fell to
         14.4% in 2008, according to the ILO definition, this has since climbed to 20.0% (January
         2011). No EU member has a national unemployment rate higher than Serbia. Labour market
         inefficiencies remain prevalent, and long-term unemployment (more than one year) has
         been endemic. Already high during the economic peak (10.4% in 2008) 23 the long-term
         unemployment rate climbed higher during the recession, as expected, and stood at 13.4% in
         April 2010, compared to 3.3% in the EU-2724

        Serbia also suffers from a high inactivity rate, accounting for 40.9% of the working-age
         population, meaning that the economy and society is not only losing people to joblessness,
         but also losing people from the labour force, especially as only around one-third of the
         inactive population state they are willing to work. This places a greater pressure on a small,
         formally-employed workforce to generate sufficient output and tax revenue to support
         social welfare and an ageing population.

        Unemployment has also fallen disproportionately hard on vulnerable groups, including
         young people (15-24 years) and older people (over 55 years), as well as Roma and other
         vulnerable groups, such as refugees and IDPs, people with disabilities, single parents, social
         benefit beneficiaries and women, contributing to the picture of social exclusion.

        The growth in GDP through the early-mid 2000s has helped to take people out of absolute
         poverty, defined at subsistence level. However, absolute poverty (7401 RSD25 per person
         per month in 2008) was suffered by 6.1% of the general population26. The previous
         downward trend was reversed in 2009, with 6.9% of the population of Serbia, or
         approximately 500,000 people, lived below the absolute poverty line27, with a monthly
         consumption of less than RSD 8,022 (€85)28 per consumer unit.

        By contrast, Serbia exhibits greater income equality than wealthier European economies.
         The Gini coefficient, which measures the distribution of incomes in society ranging from 0 as
         perfect equality to 1 as perfect inequality, has Serbia at 0.32 (for 2008)29. This compares
         favourably with the EU-27 (0.31 in 200830) and the United States (0.47 in 200731).

As elsewhere in Europe, the recession in Serbia has had a devastating short term impact on the gains
made from 2000 to 2008, particularly on output, employment, unemployment, poverty and the
Government’s fiscal position, leading to retrenchment in public spending and financial support from
the EU and IMF. However, it is expected and inevitable that, while the human costs are high in the
short term, most of the economic effects will be temporary, at least taking the medium-term
21
   Foundation for Economic Development
22
   Population aged 20-64. Foundation for Economic Development, 2010
23
   LFS definition of long-term unemployed: those out of work for 12 months or longer, as a percentage of 15-64 year olds.
24
   Eurostat, Q4 2009
25
   Approximately €88 in 2008
26
   Statistical Office of the Republic of Serbia (March 2010)
27
   The Household Budget Survey in 2009 (April 2010)
28
   Exchange rate EUR/RSD: 95.5. Source: EC inforeuro (2009)
29
   Social Inclusion and Poverty Unit
30
   Eurostat (http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_sic2&lang=en)
31
   US Census Bureau (2008)




         5
                                           OP for Human Resources Development, 2012-2013                         2nd draft


perspective of the OP. Hence, the analysis in the OP focuses on structural factors, rather than
cyclical set-backs, and underlying trends based on the return to growth anticipated from 2011
onwards.

The macro-economy sets the overall context, but the micro-economy of industrial sectors provides a
better understanding of what is happening ‘on the ground’.

Figure 4 overleaf shows the output of the Serbian economy broken down by sector, as measured by
gross value added (GVA)32 in 2008. As with all mature economies, the picture is dominated by the
service sector, which accounts for 60% of output, while manufacturing provides 17%, agriculture,
forestry and fishing stands at 11%, the rest comprising construction (5%) and primary industries
(mining 1% and utilities 4%).

While not directly comparable with GVA data, GDP data shows that the service sector is
characterised by consumer-oriented industries, such as property, finance, trade and
communications, as well as the public sector (administration, services social welfare and defence).

The share of manufacturing (17%) in GVA is comparable with European economies - industry as a
whole, including mining, is very close to the EU-27 average (18%)33. While not directly comparable,
industry figures for GDP at a more disaggregated level show production to be dominated by food &
drink, chemicals and basic metal products.

Agriculture is a proportionately large sector for a European economy, the EU-27 average being just
2% of GVA, and only Bulgaria and Romania of the EU-27 having more than 5% (and both less than
10%). Combined with processing, the wider ‘food and drink’ sector represents a potential source as
comparative advantage to the Serbian economy.




32
   Gross value added (GVA) is defined as the value of all newly generated goods and services in basic prices less the value of
all goods and services consumed as intermediate consumption. Gross value added is compiled according to the industry
that created it. Source of GVA data is the Serbian Statistical Yearbook 2009, Statistical Office of the Republic of Serbia
33
   Eurostat, “European Economic Statistics”, 2010 (GVA data for 2009),




        6
                                  OP for Human Resources Development, 2012-2013              2nd draft




                           Figure 3 Structure of the Serbian economy (2008)
                 Source: Republic Statistical Office - “Serbian Statistical Yearbook 2009”




The so-called ‘higher technology’ sectors, which typically operate in international markets - vehicle
manufacture (automotive, aerospace and others), the production of electrical, electronic, IT and
medical equipment, and the provision of R&D, design and IT services - have seen their share grow in
recent years, but still account for less than 3% of total output.

In this sense, the Serbian economy can be said historically to be structurally geared more towards
consumption and import, rather than high value production and export. However, agriculture and
food industries run a strong trade surplus, along with some other industries, such as wood
processing. In 2009 and 2010, the trade gap narrowed, with the increase in exports exceeding the
increase in imports, and the Ministry of Finance predicting that such a trend will continue in the
2011-2013 period.

There is a strong correlation between GVA of sectors of the Serbian economy and the number of
persons employed in those sectors (figure 5). The biggest discrepancies can be seen in real estate,
renting and business activities, and agriculture (where % of GVA far exceeds the share of employed
persons), as well as manufacturing (the greater percentage of employed persons, compared to GVA,
could be explained through labour-intensive food and other processing activities).




      7
                                         OP for Human Resources Development, 2012-2013                      2nd draft




                                                 Figure 4
                      Employment and Gross Value Added in the Serbian economy (2008)


The number of employed people in 200934 was the highest in manufacturing: 339,428 (17.97%), in
the field of wholesale and retail trade 193,065: (10.22%), health and social work: 162,369 (8.60%),
education: 134,795 (7.14%), transportation: 106,739 (5.65%) and construction industry: 78,936
(4.18%).

No description of the economy would be complete without reference to the informal economy. By
definition, this exists largely outside the realm of official statistics, and comprises both the ‘black
economy’, which includes economic activity which is outlawed (illegal goods and services), and the
‘grey economy’, which covers businesses in otherwise legal trades, but which are not registered /
incorporated, declare their accounts and are taxed. As such, grey businesses enjoy a cost advantage
which creates unfair competition for legitimate businesses, which tends to tip whole sectors towards
informality, while at the same time starving the state budget of revenue to pay for public services
and social welfare.

While the informal economy is concerned with enterprises, informal employment is about people,
and comprises jobs where the employment relationship is not subject to national labour legislation,
income taxation, social protection or entitlement to certain employment rights (for example,
advance notice of dismissal, and paid annual leave). Informal employment covers not only all
employees in the informal sector, but also informal jobs in the formal sector, where there is no
explicit, written agreement, because the person is casually employed or not declared to the
authorities, not registered for tax or social protection purposes and hence enjoy fewer rights than
other workers.



34
  Source RSO, Survey “RAD”. The RAD survey (translation is “work”) is the establishment survey and the main national
source of data on formal employment.




        8
                                        OP for Human Resources Development, 2012-2013                     2nd draft


Unlike the informal economy, however, the scale of informal employment is estimated frequently by
the Labour Force Survey. The informal employment rate in April 2010 stood at 17.2%35, or almost
400,000 people. Since there is almost no informal employment in the public sector, this corresponds
to an informality rate of around one fifth of all employed in the private sector.

1.1.3 Income levels and poverty

Serbian society has become richer since 2000, although it is still relatively poor compared with EU-27
averages. Absolute and relative poverty declined steadily between 2002 and 2008 thanks to
economic growth and better coordination of government’s policies and measures aimed at reducing
poverty in the framework of the Poverty Reduction Strategy, adopted in 200336. The recent
economic crisis led to a deterioration of the overall population’s welfare. The crisis affected
particularly disadvantaged groups living just above the poverty line. As a result, absolute and relative
poverty rates have worsened in 2009 although they are still much lower than in 2006.




35
 Population aged 15-64
36
  The overall goal of the Poverty Reduction Strategy to reduce by half the number of poor population in Serbia by 2010
was achieved in 2007.




        9
                                     OP for Human Resources Development, 2012-2013     2nd draft




Income and consumption

The average net salaries (including all incomes and remuneration received by employees for their
work) have continued to rise since 2004, in line with the economic recovery experienced during
those years37. Given the recent deterioration of the dinar/euro exchange rate, this upward trend
stopped in 2008 although the average amount in dinar continued to rise.




                                                 Figure 5

However, wages and salaries levels remain well below EU-27 countries and are also low compared to
neighbouring countries.




                                                  Figure 6




37
     Ministry of Finance, Bulletin Public Finance, 2010




        10
                                         OP for Human Resources Development, 2012-2013                       2nd draft


The average available monthly budget per household38 amounted to RSD 44,801(€43839) in 2010.
Salaries and wages of the employed represented 46.9% of income in money, while pensions
accounted for another 36.8%. The individual consumption expenditures40 of households in 2010
amounted to RSD 42,448 (€41541), of which expenditures for food and beverages made up the
largest share (41.3%). Average incomes in money and consumption expenditures of households
peaked in 2009, but have slightly declined since then as a result of the economic crisis.




                                                        Figure 7

The Gini coefficient, which measures inequality in income distribution, was stable at 29.5 in 200942.
It corresponds to a low level of inequality, which is equivalent to that which is experienced in the EU-
27, where the average Gini coefficient was 3143.




38
   Cumulating household income in money and household receipts in kind
39
   Exchange rate EUR/RSD: 103.3. Source: EC inforeuro 2010
40
    Individual consumption of households follows COICOP classification (Classification of individual consumption by
purpose): food and non-alcoholic beverages; alcoholic drinks and tobacco; clothes and footwear; dwelling, water,
electricity, gas and other fuels supply; home furniture, equipment, appliances and maintenance; health service; transport;
communications; recreation and culture; education; restaurants and hotels; and other goods and services.
41
   Exchange rate EUR/RSD: 105
42
   See Glossary for the definition of the Gini Coefficient
43
   Eurostat (2007)




      11
                                            OP for Human Resources Development, 2012-2013                          2nd draft




Poverty levels44

In 2009, 6.9% of the population of Serbia, or i.e. approximately 500,000 people, lived below the
absolute poverty line45, with a monthly consumption of less than RSD 8,022 (€85)46 per consumer
unit.




              Source: The Household Budget Survey, the Republic Statistical Office
                                                           Figure 8

Compared to 2008, the poverty rate increased by 12% in 2009. This increase did not come as a
surprise as a large number of households were concentrated just above the absolute poverty line
and were, as a consequence, very vulnerable to economic downturns. However, the poverty rate
remains below the 2006 and 2007 levels and is expected to fall down again as the economy picks up.

In 2009, the median average monthly consumption was worth RSD 9,583 (€ 97) and 13.9% of the
population was below the relative poverty line.




44
   See Glossary for the definitions of the absolute and relative poverty lines, and at-risk-of-poverty-rate used in this section
45
   The Household Budget Survey in 2009 (April 2010)
46
   Exchange rate EUR/RSD: 95.5. Source: EC inforeuro (2009)




      12
                                          OP for Human Resources Development, 2012-2013                       2nd draft


              Source: The Household Budget Survey, the Republic Statistical Office
                                                        Figure 9

Just under a quarter (22.5%) of the population, earning less than 60% of the median average
income47 was living at risk of poverty in 2009. In comparison, the percentage of poor people living in
the EU Member States varied between 10% and 23%48.

As shown in the following paragraphs, there is a strong correlation between the level of poverty and
type of settlement (urban or non-urban)49, the employment status, the education level and the size
of the household.

The percentage of population living below the absolute poverty line in 2009 was much lower in
urban areas (4.9%) than in the rest of the country. This is particularly true in Belgrade, which
recorded the lowest poverty rate, compared with the rest of Central Serbia and with Vojvodina. The
highest share of poor population lived in Central Serbia (the most populated region) – 9.3%, which is
also the region with the highest increase in the number of poor population in comparison to 2008
(7%). Urban areas have also lower levels of relative poverty (9.1% in 2009) than non-urban areas
(19.5% in 2009). Although non-urban areas recorded a significant reduction of poverty in past
several years50 those improvements remain fragile and dependent on economic circumstances.




                 Source: The Household Budget Survey, the Republic Statistical Office
                                                        Figure 10

The economic status of the head of household is the most important of all factors influencing the
level of poverty; 29.3% of households headed by an inactive person were living below the absolute
poverty in 2009. The figure was 17.5% for households headed by unemployed persons and only 3.9%
for households headed by employed persons. It is worth noting that, although only 6% of
households with a self-employed head lived below the poverty line, 39.9% of these households were
at risk of becoming poor compared to 14.4% for households headed by employed people and 49.3%
for households headed by an inactive person.



47
   RSD 12,000 (€ 121)
48
   Eurostat
49
   Namely, the official statistics recognize only two types of settlements: “urban” and “other”, and the latter category is
most often used to calculate data on rural regions, which is not precise enough.
50
   9.6% of the non-urban population lived below the absolute poverty line in 2009 compared to 13.3% in 2006.




      13
                                           OP for Human Resources Development, 2012-2013   2nd draft


There is also an emerging phenomenon of ‘new poor’ among older workers becoming jobless, and
pensioners with low pensions, as well as among people employed for very low and irregular wages,
such as seasonal workers and people working in the informal economy (working poor).51




                   Source: The Household Budget Survey, the Republic Statistical Office
                                                         Figure 11

As expected, education has a determining influence on the economic status of individuals and
therefore on their capacity to generate income and become more prosperous; 14.8% of households
whose heads have no elementary education lived below the absolute poverty line in 2009. The
figure is only 3% for households headed by persons with secondary education. While there was a
generally increase in poverty in 2009 compared to 2008, it is interesting to note that the poverty
decreased in the same period among households whose head had completed secondary and higher
levels of education.




                   Source: The Household Budget Survey, the Republic Statistical Office
                                                         Figure 12



51
     Overview of Poverty and Social Exclusion in the Western Balkans, G.Matkovic (2006)




         14
                                      OP for Human Resources Development, 2012-2013    2nd draft


There is an obvious relationship between poverty levels and the size of households. The highest
recorded poverty was among households with 6 and or more members with the poverty rate around
twice bigger than the average (14.2%), followed by the households with 5 members and single
member households. However, only significant poverty decrease recorded was with single member
families from 6.6% in 2008 to 5.7% in 2009.




            Source: The Household Budget Survey, the Republic Statistical Office
                                                    Figure 13

The risk of poverty depends on the number of adults and dependents composing the household;
35.4% households having 3 or more dependent children were at risk of poverty in 2009. The figure
was 32.1% for single parent households with one of more children and 26.5% for single member old
households aged over 65.




            Source: The Household Budget Survey, the Republic Statistical Office
                                                    Figure 14

Poverty is more pervasive among younger and older members of the population with younger
children being particularly vulnerable to economic fluctuations. The percentage of children living
below the poverty line was above average (9.3%) in contrast to the poverty of adults, which was




     15
                                        OP for Human Resources Development, 2012-2013                  2nd draft


slightly below average (6.4%). While a high increase was recorded in child poverty, poverty among
the elderly has remained stable in 2009 compared to 2008.




              Source: The Household Budget Survey, the Republic Statistical Office
                                                       Figure 15

Children up to 15 and people aged over 65 had also the highest risk of becoming poor (28.1% and
23.2% respectively). However, the risk for children is rising while it is declining for the elderly.




                Source: The Household Budget Survey, the Republic Statistical Office
                                                       Figure 16

Specific studies also suggest that poverty rates among Roma (49.2%), IDPs (14.5%) and refugees
(7.4%) were above-average in 2007.52 Moreover, a recent survey53 show that the current economic
crisis affected particularly vulnerable groups (the Roma, IDPs, single mothers and, social assistance
beneficiaries), as they tend to be employed in the informal economy, where adjustments in the


52
  Living Standards Measurement Survey, 2002-2007
53
  Impact of the Crisis on the Labour Force Market and Living Standards in Serbia, Belgrade 2010, Centre for Liberal
Democratic Studies




      16
                                           OP for Human Resources Development, 2012-2013                         2nd draft


labour force take place more rapidly and on a larger scale. Reduced wages in the formal and
informal economy also contributed to the deterioration of the overall economic situation of
vulnerable groups.

Currently, the social inclusion indicators are measured and monitored by:
         The Republic Statistical Office through the Household Budget Survey (HBS) and the Labour
          Force Survey (LFS), while the Living Standards Measurement Survey (LSMS) was done in
          2002 - 2007 - indicators relating to financial poverty and employment, education and,
          health;
         The Institute for Public Health “Dr Milan Jovanovic Batut” - health indicators;
         The Ministry of Education and Science - education indicators;
         The Independent researches on the position of the specific vulnerable groups are also
          valuable source.
It should be noted that the official statistics provide data on the general population, and detailed
disaggregation of data is limited. Some of the key indicators for social inclusion are not covered54
and some of the most vulnerable groups are not captured. In order to provide reliable data and
quality analysis of the situation and changes over time of the most vulnerable groups, the detailed
classification of the households against different parameters should be improved.

The regular collection of economic and social data according to EU methodology is necessary for
measuring progress with social inclusion and is very important for Serbia’s participation in the EU-
wide social inclusion policy. From this point of view, the preparation of the Survey on Income and
Living Conditions (SILC), which is underway, represents a major advance for the analysis of the
situation of socially excluded groups and individuals in Serbia, and will enable valuable comparisons
with other EU countries. SILC will become the main instrument for measuring social inclusion and
poverty in the future period.




54
  The report “Monitoring Social Inclusion in Serbia – Overview and Current Status of Social Inclusion in Serbia Based on
Monitoring the European and Nationally-Specific Indicators”, by Social Inclusion and Poverty Reduction Unit and the
Statistical Office of the Republic of Serbia (July 2010), provides detailed analysis of the on the existing capacities for the
monitoring of social inclusion indicators and required data




         17
                                         OP for Human Resources Development, 2012-2013                  2nd draft




1.1.4 Employment and labour market

Major labour market indicators and trends

In the period 2006-2008, Serbia achieved an impressive macroeconomic stability performance and a
more favourable microeconomic situation for firms and households. However, at the same time,
despite slight improvements on the labour market until the crisis hit in the last quarter of 2008, the
significant GDP growth experienced earlier in the decade did not convert into notable employment
increases, for several reasons.

                                           Employment and GDP growth
                                                  2004 - 2010
                 10%
                  8%
                  6%
                  4%
                  2%                                                                GDP growth
                  0%
                 -2%
                 -4%
                                                                                    Changes in
                 -6%
                                                                                    Employment
                 -8%
                -10%
                          04      05      06         07      08        09   April
                Source: Serbian Statistical Office                           10
                                                                      55
                                                          Figure 17

First, the economic growth was largely generated by domestic demand, initiated by privatisation
income and, foreign direct investments, as well as access to credit and loans granted by foreign
banks. Even though a portion of these amounts was directed to state and socially owned
enterprises, it was not significant to generate sufficient jobs.

Second, slow legislative changes and limited improvements of the business environment for small
and medium-sized enterprises, which are the main generators of new jobs, were also factors
affecting employment.

The economy is dominated by small and medium-sized enterprises (SMEs), defined as businesses
employing less than 250 people, which account for 99.8% of all enterprises, more than 67% of all
employees, 66% of its turnover and 59% of gross value added (GVA). Serbia’s SME business base is
relatively similar in structure to the EU-27, but skewed towards the smallest firms56 - with 96% micro
enterprises (compared with an average of 92% in the EU-27), 4% are small enterprises (7% in the EU-
27), while only 0.9% make medium-sized enterprises (1% in the EU-27).

Over the past years until the recent economic crisis, large companies have shown consistently higher
productivity levels than SMEs, but this has actually led to job cuts, as shown on Figure 18. In

55
   It should be noted that in 2008 LFS methodology was changed and this is the main reason lying behinf the high
employment growth.
56
   Micro enterprises have up to 9 employees, small enterprises employ 10-49, and medium-sized enterprises employ 50-
249.




      18
                                          OP for Human Resources Development, 2012-2013                       2nd draft


contrast, SMEs have served as a valuable employment generator in this period, but have been
unable to compensate for job-shedding in large enterprises caused by the privatisation and
restructuring process. Even in times of significant economic growth, the benefits of that growth
were transferred to the population through wage increases, and not through employment growth. 57

                            Real growth rates of output, employment and labour productivity

                            15%


                            10%

                                                                                     GVA
                             5%
                                                                                     Employment
                                                                                     Productivity
                             0%
                                  2005 2006 2007 2008 2005 2006 2007 2008
                            -5%
                                          Large                  SMEs

                           -10%

                   Source: Report on SME and Entrepreneurship 2008 (Ministry of Economy and Regional Development)
                                                          Figure 18

When the economic crisis reached Serbia in 2009, many workers became redundant as employers
resorted to dismissals as a way out of economic difficulties. In order to bring down budget deficits,
significant staff reductions also took place in the public sector putting an even greater pressure on
the labour market.

Serbia’s high employment elasticity58, indicates a strong relationship between GDP levels and the
situation on the labour market. The contraction of the GDP experienced in Serbia since 2008
resulted in considerable job losses compared to neighbouring countries. It contributed to accelerate
the restructuring process of socially owned enterprises.59

                          Country           Cumulative fall Total fall in Employment
                                               of GDP       employment     Elasticity
                         Bulgaria                   7.0                 6.1                0.9
                      Czech Republic                4.9                 3.0                0.6
                         Hungary                    9.7                 2.0                0.2
                          Poland                    7.9                 2.9                0.4
                         Romania                   -4.8                 -0.3               0.1
                         Slovenia                   9.7                 1.2                0.1
                         Slovakia                   7.0                 1.2                0.2
                          Croatia                   7.6                 5.4                0.7
                          Serbia                    4.7                 12.5               2.6



57
   The share of SME sector in total GVA increased from 35.5% in 2002 to 45.3% in 2008. It fell to 41.6% in 2009 due to the
crisis. During the same period, the share of employment in SMEs increased from 51.7% in 2002 to 57.8% in 2008 (57.7% in
2009). Source: Republic Development Bureau, Serbian Economy 2009
58
   Employment elasticity measures the percentage change in employment resulting from 1 percentage change in output. It
provides a useful indication of the labour intensity of growth.
59
   Q1 2008 - Q1 2010 FREN




      19
                                          OP for Human Resources Development, 2012-2013                      2nd draft


Serbia, as well as the neighbouring countries and the EU- 27, had negative employment elasticity in
the agricultural sector in the period 2001-2008. In Serbia, it was 0.45, and in the EU-27, it was 1.38.
The highest negative employment elasticity is in the industrial sector (-2.26). The key reason for a
decrease in employment in agriculture and industry is the over- employment that was present in the
previous period in these sectors, or their lack of competitiveness.

     Employment and activity60

The working age population (15-64) in Serbia numbered 4,822,936 people in April 201061. The active
population was made up of 2,851,005 people (59.1% of the working age population) consisting of
2,278,504 employed and 572,501 unemployed and 1,971,930 people were inactive (40.9% of the
working age population).

                                              Population structure per activity
                                                            Aged 15-64




                                             Inactive, 1,971,930         Employed,
                                                   40.9%                 2,278,504
                                                                           47.2%




                                                                              Unemployment,
                                                                                 572,501
                       Source: Labour Force Survey Q1-10                          11.9%

                                                            Figure 19

Employment (47.2%) and activity rates (59.1%) for the population group 15-64, in Serbia in April
2010 are well below EU-27 rates (64.4% and 71% respectively), but also below rates in neighbouring
countries. Serbia is quite far away from reaching the employment rate of 75% - the target set by the
Council of Ministers for the EU in the Europe 2020 Strategy.




                                                            Figure 20

60
   An employed person is defined as anybody who performed any work at all in the reference period for pay or profit (or
pay in kind), or was temporarily absent from his/her job for reasons such as illness, parental leave, holiday, training or
industrial dispute (RSO). RSO labour force surveys are carried out according to this definition and capture therefore both
formal and informal employment.
61
   Labour Force Survey (April 2010)




       20
                                        OP for Human Resources Development, 2012-2013                     2nd draft


For the last 10 years, the participation and employment rates have been decreasing sharply. This is
particularly worrying in the context of a shrinking working age population (15-64), which continues
to characterise Serbia. The fall in the employment rate has been almost continuous in recent years,
with only a slight improvement in 2008, from a peak of 53.4% in 2004, employment fell to 47.2% in
April 2010. The recent deterioration makes it even less likely that Serbia will reach the target of 67%
employment rate by the end of 2010 set in the National Employment Strategy.

The fall in participation and employment are linked to a decline of available jobs and the insufficient
employability and adaptability of the work force. The number of job openings has been falling as a
result of the privatisation and restructuring processes, a phenomenon aggravated by the crisis. The
lack of qualified work force and the high percentage of discouraged long-term unemployed who
have lost motivation to look for a job are negative factors weighing on the labour market.

A higher participation rate of the population is important for competitiveness, especially for an aging
population and is particularly harmful in the current context of the economic crisis and deepening
state deficits. Serbia needs to increase its active working-age population to ensure the viability of its
public services and welfare system. In other words, it is only by putting more people into work and
by reaching higher levels of employments and growth that Serbia will be able to widen its tax base
and gather sufficient means to implement social protection systems.




                                                      Figure 21

     Unemployment and inactivity62

The rates of inactivity and unemployment confirm Serbia’s poor performance in terms of labour
market activity compared to EU-27 and neighbouring countries. Serbia has much higher inactivity
(40.9%) and unemployment rates (20.1%). As a comparison, the EU-27 inactivity rate was at 29.2% of
the working-age population and the unemployment rate reached 9.4% of the active population in
April 2010. No EU member has an unemployment rate higher than Serbia.

Historically, unemployment was on the rise in Serbia until 2005. In the period from 2005 until the
beginning of crisis (Q4 2008), the labour market situation slightly improved, and the unemployment
rate was decreasing. However, the negative trend began again in October 2008, caused by the crisis
and the continuation of the privatisation and restructuring process63. Since privatisation and

62
  See Glossary for definition of unemployment and inactivity rates
63
  A significant decrease of unemployment rate recorded in the period from October2007 (18.8%) to April 2008 (14.7%) can
partly be explained by a change in methodology used in labour force surveys.




       21
                                           OP for Human Resources Development, 2012-2013                     2nd draft


restructuring are not yet over, further worsening of the unemployment rate can be expected in the
near future.

                                           Unemployment and Inactivity rates
                                                    2004-2010
                  45%
                  40%
                  35%
                  30%
                  25%                                                                      Unemployment
                  20%                                                                      rate
                  15%
                  10%                                                                      Inactivity rate
                   5%
                   0%
                             04       05     06        07      08       09   April 10
                  Source: Serbian Statistical Office
                                                            Figure 22

The inactivity rate followed the same trend during the reference period, which shows that the labour
market was not only losing people to unemployment, but losing more people from the labour force.
This is particularly worrying since LFS measures real inactivity - i.e. people who are neither engaged
in formal nor informal employment. The high inactivity rate means an untapped potential for the
Serbian economy and the fact that the share of those who are inactive and unwilling to work among
the inactive is as much as around 67% is particularly worrying.

According to the data, there is a strong correlation between educational attainment and activity
status. The inactivity rate of people without education is 88%. That rate falls to 21% for people with
higher education. However, the proportion of unemployed among people with medium or high
education is higher than among people with low or no education. One reason for this is that there
are more low-skill jobs available than high-qualified ones.

                                             Inactivity per level of education

                   50%

                   40%

                    30%

                    20%

                     10%

                        0%
                                  No education    Low level of          Secondary         Higher
                                                   education            education       education
                  Source: Labour Force Survey Q1-10

                                                            Figure 23

Youth labour market in general is marked with low activity rates. The youth activity rate in April 2010
amounted to 28.2%, as compared to general activity rate of 59.1% (15-64). Such a low activity rate
can be accounted for by the fact that a lot of young people opt for extended education when faced
with the impossibility of finding a job, or in order to help them compete better for work in a tight




     22
                                           OP for Human Resources Development, 2012-2013                   2nd draft


labour market. However, the fact that 9.6% of youth are neither in education nor working64is
worrying, as well as the share of people younger than 35 in the total inactive population which is
23.8%.

                                                 Inactive population
                                                  Aged 15 and more



                                                    18.5%                      15-24 years

                                   41.0%                            5.3%       25-34 years

                                                                    3.9%       34-44 years
                                                            9.0%               45-54 years
                                                                               55-64 years
                                                22.3%
                                                                               65 years and over

                         Source: Labour Force Survey Q1-2010

                                                        Figure 24

If attention turns to the age structure of inactivity, the picture becomes even more worrying, as it
shows that a large proportion of the inactive (18.5%) are young people aged 15-24.

     Registered employment and unemployment

Although they give a much higher unemployment level65, the employment and unemployment
figures published by the National Employment Service (NES), based on individuals registering with
NES, confirm the trend revealed by the labour force surveys. There were 762,592 people registered
as unemployed with NES in May 2010. The overall decrease in unemployment figures recorded in
the past five years is mostly due to the introduction of the new Law on Employment (2003), which
uncoupled the payment of health insurance from unemployment registration. Worth noting is the
fact that the number of newly registered unemployed (42,175) increased by 23% in 2009 compared
to the previous year although the number of registered unemployed remained almost unchanged
(+1%) over the same period.66




64
   The position of vulnerable groups on the labour market, Gorana Krstid, Mihail Arandarenko, Aleksandra Nojkovid, Marko
Vladisavljevid, Marina Petrovid
65
   NES and RSO use different methodologies for calculating unemployment rates. In addition, the definitions of employed
persons used by the two institutions are not the same. Namely, RSO uses EUROSTAT and ILO definition and the number of
employed persons calculated for LFS purposes takes into account all people who worked for at least an hour in the
reference week and were paid in money, or in kind, that is, all persons who had either formal or informal employment. On
the other hand, all people who are not formally employed can register with NES as unemployed and take part in the
number used for calculating registered unemployment rate, that is, even those who have informal employment can be
registered with NES.
66
   The changes in the number of people registered by NES do not reflect the real labour market situation. For example,
when SOS shops opened, the number of people on the register increased by around 30,000




      23
                                         OP for Human Resources Development, 2012-2013                     2nd draft




     Regional and labour market imbalances

In addition to structural unemployment and the high share of vulnerable groups among the
unemployed, Serbia also records high regional and local disparities. The key regional problems of
Serbia are drastic depopulation, high unemployment and low economic activity, especially lack of
competitiveness in industrial enterprises. In addition, it is widely acknowledged that economic
restructuring tends to deepen the gap between the stronger labour markets in the capital and more
developed regions with a favourable geographic position, and those labour markets in less
developed parts of the country. The degree of district development, measured by the level of
income per capita, is within the ratio of 4:1; the highest levels in 2010 being observed in the City of
Belgrade and the Southern Bačka county (74% and 41% above the national average), and the lowest
ones in Toplički and Jablanički counties (around 60% below the national average). The highest
unemployment rates were almost twice the national average in 2010 (26.9%). They were registered
in Toplički (47.6%) and Jablanički (44.8%) districts. The lowest unemployment rate in 2010 was
recorded in the City of Belgrade (13.5%).




                                                      Figure 25


Local self-government units belong to 4 sub-groups according to their level of development67,:
     1) local self-government units with a level of development above the national average;
     2) local self-government units with a level of development between 80% and 100% of the
        national average;
     3) local self-government units with a level of development between 60% and 80% of the
        national average;
     4) local self-government units with a level of development below 60% of the national average.
        Local self-government units, with a level of development below 50% of the national average,
        are considered devastated areas.

67
   The level of development of LSU is defined according to the main and corrective indicator of the economic development
of the LSU. The main indicator for measuring the level of EDLSU (economic development of the local self government unit)
is the sum of the incomes and pensions in the LSU and the budgetary incomes of the LSU upon the exemption of the
resources received from other levels of government for the purposes of mitigating the consequences of emergency
situations, expressed per capita.




       24
                                            OP for Human Resources Development, 2012-2013      2nd draft


46 out of 150 Serbian municipalities are underdeveloped. They are mainly located in the South; 19 of
those are situated in just 4 districts (representing statistical territorial units): Jablanički, Pčinjski,
Nišavski and Toplički. 40 municipalities are considered ‘devastated’.

Serbia’s largest cities have driven the country’s growth between 2001 and 2008: the largest four
cities in terms of population (Belgrade, Novi Sad, Niš and Kragujevac) contributed to almost two-
thirds of Serbia’s growth68. As shown in diagram below, Belgrade itself contributed to about 43% of
growth achieved in Serbia over the past eight years.




                                                           Figure 26

As a result, the economic activity is concentrated around Serbia’s three largest cities: Belgrade, Novi
Sad and Niš. Belgrade. Novi Sad alone have contributed to value added of almost 60% of Serbian
economy (see diagram below), while the share of cities and towns in the rest of Serbia is almost
insignificant.

                                                 Registered unemployment rate
                                                            July 2010


                             50%
                             40%
                             30%
                             20%
                             10%
                              0%




                         Source: NES
                                                           Figure 27

The problem of regional disparities is compounded by the low mobility of the labour force.
According to NES, employers’ needs for specific skills and occupations are sometimes not met
because of the unwillingness of people with the right skills to relocate to another town. Costs
attached to relocation often explain the reluctance of people to move.



68
     0nly three cities in Serbia have share in the national economy above 2%.




         25
                                     OP for Human Resources Development, 2012-2013                 2nd draft


The figure below shows the differences in unemployment rates across Serbia at the level of
municipalities. Municipalities with the highest unemployment rates (higher than 33.5%) are
concentrated in the southern part of Serbia and eastern and western parts of Vojvodina.
Municipalities doing better than the average unemployment rate (25.8%) are the city of Belgrade
and municipalities in Central Serbian, along with three municipalities in Vojvodina (Subotica, Sombor
and Vojvodina).




Source:                                                                                                  SIEPA,
http://www.siepa.gov.rs/site/en/home/2/maps/unemployment_rates/http://www.siepa.gov.rs/site/en/home/2/maps/une
mployment_rates/, downloaded July 2010.
                                                  Figure 28

Serbia is committed to reducing existing regional disparities by means of an active regional policy,
the institutional framework of which is currently being developed. The new Law on Regional




     26
                                         OP for Human Resources Development, 2012-2013                        2nd draft


Development divides up the country into five regions69 classified as developed or under-developed
regions depending on whether their GDP per capita is above or below the national average.

According to the Law on Ministries, the central government institution competent for the creation of
regional development policy is the Ministry of Economy and Regional Development. Pursuant to the
recently adopted Amended Law on Regional Development, Regional Development Agencies and
Regional Development Councils will be established. Other key bodies in this area are the National
Council for Regional Development, the National Agency for Regional Development (NARD), Regional
Development Councils (RDCs), and Regional Development Agencies (RDAs).

In the short term, the government is trying to deal with regional imbalances by adopting annual
programmes developed exclusively for underdeveloped areas:

         The ‘Programme for Revival of Large Industrial Centres (Niš, Zajecar, Kraljevo and Novi Pazar)
          and Extremely Underdeveloped Areas’ (in May 2010) aims to reduce regional differences
          through reviving production, opening new factories and supporting job creation, targeting
          areas with a level of development below 50% of the average in the Republic.

         The ‘Programme for Attracting Direct Investment’, which is implemented by the Serbian
          Investment and Export Promotion Agency (SIEPA) provides subsidies to investors depending
          on the number of jobs created, the location (focus on areas of special interest70 and
          extremely underdeveloped areas71), the size of the investment72 and the sector targeted
          (focused on automotive, electronics and information and communication technology
          industries).

The Development Fund of the Republic of Serbia provides loans of up to RSD 10 billion
(approximately €100 million) in the framework of the ‘Programme for Stimulation of Balanced
Regional Development’, which include the following goals:

     1) Stimulation of production and employment in extremely underdeveloped areas;
     2) Stimulation and development of enterprises and entrepreneurship in underdeveloped
        municipalities;
     3) Investment in labour intensive processing industries in underdeveloped municipalities.

The labour intensive processing industries include:

         production of clothing and fur;
         production of leather and leather products;
         footwear;
         wood and cork based production and processing;
         production of items made of other minerals;
         production of metal products except from machines;
         production of other machines and devices;

69
   Belgrade, Vojvodina, Sumadija and West Serbia, Southern and Eastern Serbia and Kosovo and Metohija
70
   ‘Areas of special interest’ are towns representing large industrial centres and whose accelerated development is of
special importance for Serbia: Niš, Zajecar, Kraljevo and Novi Pazar.
71
   ‘Extremely underdeveloped areas’ are local self-governments whose level of development is below 50% of the national
average. They include the following municipalities: Merošina, Bojnik, Trgovište, Malo Crnide, Tutin, Bela Palanka, Svrljig,
Knid, Žabari, Bosilegrad, Golubac, Kuršumlija, Ražanj, Gadžin Han, Sjenica, Žagubica, Medveđa, Rekovac, Osečina, Blace,
Crna Trava, Žitorađa, Vladičin Han, Mali Zvornik, Plandište, Žitište, Nova Crnja, Preševo, Bujanovac, Kučevo, Babušnica,
Vlasotince, Lebane, Mionica, Prijepolje, Krupanj, Rača, Doljevac, Varvarin and Ljubovija
72
   ‘Investment of special importance’ is an investment of at least €200 million, creating at least 1000 new jobs within a
three year period




         27
                                         OP for Human Resources Development, 2012-2013                  2nd draft


         production of office and calculating machines;
         production of highly precise and optical instruments;
         production of other transportation vehicles;
         production of furniture and similar products;
         automotive production;
         electronics production.

Coordination between employment and regional development policies is facilitated by the fact that
the Ministry of Economy and Regional Development is in charge of both areas. In order to increase
the impact of those policies, , ALMPs and incentives to regional development are not only often
targeting the same least developed regions but measures are designed to complement each other.
Concrete cooperation is also taking place at the institutional level.
For example, the National Employment Service and the National Agency for Regional Development
(NARD) have been cooperating on entrepreneurship promotion and development since 2002. NARD
organised and delivered training in entrepreneurship development for NES staff (ToT trainings, etc.)
and conducted seminars for registered unemployed in business start ups and management of one’s
own business. It also mentored entrepreneurs receiving NES self-employment subsidies. Finally, NES
and NARD have also carried out joint demonstration in business fairs.

     Informal employment73

The employment rate measured by Labour Force Surveys covers both registered and unregistered
employment.

Work in the informal economy remains pervasive and is increasingly absorbing unqualified and
unskilled labour, although many jobs were recently lost in the informal economy as a result of the
economic crisis. Employment in the informal economy74 in April 2010 stood at 17.2%75 i.e. the
number of people employed in the informal economy decreased about 68,000 (-1.3 percentage
points). To put this into perspective, 1.9 million people were formally employed while 2.0 million
were inactive (40.9% of the population aged 15-64), 572,500 were unemployed (11.9%) and about
400,000 worked in the informal sector (8.2%). Since there is almost no informal employment in the
public sector, this corresponds to an informality rate of around one fifth of all employed in the
private sector.




73
   This section draws on the Technical note, World Bank, June 2010: “Does formal work pay in Serbia?”
74
   See the Glossary for a definition of informal economy
75
   Population aged 15-64. Source: LFS (April 2010).




         28
                                            OP for Human Resources Development, 2012-2013                   2nd draft




                                                 Informal employment
                                                           Aged 15-64




                                         Inactive, 1,971,930       Formally Employed,
                                                40.9%                  1,886,601
                                                                         39.1%




                                                                                           Informally
                           Unemployed,                                                  Employed, 391,903
                             572,501                                                          8.1%
                              11.9%

                  Source: Labour Force SurveyQ1-10

                                                               Figure 29

Employment in the informal sector among people aged 15-24 stood at 28.8%, the highest proportion
for any age group followed by older workers. Informality is high among those that have just joined
the labour force (the young) or those that are about to leave it (in particular workers above the age
of 65). Informal employment among young people is strongly determined by the level of education
and the economic sector. In 2006, nearly 95% of all young workers with primary education were
informally employed, compared to 40% of workers with secondary education and 16.3% of higher
educated employees. Interestingly, young workers who dropped out before completing education
were more likely to be engaged in the informal economy than those who had completed their
studies. For instance, 13.3% of unregistered employees dropped out from primary education
(compared to none among registered employees), 13.8% dropped out from secondary education
(compared to 10.8% of formal employees), and 32.8% dropped out from tertiary education
(compared to 27.6% of registered workers). This shows the need for inclusive education measures to
reduce dropout rates.

Approximately 68% of all informal workers are employed in the agricultural sector mainly as
individual farmers or as unpaid family workers. There is nonetheless a sizable informal labour force
in the non-agricultural sector, in particular in the retail and catering industry.

Characteristics of the labour force (aged 15-64)

      Labour force indicators by gender

The share of women in the total labour force is 50.9%. In the first quarter of 2010, 977,548 women
(40.3%) were employed compared to 1,300,957 men (54.3%). Women are less likely to be employed
although the gap between male and female unemployment rates has shown a downward tendency,
from 3 percentage points in October 2009 to 1.5 percentage points in April 2010. The latest available
data76 reveal that 259,062 women (20.9%) were unemployed, compared to 313,440 men (19.4%). As
for men, women’s unemployment reflects inadequate levels of qualification and skills. However, in



76
     LFS (April 2010)




         29
                                               OP for Human Resources Development, 2012-2013             2nd draft


the private sector, young women are less likely to be employed than young men for an equivalent
educational attainment.77

Also, according to NES register, there were 5% more women than men on the unemployment rolls in
2010, while almost 60% of first-time job seekers were women, out of which almost 55% are long
term unemployed pointing to the fact that they face multiple barriers to entering the labour market.
Activity rate of women is also low at 50.9%, as compared to male activity rate of 67.4%. Long term
unemployment is also affecting women more than men, as women change more often their activity
status due to family responsibilities. The incidence of women female long term unemployment is
67% and the figure for men is 60%. According to NES, unemployed women on NES’s register in 2010
had been looking look for a job longer than 4.2 years on average, compared with 3.3 years for
unemployed men. The lower participation rate points to specific obstacles preventing women from
actively taking part in the labour market. In particular, women are more vulnerable to long-term
unemployment.

                                       Employment and Unemployment rates per gender
                      70%
                      60%                                                          Male Employment
                                                                                   rate
                      50%
                      40%                                                          Male Unemployment
                      30%                                                          rate

                      20%                                                          Female Employment
                      10%                                                          rate
                       0%
                                                                                   Female Unemployment
                               2005    2006     2007     2008     2009     April   rate
                                                                           2010
                     Source: Labour Force Survey Q1-2010
                                                               Figure 30

      Labour force indicators by age

The age structure of the unemployed can be described with the following figures: the highest share
of the unemployed is in the age groups 25-34 (29.6%), and 35-44 (21.3%). Of the total number of
572,501 unemployed persons, 29.4% are over 45 years of age, 117,618 (20.5%) are between 45 and
54, and 50,769 (8.9%) are between 55 and 64.

                                              Employment and Unemployment rates
                                                           per age

                        80%
                        70%
                        60%
                        50%                                                          Employment
                        40%                                                          rate
                        30%
                        20%                                                          Unemployment
                        10%                                                          rate
                         0%
                                 15-24 25-34 35-44 45-54 55-64 65 and
                                                                over
                      Source: Labour Force Survey 01-10



77
     Statistical Office of the Republic of Serbia, LFS Q1-10




         30
                                           OP for Human Resources Development, 2012-2013    2nd draft


                                                      Figure 31

The share of older people among unemployed people has kept increasing with the restructuring of
the economy, as privatised enterprises tend to lay off older workers. The employment rate of the
population aged 55-64 amounted to 32.6% compared to 46.1% in the EU-27. The unemployment
rate for the same population group averaged 11.6% compared to 6.6% in EU-27. Population group
25-34 has the highest long- term unemployment rate of 16.74%.

Youth

Unemployed youth (15-24) make up 19.6% of the total number of unemployed (15-64). The Serbian
youth unemployment rate amounted to 46.4% in the first quarter of 2010, compared to 20.3% in the
EU-2778. Unemployed youth without qualifications on NES register make up as much as 19%79
approximately of the total number of unemployed youth (15-24). These figures highlight the
problems faced by young people in making a smooth and quick transition from education to work.
They also point to inadequate qualifications among young people and the failure of the education
system to equip young people with the skills and knowledge required by the labour market. The
highest proportion of inactive people is also found among the younger tranche of the population,
40.3% of inactive people are younger than 35 years. However, this is partly due to the fact that a
significant portion of people aged 15-24 are still in the education system. The share of those that are
neither in school nor in employment is around 7%.

                                     Youth employment and unemployment rate
                                                  aged 15-24

                          50%

                          40%                                                  Employed

                          30%                                                  Unemployed
                          20%

                          10%

                           0%
                                   EU27       BG     HR       RO         SER
                     Source: Labour Force Survey Q4-10, Eurostat Q4-09
                                                      Figure 32

In addition, this group has the highest probability of becoming jobless in times of crisis. Work in the
informal economy is also characteristic for this age group, as well as acceptance of jobs below their
qualification level.

      Labour force indicators by educational structure

According to the latest LFS (April 2010), the educational profile of the labour force is as follows:
people with tertiary and secondary education make up 80.8% and those with primary education or
less, 19.2%.

The educational levels of the labour force greatly influence their position on the labour market. Low
educational levels are a strong determinant of labour market disadvantage and poverty. According
to LFS, people with lower levels of education (primary school or less) have lower activity and

78
     Population aged 15-24, Eurostat (Q4, 2009)
79
     NES (December 2010)




         31
                                              OP for Human Resources Development, 2012-2013           2nd draft


employment rates (38.5% and 31.8% respectively) compared to the general population (59.1%,
47.2%), indicating the difficulties these groups face in entering the labour market. The situation is
due to the mismatch between educational outcomes and employers’ needs for knowledge and skills.

People with secondary education (medium level of education) have the highest unemployment rate
(22.5%), whereas the unemployment rate of people with higher education is 13.3%.




                                                                Figure 33

      Duration of unemployment

Long term unemployment still poses one of the most serious problems for the Serbian labour
market. The average duration of job search period is worryingly long80. As much as 66.7% of
unemployed people had been unemployed longer than 12 months (April 2010). As can be seen from
figure 35, long term unemployment has been decreasing in the years preceding the crisis, but
nevertheless, it is still one of the most serious challenges on the Serbian labour market.

                                                          Duration of job seeking

                             90%
                             80%
                             70%
                             60%
                                                                                    Up to 12 months
                             50%
                             40%
                                                                                    Longer than
                             30%                                                    12 months
                             20%
                             10%
                              0%
                                     Oct 07      Apr 08        Apr 09    Apr 10
                           Source: Labour Force Survey 01-10
                                                                Figure 34

The long-term unemployment rate (>1 year) amounted to 13.4% in April 2010, compared to 3.3% in
the EU-2781; 33.3% of the unemployed in Serbia in April 2010 were jobless for at least a year and
34.3% for over four years.



80
     3.8 years in 2009, according to NES data
81
     Eurostat (Q4 2009)




         32
                                     OP for Human Resources Development, 2012-2013       2nd draft



                                       Long-term unemployment rate

                  15%


                  10%


                   5%


                   0%
                            EU27          BG          HR         RO   SER
               Source: Labour Force Survey 04-10, Eurostat Q4-09
                                                   Figure 35

Data from NES also confirm a high proportion of long-term unemployment. In 2010, 64% of the
registered unemployed were seeking a job longer than a year.




                                                   Figure 36

   Difficult-to-employ groups

The difficult-to-employ population groups are unemployed persons who due to their health
conditions, insufficient level or inadequacy of education, socio-demographic features, regional or
vocational imbalance between labour market demand and supply, or some other objective
circumstances, have difficulties finding a job. Since labour market is dynamic and prone to changes,
the group of difficult-to-employ also varies and the National Employment Action Plan defines these
groups of unemployed annually to assign them the advantage of inclusion in ALMPs. For example,
the NEAP for 2011 defines the following target groups on the basis of labour market information:
long- term unemployed, unemployed with no/low qualifications, redundant workers, PwD, the
Roma, refugees and IDPs, and returnees under readmission agreements, youth, elderly, women,
trafficking and domestic violence victims, socially disadvantaged people and social welfare
beneficiaries. These groups are defined and then prioritised for inclusion in ALMPs.




     33
                                        OP for Human Resources Development, 2012-2013                      2nd draft


The position of the Roma on the labour market is very unfavourable, according to LFS data from
2009, as their unemployment rate amounted to 40.7%82. The activity rate of the Roma population is
as low as 46.8%, as compared to the general population (60.8%). Another feature of Roma
unemployment is its long term nature. The share of long- term unemployed Roma in the total
unemployed Roma population is 74.2%.

The unemployment rate of IDPs amounted to 36%83, as compared to the general unemployment
rate of 13.9%. The educational levels of unemployed IDPs are significantly more unfavourable than
for the general population, making their employment more difficult. The share of unemployed IDPs
with less than secondary education was 36.5%, and for general population, that share amounted to
21.7%.

According to the LSMS, the unemployment rate of refugees amounted to 18.1%, as compared to
general unemployment rate of 13.9%.

According to the recent study conducted by the Foundation for the Advancement of Economics84,
the number of People with Disabilities living in the Republic of Serbia is estimated at more than
500,000. However, only 20,402 of them were registered with NES (out of which 6,672 were women)
in 2010. This can be explained by the extremely high inactivity rate which amounts to 69%85.




                                                Figure 37 Source: NES


Active labour market programmes

Active labour market programmes (ALMPs) are the principal instrument to improve the functioning
of the labour market through targeted support to the unemployed86. They provide labour market
integration measures for the job seekers.

The creation and delivery of ALMPs in the Republic of Serbia is defined in the Law on Employment
and Unemployment Insurance. Under that law, National Employment Action Plans are adopted
82
   The position of vulnerable groups on the labour market, Gorana Krstid, Mihail Arandarenko, Aleksandra Nojkovid, Marko
Vladisavljevid, Marina Petrovid
83
   LSMS of IDPs, Cvejic, Babovic (2007)
84
   The position of vulnerable groups on the labour market, Gorana Krstid, Mihail Arandarenko, Aleksandra Nojkovid, Marko
Vladisavljevid, Marina Petrovid
85
   Ibid
86
   According to the Law on Employment and Unemployment Benefits, only people registered with NES as unemployed are
eligible for ALMPs. Inactive people need first to register with NES in order to participate in ALMPs. By doing so, they
become part of the active population.




      34
                                        OP for Human Resources Development, 2012-2013                     2nd draft


annually and used by the National Employment Service to draft and adopt annual Activity Plans
defining active labour market programmes (ALMPs) to be delivered in the forthcoming year.

Measures of active employment policy defined under the Law on Employment and Unemployment
Insurance are as follows:

         Job brokering;
         Vocational guidance and career counselling;
         Employment subsidies;
         Support to self employment;
         Further education and training;
         Incentives for unemployment benefit recipients;
         Public works; and
         Other measures aimed at employment of job seekers.

     ALMP budget allocations over time

The annual budget allocated for addressing the unemployment problems by means of active labour
market measures has been gradually increasing over the past several years, amounting to 5.5 billion
dinars in 2011 (around €55 million)87. However, this still represents only 0.17% of GDP.


                                         2005      2006     2007     2008      2009     2010

                     Budget for
                     ALMP, in             7.5    13       23.8      30.1     35         37
                     MEUR

                     Budget ALMP
                                         0.04    0.07     0.10      0.11     0.12       0.12
                     in GDP, %
                                     BUDGET ALLOCATION FOR ALMP (2005-2010)
                                                 Source : MoERD

Expenditure on unemployment benefits has also been growing to reach the amount of 25.5 billion
dinars (€248 million) in 2010. One of the intentions behind the new employment law is to shift the
focus from passive to active measures. However, a lot remains to be done since the budget for
passive measures is still more than 6 times higher than the budget for active employment policy.




87
  Euro equivalent for 2010 was calculated on the basis of average exchange rate for the period of the first 6 months of
2010.




       35
                                          OP for Human Resources Development, 2012-2013   2nd draft




                                                   Figure 38

The total number of unemployed on NES register amounted to 744,000 on average throughout 2010
and 124,349 of them were included in ALMPs, which means that 16.7% of the registered
unemployed benefited from ALMPs in 2010, and only a fraction of them were involved in training
and retraining courses (0.63%).88 It should be remarked however, that NES main services – active job
search programmes are not a costly measure, as these services present a part of everyday activities
of NES staff. Therefore, they are not funded from ALMP budget, but mostly through the salaries of
NES staff.




                                                   Figure 39

The table overleaf provides a breakdown of ALMPs with resources allocated and number of
beneficiaries. These ALMPs are briefly presented in the following paragraphs.




88
     3,365 of the registered unemployed




        36
                                       OP for Human Resources Development, 2012-2013                     2nd draft



                                                                                                               89
ALMP                                             As a % of the total budget    As a % of ALMPs beneficiaries
                                                           (2010)                          (2009)
Active job search programmes                                0.1%                            68%
Further education and training programmes                  56.6%                            15%
                                                                 90
Employment subsidies                                      24.3%                              9%
Public works                                               18.9%.                            8%


     Job-matching service and vocational guidance and career counselling

These activities are one of NES main activities and they include job matching (with active job search)
and vocational guidance and career counselling provided to job seekers and employers through:

         individual employment plans,
         information about career development opportunities,
         job counselling,
         selection and classification of potential job candidates,
         job fairs,
         job clubs,
         active job search training,
         self-efficiency training.

     Job-matching services and vocational guidance and career counselling were particularly
     effective in contributing to the increase of job placements by NES since 2006, and to some
     extent to the decrease in the number of registered unemployed91.




                                                     Figure 40

The chart above shows the total number of beneficiaries of active job search. Active job search
includes job fairs, job clubs, active job search training and self-efficiency training for vulnerable
groups. These types of programmes have grown in significance and coverage since 2005.




89
   This figure stands for the number of services, as one beneficiary may be counted more than once if he/she received
more than one service. The figure may therefore sometimes include the same people several times.
90
   Of which, self employment accounted for 8.1% and job creation subsidies for 16.2%
91
   ‘Impact Analysis of Employment Policy and Active Labour Market Programmes’ (2008)




         37
     OP for Human Resources Development, 2012-2013   2nd draft




38
                                  OP for Human Resources Development, 2012-2013           2nd draft


   Further education and training programmes

Further education and training programmes include:

       Functional adult primary education (programme for the Roma);
       Apprenticeships, internships and volunteers programmes; and
       Training and retraining courses (vocational training, IT and language courses).

The programme for the Roma (implemented in cooperation with the Ministry of Education and
Science) targets Roma people without basic education. The goal is for them to acquire basic
education and training for less complicated jobs and increase their employability. Under the
apprenticeship programme, young people up to 30 years without previous work experience are
offered 12-month subsidised employment within their occupation.

Training and retraining programmes are aimed at improving employability of the unemployed. There
are two types of programmes: 1) training courses requested from specific employers, who commit
themselves to recruit some of the trained unemployed; and 2) training courses organised by NES and
delivered by training providers in line with labour market needs.

According to the NES Annual Report for 2010, slightly less than 8% of the total ALMP budget was
spent on training courses for the unemployed, and the total number of unemployed people on NES
register that attended training courses reached 4,697. Only 767 (0.3%) unemployed people with
primary education or less (as an average share in the total number of the unemployed people with
primary education registered with NES) took part in some form of training, and 3,048 (0.8%) of those
with lower or upper secondary education. Only a fraction of the unemployed registered with NES
underwent training and retraining courses (0.6%) in 2010. The allocation for training and retraining
courses, and the number of unemployed benefiting from those courses, have been decreasing over
time with a significant drop in 2009 and 2010, as part of the available funds for training were
transferred as a response to the crisis to the ‘First Chance’ programme, a type of apprenticeship
programme helping youth gain their first work experience. Therefore, there is an acute need for
funds to finance vocational training and retraining courses, which are currently underfunded and are
particularly needed to combat unemployment.




                                              Figure 41

   Job subsidies

Job subsidies cover different forms of subsidised employment including self-employment subsidies,
and job creation subsidies. Self-employment subsidies are financial support to the unemployed who




       39
                                          OP for Human Resources Development, 2012-2013       2nd draft


decide to start their own business. Job creation subsidies can be granted to private sector employers
for every job created and filled with an unemployed person registered with NES. The subsidy is paid
to the employer as a lump sum per job created. The employer is obliged to keep the employee for at
least 24 months. Job subsidies have increased steadily as a share of ALMP allocation to account for
more than half of the total ALMP budget in the period 2006-2008, but started falling again after that
period.

The total number of beneficiaries of self employment subsidies reached 2,217 unemployed in 2010
and 4,745 unemployed people found a job thanks to a job creation subsidy92.




                                                        Figure 42

      Public works

The organisation and implementation of public works in Serbia started in 2006 and has gained
importance since then, both in terms of funding and number of beneficiaries. These programmes
target vulnerable groups in less developed and underdeveloped municipalities of Serbia. Public
works has assumed an important place in employment policy in 2009, as a result of the economic
crisis when almost a third of the ALMP budget was earmarked for this programme. Public works are
an important social security net in times of crisis.




92
     Combined budgets of the Republic of Serbia and of the Autonomous Province of Vojvodina




         40
                                     OP for Human Resources Development, 2012-2013               2nd draft




                                                 Figure 43

Institutional and legal framework

Annex B describes the ministries responsible for policy and legislation in the field of employment
and labour market namely the Ministry of Economy and Regional Development and the Ministry of
Labour and Social Policy. It also describes the roles of other key bodies, namely the Agency for
Peaceful Settlement of Labour Disputes, and the Socio-Economic Council (SEC). It also sets out the
current body of laws governing competitiveness, as defined by IPA Implementing Regulation.

Strategic framework

Medium term national employment policy is defined in the National Employment Strategy prepared
by the Ministry of Economy and Regional Development and adopted by the Government of the
Republic of Serbia. This strategy reflects the three goals of the EU Lisbon Strategy – full employment
(revised in Serbian conditions to satisfactory employment rate increase), improving quality and
productivity of labour and strengthening social cohesion and labour market inclusion – and it fully
embraces the integrated approach of the EU Employment Strategy. The National Employment
Strategy sets the following priorities for the period 2005-2010:

         Towards Sustainable Employment Growth
         Towards Enhanced Quality and Productivity of Work
         Towards Strengthening Social Cohesion in Labour Market

The National Employment Strategy 2005-2010 was made operational through three National
Employment Action Plans: NEAP 2006-2008, NEAP 2009 and NEAP 201093. Each NEAP defines
priorities and objectives of employment policy and stipulates programmes and measures that need
to be established for the achievement of those priorities and objectives.

The proposal of the National Employment Strategy 2011-2020 has been prepared and is pending the
Government adoption procedure. The priorities of the proposed strategy are as follows:

         Employment promotion in less developed regions and development of regional and local
          employment policy

93
  The 2009 Law on Employment and Unemployment Insurance stipulates the annual adoption of National Employment
Action Plans.




         41
                                 OP for Human Resources Development, 2012-2013          2nd draft


       Human capital promotion and greater social inclusion
       Improvement of institutions and labour market development
       Reduction of labour market dualities.

The objectives and priorities to be achieved with employment policy in 2011 defined in NEAP 2011
are as follows:

Objectives:

 1. Increase employment;
 2. Invest in human capital;
 3. Social Inclusion.

Priorities:
   1. Matching labour market demand and supply;
   2. Job creation;
   3. Improvement of education and training measures with a view to developing qualified labour
        force;
   4. Promotion of employment of difficult-to-employ groups and vulnerable groups;
   5. Decentralisation and stimulation of development of regional and local employment policy.

Under the new employment law, National Employment Action Plans (NEAPs) are adopted on an
annual basis, defining the employment priorities for the forthcoming year. A report on the
implementation of each NEAP is produced to feed into the drafting of the new NEAP. Employment
policy is created on the basis of labour market information produced by the Republic Statistical
Office in the form of Labour Market Surveys conducted twice a year. In addition, the National
Employment Service has its own register of unemployed used for keeping records on the situation
on local labour markets and monitoring the status of persons included in ALMPs.

In September 2009, the Government of Serbia adopted the Youth Employment Policy and Action
Plan (2009-2011) prepared by the Ministry of Economy and Regional Development, defining five
strategic objectives to be pursued for the promotion of full, productive and freely chosen
employment for youth, namely:

       Strengthen the (youth) labour market governance system,
       Improve the employability of young people,
       Foster youth employment through private sector development,
       Improve decent work prospects for youth,
       Promote inclusion through targeted measures.

Once it obtains candidate country status, Serbia will also need to draft the Joint Assessment Paper
(JAP) on Employment in cooperation with the European Commission. Technical assistance under IPA
2011 will help the working group, to be established for those purposes, draft the JAP and define
future employment policy priorities and also coordinate with the preparation of the Joint Inclusion
Memorandum (JIM).

1.1.5 Education and VET

Education profile of the Serbian population

The current educational profile of the Serbian population does not match the needs of the economy.
According to the 2002 Census, the overall educational level of the Serbian population is low:




       42
                                        OP for Human Resources Development, 2012-2013                      2nd draft




                Source: RSO, Census 2002
                                                           Figure 44

According to the last Census, the illiteracy rate was 3.6%94. Illiteracy is likely to be even greater
among marginalised groups, since the Census does not cover all members of these groups 95.
According to the Institute for Statistics (UNESCO), 96.4% of the Serbian population was literate in
2003, with a significant gender difference: 98.9% for males versus 94.1% for females, while youth
literacy rate was 99.4% with almost no gender difference.

The educational attainment of disadvantaged groups is even worse, as illustrated by the example of
Roma people96, of which 62% have no formal education at all.




                                                      Figure 45

The latest Labour Force Survey (April 2010) confirms the low educational attainment of the
population aged 15 and above: 3% of the labour force do not have full elementary education, 35%
of the labour force has only elementary education. Secondary education represents the highest
educational attainment for almost half of the labour force aged above 15 (see figure below97). In the
EU-27, 71.5% of the population aged 24-65 had completed upper secondary education in 2008.

94
   Population aged over 15
95
    The Census measures literacy from the statements of participants. Functional literacy, measured in developed
economies, is not measured in Serbia. Educational deficiency is most prominent among Roma, and it later remains as one
of the causes of trans-generational transfer of poverty.
96
   Living Standards Measurement Study (LSMS), Serbia 2002-2007, Statistical Office of the Republic of Serbia
97
    ‘Low’ corresponds to completion of primary education at best (ISCED levels 1 and 2); ‘medium’ corresponds to
completion of secondary education (ISCED level 3 or 4); ‘high’ corresponds to completion of tertiary education or higher
education (ISCED levels 5 and 6).




      43
                                        OP for Human Resources Development, 2012-2013                     2nd draft




                                                      Figure 46

Older generations are less educated than younger ones. The great majority of people without
education were over 6598. In contrast, 21% of active people aged 25-34 had completed tertiary
education in 2010.

Women are better educated than men: the attainment at primary - secondary - tertiary level is 30.6 -
53.3 - 16.1 for women and 47.8 - 40.0 - 12.2 for men99.

Only 14% of the population aged 15 and above has completed higher education100. The Europe 2020
Strategy proposes to increase the share of the population aged 30-34 having completed higher
education in the EU-27 from 31% to at least 40%. Currently, the percentage of Serbia’s population
aged 30-34 having completed higher education is only 21%. 101

The education system in Serbia

The education system in Serbia consists of pre-school, elementary, secondary and higher education
with around 1,400,000 pupils, students and children and around 102,000 employed professional
staff (teaching staff, pedagogues, psychologists, social workers and special education pedagogues).

The Law on the Foundations of the Education System (2009) lays down the principles of the
education system, which include:

         equal rights and availability of education at all levels and without discrimination; and
         quality and balanced education based on contemporary science, pupil/student-centred and
          adjusted to age and personal needs.

The new law puts also emphasis on the timely participation in pre-school education and the need for
appropriate preparation for school and learning.

The diagram overleaf provides an overview of the education system in Serbia with corresponding
ISCED levels102. The current classification (ISCED 1997) includes the following levels of education:



98
   80%, Labour Force Survey (April 2010)
99
    Krstic, G., Corbanese V., Situation analysis of youth employment in the Republic of Serbia, ILO Employment Papers,
(2008)
100
    Labour Force Survey (April 2010)
101
    The First National Report on Social Inclusion and Poverty Reduction in Serbia, Belgrade, 2011.
102
    See Glossary for a definition of ISCED




         44
                                 OP for Human Resources Development, 2012-2013       2nd draft




Level        Description

ISCED 0      Pre-school education
ISCED 1      Primary education or first stage of basic education
ISCED 2      Lower secondary or second stage of basic education
ISCED 3      (Upper) secondary education
ISCED 4      Post-secondary non-tertiary education
ISCED 5      First stage of tertiary education (not leading directly to an advanced research
             qualification)
ISCED 6      Second stage of tertiary education (leading to an advanced research qualification)




        45
                 OP for Human Resources Development, 2012-2013   1st draft




     Figure 47




46
                                         OP for Human Resources Development, 2012-2013        2nd draft



      Pre-school education

Pre-school education for children aged 1 year to school-age (6.5–7.5 years) is carried out in pre-
school institutions and, less frequently, in elementary schools103. A total of 184,066 children were
attending pre-school education in 2009/2010104.

A pre-school institution is established by the Republic of Serbia, an autonomous province, local self-
government unit, or other physical or legal person in accordance with the Law on Foundations of
Education System. The network of state-owned pre-schools is currently set-up on the principle of
“one municipality – one institution”. Each pre-school institution has a central building and a pre-
school network which comprises the buildings within the territory of the municipality. In 2009/2010,
there were 2,364 buildings and other spaces for work with children at the pre-school level across
Serbia105. The pre-school network is, however, insufficient to cater to the needs of all children and
families across the country. The criteria for establishing a new network of pre-school institutions are
being prepared in line with the Law on the Foundations of the Education System106.

Pre-school institutions develop and implement education programmes based on the Foundations of
Pre-school Education Programme. Attendance at preparatory pre-school programme is compulsory
and from 2009, has been is extended from six to nine months preceding the child’s enrolment in
primary school. This preparatory programme is free of charge and in effect leads to 9 years’
compulsory education in Serbia

Free pre-school education for children with developmental difficulties and disabilities is carried out
in regular educational groups (1-2 children per group), or special developmental groups (up to 8
children), or in hospital for hospitalised children.

      Elementary education

Elementary education is obligatory, free of charge, and lasts 8 years. It covers children aged from 6.5
or 7.5 years to 14 or 15 years. Due to the low birth rate, the number of pupils in elementary school
has been falling. There were 587,147 pupils enrolled in elementary education in the school year
2009/2010107.

It is carried out in elementary schools, which can be established by the Republic of Serbia, an
Autonomous Province, a unit of local self-government and other legal and physical person, or by a
foreign country or a foreign legal or physical person, in accordance with the Law on Foundations of
Education System. There were 1,176 elementary schools with a network of around 3,500 branch
schools in the school year 2009/2010. There were also 44 schools for children with disabilities and
55 art elementary schools (52 music and 3 ballet schools)108.

Teaching is carried out in Serbian or in the languages of national minorities109. Elementary education
is carried out in two educational cycles, the school adopting its own programme in accordance with
national curricula. Each cycle covers four grades and includes compulsory and optional subjects. For
the first time in school year 2010/2011, pupils will take a final exam at the end of their elementary

103
    In rural areas or areas with no preschool institutions
104
    Statistical Office of the Republic of Serbia, Communications (April 2010)
105
    Ibid.
106
    new Law on Preschool institutions determinates 100 groups per one preschool institution
107
    Statistical Office of the Republic of Serbia, Communications (March 2010)
108
    Ministry of Education data (September 2010)
109
    Albanian, Bulgarian, Hungarian, Romanian, Rusyn, Slovak and Croatian languages

        47
                                           OP for Human Resources Development, 2012-2013           2nd draft



education to test the acquisition of knowledge according to the curricula and standards of
achievements, which in the case of children with disabilities will be adjusted to their abilities. The
final exam is approved by the National Educational Council. It gives direct access to secondary school
except for specialised secondary schools (maths, language and art secondary schools) where
entrance exams are required.

Elementary education of children with disabilities can take place either in regular or special schools.
In 2008/2009 there were 7,092 children with disabilities enrolled in elementary education.110
Additional educational, health or social support is being provided, based on the assessment of the
child’s abilities and needs and with the consent of the parents.

      Secondary education

Secondary education is free of charge and is not compulsory. It covers pupils aged from 15 to 19. A
total number of 286,844 school children attended secondary school in 2009/2010111. The secondary
school system consists of:

      A. General secondary education, in duration of four years (gymnasium)

      B. Secondary vocational education in duration of four years; secondary vocational education in
         duration of three years; and education for professions of lower educational level (vocational
         schools). They prepare young people for jobs in 12 occupations:

               1. Agriculture, food production and processing
               2. Geodetics (land survey) and civil engineering
               3. Electrotechnics
               4. Mechanical engineering and metal processing
               5. Health and social care
               6. Economics, law and administration
               7. Chemistry, nonmetals and graphics
               8. Forestry and wood processing
               9. Traffic engineering (transportation)
               10. Textile and leather processing
               11. Geology, mining and metallurgy
               12. Catering/hospitality and tourism


      C. Art education in duration of four years (music, ballet and visual art schools)

In 2009/2010, there was a total of 579 secondary schools. Out of this total, there were 125
gymnasiums delivering four-year general education (110 state-owned and 15 private ones) of which
9 were specialised112 gymnasiums (6 state-owned and 3 private ones) and 19 specialised
departments within regular gymnasiums.

In the 2009/10 school year, there were 341 vocational secondary education schools (317 state and
24 private ones), as well as 43 mixed schools (vocational and gymnasiums or vocational and art


110
    Statistical Yearbook (2010), Statistical Office of the Republic of Serbia
111
    Ministry of Education data (September 2010)
112
    For particularly talented students in specialised areas such as math, language, sport and IT

       48
                                           OP for Human Resources Development, 2012-2013      2nd draft



schools). Also, there were 41 art secondary schools, and 29 secondary schools for children with
disabilities.

While there has been a declining trend in the secondary school population since the 1990s, the
number of classes and teachers has continued to increase.




                   Source: RSO
                                                    Figure 48

During the school year 2009/10, 28% of secondary education students were enrolled in, general
secondary education (gymnasium), 66% in VET education , 5% in secondary education for children
with disabilities and 8% in art education.113

A final exam will be taken at the end of three-year vocational education programmes from
2013/2014 school year onwards and a Matura exam at the end of four-year vocational education
programmes (general, vocational and art) will be taken from 2014/2015 school year onwards. The
completion of specialist education is certified by a specialist, i.e. master-of-the craft exam. The final
exam is also taken upon completion of adult education programmes. Final and specialist exams are
proposed by the National Council for Vocational and Adult Education and approved by the Minister.

Secondary education of pupils with disabilities can take place in:

           schools for pupils with disabilities;
           special departments for pupils with disabilities within regular schools; and
           elementary schools, based on an individual education plan

In schools for children with disabilities, a curriculum of lower volume and contents is applied. Special
programmes are also carried out for pupils with mild intellectual disabilities. There were 1,628
children with disabilities enrolled in the secondary education in year 2008/2009114

113
      Ministry of Education (September 2010)

           49
                                           OP for Human Resources Development, 2012-2013                          2nd draft



      Higher education

The higher education system includes post-secondary vocational education programmes and
university education leading to bachelor, masters and PhD degrees. There were 235,940 students
enrolled in higher education in Serbia during the academic year 2008/2009115.

In 2009, Serbia counted:

              7 public universities116 (105 faculties);
              7 private universities117 (53 faculties); and
              80 High Schools for Applied Studies

Higher education programmes are broken down into three cycles:

              First cycle (3 or 4 years) covers academic studies and applied studies;
              Second cycle (1 or 2 years) covers master and academic and professional specialisations;
              Third cycle (3 years) covers doctorates.

Access to higher education is available to those who have completed secondary education and
passed the entrance exam. Each year, the Government decides on the total number of students who
can enrol in state-owned universities and post-secondary vocational schools, together with the
distribution of students among different institutions (faculties and vocational schools). These
numbers are not based upon estimated needs but mostly reflect the capacity of the existing
institutions.

The framework for higher education qualifications (levels 6, 7 and-8) was developed in compatibility
with the European Higher Education Area and approved by the National Council for Higher Education
in April 2010.

Since 2007, vocational post-secondary schools (Više škole) can go through an accreditation process
to become part of the higher education system (Visoke Škole); 48 VET post-secondary schools
became "Higher schools of applied studies" after accreditation. While these schools are now closer
to universities118, at the same time they are farther from VET schools, increasing the gap between
VET and higher education119.

Adult education and lifelong learning

      Formal adult learning

Formal adult education and training is carried out within the school system – from elementary
schools to postgraduate studies at universities, on the basis of approved programmes of education
leading to diplomas (i.e. national certificates) on acquired qualification and educational level.


114
    Statistical Yearbook (2010), Statistical Office of the Republic of Serbia
115
    Ministry of Education (September 2010)
116
    University of Belgrade, University of Arts in Belgrade, University of Niš, University of Kragujevac, University of Novi Sad,
State University of Novi Pazar and University of Pristine in Kosovska Mitrovica
117
     University Brada Karid, Megatrend University, European University, Singidunum University, University 'Union' and
University of Novi Pazar, Academy of Economic Studies, Novi Sad
118
    In terms of duration of studies aligned on the bachelor level, of proportion of PhD graduates among teachers, and other
accreditation criteria.
119
    Review of Human Resources Development In Serbia, ETF (September 2010)

        50
                                    OP for Human Resources Development, 2012-2013          2nd draft



Elementary education for persons over 15 years of age, who do not attend the school regularly, is
realised according to lighter curricula lasting for four years, in accordance with the Law on
Elementary School. However, teaching contents and methods are not tailored to the needs of adults
and many teachers lack the skills and competences required for working with adults. A class cannot
exceed 20 adults. Completion of each grade is sanctioned by a certificate. ‘Functional Education of
Adult Roma’ is also being carried out, as a pilot, in a number of schools for adults, which will be
pursued under an IPA 2008 project. At present, there are 15 schools for adult elementary education
operating in Serbia, with around 2,500 attendees per year.

According to the Law on Foundations of the Education System, secondary schools are entitled to
carry out special training for adults including upskilling and specialisation programmes.

The Ministry of Education and Science has established five Regional Training Centres (RTCs) for adult
education to become leading institutions for vocational training, capacity building and training for
adults in their regions. Their aim is to support the economic development of regions through rapid
and quality responses to the needs for knowledge, skills and competences.

The RTCs are located in five VET schools:

        Chemical, Food-production and Textile School “Uroš Predid” (Zrenjanin), covering the district
         of middle Banat;
        Technical School in Novi Beograd (Belgrade), covering the city of Belgrade;
        Second Technical School (Kragujevac), covering the district of Šumadija;
        Civil Engineering and Technical School “Neimar” (Niš), covering the district of Nišava;
        School of Mining and Metallurgy (Bor), covering the district of Bor.

RTCs provide:

        training courses, based on regular curricula of vocational education;
        short-term and certified vocational training programmes;
        programmes for continuous professional advancement for the employed;
        post-secondary education programmes; ,
        special programmes of non-formal education contributing to the development of key
         competences;
        the accreditation of prior learning; and,
        information and counselling on adult education and lifelong learning.

RTCs have developed around 50 programmes of vocational trainings for adults with certificates
recognised by the Ministry of Education and Science. Around 2,000 people attended trainings in
RTCs. By the end of 2012, three new RTCs are to be established.

   Non-formal and informal adult learning

Training courses for adults are increasingly delivered outside the formal education systems by
various organisations, including:

        VET schools and RTCs;
        people’s universities, worker’s universities and open universities;
        chambers of commerce;
        NGOs;
        private schools;

        51
                                          OP for Human Resources Development, 2012-2013                        2nd draft



          private companies;
          regional development agencies;
          professional societies and associations;
          museums, libraries, reading rooms, theatres, cinemas, art galleries, and cultural centres;
          sports organisations, clubs and recreation centres;
          scientific institutions and societies;
          care institutions for the elderly;
          correctional institutions;
          international organisations, institutions and foundations.

There is a lack of comprehensive data on providers of non-formal education.

The great majority of certificates awarded by non-formal training providers are not recognised,
which is a disincentive for adults to enrol in those courses. There is also no system for recognising
informal education.

Investment in education

Public expenditure on education represented 3.3% (2009) of GDP and the share of education in the
whole budget of the Republic of Serbia in 2010 is 16.17%120, a proportion which was increasing until
2008.




                                                        Figure 49

Over the period 2001-2006, the proportion of public expenditures dedicated to education on
average in the EU-27 remained stable at around 5.1% of EU-27121. The OECD recommends an
average of 6% of GDP.

The education budget is shared between pre-school and primary education (48%), secondary
education (21%), higher education (22%) and student welfare (8%). The remaining 1% covers the
operating costs of the Ministry of Education and Science and other central bodies such as national



120
   Review of Human Resources Development In Serbia, ETF (September 2010)
121
   Total public expenditure on education includes the expenditure of all levels of government, from local to central
government, not only with educational institutions, but also with transfers to students and their families and other private
entities.

          52
                                         OP for Human Resources Development, 2012-2013                  2nd draft



education councils and institutes. As much as 85% of education expenditures concern the salaries of
the education staff. 122

Financial transfers to school are based on a number of criteria reflecting the size and the needs of
the school123. However, these formulas are not fully binding and their parameters were fixed in the
1990s124. The Law on Fundamentals of the Education System introduces a new financing system
which links transfers to teaching costs per capita estimated at market price. It is expected to come
into force in the school year 2014/2015.

While salaries of teaching staff are paid from the national budget, about 20% of public expenditures
in primary and secondary education come from local self-governments to cover operating costs and
school staff development. Many municipalities, however, do not fulfil their obligations towards
schools125. Large differences in local government spending on education reflect local policy priorities,
but also severe budgetary constraints in municipalities from poorer regions.




122
    Review of Human Resources Development In Serbia, ETF (August 2010)
123
    Such as number of students and teaching staff, number and type of profiles taught
124
    Masson, J.-R., ETF, Financing VET in the Western Balkans and Turkey, unpublished (September 2008)
125
    Only 30% of municipalities financed VET schools

      53
                                        OP for Human Resources Development, 2012-2013                    2nd draft




Access to education

      Coverage and participation




                                                      Figure 50

          Pre-school
Pre-school attendance was very low until the recent introduction of a compulsory preparatory pre-
school programme126, which in 2009/2010 covered 87.8% of children aged 6 to 7127. However, the
coverage of children aged 3-5 years at 41.5% in 2009/2010 is still among the lowest in Europe. The
low participation is mainly due to the insufficiently developed network of pre-school institutions. In
urban areas, 14,000 children were on waiting lists for enrolling in pre-schools in 2009/2010128.
Children most in need are not covered i.e. children from poor families and rural areas, Roma
children from marginalised groups and children with disabilities129.

             Elementary education

In 2009/2010, 98.17% of children aged 7 to 14 were attending primary schools130. The largest
proportions of children outside the education system were recorded among Roma families (21.6%),
poor families (11.8%) and low educated families131 (4.4%). In the period 2002-2007, the primary
education coverage of Roma children has increased from 56% (2002) to 73% (2007) and the
percentage of these children in schools for children with development difficulties decreased over the
same period (from 8% to 6%). The number of children from rural areas, who are outside the
education system, has increased from 1.5% in 2002 to 2.4% in 2007. 132


126
    As a result the coverage of children aged 3-7 years has increased from 43% (2002) to 51% (2007) LSMS, 2002-2007
127
    The Statistical Office of the Republic of Serbia, Communications (April 2010)
128
    RSO
129
   The coverage of city children aged 3 to 5 is 45%, and of rural children 14%, only, 7% of the poorest and 4% of Roma
children Survey of Multiple Indicators of the Situation of Children and Women, UNICEF (2005), hereinafter MICS3.
130
    Statistical Office of the Republic of Serbia, Communications (March 2010)
131
    Whose head of household has no or incomplete primary school education or with only primary school completed
132
    Living Standard Measurement Study, Serbia 2002-2007, Statistical Office of the Republic of Serbia

        54
                                          OP for Human Resources Development, 2012-2013                        2nd draft



           Secondary education

In 2009/2010, 84.4% of children aged 15-18 years were attending secondary schools133. The
secondary education net enrolment rate has been continuously increasing since 2005. Participation
is much lower among children from low educated families (72%), the poorest families (58%), Roma
(38%), refugees and IDPs (78%)134.

There is also a very pronounced gender difference in favour of girls: the participation in secondary
education was 79% for boys and 88% for girls.

            Tertiary education

The share of young people engaged in tertiary education has kept increasing for the last ten years.
During the academic year 2007/2008, 40% of the population aged 20-24 was enrolled into tertiary
education. As a comparison, that rate amounted to 57.4% in the EU-27 in the academic year
2004/2005135.




                                                        Figure 51

However, young people from the poorest families are under-represented (14%) in tertiary
education, as well as young people from the least educated families (19%).

Following a similar trend to the EU-27, women’s participation in higher education is higher than
men's since 2002 (123 women enrolled for every 100 men). There remained, however, significant
imbalances depending on the field of study.

           Adult education

In 2008, the proportion of the population aged 25-64 years participating in adult education was
significantly lower in Serbia (3%) than in the EU-27 (10%)136.




133
    Ministry of Education (September 2010). If we include persons aged 19, the enrolment rate is 67.1%
134
    Living Standard Measurement Study, Serbia 2002-2007, Statistical Office of the Republic of Serbia
135
    At EU-27 level, higher education entrants account for 85% of qualifying graduates of general secondary schooling.
136
    Eurostat, Pocketbook on candidate and potential candidate countries (2010)

      55
                                        OP for Human Resources Development, 2012-2013                     2nd draft




                                                      Figure 52

For those aged 19-24, attendance of various programmes of informal education dropped by 1% over
the last five years. Men are still more frequently attending various courses and training than women
(17% compared to 4%); similarly, young people are more likely to attend from urban than non-urban
areas (16% compared to 8%). Younger people and with higher education are the most likely to be
engaged in adult education. The percentage of older people with lower educational level
participating in adult education is particularly low137.

Among employed people aged 15-24, 6% of the male population and 14% of the female population
are students, while 0.4% of the male population and 1.4% of the female population attend
secondary school while working at the same time. This indicates that young women are investing
more in further education than young men.

      Drop-outs and early school leavers




                                                      Figure 53

In 2008/2009, the yearly drop-out rate in primary education was 1.8%138. However, according to the
generation survey 2000–2008139, the drop-out rate in primary education amounted to 7%. In
2008/2009 the drop-out rate in secondary education was 2.5% among children attending four-year
education programmes and 8.4% among those attending three-year education programmes.

137
    LSMS, 2002-2007
138
    Ministry of Education (September 2010)
139
    Percentage of children who enrolled in the 2000/2001 academic year and dropped out by the end of primary education,
2007/2008 academic year. Report for the Enhanced Permanent Dialogue, Ministry of Education (December 2009).

        56
                                         OP for Human Resources Development, 2012-2013                        2nd draft



Some studies reveal much higher drop-out rates than official statistics, which do not follow pupils by
age cohorts. (15% for primary and around 30% for secondary)140 The highest drop-out rates (10%-
15%)141 are recorded during the year of transition from primary to secondary school. These figures
are much higher among children from disadvantaged groups142 as illustrated by the example of
Roma: while 73% of Roma attend primary school, only 38% of them reached secondary school.




                                                        Figure 54

Early school leavers represented 30% of the Serbian population aged 18 to 24 compared to 14.9% in
the EU.143

An unknown number of children remain invisible to statistics because they never enroll in the
education system. This is often the case with Roma children.

Quality of the education system

According to the results of the latest PISA survey in 2009144, the average education performance of
students aged 15 in the three surveyed areas (mathematical, scientific and reading literacy) is by
around 60 score points below the OECD average145. The analysis shows that Serbian students would
need slightly more than one year of schooling in all three areas to catch up with the level of students
from Croatia, Slovenia and the OECD average. However, PISA 2009 results are better than in 2006.
Regarding reading literacy, the scale of improvement realised by Serbian students is the greatest
ever recorded by any country between two PISA tests. The average performance is higher by 40
score points while percentage of students not reaching the level of functional reading literacy has
decreased from 52% in 2006 to 33% in 2009. Regarding mathematical and scientific literacy, some
progress has also been made compared to 2006–(+7 score points)..

140
    Government of Serbia, Poverty Reduction Strategy Paper (2003)
141
    Report for the Enhanced Permanent Dialogue, Ministry of Education (December 2009)
142
    Children from poor and low educated families, from Roma families, from rural areas and children with disabilities
143
    EU 2020 target is 10%. Serbia 2020 target is 15% (First National Report on Social Inclusion and Poverty Reduction in
Serbia, Belgrade, 2011). Early School leavers are defined as the percentage of the population aged 18 to 24 with no more
than secondary education and not engaged in further education or training
144
    Programme for International Student Assessment (PISA), OECD, MoE, 2009, Belgrade.
145
    1 school year= aproximately 38 score points.

      57
                                         OP for Human Resources Development, 2012-2013                      2nd draft



However, despite progress since 2006, 36% of Serbian students can still be considered functionally
illiterate in all three areas146.

Gender differences in education performance are similar to OECD average. Girls have better
achievements in reading literacy while boys perform better in mathematical literacy. No gender
differences was recorded in scientific performance.

Equality in education has improved compared to 2006. It is higher than in other countries of the
region and above the OECD average. The impact of the socio-economic status of students on
educational achievements has decreased; it explains only 10% of the variance in the educational
achievements in reading literacy compared to 14% in 2006.

Some of the reasons behind poor PISA results are presented below:

          Curricula are content-oriented, as opposed to outcome-based where learning is oriented
           towards development of literacy and living skills (as is the case in EU countries).

          The teaching process is not sufficiently intellectually stimulating; “learning to learn” is
           missing, as well as creative and critical thinking and individual problem-solving. Teachers’
           competences are insufficiently in line with contemporary science (both in academic fields
           and in pedagogy). A system for following up the academic achievements of pupils is non-
           existent.

          The network of schools is very uneven and scattered147, with negative influence on the
           quality of education. It does not fit the new demographic picture of Serbia148 and the
           demand for new qualifications. There are large schools with more than 3,000 pupils and
           small ones with less than 50 pupils. The teaching environment varies considerably. Some
           schools comply with ISO standards and boast the latest IT equipment while others lack the
           most elementary teaching materials and equipments.

          The declining trend of pupils in primary and secondary schools has not been reflected in
           reduction in teacher employment or number of classes taught. As a result, the efficiency of
           the system has deteriorated. This is true, not just because of a large number of very small
           classes in rural schools, but because class sizes in standard schools have been allowed to fall
           as well. The teacher-to-student ratio went from 1:16.5 in primary schools and 1:13.6 in
           secondary schools in 2000, to 1:13.8 in primary and only 1:10.7 in secondary schools in
           2006149, while the OECD average is 15.2 and 13.0. Another source of inefficiency is the large
           number of small schools.

          Indirect indicators show that teaching time is not being used efficiently enough (i.e. oral
           exams are still the most widespread, even if they are the least economical and the least
           objective), and that the teaching staff is insufficiently trained for efficient management of
           the learning process.
146
    Taking into account that 10-15% of pupils do not continue schooling after elementary school and therefore do not take
part in the PISA tests, the percentage of functionally illiterate among the total population is in fact higher.
147
    Primary schools exist in around 70% of settlements. Village schools represent 60% of the total number of schools, but
they are attended by only 10% of pupils’ population. In Serbia, 27.8% of pupils travel between 11 and 20 kilometres to go
to school, while 27.9% travel more than 21 km.
148
    The current network of schools was established at a time when there were approximately 100,000 newborn children
per year compared to a little more than 80,000 today.
149
    Mijatovid, B. (ed.), Reforms in Serbia: Achievements and Challenges, Centre for Liberal-Democratic Studies, Belgrade
(2008) http://www.clds.org.rs/newsite/Reforme08-eng.pdf

          58
                                       OP for Human Resources Development, 2012-2013                     2nd draft



          The network of special schools and special departments, where education is significantly
           more expensive than in regular system, is overgrown with minimal benefits. The number of
           employees in special schools has grown dramatically over the past years.

Institutional and legal framework

Annex B describes the ministries responsible for policy and legislation in the field of education and
VET namely the Ministry of Education and Science. It also describes the roles of other key bodies,
namely the Provincial Secretariat for Education, the National Education Council, the National Council
for Vocational and Adult Education, the National Council for Higher Education, the Institute for the
Improvement of Education, the Institute for Education Quality and Evaluation and the Pedagogical
Institute of Vojvodina. It also sets out the current body of laws governing education and VET, as
defined by IPA Implementing Regulation.

Strategic framework

      Priorities for an integrated educational strategy (draft)

The Ministry of Education and Science is committed to developing and adopting an integrated
education strategy in the course of 2011. As a part of this process, , the National Education Council
has recently adopted guidelines150 for further reforms of pre-school, primary, general secondary and
art secondary education. This document lays down also strategic goals for further development of
the education system as whole:

      (1) Increase the efficiency and effectiveness of the education process in order to improve the
          performance of the education system through:
               a. Ensuring accessibility of education – increase the coverage of children (drop-out
                  prevention, increase of school completion rate etc) by promoting equality in
                  education at all levels;
               b. Improving quality of education – that includes all quality parameters – conditions for
                  learning, educational programmes, teaching process, teachers and in particular
                  quality of educational achievements through evaluation of skills, knowledge and
                  competences;
               c. Financial and economic efficiency – measured through rational investment in
                  education and its return on the overall development of the country and local
                  community.

      (2) Establish better communication and linkages e with other sectors (economic, social,
          technological and cultural) to enhance the role of education as a key resource for the long-
          term development of Serbia

      (3) Modernise the education system in line with EU and world trends and promote greater
          internationalisation of the education system




150
   “Education in Serbia, How to Achieve Better Results? Guidelines for further development and quality improvement in
pre-school, primary, general secondary and art secondary education 2010-2020”

          59
                                       OP for Human Resources Development, 2012-2013                    2nd draft



      Strategy for the Development of Secondary Vocational Education

The Strategy for the Development of Secondary Vocational Education, adopted in December 2006,
defines the main objective of the VET system, which is “to provide youth and adults with the
opportunities to gain knowledge, skills and competencies needed for work and employment and to
ensure conditions for further education and learning in the perspective of the society’s sustainable
development”. The Strategy’s goals are reflected in the new Law on the Foundations of the
Education System (2009). The Action Plan for the implementation of the Strategy was adopted in
2009.

The VET development strategy and its Action Plan revolve around the following themes:

          development of social partnership in vocational education in Serbia though further
           institutional development enabling cross-sectoral approach in further reform of the VET
           system;
          development of the National Qualifications Framework as the cornerstone of the education
           system including VET;
          Establishment of quality assurance system and transparent accreditation and certification
           system;
          establishment and development of the system of career guidance and counseling in
           vocational education in Serbia151;
          development of entrepreneurship in vocational education.

      The Adult Education Development Strategy

The Adult Education Strategy was adopted in 2006, and the Action Plan for its implementation in
2009

The Adult Education Strategy includes the following priorities:

          the establishment of partnership mechanisms with social partners;
          the demarcation of responsibilities and competencies between ministries;
          the development of adult education programmes (primary and vocational);
          the promotion of quality of adult education and training.
          the strengthening of the capacity of training providers.

      Strategy for Career Guidance and Counselling and the Action Plan

The Strategy for Career Guidance and Counselling and the Action Plan for its implementation (2010 -
2014) were adopted in March 2010. The main strategic objective is the establishment of a system of
career guidance and counselling promoting a better use of human resources through links between
the worlds of work and education. Such a system would also contribute to the objectives of social
equality and inclusion.




151
   The Strategy for Career Guidance and Counseling and related Action Plan are prepared by the Ministry of Youth and
Sport and adopted by the Government

          60
                                   OP for Human Resources Development, 2012-2013              2nd draft




1.1.6 Social inclusion

An individual’s prospects within the education system and for gaining and retaining work, especially
in the formal economy with full rights and entitlements, are dependent on their background and
personal characteristics. Different groups in society, whether defined by gender, age, ethnicity,
physical, mental or intellectual ability, location or residential status, have widely varying experiences
and expectations of the employment and education systems, and hence life outcomes and access to
opportunities and norms in society.

Characteristics of vulnerable and disadvantaged groups

Not every group in society has equal access to education and work opportunities, or to the benefits
of fully participating in society. While every person has their own unique combination of attributes
and aptitudes, specific groups in society can be characterised as facing distinct challenges, while
sometimes also enjoying specific advantages.

   Children (and families)

As already mentioned above, poverty is more widespread among children than any other age
category. Children up to 15 have the highest poverty risk (28.1%) of all age groups. Their economic
dependence explains their greater exposure to poverty. Their deprivation is not just financial but
concerns all aspects of social life, with adverse consequences in the long-term – unhealthy living
conditions, lack of access to cultural and educational services, and inadequate support and
counselling, when faced with non-functional families, violence, alcoholism or depression. The
highest percentage of poor is also among multi-member families, with the highest poverty risk for
families with 3 or more dependant children. Particularly vulnerable groups are single parents with no
or limited system support.

Although poor children and their families are relatively well supported by social assistance schemes,
the lack of coordination and cooperation among available social services prevents strong and
efficient responses to the needs of those populations in education, health and employment.
Moreover, specific services need to be further developed to tackle the whole range of issues from
street children, children without parental care, children with disabilities, through those in conflict
with the law or victims of trafficking and prostitution.

   Youth

Young people aged 15-24 are particularly vulnerable to social exclusion, due to their precarious
situation on the labour market, as evidenced by the high level of youth unemployment and the low
participation of young people in the labour market (see section 2.1.2). Exclusion from the labour
market is linked to low levels of qualification and the difficulty to acquire a first working experience.
The problem originates in the education system, which fails to equip young people with knowledge
and skills required in the economy, is characterised by a high number of drop-outs in elementary
and secondary school, and offers too little opportunities for training and retraining for young adults
(see sections 1.1.5 and 2.1.3).

As for children, the insertion of young people into society suffers from insufficient or substandard
social services to address some of their specific needs. For example, there is no adequate support for



     61
                                          OP for Human Resources Development, 2012-2013                        2nd draft



adolescent girls/teenagers falling pregnant152, although it is well documented that young
motherhood is a major factor in poverty among women. The lack of coordinated responses to the
problems of disadvantaged youth is particularly acute among young people leaving institutional care
and those with behavioural problems, disabilities or special educational needs (mental, physical or
sensory), as well as young people from ethnic minorities, in particular Roma.

      Elderly

With one sixth of its total population older than 65, Serbia was the sixth “oldest” country in the
world in 2009153. All demographic projections indicate that the percentage of elderly people will
continue to increase until 2052, when one quarter of the population will be over 65 and the number
of those over 80 will have tripled. Like the rest of Europe, Serbia must reform its social security and
pension systems and increase labour force participation to ensure the continued financing of
pensions and health care for the elderly. Due to their economic inactivity and constraints on social
transfers, elderly people are particularly at risk of poverty and social exclusion. There are insufficient
social services to address the specific needs of the elderly and meet the increasing demands for
support and care.

      Women

Women make up 51% of the population of Serbia, but only 43% of the active population and 43% of
the employed population. 60% of the inactive population are made up of women154. As mentioned in
section 1.1.5, the employment rate among women (15-64) (40.3%) is much lower than among men
(54.3%) and considerably below EU-27 rates. The low participation of women on the labour market
makes them particularly vulnerable to social exclusion. Moreover, women tend to be discriminated
by employers as evidenced by the difference in earnings between men and women (16% in favour of
men)155.

Women face many socio-cultural barriers in their professional life. Studies show that they have
lower aspirations and tend to comply with stereotypes in selecting education and occupations. As a
result, there is a low participation of women in executive positions (30.5% of women hold executive
positions in the business and public sector while women represent 18.5% of government staff) and
more generally in entrepreneurship and SMEs. The traditional role expected from women in the
family is often not reconcilable with the requirements of a full- time job in the modern economy.
Women also tend to be confined to specific jobs and are excluded from potential job opportunities
not considered suitable for them.

According to a recent study156, women tend to be are among the most vulnerable during the
economic transition. This is particularly true for older women, low educated women, those living in
rural areas or from ethnic minorities, as well as women faced with family issues, with no family
support and those victims of violence. Single female parents, who are representing over three-
quarters of all single parents, are also particularly at risk of social exclusion.



152
    Alongside the UK, Serbia has the highest rate of teenage pregnancies. The number of adolescent girls falling pregnant is
between 6,000 and 7,000 a year, Source: Republic Centre for Family Planning
153                                             st
    “Demographic Review: Serbia in the Mid-21 Century – Depopulated and Old?”, No.25/2007
154
    LFS (Q1, 2010)
155
    The National Strategy for Improved Status of Women and Gender Equality Promotion
156
     Gender Inequalities the Labour Market and incentives for European integration process, Marija Kolin, European
Movement in Serbia (December 2009)

        62
                                       OP for Human Resources Development, 2012-2013          2nd draft




      Refugees and IDPs

In 1996, there were 537,937 people registered as refugees and 79,791 people registered as war-
affected people157. Almost 15 years later, thanks to systematic action by the Government of Serbia,
the number of refugees has significantly decreased and now it stands at 86,154158. The figure is
expected to decrease as a result of continuing returns to Bosnia and Herzegovina and Croatia, as
well as local integration. The main focus of the government strategy for resolving the situation of
refugees in Serbia in the past 10 years was to support their successful return to their country of
origin or third country, and to support the integration of those who decided to stay in Serbia.
Although a lot has been done, employment and housing still remain the main challenges for their full
integration into society. The unemployment rate among refugees is significantly higher than in the
rest of the population (see section 1.1.5), 29% of refugees have monthly incomes of less then €48,
which is a threshold for social welfare benefits and 61% of refugees do not have a housing
solution159.

The number of IDPs from Kosovo is 205,835160. According to the UNHCR, the socio-economic status
of IDPs remains precarious. The unemployment rate among IDPs is notably higher in comparison to
the local population (see section 1.1.5). IDPs are also facing considerable housing problems,
especially Roma who often live in unhygienic settlements. It is crucial to provide them with better
living conditions and ensure that they enjoy the same rights as host communities and receive
adequate assistance.

Still, Serbia hosts one of the largest populations of refugees and (IDPs) in Europe. Most live in private
accommodation, but some 5,100 remain in 57 collective centres. The Government has been making
great efforts to take different options into consideration to address the needs of refugees and IDPs
such as support to employment and housing.

      Returnees to Serbia

According to the Council of Europe’s estimate, the projected number of returnees based on the
Readmission Agreement, due to return from the EU to Serbia, is about 50,000 and 100,000. The
great majority of them are Roma (according to estimates, more than 70%). However, there are no
precise data on the exact number and structure of the returnees, which creates a limitation in
understanding their needs and providing the primary admittance according to those needs. The lack
of data also presents the obstacle in assessing the level of vulnerability of the returnees, and from
the estimate, on the number and structure of the most vulnerable groups among them. The recently
adopted Strategy on the Reintegration of Returnees on the basis of the Readmission Agreements
presents the framework for guiding activities for primary admittance and full reintegration of the
returnees in Serbia. Through inter-sectoral cooperation, returnees will be supported in employment,
housing, education and social needs.

      Roma

The Roma population is the third largest ethnic group in Serbia with officially 108 193 residents
(Census 2002), of which about 38,000 registered as IDPs. However, various researches estimate their

157
    Registration organised by the Commissariat in cooperation with UNHCR in 1996
158
    UNHCR data as of 1 August 2009
159
    Commissariat for Refugees Research in cooperation with IOM and UNHCR (October 2008)
160
    Ibid

        63
                                        OP for Human Resources Development, 2012-2013                      2nd draft



number to range from 250,000 to 500,000. The majority of Roma live in ethnic enclaves, and are
often unwilling to or incapable of participating in nation-wide research, which explains the relative
scarcity and inaccuracy of data about them. The Roma population is a young population with an
average age of 27.5 years old and large families (5.3 members per household on average).

Roma people are one of the poorest and most vulnerable groups in Serbia with acute social
problems, ranging from lack of decent housing, high unemployment and inactivity rates, low
qualifications, lack of access to education, health care, social counselling and employment support,
high insecurity, violence and crimes. The education system is particularly failing to integrate Roma
children, as evidenced by the significant gap between Roma and other children in terms of school
enrolment at all levels and the low rate of completion at both primary and secondary school (see
section 1.1.6). An UNDP survey161 shows that Roma unemployment rates are between 1.5 and 3
times higher than average (see also section 2.1.2). When employed, the majority of Roma work in
majority in the informal economy (58%). A worrying fact is also that better educated Roma have
more difficulty in finding employment.

Despite numerous policies and initiatives in recent years to improve the situation of Roma people,
the range of social services and initiatives to promote their inclusion into society is still inadequate in
relation to the needs and complexity of the issue.

      People with disabilities

There is no official census or comprehensive survey on the number of people with disabilities (PwD),
but according to current estimates, there are about 700,000 to 800,000 of PwD in Serbia 162.
Likewise, there is no accurate data regarding the number, types and levels of disabilities.

Despite significant improvements in their overall status in the society and in the legal and strategic
frameworks concerning them, PwD are at a greater risk of poverty and social exclusion, as they
continue to face numerous barriers in accessing education, employment and healthcare.

As in other countries in the region, social services for children and adults with disabilities is
underfunded and often unable to provide efficient support to PwD in overcoming barriers to
education, healthcare and labour market163. Social benefits for PwD are based on medical models of
amount and type of disability and tend to be relief-oriented, rather than supportive of employment.
Physical barriers (such as absence of accessible housing, limited access to public buildings and
spaces, and inadequate accessible public transportation) limit the mobility of people with disabilities
and discourage their active participation in society.

There is very low percentage of children with disabilities in the mainstream education. Drop-out
rates are also higher than average.

The lack of job opportunities is one of the major factors of exclusion for PwD. Access to labour
market is hampered by their low levels of education and the insufficient availability of vocational
and rehabilitation training. The attitude of employers, who are often unwilling to employ PwD, is
also part of the problem, although the adoption of a new law should soon bring improvements in
this respect (see section 2.1.2).


161
    “At Risk: The Social Vulnerability of Roma, Refugees and Internally Displaced Persons in Serbia”, UNDP (June 2006)
162
    Ministry of Labour and Social Policy data
163
    Social Protection and Social Inclusion in the Western Balkans, A Synthesis Report, European Commission, Directorate-
General for Employment, Social Affairs and Equal Opportunities (January 2009)

        64
                                          OP for Human Resources Development, 2012-2013                       2nd draft




      Rural communities

Rural areas account for 85% of the territory of Serbia, generate 41% of gross domestic product
(GDP), and are inhabited by 42% of the total population. The aging index and the dependency index
are considerably higher in rural areas164. The illiterate population in non-urban settlements is almost
4 times higher than in urban areas with over 30% of people not having finished elementary school.

As already indicated in the previous section on poverty levels, rural areas record above-average
levels of poverty. Factors of poverty in rural areas include the overreliance on agriculture as the
main source of jobs, the insufficiently diversified economic structure and the low mobility of the
labour force. Agricultural households are trapped into poverty due to the unfavourable ownership
structure, underdeveloped land, poor utility and business infrastructure and weak human and
entrepreneurial capacity.

      Other vulnerable groups

There are substantial overlaps among the groups described above. Without seeking to provide an
exhaustive list of vulnerable groups, it is worth noting that, in addition to the categories of people
described above, there are other groups of disadvantaged people suffering from exclusion on
various accounts, who have been given little or no attention, due to their size or the slow
recognition of their needs. Among these are:

        “New poor” older workers, - who have lost their jobs due to the restructuring of the
         economy and the privatisation process; having outdated skills not in demand any more,
         these older workers often faced with mental health issues and other social problems;
        Homeless persons, - who have been supported through social networks at the local level,
         without successfully reintegrating society;
        War veterans - suffering from social (residential, financial, unemployment, marital and
         family), medical (health physical disability) and mental problems (PTPD, alcoholism,
         depression, psychosomatic disorders) as a result of the war;
        HIV/AIDS infected people - who are stigmatised and suffer from a lack of awareness of the
         discrimination directed against them;
        Drug addicts - with no developed social network for their reintegration into society;
        Ex-offenders - with no systematic approach to their re-integration;
        People with a history of mental health problems, - who are usually treated within health
         system with no community support services for their full integration into society;
        Lesbian, gay, bisexual and transgender (LGBT) population;
        People seeking international protection and others moving irregularly - the number of
         asylum applications remains low. Implementation of Serbia's asylum legislation started in
         mid-2008165.

When available, the support to these groups is fragmented within single systems and uncoordinated
and therefore unable to promote efficiently their (re)integration into society.



164
    The share of dependent categories of the population (children aged 0-14 and elderly older than 64) in comparison to the
population of working age is 55% and/or 43% in urban settlements (Statistical Office of the Republic of Serbia).
165
    UNHCR Statistical Yearbook (2009)

        65
                                          OP for Human Resources Development, 2012-2013                       2nd draft



Social welfare system in Serbia

The overall goal of the social welfare system in Serbia is to promote decent living for all and ensure
social cohesion, in particular by combating poverty and social exclusion and helping vulnerable and
disadvantaged groups lead independent and productive lives.

The provision of social welfare in Serbia is managed by the Ministry of Labour and Social Policy. It
consists of cash benefits and social services to citizens, which are provided through the network of
institutions run by the state and local self-governments. Over the past few years, service providers
from the non-governmental and private sector have become increasingly involved in social service
provision across Serbia.

The social welfare system has been characterised by a high degree of centralisation since it was
designed in the nineties. Reforms have gradually been introduced in the last 10 years to modernise
social welfare by encouraging, in particular, greater involvement of local actors. A number of
breakthroughs have been achieved since reforms started:

       Integrating lessons learned from best practices and various pilot projects implemented in
        Serbia, a new Law on Social Welfare has been drafted which creates a framework for a
        progressive decentralisation and modernisation of social welfare in Serbia.
     The Law promotes service delivery pluralism and quality assurance through national
        minimum standards for social services and supervisory support. It also creates a regulatory
        framework based on the licensing of professionals and service providers166 and inspection
        mechanisms. .
     Emphasis is now placed on the provision of services in the community and the family.
     Services have been grouped together in an open-ended list which allows for the
        development of new services and their mainstreaming into the system.
     Earmarked transfers from central level to local communities are foreseen to support the
        development of community-based social services.
     In order to reach the most vulnerable populations often excluded from the system in the
        past, the new Law provides for higher amounts of cash social assistance for the poor and
        encourages accompanying active inclusion measures.
     Institutes for Social Protection are operational since 2006 and provide research and
        development at Republican and Provincial level for the promotion and development of the
        social welfare system167.
The following paragraphs describe key aspects of the existing welfare system as transformed by
reforms carried out to date while a more detailed look at further reforms and challenges linked to
the implementation of the new Law is provided under section 2.1.4.

      Social welfare expenditures

Social welfare expenditures consist of expenditures on social services and cash benefits both at
central and local levels. Social welfare expenditures reached a peak of 3.8% of GDP in 2002-2003168,



166
    the Social Welfare Chamber will be established for issuing licences to professionals
167
    This includes monitoring the quality of work in the social welfare sector including supervisory support to service
providers and other actors (e.g. local governments), development of national minimum standards and accreditation of
training programmes for professionals. See Annex B for more details.
168
    Assessment of the actual allocation of functions and financial resources among central and local level in the domain of
social welfare services, DFID (September 2007)

          66
                                           OP for Human Resources Development, 2012-2013                          2nd draft



after which they decreased to 3.1% of GDP in 2008 (€955m). The total budget for social welfare was
€929m169 in 2009 accounting for 3.8% of GDP.

Central level expenditures represent 90% of this budget. Services account for 32.4% of total
expenditures and cash benefits for 67.6%168. However, the greatest share of local level expenditures
is spent on services (70%).

Out of the total spending on social services at the central level, residential care represents more
than 70% (73% in 2005 and 71.6% in 2006). This ratio gives an indication of the excessive weight of
residential care and the underdevelopment of community-based services in Serbia168168.

The main poverty targeted benefit the so-called cash assistance support CSAaccounted for 5.1% of
social protection expenditures and 0.2% of GDP. Although it increased, this share is still lower than
other countries in the region (Croatia, 0.3% of GDP Slovenia, 0.6% of GDP Bulgaria, 0.3% of GDP)170.

In 2009, child allowances represented 9.2% of the total social protection expenditures and 0.3% of
GDP and the carer’s allowance accounted for 6.5% of the total social welfare expenditures, and 0.2%
of GDP.

Local self-government contributes for less than 10% of total social welfare expenditure.
Municipalities have discretionary power to decide how much to spend on social welfare.
Municipalities spend between 0.1% and 9.5% of their total budget on social welfare and an average
59 RSD per capita on social assistance, an indication that social welfare is not among their first
priorities. There are huge disparities between LSGs. The four largest cities – Belgrade, Novi Sad, Niš
and Kragujevac – accounted for around 73% of total social expenditure at the local level in 2005 and
2006. The State budget contribution to local government expenditure in social welfare has been very
important: two-thirds in 2005 and more than 60% in 2006168.

Social welfare budgets at the local level present an almost completely opposite structure to the one
prevailing at central level: the major part of the budget is spent on social welfare services (86%),
with only a small portion expanded on cash benefits (14%)171. In practice, the latter has little impact
on the welfare of beneficiaries, since they are only supplementing central cash benefits. However,
almost all LSGs allocate funds for one-off payments to people most in need and almost one-third of
LSGs allocate budget funds for in-kind assistance and humanitarian support172.




169
    The lower budget amount in 2009 in euro is caused by high drop of dinar value comparing to euro
170
    World Bank (2006)
171
    Ibid
172
    Such as assistance in purchasing basic food items, items for beneficiaries placed in residential institutions, school items
for poor children, funding soup kitchens, etc. The Situation Analysis on Social Welfare at Local Level, survey in 30
municipalities, Matkovic (2006)

      67
                                            OP for Human Resources Development, 2012-2013                    2nd draft




      Social welfare at the central level

              a. Central cash benefits

The cash benefits funded at the central level can be grouped according to the laws which regulate
them:
   i. Financial social support regulated by the Law on Social Welfare. It includes cash social
   assistance (CSA) and carer allowance;
   ii. Benefits for children and families regulated by the Law on Financial Support to Family and
   Children. They include maternity allowance, parental allowance, child allowance, pre-school
   attendance cost for children without parental care, and pre-school attendance cost for children
   with disabilities;
   iii. Cash benefits for disabled war veterans.

Scope and take-up of cash benefits (2009)
Benefit                                  Beneficiaries          Commentary
                                        (average on a
                                        monthly basis)
Cash Social Assistance (CSA)          59,067 households         The Government’s main instrument against poverty
                                     (151,504 individuals)      and social exclusion, this is a means-tested instrument
                                                                for no or low income households, the level depending
                                                                on number of family members activated when
                                                                individual/family are unable to maintain even the
                                                                                          173
                                                                minimum living standard .
Carer allowance                              46,739             Intended for protection of persons who, due to
                                                                physical or sensory impairment, intellectual difficulties
                                                                or deteriorated health conditions are in need of
                                                                another person's care and assistance in order to meet
                                                                their basic needs, , carer allowance is conditioned only
                                                                by a health condition, not by the beneficiary’s financial
                                                                standing (in contrast to CSACSA).
Maternity allowance, child                   30,568             Benefits paid to pregnant women/new mothers for the
                                                                                                                st     nd
care allowance and special                                      period of maternity leave (up to 1 year for 1 and 2
                                                                                                rd     th
child care allowance                                            child, and up to 2 years for 3 and 4 child). It can be
                                                                exercised by father, adopter, foster parent or carer of
                                                                the child. To exercise the right the person must have
                                                                been employed.
                                                                                                 st nd rd      th
Parental allowance                          61,406              One-off fixed benefit for the 1 , 2 , 3 and 4 child.
                                       (62,558 children)




173
      It is a typical guaranteed minimum income that can be found in almost all EU countries

         68
                                         OP for Human Resources Development, 2012-2013                       2nd draft




Child allowance                          203,403             Targeted at poor families with children, it is a
                                    (386,465 children)       conditional cash transfer i.e. the entitlement to child
                                                             allowance can be acquired for no more than four
                                                             children in a family, provided that they attend
                                                             elementary or secondary school regularly and can be
                                                             extended beyond school age for children with
                                                             disabilities up to 26 years if they are covered by
                                                             educational programmes or training for work. The
                                                             threshold and entitlement levels are equal for all
                                                                                              174
                                                             children in the whole of Serbia and are indexed to
                                                             the cost of living
Pre-school attendance cost
for children without
                                                             Cumulative benefit exercised only for the beneficiaries
parental care                               300
                                                             of child allowance
Pre-school attendance cost
for children with disabilities
Cash benefits for disabled
war veterans
Source: MoLSP Annual Report 2009

CSA is the most important source of income for poor families, namely Roma families, single member
families, families with many members, the elderly, and persons with disabilities who are unable to
work. It gives access to other types of assistance provided by local governments, such as one-off
payments, subsidies for the payment of utility services, free textbooks, transportation and medical
treatment.175

CSA beneficiaries have doubled since 2000, following amendments to the Law. In mid 2009, the
number of households receiving CSA reached 70,012, after an increase of 20,000 compared to the
previous year. The increase of CSA beneficiaries in mid- 2009, as a result of the financial crisis, shows
the importance of the CSA as an instrument to respond quickly to sudden shifts in poverty.

Despite a higher coverage, only 8.6% of the poor received CSA in 2007, while only 11.4% of
households living below the poverty line applied for CSA.176 Of the total number of households in
Serbia, only about 2% receive CSA. The cumbersome administrative procedures, the relatively high
application costs, and the social stigma attached to it, explain partly the reluctance of many
potential beneficiaries to apply for the CSACSA.

The largest group of CSA beneficiaries is constituted by single member families (39.1%), followed by
families with 4 and more members, (27.7%) and 2-member families (18%). The low amount of
assistance and inadequate equivalency scale favouring individuals over households177 explain why
single-member families are the principal CSA beneficiaries, despite the fact that families with 3 and
more members are at a higher risk of poverty.


174
    The threshold and entitlement levels are higher (an increase in the threshold by 20% and the amount of child allowance
by 30%) for foster and guardian families, single parents and children with disabilities in order to encourage alternative
initiatives to institutional placement.
175
   Support to the employment of socially excluded youth -guidelines for the development of integrated services of the
labour market and social services, Lela Veljkovic (November 2009)
176
    Living Standard Measurement Study, Serbia 2002-2007
177
    An Analysis of the Impact of Government Financial Assistance for the Poor, Gordana Matkovic and Bosko Mijatovic
(September 2008)

      69
                                         OP for Human Resources Development, 2012-2013                       2nd draft




                                                       Figure 55
                                  Source: Ministry of Labour and Social Policy, May 2010

The take-up of CSA varies widely across Serbia and leads also to controversial outcomes: in some
underdeveloped local self-governments (LSGs) with very low living standards and significant social
problems, the share of households receiving CSA is less than 1%.178 LSGs where the share of
households receiving CSA is over 5% include both some of the least developed LSGs179 and some of
the most developed ones. This situation results from the different approaches that staff of Centres
for Social Work (CSW) use when assessing the eligibility of applicants and the lack of standardised
assessment procedures.

According to available data, almost half of CSA beneficiaries are unemployed and able-bodied. The
current rule to limit access to CSA to a maximum of nine months per year for working-age
beneficiaries is not a sufficient incentive to bring people back to work.180 On the contrary, CSA might
discourage poor beneficiaries to look for a job since it is a regular and reliable benefit. In many cases,
working-age beneficiaries survive three months without CSA, relying on child allowances and
incomes gained on the informal economy before reapplying.

Out of 178,000 CSA beneficiaries in 2010, 46% were unemployed, a figure which indicates the
potential for active inclusion measures.181




178
    Kučevo, Ljubovija, Malo Crnide and Žabari Source: An Analysis of the Impact of the Financial Government Assistance for
the Poor, G. Matkovic and B. Mijatovic (September 2009)
179
    Žitište, Crna Trava, Bujanovac, Preševo and Lebane. Source Ibid
180
    World Bank, Serbia Social Assistance and Child Protection Note (2006), p.9
181
    MoLSP data (May 2010)

      70
                                           OP for Human Resources Development, 2012-2013        2nd draft




                 Source: Ministry of Labour and Social Policy, May 2010
                                                         Figure 56

200,488 households benefited from child allowances, which reached 311,116 children in 2010. The
coverage of poor households by child allowances amounted to 58% in 2010 and is much higher than
for the CSA. On the other hand, 84% of households receiving child allowances were not poor
pointing to weaknesses in targeting182.

           b. Centrally managed social services

Centrally managed social services are all social services provided by state institutions and they
include services provided by Centres for Social Work, residential care and foster care.

         Centres for Social Work

The backbone of the social welfare system is the country-wide network of 140 Centres for Social
Work (CSWs), acting as de-concentrated offices183 of the MoLSP in almost every local self-
government (LSG). CSWs are public bodies existing since the mid-1950s in charge of basic social
services for children, young people, adults and elderly people from disadvantaged and vulnerable
groups. Although CSWs are established by LSGs, their responsibilities derive from the central
government which provides the majority of their funding.

The primary function of CSWs is to assess the needs and abilities of their clients and refer them to
appropriate social services and benefits to meet those needs. The whole process of assessment and
planning is defined in individual care plans. It is difficult to access financial social support, be placed
in a residential institution or a foster family, or even use local services, without the assessment of
and decision from a CSW. In addition to this key role, CSWs must also fulfil other functions of public
interest in accordance with the laws such as counselling, mediation, custody, foster family
assessment, emergency intervention service, etc. They also administer financial social support for
the poor and people with disabilities184.




182
    MOLSP data (May 2010)
183
    Decentralization of Social Welfare in Serbia, G. Matkovic (2006)
184
    CSA, carer allowance and one-off payments

      71
                                          OP for Human Resources Development, 2012-2013                         2nd draft



The new Law on Social Welfare specifies the conditions under which CSWs may become service
provider themselves185. This is an important novelty as it ensures better quality of service provision,
clear distinction of public functions and service provider role and it also contributes to the plurality
and diversification of service providers.

Finally, CSWs also play an important role in planning and developing local social policy, monitoring
local social problems, and proposing the creation of new programmes and services required in the
local community. CSWs fulfil this role through their participation in local Social Policy Councils (see
next section).

CSWs employ a total of 3,069 people, out of which around 60% are professional workers, including
social workers, lawyers, psychologists, educators and sociologists.186




             Source: Annual Report on the work of CSWs in Serbia for 2009
                                                         Figure 57

Compared to 2008, the number of CSWs’ clients increased by 7.45%, reaching a total of 555,425
people, which accounts for 7.5% of the total population of Serbia.




185
    a separate organisation unit must be formed and licensed for the provision of the given social service, no other licensed
service providers must be active in the given LSG, the service must be funded by a commissioner of service such as LSG or
Provincial Authority.
186
    The Annual Report on the work of CSWs in Serbia for 2009

      72
                                          OP for Human Resources Development, 2012-2013                       2nd draft




             Source: Annual Report on the work of CSWs in Serbia for 2009
                                                        Figure 58

Case management was introduced in all CSWs throughout 2008 and 2009. The shift to case
management was accompanied with extensive training187 and professional supervisory support
organised by the MoLSP and the Institutes for Social Protection (ISP).

         Residential care

The state network of residential care institutions consists of 79 residential institutions grouped into
10 categories188. Placement within an institution is decided by the CSWs.




               Source: MoLSP data, May 2010
                                                        Figure 59



187
    Training programmes for case management and supervision have been accredited and a network of accredited trainers
was developed through training of trainers programme (34 for case management and 8 for supervision). All over Serbia
1,453 case managers and 253 supervisors successfully completed the basic accredited course in case management..
188
    Children and youth without parental care, children with disabilities, children with behavioural problems, adults with
disabilities (physical and sensory i.e. visual impairments), adults persons with learning disabilities, adults persons with
mental disorders and homes for elderly and gerontology centres

      73
                                           OP for Human Resources Development, 2012-2013                          2nd draft



Over the years, residential care has gradually become the dominant social service for children, young
and adult persons with disabilities, due to insufficiently developed capacities of LSGs and the
shortage of alternatives.

Residential care institutions often lack staff and specialised care programmes.189 Premises and
equipment are often sub-standard and would require significant investment. Placement into those
institutions has often adverse consequences on the inmates, who are kept in isolation, away from
their family and natural environment and with little possibility to access other forms of social
support.190

The transformation process of residential care was given a prominent place on the reform agenda as
illustrated in the field of child care.191 Thanks to systematic support to the provision of care into
family environment and deinstitutionalisation, the number of children placed in institutions has
been reduced by half since 2000. This decline has been accompanied by the parallel growth of
number of children in foster families, whose number has more than doubled over the same
period.192




              Source: MoLSP, January 2010
                                                          Figure 60

In parallel, MOLSP has supported efforts to improve the quality of care provided in institutions. A
good practice example is given by the successful pilot project in Stamnica’s residential care
institution, which is being replicated in other institutions across the country.




189
    Report on the State of Affairs in the Residential Institutions for Children, Adults and Elderly with disabilities in Serbia,
November 2007
190
    For example, once a child is admitted into an institution, there is often a lack of cooperation between the CSW’s
employee responsible for the child’s care and the professionals from the respective institution, with rare visits to the child.
191
    The MoLSP developed a Master Plan for the Transformation of Residential Institutions for Children with support from
UNICEF (September 2009). The Plan foresees that within the next five years all residential institutions for children without
parental care, children with disabilities and correctional institutions for children and youth will enter into or conclude the
transformation process The Plan is an integral part of the new Decision of the Network of Residential institutions in Serbia
adopted by the Government in June 2010
192
    In June 2010, the total number of children (without parental care, with behavioural problems and with disabilities) in
residential institutions amounted to 2,001 while the total number of foster families reached 3,622.

      74
                                            OP for Human Resources Development, 2012-2013                          2nd draft




The “Dr Nikola Sumenkovic” institution at Stamnica is a large complex providing institutional care for approximately 338
adults and 90 children with severe to profound learning disabilities. Many beneficiaries have multiple and/or complex
disabilities, but there is a significant number of beneficiaries who are only moderately disabled by their impairments. The
care treatment was faced with three major quality issues: an inadequate or out-of-date assessment of the needs and
abilities of beneficiaries, inappropriate grouping of beneficiaries and overcrowding to the extent that it is well below the
new minimum standards adopted by the MOLSP.

The MoLSP, in partnership with Child’s Heart (a Serbian NGO), the ISP and the staff of Stamnica, designed and
implemented the new work methodology and achieved the following results:

     Functional assessments and individual service plans (ISPs) for all 434 beneficiaries, including the definition of specific
      treatments;

     These treatments were aggregated into an Institutional Treatment Plans (ITPs), in a format, which is easy for the
      institutional staff to use and review;

     Eligibility criteria for each treatment identified in the ITPs are developed, and a computer database makes it possible
      to research quickly the needs and development of all individuals;

     Stamnica staff was trained in the assessment model and service planning.

Overall, the project has resulted in the improved quality of life of beneficiaries and a change in the staff’s attitude towards
them. All beneficiaries now have activities all throughout the day, designed in accordance with their abilities and needs,
and a higher number of them are involved in constructive activities outside the institution.


          Foster care

The Foster Care Programme started in 2003. As explained above, this programme has been one of
the pillars of child care reforms.

In 2009, the Rulebook on Foster Care was adopted defining basic types of foster care193, foster care
service standards and procedures and professional development for foster advisors. Foster advisors
completed intensive training programmes to manage foster families and provide appropriate
support in the best interest of the child.

Comparing to 2004, the number of foster families across Serbia has tripled as a result of constant
improvement of the Foster Family Programme over the past several years. The network of foster
families included 3,622 families fostering at total of 5,453 people in June 2010.

There are eight regional foster centres established by the MoLSP in 2011 (Novi Sad, Duprija, Niš,
Subotica and, Bela Crkva Kragujevac, Belgrade and Milosevac)

      Social welfare at the local level

Local self-government is the most important player in the implementation of social policies at the
local level. LSGs are responsible for providing social welfare to their citizens in line with identified
local needs through the provision of both social benefits and social services . Social benefits in cash

193
    These are: i) standard foster care for a child of a normal psychophysical development; ii) specialized foster care for
childen with disabilities, health problems or behavioural disorder; iii) emergency foster care applied in emergency
situations; and iv) respite foster care, which envisages placement of a child in another foster family, so that the foster or
natural family can have a break and maintain its capacities for further caring of the child, or for children older than 10 years
old who have been placed in an institution for a longer period, aiming to provide them the experience of family life model
and prepare them for independent living.

        75
                                           OP for Human Resources Development, 2012-2013                          2nd draft



or in kind194, which are provided by the LSGs out of their own resources, supplement the financial
assistance provided by the State at central level. LSGs also finance and manage community-based
social services. Although the previous legislation officially recognised only home care, day care,
shelters and safe houses services, it also enabled the provision of additional community-based
services beyond those prescribed by law. The new law goes further and promotes the development
of diversified and innovative community-based services and encourage the involvement of the
largest possible number of actors in the provision of services. The new Law creates conditions and
mechanisms for LSGs to meet the social needs of their vulnerable groups primarily through the
development of services supporting their inclusion in the community.
The MoLSP, with significant support from international donors, has been helping LSGs to steer the
development of community-based services at the local level. Assistance was available to develop
local social strategies and action plans and to access financial resources necessary to implement the
services prioritized in those strategies. The vast majority of LSGs have established a Local Social
Policy Council, a consultative body making recommendations regarding the design, implementation
and monitoring of social strategies at the local level. Local Social Policy Councils are composed of
representatives from LSGs, CSWs and from all relevant local organisations and institutions in the
field of education, health, employment, police, NGOs, media, local companies and service users. As a
result, over 120 LSGs have developed strategies and plans to address the needs of local vulnerable
groups.195

An example of a well-managed support to LSGs in implementing local social policies is provided in
the box below. However this is not a unique . Based on lessons learnt, the MoLSP has launched
similar initiatives for LSGs within the IPA 2008 - Fostering Social Inclusion by Developing Community-
Based Social Services for Children with Disabilities and their Families and IPA 2009 - Supporting
access to rights, employment and livelihood enhancement of refugees and IDPs in Serbia. Both IPA
projects include technical assistance to LSGs and grant scheme for the development of community-
based services focusing on very specific vulnerable groups not covered by this OP. These two
projects will however produce very important lessons regarding the involvement of LSGs in social
policy.

  The joint DfID/NMFA programme, which supported the implementation of the Social Welfare Development Strategy,
                                                     196
  represents a good practice of local social planning :

      28 LSG strategies with budgets and action plans have been adopted. Three of them (Krusevac, Ivanjica and
       Subotica) were assessed as the best practice examples.

      Out of the 28 strategies, two are inter-municipal cluster strategies: (South Banat or Vrsac cluster and West Backa or
       Sombor cluster). The Vrsac cluster initiated the first ever system for funding inter-municipal social services in Serbia.

      4 large cities adopted strategies with action plans and budgets - Nis, Kragujevac and Novi Sada while Belgrade’s
       strategy is currently being drafted.

      37 community-based social services (CBSS) have been co-funded through a grant scheme, out of which 6 are inter-
       municipal services that can be accessed by citizens from four different LGSs.



194
    Such as one-off payments, clothing and incidentals for beneficiaries placed in residential institutions or other family, as
well as pre-school attendance cost for children from material deprived families, subsidies for communal services to
materially deprived households etc
195
     The number is probably higher, as many LSGs include social policy activities within broader economic and social
developments strategies.
196
    Implementation of the Social Welfare Development Strategy, Final Report, Oxford Policy Management (December 2009-
Janury 2010)

      76
                                          OP for Human Resources Development, 2012-2013                       2nd draft




     31 LSGs have allocated budget resources for funding the implementation of local strategies.

     The overall budget allocations to community-based social services for the 31 LSGs and cities (excluding Belgrade)
      has increased by 149% since 2005 and 94% since 2006, while the number of CBSSs supported has increased from 91
      in 2006 to 148 in 2009.

     Through the ‘decisions on extended entitlement’ funds were allocated in LSG budgets to finance CBSSs for four
      years, a clear evidence of commitment to the sector and a key indicator of sustainability

In addition to support to LSGs, the MoLSP has been providing continuous technical and financial
support to local service providers and community-based services through two mechanisms: the
Social Innovation Fund and the Fund for Organisations dealing with People with Disabilities.

The Social Innovation Fund (SIF) was launched in 2003 as a programme of the MoLSP, managed by
the UNDP and supported by the EU, Norway and DFID. Since its beginning, SIF has contributed to
more diversified community-based services and providers (from the non-governmental and private
sectors) including non-state providers) while promoting local partnerships in providing services. As a
grant mechanism, SIF funded over 300 projects for a total value of €7.3m. Projects helped develop a
variety of services aiming at greater inclusion of the most disadvantaged into the community ranging
from support to housing for people with intellectual disabilities, personal assistants services for
people with physical disabilities to day care centres for different vulnerable groups – children,
elderly, etc. Many services developed thanks to SIF participated in the pilot programme to develop
national minimum standards for social services as a basis for the future licensing of service
providers. This programme served as a basis for creating regulatory mechanisms now enshrined in
the new Law on Social Welfare.

SIF has also provided capacity building to over 500 professionals from more than 300 organisations
through technical assistance, training, partnership building and support with the implementation,
monitoring and evaluation of local social services. SIF has not been institutionalised although it is still
operational at programme level within reduced capacity and scope.

The Fund for the Organisations dealing with People with Disabilities (PwD) is an institutional
mechanism managed by the Department for the Protection of PwD in the MoLSP. It has a long
tradition in supporting the development of community-based initiatives for PwD through funding
support and capacity building activities funded from the national budget and the national Lottery.
The Fund has supported over 560 civil society organisations (associations, NGOs, socio-humanitarian
organisations) since its creation. The Fund’s procedures were refined on several occasions in the
past and methodology was aligned with SIF since many organizations were applying to both Funds.
Since a new Law on Civil Society Organisations has been enforced in October 2009197, the work of
the Fund is exclusively managed through open calls for proposals. The World Bank DILS project has
further improved the funding procedures. Approximately €3m were allocated to different
community-based services for PwD in 2010. The Fund recently extended its scope and target groups
to cover vulnerable groups such as Roma, IDPs, young, elderly, etc.

 Despite past efforts and support provided to LSGs and service providers, the availability of
community-based services across the country is still limited. 21.2% of all LSGs do not have home care
service and only 38.8% have day care centres for children with disabilities198. There are also huge

197
  RS Official Gazette, no. 51/9
198
  Distribution of the Social Welfare Services in Serbia, UNDP and Ministry of Labour and Social Policy, Belgrade (January -
May 2009).

      77
                                       OP for Human Resources Development, 2012-2013          2nd draft



discrepancies among municipalities, given the difference in the size of LSGs and their budgets.
Among the most developed LSGs, 90% have home care, while this number decreases to 57% among
the least developed ones. The ratio falls to 2:1 for day care for children with disabilities. Among the
poorest municipalities, none has a day care centre for the elderly.199

Institutional and legal framework

Annex B describes the ministries responsible for policy and legislation in the field of social inclusion
namely the Ministry of Labour and Social Policy, the Ministry of Health, the Ministry of Human and
Minority Rights, Public Administration and Local Self-Government, and the Ministry of Youth and
Sport. It also describes the roles of other key bodies, namely the Province Secretariat for Health and
Social Policy, the Institutes for Social Protection, the Fund for the Organisations for People with
Disabilities, the Commissariat for Refugees, the Social Inclusion and Poverty Unit and the Social
Inclusion Work Group. It also sets out the current body of laws governing social inclusion, as defined
by IPA Implementing Regulation.

Strategic Framework

Serbia has a well developed strategic framework for fighting poverty and social exclusion.

      Poverty Reduction Strategy

The Poverty Reduction Strategy for Serbia was adopted by the Government of the Republic of Serbia
in 2003. The Strategy defines poverty as a multi-dimensional phenomenon which, in addition to
insufficient income for securing livelihood, implies the inability to find employment, inadequate
housing and access to social welfare, medical, educational and utility services. Other key aspects of
poverty include the inability to exercise the right to a healthy environment and natural resources, in
the first place clean water and air. The main goal set out in this document was to reduce poverty by
half by 2010, which was already achieved by 2007.

 The strategy has helped mainstream concerns about poverty and social exclusion across all relevant
policy fields and coordinate public and private efforts in favour of the poorest and socially most
vulnerable groups. As such, it paved the way for Serbia’s preparation of the Joint Inclusion
Memorandum (JIM) and future participation in the EU Open Method of Coordination on social
inclusion.

      Social Welfare Development Strategy

The Social Welfare Development Strategy has been guiding reforms in the sector since 2005. The
Strategy sets out two main objectives for the reform process:

            Improvement of social welfare for the poorest citizens, by securing an "existential minimum"
             and developing a more efficient system of financial support;
            Development of a network of integrated community-based services reflecting the needs of
             local beneficiaries and complying with minimum quality standards.

The MoLSP is committed to developing a new Strategy on Social Welfare and accompanying action
plan to support the enforcement of the new Law and and implement improved systems. ..


199
      Ibid

            78
                                    OP for Human Resources Development, 2012-2013               2nd draft



   Other relevant national strategic documents

The Strategy for Improving the Position of People with Disabilities in the Republic of Serbia promotes
a multi-sectoral approach in improving the status of people with disabilities and equal opportunities
in the area of the protection of the law, education, employment, housing and labour market.

The National Strategy for Improved Status of Women and Gender Equality Promotion sets actions in
the key areas for the improvement of status of women and gender equality:

   1) increased representation of women in public and political life,
   2) improvement of the economic position of women,
   3) achievement of gender equality in education,
   4) improvement of the health state of women and improvement of the gender equality in the
       health policy,
   5) prevention and suppression of violence against women, and
   6) elimination of gender stereotypes in the media and promotion of gender equality.

The Strategy for Improvement of the Status of Roma in the Republic of Serbia sets the foundation for
identifying and implementing affirmative actions in favour of Roma in the areas of education, health,
employment and housing.

The National Strategy for Resolving the Problems of Refugees and Internally Displaced Persons
provides the framework for resolving refugee and IDP issues - the return and integration of
refugees/IDPs, livelihood enhancement, housing and employment.

Strategy for the Reintegration of Returnees on the basis of the Readmission Agreements provides a
framework from primary admittance of returnees and their full reintegration into local communities,

The National Youth Strategy and the Action Plan for its implementation until 2014 provides a
framework for the promotion of young people in the 21st century as active and equal participants in
all areas of social life with equal rights and opportunities for the full development of their potential.

The Sport Development Strategy and its action plan sets a vision of Serbia until 2013 as a country
where sport will be available to every person, especially children, with developed sport
infrastructure and high achievements in sport competitions. The main inter-related strategic
priorities are 1) sport development for children and young people, 2) sport infrastructure
development and 3) professional sport development.

The National Plan of Action for Children is based on the four basic principles of the Convention on
the Rights of the Child 1) the right to life, survival and development; 2) the best interests of the child;
3) protection from discrimination and 4) right of participation. The priorities of the National Action
Plan until 2015 are: poverty reduction, quality education and better health for all children, the
improvement of the position and rights of children with disabilities, the protection of the rights of
children without parental care, the protection of children against abuse, neglect, exploitation and
violence and the strengthening of national capacities for dealing with problems related to children.

The National Strategy for Children Protection and Prevention of Violence is in line with international
conventions and runs until 2015. The Strategy sets as a goal that every child in Serbia, regardless of
gender, age, ethnic origin or social status, should grow in a safe environment respecting the integrity
of his/her personality and dignity. The Strategy covers physical and psychological violence,
exploitation, neglect and maltreatment as well as sexual abuse of children.


     79
                                    OP for Human Resources Development, 2012-2013              2nd draft



The National Strategy on Ageing promotes the lifelong development of individuals, the quality of life
in old age, the full integration and participation of the elderly into the community, the elimination of
all forms of social negligence due to the regression of functional abilities in old age and disability and
inter-generational and intra-generational transfers, solidarity and dialogue.

The Migration Management Strategy sets measures for monitoring migrations, strengthening the
institutional and legal framework for managing migrations and achieving international standards in
the field of human rights protection for all migrants and towards their integration and social
inclusion.

The strategic framework for improving the state of health of the population in Serbia includes
several strategies. The main ones are the National Public Health Strategy, the National Mental
Health Strategy, the Strategy for Development and Health of Youth, the Strategy for Palliative Care
and the Strategy for fighting HIV/AIDS.

Social cohesion is also one of the most important dimensions of the Sustainable Development
Strategy of the Republic of Serbia (see section 3.3.2).

   Towards the Joint Inclusion Memorandum

As Serbia is preparing for the candidate status, the consultation process on drafting the Joint
Inclusion Memorandum (JIM) has started with the support of the Social inclusion and Poverty
Reduction Unit in the office of the Deputy Prime Minister for European Integration. The JIM will
identify and outline the principal challenges which Serbia faces in tackling poverty and social
exclusion. It will assess the strengths and weaknesses of existing policies and identifies future
challenges and policy priorities.




     80
                                         OP for Human Resources Development, 2012-2013                       2nd draft




1.2 Community strategic framework
1.2.1 Introduction

The strategic context for the analysis, priorities and measures of the OP has two dimensions – a
national (including local and regional) and a supranational level. The key strategy documents for the
sector within Serbia, adopted by the Government, were described in the preceding section. The
following section describes the European Union’s priorities for the sector, taken from its regulations,
plans and guidelines, as transposed into agreements with the Republic of Serbia.

In particular, the OP has been shaped by:

          The Council regulation establishing IPA200, and the Commission regulation which governs its
           implementation and determines its eligible actions201;
          The Multi-Annual Indicative Programming Document (MIPD), which sets out the
           Commission’s objectives and expectations for all interventions using IPA funding over the
           programming period202;
          The European Partnership203, adopted by the Council of the European Union, which sets out
           mid-term objectives for Serbia to meet the requirements of EU membership, within the
           context of the Stabilisation and Association process (SAp).
          The Community Strategic Guidelines on economic, social and territorial cohesion for 2007-
           2013204, also adopted by the European Council, which elaborate how the Lisbon205 and
           Gothenburg206 agendas should be interpreted within the context of funding the EU’s
           cohesion policy;
          “Europe 2020”, which was adopted by the Council on 17 June 2010 and provides the
           framework for Europe-wide action to achieve smart, sustainable and inclusive growth over
           the next decade207.

In accordance with the principle of concentration, the OP will focus limited resources on priority
themes of this OP, by matching Serbia’s priorities and development needs with the most relevant
aspects of the EU’s strategies and guidelines.




200
    Council Regulation (EC) No 1085/2006 of 17 July 2006 establishing an Instrument for Pre-Accession Assistance (IPA)
201
     Commission Regulation (EC) No 718/2007 of 12 June 2007 implementing Council Regulation (EC) No1085/2006
establishing an Instrument for Pre-Accession assistance
202
    The MIPD for 2011-2013 will not be published by the European Commission until autumn 2010, and hence this sub-
section will be added later. Moreover, specific guidance for IPA components III to V will only be issued when Serbia
achieves candidate country status.
203
    Council Decision (Official Journal of the European Union, L 80 of 19.03.2008)
204
    Council Decision of 6 October 2006 on Community strategic guidelines on cohesion (2006/702/EC)
205
    In March 2000, the European Council adopted the Lisbon Strategy and set a goal for the Union to become the most
competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and
better jobs and greater social cohesion by 2010. In 2005, the European Council re-launched the Lisbon Strategy by focusing
on growth and jobs.
206
     By adopting the Gothenburg Strategy in June 2001, the European Council agreed on the first EU Sustainable
Development Strategy, adding an environmental dimension to the Lisbon process for employment, economic reform and
social cohesion. In June 2005, the European Council adopted a Declaration on Guiding Principles for Sustainable
Development.
207
    http://ec.europa.eu/eu2020/index_en.htm

          81
                                   OP for Human Resources Development, 2012-2013            2nd draft



1.2.2 IPA regulations

The European Council’s IPA Regulation describes IPA Component IV as “accessible only to candidate
countries accredited to manage funds in a decentralised manner, in order to help them prepare for
the time after accession, in particular for the implementation of the Community's cohesion policies”.

According to Article 11, IPA component IV “shall support countries … in policy development as well as
preparation for the implementation and management of the Community's cohesion policy, in
particular in their preparation for the European Social Fund”.

Article 148 of the IPA Implementing Regulation defines, inter alia, the eligible activities under IPA
component IV as contributing to strengthening economic and social cohesion, as well as to the
priorities of the European Employment Strategy in the field of employment, education and training
and social inclusion. It states that assistance shall focus on those policies and activities which have
the potential to act as catalyst for policy change and which enhance good governance and
partnership. In particular, the scope of this component shall cover assistance to persons and focus
on the following priorities, the precise mix and concentration of which shall depend on the economic
and social specificities of each beneficiary country:

    (a) increase adaptability of workers, enterprises and entrepreneurs, with a view to improving
        the anticipation and positive management of economic change, in particular by promoting:

            (i) lifelong learning and increased investment in human resources by enterprises and
                workers;

            (ii) design and dissemination of innovative and more productive forms of work
                 organisation;

    (b) enhance access to employment and sustainable inclusion in the labour market of job seekers
        and inactive people, prevent unemployment, in particular long term and youth
        unemployment, encourage active aging and prolong working lives, increase participation in
        the labour market notably by promoting:

            (i) creation, modernisation and strengthening of labour market institutions;

            (ii) implementation of active and preventive measures ensuring early identification of
                 needs;

            (iii) improvement of access to employment and increase of sustainable participation and
                  progress of women in employment;

            (iv) increase in migrants’ participation in employment, thereby strengthening their social
                 integration;

            (v) facilitation of geographic and occupational mobility of workers and integration of
                cross-border labour markets;

    (c) reinforce social inclusion and integration of people at a disadvantage, with a view to their
        sustainable integration in employment, and combat all forms of discrimination in the labour
        market, in particular by promoting:

            (i) pathways to integration and re-entry into employment for disadvantaged people;


     82
                                     OP for Human Resources Development, 2012-2013             2nd draft



             (ii) acceptance of diversity in the workplace and non-discrimination;

    (d) promote partnerships, pacts and initiatives through networking of relevant stakeholders,
        such as social partners and non-governmental organisations, at national, regional, local
        level, in order to mobilise for reforms in the field of employment and labour market
        inclusiveness;

    (e) expand and enhance investment in human capital, in particular by promoting:

             (i) the design, introduction and implementation of reforms in education and training
                 systems, in order to develop employability and labour market relevance;

             (ii) increased participation in education and training throughout the life-cycle;

             (iii) the development of human potential in research and innovation;

             (iv) networking activities between higher education institutions, research and
                  technological centres and enterprises;

    (f) strengthen institutional capacity and the efficiency of public administrations and public
        services at national, regional and local level and, where relevant, the social partners and
        non-governmental organisations with a view to reforms and good governance in the
        employment, education and training, as well as social fields.

Technical assistance may also be granted to support the preparatory, management, monitoring,
administrative support, information, evaluation and control activities of the programme, and
preparatory activities with a view to the future management of European Structural Funds.

The strategy of the OP is entirely aligned with the eligible actions in the IPA regulations.

1.2.3 European Partnership

The European Partnership set out specific challenges for Serbia to be positioned for EU membership.
Some of these priorities, when enacted, will set the context for the programming of IPA IV in Serbia,
while others provide the framework for actual assistance under the OP. The following table sets out
all the relevant mid-term objectives, and identifies which are covered by the OP, relative to the
three main themes.

Mid-term objective                                               Employment &    Education &       Social
                                                                 labour market      VET          inclusion
Improve the education system with the aim of increasing skills         -              Y              -
which foster employment opportunities and long term
economic growth
Adopt a national qualifications framework for vocational and           -             Y               -
education training
Promote regional cooperation in the field of higher education          -             N               -
Adopt measures to increase school enrolment rates at                   -             P               -
secondary level of children of all communities
Reform the childcare system and ensure mainstream                      -             P               -
education for children from minorities
Continue de-institutionalisation, community-based services             -              -             Y
and aid to dependent persons, including in the field of mental
health


     83
                                            OP for Human Resources Development, 2012-2013   2nd draft



Improve the protection of women's and children's rights               P            P            P
Ensure that constitutional provisions on cultural and minority        Y            Y            Y
rights and protection of minorities are observed
Fully implement the strategies and action plans relevant to           P            P            P
integration of Roma, including returnees
Implement the anti-discrimination legislation                         P            P            P
Continue efforts to integrate and improve the conditions for          Y            Y            Y
children with disabilities
Provide sustainable solutions for the integration of                  P            -            P
readmitted persons;
Further develop social inclusion and social protection policies       -            -            Y
Take further efforts to improve the situation of persons with         Y            Y            Y
disabilities

Y = fully; P = partly; N = not applicable

1.2.4 Community Strategic Guidelines (CSG) for 2007-2013

The OP has also been prepared to move Serbia closer to the Lisbon and Gothenburg agendas, as
articulated through the CSG. The CSG state that the programmes supported by the EU’s cohesion
policy in the 2007-2013 financial perspective should seek to target resources on the following three
priorities:

        Improving the attractiveness of Member States, regions and cities by improving accessibility,
         ensuring adequate quality and level of services, and preserving the environment;
        Encouraging innovation, entrepreneurship and the growth of the knowledge economy by
         research and innovation capacities, including new information and communication
         technologies; and
        Creating more and better jobs by attracting more people into employment or
         entrepreneurial activity, improving adaptability of workers and enterprises and increasing
         investment in human capital.

While the CSG is intended to guide the implementation of the Structural Funds and the Cohesion
Fund, which have a far greater scope than IPA, the OP will follow the most appropriate guidelines for
action, set out below.

Guideline 1.3.1: Attract and retain more people in employment and modernise social protection
systems

In the framework of the Commission’s Employment Guidelines, the specific guidelines of the CSG are
as follows:

        Implementing employment policies aimed at achieving full employment, improving quality
         and productivity at work, and strengthening social and territorial cohesion.
        Promoting a life-cycle approach to work.
        Ensuring inclusive labour markets, enhancing work attractiveness, and making work pay for
         job-seekers, including disadvantaged people, and the inactive.
        Improving the matching of labour market needs.

The CSG notes the primacy of efficient and effective labour market institutions, notably employment
services that can respond to the challenges of rapid economic and social restructuring and
demographic ageing, in order to support service delivery to job seekers, the unemployed and


        84
                                  OP for Human Resources Development, 2012-2013           2nd draft



disadvantaged people. An important priority is to strengthen active and preventive labour market
measures, and to ensure inclusive labour markets for people at a disadvantage or at risk of social
exclusion, such as early school-leavers, the long-term unemployed, minorities and people with
disabilities. This calls for an even broader range of support to build pathways to integration and
combat discrimination. The aim should be to:

       Improve their employability by enhancing participation in vocational education and training,
        rehabilitation and appropriate incentives and working arrangements, as well as the
        necessary social support and care services, including through the development of the social
        economy.
       Combat discrimination and promote the acceptance of diversity in the workplace through
        diversity training and awareness-raising campaigns, in which local communities and
        enterprises would be fully involved.

The OP’s strategic priorities for employment and social inclusion will take on board the holistic
approach to raising employment levels and opportunities, especially among the most vulnerable
groups.

Guideline 1.3.3: Increase investment in human capital through better education and skills

To enhance access to employment for all ages and to raise productivity levels and quality at work,
there is a need to step up investment in human capital and to develop and implement effective
national lifelong learning strategies for the benefit of individuals, enterprises, the economy and
society. In the framework of the Employment Guidelines, the specific guidelines for action in the
less developed territories include:

       Ensuring an adequate supply of attractive, accessible and high quality education and training
        provision at all levels;
       Supporting the modernisation of tertiary education and the development of human
        potential in research and innovation, through post-graduate studies, further training of
        researchers, and attracting more young people into scientific and technical studies,
       Promoting the quality and attractiveness of vocational education and training, including
        apprenticeships and entrepreneurship education,
       Ensuring, where appropriate, greater mobility at regional, national or transnational level,
        and promoting frameworks and systems to support the transparency and recognition of
        qualifications and the validation of non-formal and informal learning.
       Investing in education and training infrastructure including ICTs, where such investments are
        necessary for the implementation of reform and/or where they can significantly contribute
        to increasing the quality and effectiveness of the education and training system.

Within the resource constraints of IPA IV, the strategic priority for education focuses on
strengthening education and training provision, and particularly the frameworks for ensuring
transparency and recognition of qualification and validation of learning, and the quality and
attractiveness of VET.

1.2.5 Europe 2020

The OP will also adopt the priorities of Europe 2020, within a Serbian context. As a Europe-wide
strategy which will be implemented at the national level and therefore attuned to national
circumstances, Europe 2020 sets out a vision of Europe's social market economy delivering high



       85
                                          OP for Human Resources Development, 2012-2013                       2nd draft



levels of employment, productivity and social cohesion, and based on three mutually reinforcing
priorities:

          Smart growth: developing an economy based on knowledge and innovation;
          Sustainable growth: promoting a more resource efficient, greener and more competitive
           economy;
          Inclusive growth: fostering a high-employment economy delivering social and territorial
           cohesion.

In order to establish a clear direction, the Commission has proposed a series of headline targets for
the EU as a whole, which will be converted into national targets and trajectories for Member States.
In relation to HRD, these are:

          Aiming to raise to 75% the employment rate for women and men aged 20-64, including
           through the greater participation of young people, older workers and low-skilled workers
           and the better integration of legal migrants;
          Improving education levels, in particular by aiming to reduce school drop-out rates to less
           than 10% and by increasing the share of 30-34 years old having completed tertiary or
           equivalent education to at least 40%;
          Promoting social inclusion, in particular through the reduction of poverty208, by aiming to lift
           at least 20 million people out of the risk of poverty and exclusion

The Commission has also put forward seven flagship initiatives, of which three apply to the field of
HRD:

      •    "An agenda for new skills and jobs" - to modernise labour markets and empower people by
           developing their skills throughout the lifecycle with a view to increase labour participation
           and better match labour supply and demand, including through labour mobility;
      •    "Youth on the move" - to enhance the performance of education systems and to facilitate
           the entry of young people to the labour market; and
          "European platform against poverty" - to ensure social and territorial cohesion such that the
           benefits of growth and jobs are widely shared and people experiencing poverty and social
           exclusion are enabled to live in dignity and take an active part in society.

The strategic priorities of the OP will be fully aligned with the direction of these initiatives, in terms
of action on modern employment policies, strengthening the education system and its relationship
to labour market needs, and enhancing social cohesiveness.

1.2.6 Coordination mechanisms

The programming and management of IPA component IV monies will be coordinated with those of
other IPA components, and with national programmes, bilateral funds and International Financial
Institutions (IFIs), in line with the principles of complementarity and consistency. Inter-ministerial
and donor coordination will evolve from the preparation of the OP (described in the following
section) into the implementation phase.

According to Article 9 of the IPA Implementing Regulation, assistance under IPA shall be consistent
and coordinated within and between the IPA components, both at planning and programming levels.
208
   Defined as the number of persons who are at risk-of-poverty and exclusion according to three indicators (at-risk-of
poverty; material deprivation; jobless household), leaving Member States free to set their national targets on the basis of
the most appropriate indicators, taking into account their national circumstances and priorities.

          86
                                   OP for Human Resources Development, 2012-2013             2nd draft



Any overlap between actions covered by different components shall be avoided and no expenditure
shall be financed under more than one operation. Coordination between different components has
been ensured through the inter-ministerial working groups for IPA components I, III and IV and with
strong involvement of the NIPAC Technical Secretariat throughout the process of SCF and OP
preparation.

The NIPAC and NIPAC Technical Secretariat will have eight Sectoral Working Groups (SWGs) to
prepare the Needs Assessment Document (NAD) for international assistance in 2011-13, as the basis
for identifying annual IPA I programmes and bilateral donor projects. These SWGs will comprise
representatives from Line Ministries and other beneficiaries as the main actors in programming and
project identification, with considerable cross-over with the OPWGs for IPA III and IV. The SWGs will
contribute to the identification and prioritisation of projects, ensuring co-financing and analysis of
project implementation, and will be structured according to the following eight sectors, in line with
the eligibility criteria for IPA component I and the transition from potential to full candidate country
status: the rule of law; public administration reform; civil society, freedom of speech and cultural
rights; transport; environment and energy; competitiveness; human resources development; and
agriculture and rural development. As with IPA III and IV, the IPA I programming process has
engaged representatives of partners, donors and IFIs.

Experiences and lessons learned from CBC programmes have been taken into account during
drafting of SCF and OPs. The key task concerning future coordination will be implementation of
specific grant schemes. Concerning IPA component V (IPARD), the process of conducting sector
analysis for the chosen sectors (dairy, meat, fruits and vegetables) of agricultural production will be
completed by 30th June 2010. Drafting of the Rural Development Programme, in line with article 184
of the IPA Implementing Regulation, will proceed in parallel with drafting of the SCF and the OPs
under IPA III and IV, and is expected to be prepared by November 2010. Preparation for IPARD will
be supported by IPA 2007 project ‘Strengthening the capacities of the Republic of Serbia for the
absorption of EU Rural Development funds in pre-accession period’.

Coordination of programming at the highest policy level is the responsibility of the Commission for
Programming and Management of EU Funds and Development Assistance. The Commission is
chaired by the Deputy Prime Minister for European Integration, who also fulfils the role of NIPAC,
and is composed of 9 ministers and the Director of the SEIO. The task of the Commission is to review
draft documents that will be presented to donors, suggest priorities for use of resources of
international development assistance, and consider and make proposals to the Government on
other significant issues related to the use and management of EU funds and development assistance.
Meetings of this Commission are organised on an annual basis. As a monitoring tool, the EU
Delegation and NIPAC have also created monthly ‘’bottleneck meetings’’ between DEU, NIPAC and
line ministries to discuss the progress of IPA funded projects and to ensure their smooth
implementation.

Looking to the future, the IPA Implementing Regulation stipulates two levels of Monitoring
Committee, in order to provide coherence and coordination in the implementation of IPA and
engage all relevant actors:

        IPA Monitoring Committee (IPA MC);
        Sectoral Monitoring Committees (SMCs) for each OP.

The IPA Monitoring Committee has been operational since 2009, to ensure coherence and
coordination in the implementation of all IPA components. Among its members, the IPA MC includes
representatives of the European Commission, the National IPA Coordinator, the National Authorising

        87
                                   OP for Human Resources Development, 2012-2013            2nd draft



Officer, representatives of the Operating Structures, and the Strategic Coordinator. Meetings are
organised regularly twice a year. The two Sectoral Monitoring Committees for IPA components III
and IV will come into being following the approval of the OPs and signature of the Financing
Agreements, but will be established as shadow SMCs in anticipation. It is expected that the core
membership of the SMCs will mirror the participation in the OPWGs for IPA III and IV, and to a large
extent, the SWGs for IPA I, offering both continuity and coordination. Once Serbia attains Candidate
Country status, it will be necessary to review and to adjust the role of the Commission for
Programming and Management of EU Funds and Development Assistance in programme
management implementation, in light of this full and reconfigured set of Monitoring Committees.

A pivotal mechanism for coordination across IPA components is the role of the ‘IPA Units’ within
each line ministry. In preparing the systematisations of staffing across the Government of Serbia,
the management of IPA funds has been largely unified at ministry level, by creating IPA Units based
on the PIUs for IPA component I, which are responsible for the programming and implementation of
IPA components III, IV and V, as appropriate. These IPA Units will form the basis of the Operating
Structures for the two OPs under decentralised management of IPA III and IV.

Furthermore, donor coordination meetings on the central level are organised at least twice a year to
discuss national priorities, international assistance reports, aid effectiveness progress, etc.
Programming of IPA components IV has been integrated in the existing aid effectiveness framework.
The main principle in aid design and delivery is an integrated approach to all sources of aid (EU funds
and other donor funds) as well as integrated approach to planning of Serbian with external sources
of financing. In that respect, the main achievements in the period up to 2011 include the following:

        Establishment of a set of institutional mechanisms for effective aid planning, programming
         and reporting;
        Deployment of IT as a tool for aid coordination (the ISDACON Information System);
        Establishment of comprehensive national mid-term planning/ programming documents, as a
         priority platform for all sources of financing (Needs Assessment document, National
         Programme for Integration etc);
        Defining programming procedure for international assistance, including a set of
         programming tools and intensive capacity building activities – the programming process is
         defined as to ensure synchronisation with the GoS planning and budgeting processes, and
         envisages the common project identification phase for all development assistance.

Switzerland leads the donor coordination group for education, while the coordination of social
sector reform is primary responsibility of the UK’s Department for International Development and
Norwegian Ministry of Foreign Affairs.

Further details of synergies and complementarities between actual proposed measures under the
OP, and the programmes and projects under other IPA components, national funds, donor aid and
IFIs, are described in OP section 3.4.

1.3 Partnership consultation
This draft OP has been prepared through a process of inter-ministerial coordination and consultation
with key economic, social and environmental partners and civil society organisations, which will
continue and be further elaborated, until the OP is submitted for formal approval by the
Government of Serbia and the European Commission.




        88
                                   OP for Human Resources Development, 2012-2013               2nd draft



In order to ensure full coherence with national policy goals, create full ownership, and ensure
synergies and complementarities with other IPA components, the Strategic Coherence Framework
Joint Body (SCFJB) was formally created on 28 August 2009 through the “Inter-ministerial Agreement
on the SCFJB”, to act as a forum for discussing inputs to the SCF and two OPs and to review draft
documents. The SCFJB is convened and chaired by the Strategic Coordinator for IPA Components III
and IV and comprises senior representatives of Government institutions. The Inter-Ministerial
Agreement is appended as Annex D and E.

The work of the SCFJB has been supported by Working Groups, including one on human resources
development which has taken the lead role for this OP. In accordance with the Inter-Ministerial
Agreement, membership can also been extended to economic, social and environmental partners as
required, to participate in SCFJB or Working Group meetings, along with other Government
institutions. The core membership of the Working Groups consists of bodies that will constitute the
actual Operating Structures for the OPs, to ensure that the right analyses, objectives and priorities
are identified, and to give the members ownership and accountability for the entire process from
programming through to implementation.

Membership of Working Group (as at June 2010)
Working Group      Represented institutions                                                     Members
HRD                Office of the Deputy Prime Minister; Ministry of Economy and Regional          17
                   Development; Ministry of Education and Science; Ministry of Labour and
                   Social Policy; Ministry of Health; Ministry of Finance; Serbian European
                   Integration Office; Statistical Office of the Republic of Serbia. .

Following an initial briefing to prospective members on 1 July 2009, the Working Groups had their
inaugural meetings in September 2009, and have since held a further six meetings, with the
following goals:

Date(s) of meeting     Purpose
22 September 2009      Presentation and discussion of situation analysis of sector
23 & 26 October 2009   Performance of SWOT analysis and implications for possible measures
26 November 2009       Adoption of socio-economic analysis, strategic priorities, measures and operating
                       structures
17 February 2010       Discussion of draft descriptions of priority axes and measures, and implementation
                       provisions
31 May 2010            Discussion of outline content of OP and content of measures (operations, modalities
                       and timelines)
16 July 2010           Discussion of first draft OP
19 January 2011        Pre-meeting for discussions with Commission on first draft OP

The proposed content of the OP has been the subject of presentations by responsible line ministries
and discussions with the European Commission, specifically the Directorate-General for Regional
Policy and the Directorate-General for Employment, Social Affairs and Inclusion, together with the
Directorate-General for Enlargement, during their missions to Belgrade, on 28-29 September 2009,
27 November 2009 (Directorate-General for Employment, Social Affairs and Inclusion only) and 2-4
December 2009.

On 16 December 2009, the first round of consultations with the donor community was held,
regarding the SCF and the two OPs. The aim of the meeting with bilateral and multilateral donors
was to initiate consultation and ensure coordination, synergy and complementarity with their
actions. Besides avoiding overlap of funds or lack of absorption due to missed opportunities,


     89
                                     OP for Human Resources Development, 2012-2013             2nd draft



consultations with other donors are viewed as crucial so that effects of their investments, together
with complementary IPA funds, leave a more effective and deeper impact on Serbia.

Consultations with socio-economic partners and civil society organisations were held on the SCF
and two OPs on 17 December 2009 and then again on the 2nd draft of the SCF on 17 May 2010. This
included an introduction to IPA components III and IV and the process and content of OP
preparation, in order to raise awareness and seek initial feedback. The aim of inviting partners was
not merely for them to be informed about the process, but to engage them in the identification of
the challenges facing Serbia and to provide comments, inputs and ideas on the wider objectives and
more specific measures to be undertaken under the two OPs. All comments were taken on board in
the SCF drafts, before its submission to DG for Regional Policy and DG for Employment, Social Affairs
and Inclusion. Participating institutions are set out in the table below.

Purpose                        Participating institutions                                       Number
Consultation           with    Delegation of the European Union; EBRD; German Embassy;            7
multilateral and   bilateral   Italian Development Cooperation; KfW Entwicklungsbank;
donors                         Swedish International Development Association; World Health
                               Organisation
Consultation with socio-       European Movement of Serbia; Serbian Chamber of Commerce;           8
economic partners and civil    Standing Conference of Towns and Municipalities; Union of
society organisations          Employers of Serbia; Union of Independent Syndicates;
                               University of Belgrade Faculty of      Transport and Traffic;
                               Vojvodina CESS; Young Researchers of Serbia

In addition to the partner consultations during December 2009 and May 2010, which make an
important contribution to shaping both OPs, human resources development has been subject to a
specific consultation exercise, in the form of a workshop on preparing for IPA IV in Belgrade on 9-10
June 2010. This was jointly organised with DG Enlargement (TAIEX), DG for Employment, Social
Affairs & Inclusion and the European Training Foundation (ETF), to present and discuss the ETF
country review report, covering the sectoral analysis for employment, education and social inclusion,
with a view to preparing the OP. The workshop attracted the active participation of representatives
of the Office of the Deputy Prime Minister, three principal line ministries and their agencies, the
Republic Statistical Office, Councils and Institutes, local self-government, employers and business
associations, trade unions, NGOs, and education and training providers.

The preparation of the OP is an ongoing process, with the first draft submission to the European
Commission in November 2010, and informal written comments provided by the Directorate-
General for Employment, Social Affairs and Inclusion during February 2011. Consultations will
continue with socio-economic partners and civil society representatives throughout the discussion
and revision of subsequent drafts with the European Commission. In particular, a more formal and
deeper consultation phase on the OP will take place in June 2011 on second drafts, with an extensive
range of partner organisations at the national and local levels.

It is intended that the final draft SCF and OPs will be subject to inter-services consultation by the
Commission, as soon as Serbia achieves Candidate Country status, assumed to be by December
2011. After the Commission’s final comments have been taken on board, the final SCF and OPs shall
be submitted to the Government of the Republic of Serbia for approval, the target date being March
2012. Once approved by Government Decision, the SCF will be submitted to the European
Commission for collective agreement and adoption, and the OPs will then be submitted for approval
by COCOF and ESF Committee.



     90
                                          OP for Human Resources Development, 2012-2013                  2nd draft



1.4 Ex ante evaluation
The ex ante evaluation of the OP commenced in March 2011, after informal comments had been
received from the European Commission on the first draft, and a second draft had been produced
which integrates this feedback. In line with Commission guidance, the purpose of the evaluation is to
optimise the allocation of resources and to improve the quality of programming, by using
independent experts to review drafts of the OP and assess, inter alia, the rationale, relevance and
coherence of the OP, and, as far as possible, the potential effectiveness and efficiency of the assisted
actions, whether the OP demonstrates that allocated resources contribute to the objectives of the
measures, and an assessment of the implementing provisions, including plans for monitoring and
evaluation and the proposed quantified indicators.

The evaluation is being carried out in accordance with the European Commission’s “Indicative
guidelines on evaluation methods: Ex ante evaluation, Working Document No.1” (August 2006)209. In
addition, the working papers on monitoring and evaluation for the 2000-2006 programming period
may also be taken into account. The ex ante evaluation will be an interactive and iterative process
whereby the judgment and recommendations of the experts are taken into account in subsequent
drafts of different parts of programmes, based on a constructive dialogue, whilst acknowledging that
the SCFJB is responsible for the final text of the programme submitted to the Government for
approval.

At the same time, the external experts are performing a strategic environmental assessment (SEA),
in order to assess systematically the expected and potential environmental impact of the OP, and
ensure that the OP takes into consideration any material consequences for the environment,
subjects them to public consultation, and that the measurement of environmental effects is built
into the monitoring system. The SEA will be conducted in accordance with the “Handbook on SEA
(Strategic Environmental Assessment) for Cohesion Policy 2007-2013”210. In applying the advice in
the Handbook, the evaluator will be guided by the principle of proportionality, given the finite
resources available for the OP and hence the limitations on environmental impact, and therefore a
‘light touch’ SEA will be appropriate.

The ex ante evaluation and SEA was tendered and contracted by the Delegation of the European
Union to Serbia (DEU), through a framework contract under IPA 2008. The evaluation will be
conducted in parallel with the formal partnership consultation, described in section 1.3.

In later drafts of the OP, this section will present the chosen expert team, describe the scope,
content and timing of the ex ante evaluation and the strategic environmental assessment,
summarise the findings, and describe how they have been taken on board in revising the OP authors,
and hence the impact on the draft. The experts’ full report will be appended to the final draft of the
OP, before it is submitted to the European Commission for comments and, eventually, agreement
and adoption.




209
      http://ec.europa.eu/regional_policy/sources/docoffic/2007/working/wd1_exante_en.pdf
210
      http://ec.europa.eu/regional_policy/sources/docoffic/working/doc/sea_handbook_final_foreword.pdf

         91
                                       OP for Human Resources Development, 2012-2013                   2nd draft




2 ASSESSMENT OF MEDIUM TERM NEEDS, OBJECTIVES AND
  STRATEGIC PRIORITIES

2.1 Socio-economic analysis (including SWOT analysis)
The following sections identify the challenges facing Serbia in raising employment levels,
strengthening the education system and outcomes in line with labour market needs, and promoting
social inclusion. It focuses on the future, and specifically the medium-term outlook (2012-2016),
which will be the implementation perspective of the OP, based on reasonable assumptions and
projections.

2.1.1 General

The mid-term outlook for the macro-economy is conducive to the OP’s interventions, according to
forecasts by the Ministry of Finance211. As with section 1.1, further details are elaborated in the SCF,
the principal highlights are as follows:

          The economy is expected to recover from the recession and show renewed GDP growth
           coinciding with the programming period of 2012-2013. The MoF predicts that economic
           recovery in Serbia will come from rising capital investment in fixed assets, job creation and
           higher levels of personal spending, and return to pre-crisis real growth rates (above long-
           term trend) in 2012 (4%) and 2013 (4.5%). For its part, inflation is forecast to stay low and
           falling to 5.3% (2012) and 4.1% (2013) by the end of each year.

          GDP per capita is expected to exceed pre-crisis levels in 2012 (€4,751) and 2013 (€5,127).

          The MoF expects that growth rates for both exports and imports will remain relatively high
           in 2012-2013, but that exports will consistently exceed imports each year, reducing the
           trade deficit to 13.9% of GDP (2012) and 13.2% (2013), and the current account deficit to 8%
           and 7.6% respectively. Average expected FDI for the period 2012-2013 is around €1.7
           billion.

          The other key risk lies on the external side; trade and current account deficits are
           increasingly financed by borrowing from abroad, and careful management and supervision
           of lending standards will be necessary to avoid a painful contraction of the economy.
           External debt is projected to fall to 73.3% (2012) and 71.5% (2013).

          The main short-term macroeconomic challenge is on the fiscal side. Government action to
           rein in public expenditure, and introduce a new framework of fiscal responsibility rules
           within the Budget System Law, means the MoF is forecasting reduced government spending
           as a share of GDP in 2012 (41.4%) and 2013 (39.5%)212, to stand at €14.6 billion. A similar but
           smaller contraction in public revenues means the consolidated fiscal deficit would fall to
           3.2% (2012) and 2.3% (2013). The MoF forecast is that public debt as a share of GDP will be
           held below 40% (39.6% in 2012 and 37.5% in 2013).
211
    Forecasts for 2012-2013 from the Government’s “ Revised Memorandum on the Budget and Economic and Policy for
2011, with Projections for 2012 and 2013” (December 2010)
212
    Compared with the more expansionary fiscal policy pursued by the Government at the onset of the crisis, when
spending amounted to 44.0% of GDP in 2010

          92
                                          OP for Human Resources Development, 2012-2013                       2nd draft




          In line with the direction of its real GDP forecasts trends, the MoF predicts a modest
           expansion of formal employment opportunities in 2012, to an annual average of 1,838,000
           employed, and a further increase by 39,000 jobs on average in 2013. Employment will
           remain below the pre-crisis levels of 2008, however, when the number of formal jobs stood
           at 1,999,000.

       The difference between changes in GDP and employment over the period can be explained
        through changes in labour productivity. According to the Budget Memorandum, the MoF is
        estimating that productivity will continue to show strong growth in 2012 and 2013, at 2.6%
        and 2.3%.
According to demographic forecasts for Serbia, the population decline and aging process will
continue. The population growth rate in the next ten years is expected to be negative (-0.5%). The
number of persons above the age of 65 will increase over the period 2010–2020 by 13% (around
181,000 persons) and their share in the total population will rise from 17% in 2010 to 20% in 2020.
The number of young people aged 15-24 over the same period will decrease by around 17%
(131,092 persons). The share of young people in the total population will decrease from 12% to
11%213 over the same period.




               Source: US Census Bureau, International Data Base, 3rd August, 2010
                                                          Figure 61

A minor increase in fertility rate is expected from 1.4 to 1.5, but still far below the level necessary for
generation change (in Serbia the net reproduction rate was 0.7 in 2008 and forecasts show that it
will be around 0.8214 over the period 2010 – 2020). Life expectancy will remain stable and similar to
neighbouring countries215.




213
    All percentage values were calculated based on the data of U.S. Census Bureau, International Data Base.
214
    See Glossary
215
    US Census Bureau, International Data Base

          93
                                                  OP for Human Resources Development, 2012-2013                           2nd draft



                                                            Demograpgic Indicators
                                                                   2010
                         1.7                                                         79
                         1.4
                         1.1                                                         78
                         0.8                                                                       Growth rate
                                                                                                  (percent)
                         0.5




                                                                                          years
                                                                                     77            Total fertility rate
                         0.2                                                                      (births per woman)
                        -0.1                                                                       Life expectancy
                                  Serbia          Croatia     Bulgaria     Romania   76           at birth (years)
                        -0.4
                        -0.7
                        -1.0                                                         75
                       Source: US Census Bureau
                      Source: US Census Bureau, International Data Base, 3rd August, 2010
                                                                 Figure 62

The working age population will decrease approximately by 424,000 (9.2%) in the period 2010 –
2020. The number of persons above the age of 65 will increase over the period 2010–2020 by 13%
(around 181,000 persons) and their share in the total population will rise from 17% in 2010 to 20% in
2020. The number of young people aged 15-24 over the same period will decrease by around 17%
(131,000). The share of young people in the total population will decrease from 12% to 11%216 over
the same period.

The table overleaf summaries the main Strengths, Weaknesses, Opportunities and Threats (SWOT)
derived from the current overall socio-economic situation in Serbia.




216
      All percentage values were calculated based on the data of U.S. Census Bureau, International Data Base.

         94
                                               OP for Human Resources Development, 2012-2013                                2nd draft




                        STRENGTHS                                                             WEAKNESSES
   Steady GDP growth over the period 2001-2008, until global           Living standards and income levels (GDP per person) remain low
    economic crisis - GDP per person more than doubled                   relative to EU-27
   Established legal and strategic framework for HRD policy            Recent economic growth driven by consumption (leading to high
   Social and Economic Council operational at national level,           import levels), more than production, suggesting structural
   Lessons learned from previously implemented projects in              imbalance
    the fields of employment, VET, adult education, Roma                Gains in GDP largely through productivity improvements, rather
    Education, vulnerable groups, young people, outcome-                 than job creation
    based curricula                                                     Falling population numbers, due to demographic trends and net
                                                                         migration
                                                                        Impact of current global financial and economic crisis on Serbian
                                                                         economy and jobs
                                                                        Severe constraint on State Budget resulting from higher welfare
                                                                         expenditure and falling tax and other revenues
                                                                        Regional disparities in levels of employment, unemployment,
                                                                         education and social inclusion
                                                                        Slow implementation of existing laws, policies and strategies
                                                                        Very slow integration of pilot projects into system (mainstream
                                                                         activity funded through State Budget)
                                                                        Underdeveloped mechanisms for inter-sectoral cooperation
                                                                         (between ministries) and with stakeholders
                                                                        Low level of social dialogue in designing policies, including
                                                                         engagement with employers and lack of capacity at local level to
                                                                         operate Social and Economic Councils
                                                                        Insufficient decentralisation of service delivery and weak
                                                                         costumer focus
                                                                        Underdeveloped links between education, employment and
                                                                         economic development and innovation policies, and with
                                                                         industrial restructuring
                     OPPORTUNITIES                                                               THREATS
   Recovery expected to be led by investment, exports and              Unfavourable demographic trends – low birth rate, ageing
    job creation, as well as higher levels of personal spending          population, outward migration from Serbia (brain drain),
   Growing SME sector offers new work opportunities                     depopulation of rural areas and inflow to cities and major towns
   Increase in foreign direct investment during 2000s                  Public and private investments in human capital cut as a result of
    continues and generates new employment                               crisis
   Scope to use Public-Private Partnerships to invest in               Weaker than expected recovery from current world financial and
    infrastructure and service delivery                                  economic crisis undermining business and investor confidence.
   Scope to increase social dialogue through the development           Insufficient future economic growth generates too few jobs
    of Social Economic Councils and local employment councils           Recovery is strong but fails to convert into job generation (only
    at local level                                                       higher productivity among existing employed instead, due to
   Measures introduced to enhance productivity and                      capital investment)
    competitiveness of the Serbian economy                              Further restructuring of the economy worsens labour market
   Upcoming amendments to the Labour Law will promote                   situation in the short-term, including redundancies from
    greater labour market flexibility in line with EU trends             privatisation of state-owned enterprises (process of privatisation
   High resilience and adaptability of population to economic           not yet finished)
    fluctuations                                                        Underdeveloped transport, environment, economic and social
   Political will to carry out economic, social and institutional       infrastructure: lack of investment holds back job creation
    reforms and pursue EU integration                                   Reverse in the trend of falling poverty levels
   Greater access to and involvement in EU programmes,                 Increase in regional inequalities.
    including Lifelong Learning, Marco Polo, Youth in Action,
    etc
   Sharing of best practice from EU and other countries in
    particular regarding lessons learnt from previous and
    ongoing projects
   Ongoing support of EU and bilateral donors




     95
                                   OP for Human Resources Development, 2012-2013            2nd draft



2.1.2 Employment & labour market

Long-term labour market trends

The study “Evidence-Based Policy Making Initiative in Employment” forecasts that employment and
unemployment will not go back to their pre-crisis levels before 2013. This represents a more
pessimistic scenario than the Ministry of Finance’s forecasts, and is being used as the basis for
employment policy planning on the basis of a ‘worse case’ scenario. The study foresees that the
employment rate (15-64) in 2020 will amount to 61.4% as compared to 50.91% in April 2010
(+440,000 compared to 2010). Unemployment is expected to decrease by around 340,000.

Looking at the distribution of employment per sector, the study makes the following forecasts for
the same period (2011-2020): employment in industry will increase by almost a quarter (+170,000).
Employment in services will slightly increase (+250,000). Employment in agriculture will stagnate. It
is also expected that employment in public sector will not increase significantly in the next decade as
a part of the Government’s savings policy).

However, the expected rise in overall employment in the next decade will be due, to a certain
extent, to the contraction of the working-age population, which will result in much fewer labour
market entrants than exiting cohorts, providing better employment prospects for young people as
the competition for jobs becomes less fierce. Despite this more favourable demographic context,
young people will remain at risk of labour market exclusion unless they meet the level of
qualifications required by the economy.

Like many European countries, Serbia will face a sharp increase of inactive people aged over 65,
dependent on the social contributions from a shrinking working-age population. In this context,
unless formal employment increases, it will be difficult for Serbia to generate sufficient GDP growth
and Government revenue through taxation to ensure the sustainability of its public services and
social welfare.

The medium-term challenge that Serbian labour market is therefore to ensure simultaneous actions
on both sides of the labour market equation, demand as well as supply, by:

        stimulating business creation, investment, innovation and growth, increasing the number
         and quality of jobs available;
        mobilising potential (currently inactive) participants in the labour force, fighting long term
         unemployment and thus improving personal well-being, keeping skills fresh, injecting
         dynamism into the labour market and reducing the build-up of social problems;
        ensuring both unemployed and inactive are equipped to access the new jobs created and to
         compete effectively with the already employed, by increasing vocational knowledge and skill
         levels, strengthening brokerage through ALMPs and establishing linkages and synergies
         between labour market and social inclusion policies.




        96
                                      OP for Human Resources Development, 2012-2013                   2nd draft




Active labour market programmes

NES will continue to implement ALMPs in line with the objectives of NEAP (see Strategic Framework
1.1.5). NES budget for ALMPs is expected to continue to rise until 2013.


                                                   2011      2012         2013
                                Budget for
                                                 217
                                ALMP, in    55.5            56.5        60
                                MEUR
                                Budget ALMP
                                            0.16            0.16        0.15
                                in GDP, %
                                   BUDGET ALLOCATION FOR ALMP (2011-2013)
                                               Source : MoERD

The chart below shows the upward trend of ALMP budget since 2005 with forecast amounts for
2011 to 2013.




One of the recommendations of the study ‘Evidence-Based Policy Making Initiative in Employment’
(FREN) is to increase gradually the budget allocation for ALMPs from the current 0.1% to 0.4% of
GDP by 2013, and then to 0.5% in the second half of the decade in order to increase the coverage
and the impact of ALMPs. At the same time, the study recommends that budget increases should be
linked to improvements in the quality of monitoring and evaluation of existing ALMPs and ultimately
to better targeting of measures to the needs of disadvantaged groups.

Given limited financial and administrative resources, ALMPs need to be carefully selected and
targeted. Experience shows that some programmes are more effective at assisting specific target
groups than others. It is therefore of crucial importance to match the unemployed with the right
programme.

217
   This amount is the sum of ALMP national budget allocation and savings from unemployment insurance contribution.
Additional funds for implementation of ALMPs for PWD will also be available from the Budget fund for vocational
rehabilitation and employment PWD for the year 2011 in the amount of €8m

      97
                                       OP for Human Resources Development, 2012-2013                     2nd draft



ALMP planning and delivery also need to be taken down to the local level. Local stakeholders need
to be more actively involved in the identification of local labour market needs and the analysis of the
local labour market situation. In order to do so, the institutional capacity of local self-governments
need to be strengthened and local partnerships should be developed as a major instrument for the
definition and implementation of employment measures at the local level.

The main challenges expected on the labour market in the coming years and their implications for
Serbian employment policy are presented in the following sections.

Main labour market challenges

In order to take advantage of job opportunities in the medium-term, particularly in the lagging and
under-developed areas, and indeed to make those areas more attractive for investment, Serbia must
address the mismatch between demand and supply on the labour market and raise the participation
of disadvantaged groups. Without tackling these issues, it will be difficult for Serbia to reverse
current labour market patterns such as the high proportion of the long-term unemployed within
total unemployment, the low youth employment rate, the significant disparities between local
labour markets, the low labour force mobility, the high share of difficult-to-employ people among
the unemployed, and the high percentage of people employed in the informal economy.

Structural unemployment

The mismatch between the supply of skills by the labour force and the needs of employers is one of
the most serious problems on the Serbian labour market. Despite high levels of unemployment,
58,028 vacancies remained unfilled in 2009, of which 20% for a lack of the level of knowledge and
skills required by the employer.218

The high share of people with secondary education in the total number of unemployed registered
with NES (54.3%), as well as the high share of people with low or no qualifications (33.5%), provides
further evidence that the level of qualifications of the population does not meet the requirements of
the economy.

The lack of responsiveness of the education system to labour market needs is partly to blame for this
situation. In particular, teaching in vocational secondary schools is often outdated and of poor
quality. In addition, opportunities for adult learning and lifelong learning in general remain scarce
preventing people from upgrading their skills and increasing their chances of finding a job (see
section 1.1.6 and 2.1.3).

In order to remedy this situation, NES organises training and retraining measures for the less
qualified population groups, or groups without adequate knowledge and skills. However, as already
stated in the previous section, the funds for training and retraining are insufficient to cover the
needs.

It is expected that the number of unemployed with secondary education will continue to increase in
the course of the decade making it even more urgent to invest in vocational training, retraining and
upskilling programmes219.



218
    This number is probably higher given the fact that, for 30% of the cases, the reason is unknown as there was no
feedback.
219
    “Draft Study: Evidence-Based Policy Making Initiative in Employment”, Foundation for the Development of Economics

      98
                                       OP for Human Resources Development, 2012-2013                    2nd draft



Long-term unemployment

The high incidence of long term-unemployment in the latest LFS (66.8%) indicates the scale of the
problem. The less educated are particularly affected by long-term unemployment; the proportion of
long-term unemployed diminishes among the more educated. Low education attainment being
much more pronounced among vulnerable groups (Roma, IDPs and refugees, and disabled persons),
there is a higher risk for them to fall into long-term unemployment. A particularly distressing
observation is that youth unemployment is also predominantly of a long-term nature.220

The reasons for long-term unemployment are a shortage of jobs, particularly in the least developed
areas of Serbia, a lack of knowledge and skills required by the economy among young people, and an
overreliance on mid-term solutions to compensate for the absence of income, such as welfare
benefits and severance payments, which tend to reduce people’s motivation to seek jobs219.
Moreover, long-term unemployment can become self-perpetuating, in the absence of interventions
to raise skill levels, provide placements for work experience, and improve confidence and
motivation.

The long-term unemployed can benefit from ALMPs delivered by NES. However, the number of long-
term unemployed persons included in ALMPs in 2010 amounted to 42,569, which is only 9% of the
total number of this group on NES register. The coverage of the long term unemployed with ALMPs
over a longer time perspective cannot be presented, due to incomparability of data221.

Prolonged spells of joblessness, particularly early in life, can lead to demotivation and the
obsolescence of knowledge and skills. International evidence shows that the probability of finding a
job decreases with the duration of unemployment, which, in turn, may lead to permanent labour
market exclusion and poverty. In order to make an impact on long-term unemployment rate, it is
necessary to better focus ALMPs on the needs of long-term unemployed, in particular through
activation measures.

Youth unemployment

The promotion of employment among young people up to 30 years presents a great challenge for
the Republic of Serbia, since its youth unemployment rate is among the highest in Europe. A delayed
entrance into the world of work can have serious social consequences for young people, including
risk of poverty and reduced employability as skills become obsolete. Work in the informal economy
is also characteristic for this age group, as well as acceptance of jobs below qualifications. Even
though some young people find decent, steady employment sooner or later, some of them remain
trapped on temporary and badly-paid jobs for a long time. Support during the transition from
education to the labour market can improve later employment prospects. For this reason, youth
employment promotion is a priority for ALMPs, in line with the Youth Employment Policy and Action
Plan (see section 1.1.5), particularly for young people facing multiple disadvantages on the labour
market (including youth with no/low qualifications, coming from marginalised groups, and/or living
in underdeveloped areas).

Proportionately, young people (15-30) are well covered by ALMPs relative to the population of NES
clients as a whole; 66,986 young people, or 34% of the total number of young unemployed
registered with NES, benefited from ALMPs in 2010, compared to 64,762 in 2009 (33%).

220
   The incidence of long term unemployment in the age group 15-24 is 56.3%.
221
   According to the old employment law, long term unemployment started after 24 months. This duration was reduced to
12 months under the new law, which entered into force in May 2009.

      99
                                       OP for Human Resources Development, 2012-2013                   2nd draft



ALMPs for young people are objective-oriented and tailored to their specific needs, while at the
same time aimed at the creation of productive employment, facilitating the transition from school to
work. In 2010, the „First Chance“ programme provided one year of employment to 17,175 young
first-time job-seekers.

, A Youth Employment Fund (YEF) was also established in 2009 with the support of two international
projects222 with the purpose of funding ALMPs aimed at unemployed youth without qualifications,
unemployed young Roma and PwD. YEF is currently funded from several sources223.. Implementation
of ALMPs funded through YEF started in 2009 in pilot NES Branch Offices (Belgrade, Novi Sad, Vranje,
Niš, Jagodina, Subotica, Bor, Novi Pazar, Kraljevo, Požarevac) and project intervention is expected to
end at the end of 2011. The plan is to continue YEF in the future as the need for ALMPs promoting
youth employment will remain acute in the coming years, especially for youth with lower levels of
education which should be given priority in the context of a shrinking working-age population219. .
Until present, more than €1.5m have been disbursed through YEF and 2,331 unemployed youth
benefited from the Fund so far. The type of measures funded include on and off-the-job trainings,
self-employment subsidies, employment of persons with disabilities, work placement and
employment subsidies.

Regional disparities

As described in section 1.1.5, regional imbalances in Serbia are among the highest in Europe. The
poor performance of some local labour markets can be explained to a great extent by the slower
pace of enterprise restructuring, the undeveloped infrastructure and the lack of qualified workforce,
entrepreneurial initiative and know-how. In addition, it is widely acknowledged that economic
restructuring tends to deepen the gap between the stronger labour markets in the capital and more
developed regions with a favourable geographic position, and those labour markets in less
developed parts of the country224.

As part of Serbia’s current plans for promoting the harmonious development of its regions, regional
strategies including annual financing plans will be developed for each of the five regions of Serbia
(see 1.1.5) by one or more accredited regional development agencies and local self-government
units. They will be adopted by the Ministry of Economy and Regional Development.

These efforts are also paving the way for stronger and better co-ordinated regional development
and employment policies. In this perspective, closer cooperation between NES and NARD must take
place in the future to ensure that regional strategies articulate the right mix of measures, for
example by accompanying incentives to investment in a given area with the relevant employment
promotion measures.

In order to address regional employment disparities, the new Law on Employment and
Unemployment Insurance provides incentives for local self-governments to submit local
employment action plans to the Ministry of Economy and Regional Development, which are eligible
for co-financing under ALMPs225.


222
     Implemented with the support of ILO and UNDP and funded by the Governments of Spain and ItalyILO Youth
Employment Promotion and ILO, IOM, UNDP, UNICEF Youth Employment and Management of Migration.
223
     Youth Employment and Migration Project (Spanish MDG Fund) in the amount of USD 1.9m, Youth Employment
Promotion Project (Italian Government) 450,000 USD, Fund for an Open Society USD 570,000 and the national budget.
224
    Assessment of the capacity of the local Employment Councils to implement the active policy on employment in the
Republic of Serbia
225
    See Institutional and Legal Framework in Annex B

      100
                                       OP for Human Resources Development, 2012-2013                     2nd draft



MoERD approved 10 LEAPs under the 2010 budget and 122 under the 2011 budget including one
Provincial Employment Action Plan for the Autonomous Province of Vojvodina. A total of €8.5m
were requested by LSG to co-finance those plans. This testifies to the interest of local self
governments in taking a more active role in designing and implementing employment policies
tailored to their needs. However, the quality of local employment action plans needs to be further
improved and the modest capacity currently available at the local level should be strengthened.

The National Employment Plan puts a strong emphasis on strengthening the role of local
stakeholders in employment policy and some initiatives have been taken recently in this direction.
Further support is envisaged with the IPA 2011 Preparation of Serbian Labour Market Institutions for
European Employment Strategy which will strengthen the capacity of selected local self governments
and local employment councils in identifying local needs and designing LEAPs. These efforts need to
be pursued in the coming years. Local actors require support in improving LEAP and in funding and
implementing agreed measures. Partnerships between municipalities need also to be promoted to
develop joint responses to unemployment covering wider areas. The implementation of
employment policy at the regional level will require the establishment of regional entities, which are
currently being discussed in the context of the regional development policy.

Synergies between regional development and employment policies need to be encouraged also at
the local level. Cooperation should take place among responsible local institutions/councils in order
to ensure consistency and complementarity of plans and initiatives.This will also involve closer and
more frequent contacts between NARD and NES. Regional Development Agencies and NES branch
offices should be encouraged to devise and implement together measures for promoting economic
development and employment in their area..

Employment of people with disabilities (PwD)

Unemployed people with disabilities face the worst risk of long-term unemployment and labour
market exclusion than any other group of unemployed. The current situation of people with
disabilities in Serbia is characterised by exceedingly low employment rate and high unemployment
and inactivity rates226. The educational attainment of people with disabilities is lower than the
national average. Prejudices of employers, their unwillingness to adjust the working environment to
the special needs of people with disabilities, and their general lack of practice and experience
prevents many people with disabilities from getting a job and often leads to job search
discouragement. There are also insufficient employment opportunities for people with disabilities.
As a result, people with disabilities are highly dependent on benefits and are particularly at risk of
poverty.

In order to tackle this rather unfavourable situation, the new Law227 introduced many new features,
which will require considerable resources for their full implementation.

The number of PwD benefiting from ALMPs in 2010 amounted to 2,815, which is 14% of the total
number of PWD on NES register. In order to introduce a case management approach for assisting
people with disabilities, NES established a Centre for Vocational Rehabilitation and Employment of
Persons with Disabilities (CVR) in 2008,and appointed 31 employment counsellors in branch offices
to work exclusively with people with disabilities. However, NES counsellors will require extensive in-

226
   See Section 1.1.5.
227
    The Law on Vocational Rehabilitation and Employment of Persons with Disabilities (adopted in May 2009) stipulates
introduction of measures specialised for employment of PwD like wage subsidies to employers for employing PwD, and
subsidies for accessibility of the work place.

      101
                                        OP for Human Resources Development, 2012-2013                      2nd draft



service training and coaching to better match people with disabilities with suitable employment
opportunities.
People with disabilities in Serbia have the possibility to gain sheltered employment in the so-called
‘enterprises for vocational rehabilitation and employment of people with disabilities’. The role of
these enterprises is to promote integration of people with disabilities into the labour market as well
as their social integration, so that from being passive recipients of social assistance, they become
productive members of society. There are 41 enterprises currently active in Serbia228 employing
2,871 people and 1,624 of those are people with disabilities. However, their capacity and experience
are still very weak and support is therefore required to help them realise the potential of people
with disabilities and ensure the sustainability of their activities.

Informal employment

Over the past few years, the Government of Serbia has started to tackle the informal economy,
which accounts for almost a fifth of total employment in April 2010. The average fiscal burden on
employees’ net salaries was decreased, state subsidies for employment of hard-to-employ persons
were introduced (younger than 30 years old and older than 45 years old), the overall business
environment was improved, while labour regulations were amended and Labour Inspectorate was
modernised. These actions, however, did not have a significant impact, due to their fragmented
approach and the lack of inter-ministerial cooperation on the subject.

According to a recent study from the World Bank229, the main reasons for employers, self-employed,
and workers not to register their activities are:

         Too stringent regulations in the product and labour market (product licensing, employment
          protection legislation, and minimum wages);
         Cumbersome administrative procedures related to taxes, accounting, statistics;
         Unwillingness of employers and employees to pay taxes on revenues, income, profit, or
          property and social security contributions;
         Loss of social benefits (social assistance or unemployment benefits); and
         Weak enforcement of legislation against informal employment and taxation regulations.

The work of the Labour Inspectorate has a direct impact on the incidence of informal employment.
73.5%230 of people employed in informal jobs concluded regular employment contracts with their
employers as a result of an inspection.

Despite pilot initiatives, legal instruments for flexible employment are not commonly used, part-time
jobs accounted for only 9.7% of total employment in 2007 and temporary work with temporary or
fixed term contracts accounted only for 12%.231 More often, work flexibility was applied by
employers as a way to violate labour regulations at the expense of workers’ rights and security.

Although on-site inspection proved to be effective in enforcing labour regulations and formal
employment, the Labour Inspectorate is understaffed232 and under-funded, with information
228
    MoERD (March 2010)
229
    “Does formal work pay in Serbia?”, World Bank (2010)
230
     Labour Inspectorate records
231
    According to Impact Analysis of the Employment Policy, 2008, part-time jobs were almost non-existent while temporary
work with temporary or fixed term contracts accounted for only 5 percent of total employment in 2002
232
    The Labour Inspectorate has 263 inspectors (total 285 employees) in 28 branch offices across the country and over
330,000 enterprises which potentially need to be inspected; following the IMF arrangement, the number of inspectors was
sized down by 39 (Labour Inspectorate records)

      102
                                  OP for Human Resources Development, 2012-2013            2nd draft



technology infrastructure underdeveloped to support modernisation of work process and manage
the scope of work. Moreover, it has weak cooperation and coordination with other state bodies
dealing with the informal economy, with no procedures and protocols developed. This situation
means that the Labour Inspectorate can only focus on expensive on-site inspections, and that the
case proceedings take more time and that the number of enterprises inspected is declining.

The Government is aware that the fight against the informal economy requires a whole range of
coordinated social and economic policies and joint actions from different state bodies. Therefore, in
the medium term, it proposes to develop a national Action Plan to promote work in the formal
economy, which will connect and coordinate the various actions and measures (fiscal, economic and
social) implemented by different government agencies and labour market institutions, as well as
employers’ and workers’ organisations and representatives. The Ministry of Labour and Social Policy
will be leading this initiative with the support of other relevant ministries (Ministry of Economy and
Regional Development, Ministry of Finance, etc.).

The Government has also started to address weaknesses in the functioning of inspection bodies. It
has adopted a reform programme of state inspections, involving the integration of processes and
outputs and interconnection of ministries in charge of controls and inspections (Ministry of Labour
and Social Policy, Ministry of Trade and Services, Ministry of Internal Affairs, Ministry of Finance,
etc), through an information system.

The Ministry of Labour and Social Policy will prepare further amendments to align the Labour Law
with EU standards and practices, in particular regarding the implementation of new flexible forms of
work and the introduction of policies promoting flexibility and security on the labour market
(flexicurity). These measures will require close cooperation between the government and the main
social partners. Nationwide information campaigns will target both social partners and the general
public, in particular to raise the awareness of workers about their rights and obligations and
convince companies about the benefits of running legal businesses.

The table overleaf summaries the main Strengths, Weaknesses, Opportunities and Threats (SWOT)
related to the employment and labour market sector in Serbia.




   103
                                       OP for Human Resources Development, 2012-2013                         2nd draft




                      STRENGTHS                                                    WEAKNESSES
   Employment and labour market policies given more         Relatively low employment rates and high
    prominence        in recent years, with increase in       unemployment rates, in comparison with neighbouring
    expenditure and expansion of coverage since 2005          countries, EU-27 and EU2020 targets, in spite of recent
   National Employment Service (NES) with country-wide       expansion
    coverage of branch offices and ongoing reforms           Large portion of the working-age population is inactive
    (introduction of client-oriented services and            Mismatch between educational attainment and
    Management by Objectives)                                 employers’ needs for qualifications
   Law on Employment and Unemployment Insurance             Unfavourable age and qualification structure of
    adopted in May 2009                                       unemployment
   Law on Vocational Rehabilitation and Employment of       High incidence of long-term unemployment
    People with Disabilities (PwDs) adopted in May 2009      High percentage of unemployed people belong to
    introduces the obligation on the part of employers to     groups with low employability (PwDs, Roma people,
    employ PwDs , enables more comprehensive labour-          refugees, IDPs, returnees, women, youth, older workers,
    social integration of PwDs on LM and establishes a        redundancies)
    network of providers of vocational rehabilitation        Lack of special incentives for employers targeted at
    services                                                  employing people from vulnerable groups
   National Action Plans for Employment are developed       Lack of training and employment opportunities for
    annually in accordance with the new law. In addition,     people with disabilities due in particular to prejudices
    an Action Plan for Youth Employment has been              among employers
    adopted                                                  High ratio of unemployed adults to vacancies, but
   The new Employment Law provides incentives for the        employers report skill shortages in technical areas
    establishment of local employment councils and           Low percentage of private sector employment within
    adoption of local employment action plans with the        total employment, and generating insufficient jobs in the
    possibility for co-financing by central budget            formal economy even during boom-times
   Monitoring and evaluation of ALMPs and labour market     Lack of work opportunities in rural areas and low levels
    forecasting stipulated in new Employment Law and          of labour mobility
    methodologies developed under IPA 2011.                  Despite recent expansion, coverage of ALMPs remains
   Reduced difference between male & female rates of         relatively low compared to the numbers of unemployed
    employment and unemployment                              Insufficient resources for ALMPs, given the scale of the
   Interest in entrepreneurship is increasing                problem, in particular for training and targeted
                                                              measures.
                                                             ALMPs not sufficiently responsive to labour market
                                                              requirements and adapted to the specific needs of
                                                              disadvantaged groups - education and training not
                                                              sufficiently targeting low-skilled unemployed
                                                             Insufficient analysis capacity at local level to understand
                                                              labour market needs and trends, and anticipate changes
                                                              in the labour market.
                                                             Lack of regional labour market data
                                                             Low level of social dialogue in designing employment
                                                              policies, including engagement with employers - no
                                                              established      methodology       for    operating    local
                                                              employment councils and insufficient capacity at the
                                                              local level for implementing Local Employment Action
                                                              Plans
                                                             Growing share of informal economy especially among
                                                              poorest sections of population, inadequate enforcement
                                                              of existing labour laws against informal economy and
                                                              insufficient incentives to move from informal to formal
                                                              economy
                                                             Legislation allows only a limited number of flexible forms
                                                              of employment - part-time, temporary and fixed-term)
                                                             Very small number of labour inspectors (301) compared
                                                              to the large number of entities (legal persons) that need
                                                              to be controlled (330 000)




    104
                                        OP for Human Resources Development, 2012-2013                     2nd draft



2.1.3 Education and VET

Impact of demographic, labour market and economic trends on VET and adult education

According to the last Census, Serbia is one of the “oldest” countries in the world with every sixth
person aged over 65. It is expected that a quarter of the population will belong to that category by
the second quarter of the century. On the other hand, the population aged less than 15, which has
been declining since 1995, will continue to shrink in both absolute terms and as a share of the
overall population. 233

The impact of demography on the secondary school population in the medium term is fairly certain,
since the children who will make up the school population between 2012 and 2017 are already born
and death rates in this age group are very low. If all other factors (length of schooling, drop-out, and
participation rate) remain the same, the population of children in secondary schools will go down by
10.3% by 2012, and by 22.2% by 2017, compared to 2007 levels (the baseline presented in section
2.1).234

The declining demographic trend has serious implications for the reform of the education system, in
particular regarding the rationalisation of the school network, but it has also considerable
significance for education policies.

Given the shrinking working-age population235, it will be even more crucial that the education system
succeeds in increasing participation in the labour market and the performance and productivity of
workers to generate greater growth for Serbia, by raising the employability and adaptability of the
labour force. A common priority of education and employment policies is therefore to reduce
Serbia’s large proportion of inactive and long-term unemployed citizens, who belong in majority to
the less educated categories of population236.

The focus should also be on young people and older workers. Young people face particular
difficulties in joining the labour market, as evidenced by their high unemployment and inactivity
rates237. Older people have even higher unemployment rates. Many of them are former workers
with outdated skills and competences, made redundant as a result of the restructuring and
privatisation process238. Since the latter is not yet completed, it is expected that the proportion of
older unemployed or inactive workers will increase further in the near future.

This situation calls for further adult education and training measures to upgrade the skills and
competences of those who are inactive, unemployed or are at risk of becoming redundant. Short-
term training targeting those populations and responding to the needs of employers should be more
vigorously promoted. More generally, the possibilities for lifelong learning should be expanded to
enable people to continue to develop their skills and enhance their employability throughout their
lives.



233                                          st
    “Demographic Review: Serbia in the Mid-21 Century – Depopulated and Old?”, No.25/2007. See also section 2.1.1
234
    “Rationalisation of Serbian Secondary School System”, John West and Andre Peer.
235
    The working age population in Serbia will drop by more than 210,000 by 2020. Serbia, Labour Market Assessment,
September 2006, World Bank
236
    As explained section 1.1.5 (characteristics of the labour force), there is a strong correlation between educational
attainment and activity status
237
    Almost 20% of unemployed are aged 15-24. See section 1.1.5 (characteristics of the labour force)
238
    The exact number of people who made redundant is not known, approximately is over 200,000 people. 29.4% of
unemployed are over 45 years and 20.5% between 45 and 54.

      105
                                         OP for Human Resources Development, 2012-2013                      2nd draft



Many disadvantaged groups are at a greater risk of exclusion from the education system239, which
inevitably leads to later exclusion from the labour market with adverse effects on Serbia’s economic
performance and employment. The risk of exclusion should therefore be reduced by more proactive
education and training measures tailored to the needs of populations at risk.

As explained in section 1.1.3, Serbia’s economic structure is weighted towards agriculture and
industry while the service sector, which is the primary generator of employment in most developed
economies, remains relatively underdeveloped. Changing this pattern will be essential for improving
the performance of the labour market240. Further reforms of the VET and adult education systems
are necessary to facilitate the transition to an innovative and competitive economy with a dynamic
service sector (see next section).

Reforming the VET system

The VET system is not preparing students well for employment and the labour market. The lack of a
performing VET sector and the poor alignment of educational outcomes to the requirements of the
economy result in skills mismatches and bottlenecks in the labour market and low employability of
the labour force, which translates into high unemployment and inactivity rates. In this context,
policies to increase the competitiveness of the economy and attract foreign direct investment are
difficult to achieve.

The key challenge of the VET reform is to modernise the structure of educational profiles in line with
the needs of the economy. The current structure is still characterised by a high number of over-
specialised and outdated profiles, which correspond neither to the state of technological
advancement nor to the needs of modern businesses, which require individuals who are highly
adaptable, equipped not only with technical but also with soft skills (communication skills, problem-
solving, team work and self-discipline) and are capable of performing routine tasks, as well as solving
unexpected problems.

The Ministry of Education and Science has been leading the reform of the VET system since 2002. To
date, 67 out of 347 educational profiles across 12 occupational sectors have been fully revised241, in
line with revised occupational standards agreed with representatives from the relevant industries
through a consultation process. In parallel, new competence-based and outcome-oriented modular
curricula have been developed. Revised profiles were piloted in 157 VET schools with accompanying
support, training of teachers and new equipment.

Early evaluations of the pilot show an increased attendance and higher average marks for students
taught with modernised curricula242. Moreover, 86.1% of school representatives think that the pilot
profile is much better than classical one, 13.4% think that the pilot profile and the classical profile
are more or less the same, and only 0.5% think that the classical profile is better than the pilot
one243.
In September 2010, the revised profiles were mainstreamed for the first time throughout all schools
in the following three sectors, replacing classical profiles: Agriculture, Food Processing and

239
    See section 1.1.6 (access to education)
240
    It is however worth noting that there has been an increase in interest in “service” profiles compared to “industrial”
ones: +10% in trade, catering, tourism, business administration and transportation and -30% in mechanics and metals and
textiles and leather.
241
    Only 6 of pilot profiles are competence based and outcome oriented modular curricula
242
    70-80% in metal processing and agricultural schools of students have found employment within three months after
graduation.
243
    Comparative analysis of 22 classical and reformed profiles

      106
                                          OP for Human Resources Development, 2012-2013                        2nd draft



Production (7 profiles), Geodetics (land survey) and civil engineering (1 profile), Electrotechnics (1
profile). The mainstreaming of revised and piloted profiles through the whole VET system will
continue in 2011 and 2012 with the support of IPA 2007 project ‘Modernisation of VET Education’.

A mere 18% of all VET students are enrolled in the revised VET profiles244. This means that the
majority of students are still taught in occupations that do not reflect the needs of the economy and
with outdated curricula and teaching methods. The modernisation of profiles, curricula and
textbooks needs to be pursued in a more systematic manner in the context of the development of a
NQF (see next section) and corresponding final exams should be developed.

Experience from past CARDS and IPA projects shows that extensive support is required to help VET
schools manage the transition to new profiles, ranging from training of teachers and management
staff, to introducing new teaching methods and techniques, to supplying equipment and materials,
to meeting higher standards of quality. Further modernisation of profiles and the development of
the NQF (see next section) will put more requirements on VET schools, which will need further
assistance and support.

The ongoing reform of education profiles and curricula cannot be implemented satisfactorily without
rationalising the network of schools. In February 2011, the Council for Vocational Education and
Adult Education (CVEAE) agreed to define a new network of VET schools reflecting the needs of the
country. The Centre for VET and Adult Education, which is an organisational unit within the Institute
for Improvement of Education, has been entrusted with the task of drafting a proposal for the new
network This complex and demanding task 245 will be carried out through labour market research
and development forecasts246 in a consultative process involving all relevant stakeholders (Ministry
of Education and Science, Serbian Chamber of Commerce with its regional branches, National
Employment Service, representatives of the industry, of local self-governance, unions of employers
at national and regional/local level) .

Building the National Qualifications Framework

In line with the new Law on the Foundations of the Education System, Serbia has started to develop
a National Qualifications Framework for its entire education system (levels 1 to 8)247. The main
objectives Serbia wants to achieve through the NQF are:

         To promote competence-based and learning-oriented education;
         To facilitate the acquisition of knowledge, skills and competences at all ages and educational
          levels;
         To organise education through a clear system of qualifications and profiles with transparent
          progression routes and a system of credit transfer;
         To ensure that qualifications are aligned with the most up-to-date occupational standards;
         To involve social partners in defining occupational and qualifications standards;
         To ensure the recognition of all learning outcomes through better connections between
          formal, non-formal and informal education;
         To ensure the quality of education through clearly defined educational standards;


244
    before September 2010
245
    Department for Development for Qualifications and Network of Schools
246
     Demographic forecasts of school population by area, geographic characteristics, employment and economic
development plans, equal access to education and availability of communication.
247
    Levels 1 to 5 are covered by initial and continuing VET education, while levels 6 to 8 are acquired in higher education.

      107
                                          OP for Human Resources Development, 2012-2013                        2nd draft



         To ensure the mobility of students through the compatibility of Serbian qualifications with
          the European Qualifications Framework
         to contribute to inclusive education by giving people with low education level better chances
          to access the education system and by preventing them from leaving the education system
          without any level of qualification;

The key body for guiding the development of the NQF in vocational and adult education, the Council
for Vocational Education and Adult Education (CVEAE), has been operational since June 2010. In
autumn 2010, the CVEAE adopted a Protocol on NQF Development together with an action plan for
2010/2011. The action plan foresees the establishment of a high level coordination body that would
steer the development of the NQF and would include as members representatives from the three
education Councils248, MoERD, MoE and both Institutes249. In line with the action plan, a NQF
Committee has been established in December 2010 with the responsibility of building the NQF on a
day-to-day basis. With the assistance of IPA250, the NQF Committee is currently developing a concept
for the NQF up to level 5 which will specify levels required and general level descriptors.

A new National Occupational Classification (NOC) is being adjusted in line with the International
Standard Classification of Occupations (ISCO 08)251. The revised NOC is a prerequisite for further
reforms in vocational education since standards of qualifications (knowledge, skills and
competences) will be developed only for occupations included in the NOC. Based on a survey of
existing and future needs of the economy, new occupations will be added and obsolete ones will be
removed.

The development of the NQF will pursue this process further with the review and updating of all
profiles belonging to the occupations classified in the NOC. The needs are for all profiles at levels 3
and 4 to be revised and for developing new profiles to cover craft vocations and specialist education
programmes at level 5 as well as low qualifications at levels 1 and 2.

Sector Committees are being established as a tool for developing the NQF252. Their role is to
establish the list of educational qualifications and profiles, to define the standards of knowledge,
skills and competences for all existing and emerging qualifications and profiles and to chart clear
progression routes with links to formal, non-formal and informal learning. In doing so, the sector
committees will continue in a more systematic way the efforts initiated during past pilot VET
projects, and will ensure that revised pilot profiles are mainstreamed throughout the system.

In parallel, a system of credit transfer and recognition of prior learning (both non-formal and
informal) needs to be developed to ensure easy access and progress throughout the education
system.

The IPA 2008 project ‘Support for Quality Assurance within the National Primary and Secondary
Education Examination System’ will provide assistance in reaching these objectives until 2012. .



248
    National Education Council, Council for VET and Adult Education, National Council for Higher Education
249
    Institute for the Improvement of Education and Institution for Education Quality and Evaluation
250
    IPA 2007 ‘Modernisation of VET Education’ and IPA 2008 ‘Support for Quality Assurance within the National Primary and
Secondary Education Examination System’
251
    The adjustment of NOC is ongoing and is expected to be completed with the support from IPA 2011 ‘Preparation of
Serbian Labour Market Institutions for European Employment Strategy’.
252
    They are composed of representatives from the VET sector and all other relevant stakeholders ( relevant line ministries,
union of employers, trade unions, Serbian Chamber of Commerce, professional associations, NES, representatives of
industry and other governmental bodies)

      108
                                            OP for Human Resources Development, 2012-2013                        2nd draft



The establishment of a NQF is closely connected to the development of a quality assurance system
to promote consistent standards throughout the education system and ensure compliance with the
requirements of the NQF. Serbia has been putting in place elements of a quality assurance system
through past CARDS and IPA projects. Normative standards for revised profiles were defined, basic
criteria and indicators to measure quality in education were identified, while procedures for self-
assessment and external monitoring/evaluation, which any future quality assurance system will
need to articulate, were developed. However, much remains to be done to bring this system into
life. In particular, institutional responsibilities need to be clearly assigned and stakeholders need to
agree on mechanisms and incentives to promote higher standards of quality and develop a culture
of excellence across the sector.

Developing education and training opportunities for adults

In the absence of education and training opportunities, many adults are unable to upgrade or
develop their skills and competencies and raise their employability. As a result, labour markets are
less flexible. There is an acute need to develop adult education opportunities particularly in the
context of the current restructuring and privatisation process and taking into account the overall low
level of education among the Serbian labour force. The shortage of adult training affects also
employers, who have difficulty in securing the skills they need to develop their businesses, too few
training providers being able to meet the requirements of employers. An accreditation and licensing
system needs to be developed to guarantee a minimum level of quality from training providers,
discourages employers to invest into training.

The existing network of schools offering elementary education for adults is clearly not meeting the
huge needs of Serbia. There are as many as 1.3 million people in Serbia without completed
elementary education253, but only 15 schools for adult elementary education with around 2,500
attendees a year254. Although there are a number of past and ongoing pilot projects in this field,
there is a need to develop further programmes, upgrade the competences of teaching staff and
encourage the participation of adults.




                Source: RSO Statistical Yearbook 2008, Chapter: Education, database for educational statistics
                                                                 Figure 63


253
      Census, 2002
254
      See section 1.1.6

       109
                                         OP for Human Resources Development, 2012-2013                      2nd draft



Outside elementary education, opportunities for adults in the formal education system are almost
non-existent.

Only a few VET schools are engaged in continuous VET and even fewer of them in non-formal
training for adults, despite the fact that the new Law entitles VET schools to carry out special training
for adults including upskilling and specialisation programmes. VET schools need to develop their
capacity and experience in establishing effective partnerships with employers and employment
services to develop short-term non-formal education and training for adults, in line with the needs
of the economy.

Although the offer of non-formal training has been growing in recent years, there is no system in
place to assess the quality of training courses and training providers. The capacity of training
providers in developing quality courses, in line with labour market requirements, is as weak as in the
case of VET schools.

Some estimates show also an increase of company investment in employee education and
professional development255. However, learning outcomes gained within companies are not
recognised.

Serbia’s mid-term needs in the field of adult education and training are:

         to support all forms of education and training opportunities for adults (formal, non-formal
          and informal);
         to improve the knowledge and competences of teaching staff and increase the number of
          training educators in adult learning;
         to develop special curricula and learning materials adapted to the needs of adults;
         to involve more actively social partners in defining training contents and learning outcomes;
         to encourage VET schools to engage in CVET and non-formal training for adults;
         to establish links between formal and non-formal education through the NQF to ensure the
          recognition of all learning outcomes;
         to develop an accreditation and licensing system in order to regulate and improve the
          quality of training offers;
         to support training providers in developing quality training programmes in line with market
          needs and NQF requirements; and
         to strengthen the capacity of institutions such as the Centre for Vocational and Adult
          Education and the Regional Training Centres.

The new Law on Adult Education is currently being drafted and will provide a regulatory framework
for the adult education system.

Promoting inclusive education

The Ministry of Education and Science is committed to the development of inclusive education
policies to ensure that all children have a fair access to education and learning opportunities to
develop their potential256. Although there is a high awareness among teaching staff about the

255
  ETF, HRD Review (2010)
256
   The principle of equity in education is enshrined in the Serbian Constitution and in a number of international
conventions, which Serbia has ratified. The new Law on Foundations of System of Education promotes inclusive education
and the use of Individual Educational Plan. There is no strategy for inclusive education although drafts were prepared in
2002 and in 2006 but never adopted. There is, however, a roadmap for inclusive education (Ministry of Education, 2008)

      110
                                            OP for Human Resources Development, 2012-2013                           2nd draft



importance of fostering inclusion of all children, in practice, they are often ill-equipped to carry out
inclusive education measures in their schools.

As presented in section 1.1.6 (access to education), attendance in the education system at all levels
is much lower among children from disadvantaged and vulnerable groups257. Non-attendance in
(non-compulsory) pre-school education is particularly damaging for such children as it becomes
harder to break the circle of exclusion and poverty later in life. The percentage of early school
leavers is particularly high among vulnerable groups and particularly among Roma children with
disabilities, and children from the rural areas, especially girls..

Approximately 80% of Roma children and youth are institutionally segregated in special schools for
children with mild intellectual disabilities. Children with disabilities are predominantly educated in
special schools258or special classes in regular schools259, mainly located in large towns, with almost
no possibility to be transferred to mainstream schools. Medical solutions prevail over inclusive
approaches.

On the other hand, children with special needs260 in mainstream schools do not receive extra
support through additional programmes tailored to their needs to ensure their success. Professional
development for staff working with children with special needs is almost non-existent in
mainstream, but also in special, kindergartens and schools. 261

There is no adequate mechanism to prevent children from dropping out, in particular during the
transition year between primary and secondary education, when this risk is the highest among
children from vulnerable groups. Children who have completed special schools often do not
continue their schooling. The few of them who attend special secondary education programmes in
special schools rarely acquire the right skills to join the labour market.262 The formal educational
system does not provide specific institutions and programmes for illiterate adults and adults without
primary education263. Adults with disabilities have almost no available training opportunities
corresponding to their needs.

Some developments in inclusive education have, however, taken place in Serbia, through different
projects to build the capacity of schools/kindergartens in implementing inclusive practices. The
embryo of a quality assurance system has been developed, with mechanisms for evaluation and self-
evaluation of the work of schools, several Handbooks and Guides264 about inclusive education, and
the development of inclusive culture and practice in educational institutions.

Scholarships are being increasingly awarded to students from different vulnerable groups.
Cooperation and coordination has begun among the social welfare, education and health care
systems on inclusive education issues.

257
    Children with disabilities, children from poor and low educated families, Roma families, children from rural areas
258
    These schools are specialized for educating children with mental, physical and/or sensory disabilities, and children are
referred to the school based on a doctor’s commissions’ referral.
259
    Special classes existed in 90 regular elementary schools in the academic year 2007/2008.
260
    Children with relatively minor disabilities, borderline intellectual capabilities, difficulties in reception and expression of
speech, bodily disabled, chronically ill, hyperactive, hypoactive children, with emotional difficulties, with behavioral
difficulties, children from socially disadvantaged backgrounds
261
    Serbia, Regional Preparatory Workshop on Inclusive Education Eastern and South Eastern Europe, June 2007, UNESCO
262
    Ibid
263
    The situation is about to change with the IPA 2008 “Second chance” project
264
     The ‘Guide to the Advancing Inclusive Educational Practice’ provides 6 criteria and 32 indicators of good inclusive
educational practice, piloted in 5 pre-schools and in 26 primary schools. The ‘Handbook on Inclusive School Development’
was prepared to guide self-evaluation of concrete inclusive aspects in 7 areas

      111
                                           OP for Human Resources Development, 2012-2013                         2nd draft



The Ministry of Education and Science has recently launched a survey, in order to assess the extent
and causes of drop-out across schools in Serbia, which will provide a solid basis for designing
preventive actions. A grant scheme under the World Bank DILS programme will assist schools to
develop capacities for inclusive education, with a focus on children with disabilities, Roma children
and children from rural areas.

The DILS programme is also developing mechanisms to increase access and quality of education for
vulnerable groups on all educational levels (children requiring hospital treatment, children with
learning disabilities and children from disadvantaged groups). It has also recently started a massive
training of teachers in primary and secondary schools, which will increase skills and knowledge in
inclusive approaches, the development and implementation of individual educational plan and the
application of individualised education approach265. The IPA 2008 project ‘Education for all’ will
promote education among Roma children. The project focuses on building the capacity of
pedagogical assistants currently operating in pre-school and school institutions across Serbia266.
Their role is to provide support to children from all vulnerable groups (predominantly Roma and
children with disabilities).. The IPA 2009 ‘Implementation of pre-school education’ will support 15
selected LSGs in developing their network of pre-schools and improve access of vulnerable groups to
pre-schools.

Important by-laws267 have been adopted which will facilitate the shift from the current dominant
medical approach towards social inclusion solutions based on the assessment of individual needs.
However, further strengthening and support is required for the new commissions identifying the
needs of and support for vulnerable children

Serbia’s main challenges in further developing inclusive education are summarised in the ‘Roadmap
for Inclusive Education’ developed by the (then) Ministry of Education in 2008268, which identifies the
following medium-term needs:

         There is a need to increase education coverage of children from disadvantaged and
          vulnerable groups. Mechanisms should be established to identify children at risk of exclusion
          and promote their inclusion, starting from pre-school. The assessment of needs should
          involve representatives of health, education and social sector, but also parents and child.
         The school completion rate among children from vulnerable groups should be improved
          through preventive mechanisms against drop-outs. Children at risk of drop out should be
          encouraged to reintegrate into the education system through mentorship programmes and
          other preventative measures.
         It is necessary to develop professional competences of teaching staff to address the diversity
          of the needs and pace of development of pupils, through a wide and flexible range of
          responses. This will require improvement of pre-service and in-service teacher training.
         Individual educational plans (IEPs) and the evaluation of child/student’s achievements
          should be widely used. IEPs, along with professional development of teachers, are essential


265
    A pool of 100 professional trainers has been selected and it is planned that training will cover 22,650 participants being
15,875 people 7,500 staff including teachers and school directors.
266
     All pedagogical assistants have completed the introduction training, and in the course of the project will complete
modularised training for which a Rulebook was adopted in December 2010
267
    The ‘Rulebook on the Additional Educational, Health and Social Support provided to a child and student’ was approved in
July 2010 regulates setting of the Commissions which replace the Commission for Categorisation of Children with
Disabilities. The ‘Rulebook on Conditions for Determining the Right for an Individual Education Plan, its implementation and
evaluation’ was adopted in September 2010.
268
    Inclusive Education: Roadmap, National Report of the Republic of Serbia, Ministry of Education (2008)

      112
                                             OP for Human Resources Development, 2012-2013                               2nd draft



         components for an inclusive approach which seeks to realise the full potential of the child
         and motivates both parents and child in achieving agreed targets.
        Schools need to adapt their facilities and require special equipment and schoolbooks to
         implement inclusive education measures, in particular to meet the needs of children with
         disabilities.
        LSGs should be encouraged to take a more active involvement in the implementation of
         inclusive education policies, coordinating and supporting the work of educational and social
         of local services and institutions dealing with children from disadvantaged and vulnerable
         groups.

The table below summaries the main Strengths, Weaknesses, Opportunities and Threats (SWOT)
related to the education and VET sector in Serbia.

                        STRENGTHS                                                           WEAKNESSES
   Free education for preparatory pre-school, primary and              Investment in education (at 3.3% of GDP) lower than EU-27
    secondary education                                                  (and below OECD target of 6%), with around 90% spent on
   Strong government commitment of government to reforms of             salaries.
    the education system                                                High numbers of illiterate and under-qualified adults
   New Law on the Foundations of the Education System                  Average performance of students aged 15 for reading literacy,
    adopted in August 2009, enabling implementation of reforms           mathematics and science below OECD average
    in the education system, including creation of Council for VET      Low performance of the education system towards vulnerable
    and Adult Education and development of quality assurance             groups reflected in their low participation rates, high drop-
    system.                                                              out rates and lower educational achievements at all
   Established network of educational institutions, including 341       education levels
    vocational education schools, 48 ‘schools of applied studies’       The share of children aged 3 to 5 in pre-school (non-
    (post-secondary) and 13 public & private universities                preparatory) among the lowest in Europe
   Network of educational bodies to be used for Lifelong               Mismatch between education and the world of work
    Learning (LLL), including informal education system                 VET schools not responsive to market needs and to changing
   Significant funding from EU and international donors to              demographics and pedagogical developments - outdated
    support education reforms                                            curricula and obsolete teaching and learning methods and
                                                                         environment
                                                                        Incomplete National Qualifications Framework and lack of
                                                                         progression routes and credit transfer system.
                                                                        Absence of adult education and lifelong learning system and
                                                                         lack of recognition of skills and knowledge acquired outside
                                                                         the formal education system
                                                                        Insufficient     offer of quality adult training and LLL
                                                                         opportunities due to lack of resources and capacity
                                                                        VET mostly limited to initial VET with little involvement in
                                                                         continuous education & training
                                                                        Participation rates in adult education low and falling
                                                                        Lack of institutional capacity at central level to plan VET and
                                                                         AE developments
                                                                        Lack of quality assurance, monitoring and evaluation in adult
                                                                         education and VET sector including standards, accreditation
                                                                         and certification mechanisms
                                                                        Lack of quality in-service teachers training and poor capacity
                                                                         of teachers to develop transversal key competences
                                                                        School network not adapted to changing demographics and
                                                                         pedagogical developments




    113
                                    OP for Human Resources Development, 2012-2013              2nd draft




2.1.4 Social inclusion

Impact of demography on poverty and social welfare

As already indicated in section 1.1.1., Serbia in the first half of the 21st century will experience
depopulation and intensive ageing, due to low fertility rates and increased life expectancy. These
two phenomena will shape future policies in the fields of health care, education, employment and
social care.

By the middle of the 21st century, people aged over 65 will make up a quarter of the population. The
number of elderly people over 80 will treble, requiring a major shift in delivery of social care to meet
new demands in particular of long-term care services.

Ageing will pose considerable challenges for the organisation and delivery of health care, long-term
care, income support and community-based services for the elderly and other services, such as
housing, transportation, and additional cash benefits. It will put extra pressure on public finances at
a time when the shrinking working-age population is already reducing the revenue available for
social policies. As already argued in section 2.1.2 (employment and labour market), the challenge is
to bring down the share of inactive people in the economy, not only to ensure the sustainability of
the welfare system, but also to address social inclusion issues, since there is a strong correlation
between poverty and social exclusion on the one hand, and inactivity and unemployment on the
other. From this point of view, it is paramount to ensure better links and connections between social
welfare, labour market policies and other forms of social assistance, in order to increase the
employability of disadvantaged and vulnerable groups and raise the overall participation in the
labour market.

The Roma population has the highest population growth in Serbia, due to a high birth rate and a low
mortality rate. The Roma will not be affected by the same process of ageing like the rest of the
population. On the contrary, the challenge will be to integrate large amounts of young Roma people
particularly at risk of social exclusion (see section 1.1.7). In order to stop the transmission of poverty
and social exclusion from generation to generation, strong social inclusion policies targeting Roma
people are required from early childhood onwards.

Future challenges in social welfare provision

In line with the new Law on Social Welfare, the medium-term priorities are
1. to improve decentralised services delivery through:
     • strengthening local self governments’ capacities to lead social policies at the local level;
     • modernising CSW and introducing the case management social work;
     • developing community-based services as an alternative to institutionalisation; and
     • developing regulatory mechanisms and quality assurance system to manage and control
         decentralisation.

2. to improve social financial support for the poorest and promote active inclusion to facilitate
transition from welfare to work.




    114
                                         OP for Human Resources Development, 2012-2013                      2nd draft




      1. Further decentralisation of social welfare delivery

The delivery of social services entrusted to the local level and based on a close cooperation between
local self-government and local stakeholders makes it easier to respond to the needs of
disadvantaged people where it is best for them i.e. in their natural environment (family and/or local
community). The new Law on Social Welfare sets the directions for reforms needed to make further
decentralisation work.

            a. Strengthening local self governments’ capacities to lead social policies at the local level

Local self-governments in Serbia are entitled by Law to provide social welfare to citizens in line with
identified local needs. LSGs and the local Social Policy Councils play a major role in planning,
coordinating and supervising the implementation of social welfare strategies and plans, and monitor
social inclusion indicators and targets.

However, as explained in section 1.1.7, the delivery of social policies, both services and benefits,
varies widely across Serbia. To date, most LSGs did not fully seize the opportunities granted to them
to lead and support the efforts of local stakeholders against social exclusion and poverty. A reason
for this is the modest size of local budgets (see section 1.1.7, social welfare expenditure), which
makes it difficult for LSGs to ensure the availability and sustainability of a wide-range of community-
based social services. Another reason is the lack of capacity of both LSGs and local stakeholders to
implement social inclusion policies in a participative manner269, jointly mapping out needs and
resources, drawing up plans for tackling identified problems, commissioning specific services; and
regularly reviewing results.

Strong human and management capacities and the availability of local funds are prerequisites for
implementing social welfare strategies and plans.

The new Law on Social Welfare gives the possibility to LSGs to receive additional funds from the
national level (earmarked transfers) for developing community-based social services. Earmarked
transfers will be available for underdeveloped LSGs and/or LSGs where residential institutions are
being transformed. However, they can also be used for the development of innovative services.
Support will be required to help LSGs to take full advantage from these additional resources.. LSGs’
capacities should also be developed to promote the development of services within their mandate
and encourage cross-sectoral initiatives that have a stronger impact on the situation of vulnerable
groups. LSGs will require support in reforming residential care for the elderly, which is planned to be
decentralised. More generally, LSGs’ capacities should be strengthened in order to manage the
provision of social welfare by combining resources from CSW services, state-run institutions
undergoing transformation and other social service providers.

            b. Modernising CSW and introducing case management social work

In the past, CSWs used to deal with the problems of their clients in a fragmented way without
making connections between health, education, social and employment needs. No clear objectives
and outcomes were agreed with the client and access to assistance was a long and complicated


269
   Pilot projects funded by the MoLSP through the Fund of for the Organisations dealing with People with Disabilities and
other donor programmes (in particular through the Social Innovation Fund) give plenty of examples of the importance of a
strong partnership between local stakeholders and LSGs

      115
                                             OP for Human Resources Development, 2012-2013       2nd draft



process. Moreover, CSWs would often refer clients to residential institutions, due to non-existing or
insufficient community-based social services.

To remedy this situation, a system of case management was introduced in all CSWs in line with the
Rulebook on Standards and Organisation of Centres for Social Work270. Case management is a new
approach to social work in Serbia. Centred on the needs and abilities of the client, it takes into
account his/her personal background and social environment before arranging and coordinating a
package of multiple services to meet the client’s specific needs.

Case management is at the heart of ongoing reforms and modernisation of social work. It ensures
that vulnerable groups are primarily provided with appropriate services in the community and
envisages placement in residential institution only if all other existing forms of services have been
exhausted. . Case management is a strong driver for better local planning and monitoring of social
issues as it encourages the design of new programmes and services in the local community. It
facilitates a clear separation between the role of service commissioner/financier, referral body and
the function of service provider. Finally, it stimulates competition by encouraging the participation
of non-governmental and private stakeholders in the delivery of services.

The case manager in the CSW assesses the needs and abilities of his/her client, establishes an
individual care plan in cooperation with him/her and coordinates the delivery of services and
support between the local branches of various public and private services (health, education, social,
employment). The practice of social work case management is highly complex and calls for a variety
of roles and skills, such as advocate, broker, diagnostician, planner, community organiser, evaluator,
consultant, and therapist.

According to an analysis of the performance of CSWs carried out in 2009, about one-third of CSWs
have had difficulties in fully applying the expected standards of case management with their clients.
This is true in particular for small CSWs. Therefore, ISPs started to organise supervisory support for
CSWs in 2010. Of critical importance is also the capacity to establish connections and synergies
among the different segments of support (housing, employment, education, health and other social
services) to better respond to the needs of target groups. In addition, active inclusion (“activation”)
programmes will require the introduction of case management to beneficiaries of social benefits.

There is, therefore, a need to further strengthen the knowledge and technical expertise of case
managers in CSW to provide quality services to their clients in the most efficient and effective
manner. The success of case management is also depending on the availability of a wide range of
community-based social services covering the needs of local disadvantaged and vulnerable groups.

              c. Developing community-based services as an alternative to institutionalisation

The new Law on Social Welfare places great emphasis on developing social care services that help
disadvantaged people lead a normal life in their community and involve all aspects of their existence
(health, social, education, employment) in contrast to residential care which tends to apply one-
dimensional solutions and often exclude patients from society.. Under the new Law, placement in a
residential institution is considered only as a last resort solution after all other options have failed,
and when the client’s physical and mental conditions require special treatment and/or supervision,
which can only be provided inside an institution.




270
      Entered into force in June 2008, Official Gazette of RS, 59/2008.

       116
                                   OP for Human Resources Development, 2012-2013              2nd draft



Deinstitutionalisation is has been implemented at national level through parallel and coordinated
interventions namely:

        •   the gradual downsizing of residential care institutions;
        •   the improvement of quality of the care provided in residential care institutions; and
        •   the development of community-based alternatives to institutional care.

While significant progress with deinstitutionalisation already took place in the field of child care (see
section 1.1.7), it is necessary to continue this process by addressing the needs of other vulnerable
groups.

Deinstitutionalisation can only seriously be envisaged when alternative quality community services
are available. The development of the latter is, however, dependent on funding and the availability
of a variety of providers, on the definition of national quality standards and on the implementation
of monitoring and control mechanisms (see next section quality assurance and regulatory
mechanisms). .

As explained above, the decentralisation of social welfare policy and the accompanying development
of the community-based services are also hampered by the lack of resources in local self-
governments’ budgets. Although it can be expected that earmarked transfers foreseen in the new
Law will bring improvements in the long-run, it is of utmost necessity to create incentives for LSGs to
use “non-earmarked revenues” (own revenues, tax shared revenues and general grants) in support
of greater diversity of community-based services. Recent initiatives led by the MoLSP and donor
programmes have shown that a lot can be achieved by raising local allocations for social welfare and
social services in particular (see section 1.1.7). The availability of alternative community-based
services at the local level is a pre-condition for continuing the processes of decentralisation and
deinstitutionalisation. Assistance is particularly needed:

       to expand the range of services in relation to identified needs;
       to develop cooperation and coordination among the various services and across sectors;
       to introduce new methods of social work in line with EU best practices; and
       to enhance the capacity of private and public service providers, in particular to ensure
        compliance with minimum quality standards.

          d. Developing regulatory mechanisms and quality assurance system to manage and
             control decentralisation

The development of regulatory mechanisms and quality assurance system for decentralised social
service delivery is essential for further social welfare development in Serbia. In a decentralised
environment, the MoLSP will no longer be involved in direct delivery of services at the local level. Its
role will be confined to quality control, performance monitoring and expert guidance and support to
local authorities and service providers.

The MoLSP has recently started to set up a quality assurance system of social services providers,
which will be based on national minimum standards for each type of social service, clear supervision
and inspection mechanisms and licensing procedures for service providers and professionals.

To date, national minimum standards have been developed for 16 priority social services covering
residential care institutions and community-based social services. The development of standards is
carried out through a highly participatory and consultative process currently involving over 200
professionals and practitioners from state, private and non-governmental organisations and with the


    117
                                            OP for Human Resources Development, 2012-2013                           2nd draft



participation of service beneficiaries. A piloting stage is compulsory before standards can be
introduced throughout the system. National minimum standards for ten social services271 have been
successfully piloted across the country and will be made universal by means of a by-law. It is
necessary to pilot and subsequently mainstream the minimum standards for six remaining six
services272. However the process should continue with the development of national minimum
standards for other existing social services. Criteria need also to be developed for identifying
innovative services which could be mainstreamed.Institutes for Social Protection should be further
supported in doing so while the MoLSP needs strengthening its capacity to ensure compliance with
standards and monitor the performance of service providers. The licensing system of service
providers and professionals will enable the MoLSP.to perform this role. The MoLSP has just started
to develop a licensing model which is being piloted, and once approved, will be implemented
throughout the system. Licensing, based on defined minimum standards, is an important pillar of the
quality assurance system, which will ensure that service providers and professionals meet a
sufficient level of quality. Licensing is a precondition for expanding the availability of community-
based social services at the local level both by facilitating investment decisions by local self-
governments and by encouraging a greater range of organisations to provide services in the
community. National mechanisms to grant and review licensing need to be further developed.

Looking at the national level, MoLSP has recently started to adopt a more proactive approach in
coordinating its activities with related ministries in order to develop integrated social services
(Ministry of Health, Ministry of Education and Science, Ministry of Youth and Sport and Ministry of
Economy and Regional Development). Inter-ministerial cooperation is particularly needed for the
development of joint national standards and the mainstreaming of pilot cross-sectoral services.
However, the capacities of the MoLSP and other ministries are still insufficient to achieve the
necessary level of cooperation which would enable fully integrated social policies.

      2. Improving social welfare for the poorest and promoting active inclusion to facilitate transition
      from welfare to work

One of the key objectives of the new Law of Social Welfare reforms is to improve the situation of the
poorest citizens by increasing the efficiency and effectiveness of financial support system. Although
there has been some improvements with the guaranteed minimum income (CSA) in terms of
coverage over the past few years (see section 1.1.7, social welfare at central level), the potential of
the CSA as an instrument for combating poverty and social exclusion could still be significantly
enhanced. Issues with the low take-up (not all eligible people requests the benefits) and
administrative leakages (some people receiving benefits are not eligible) need to be addressed, in
order to increase the impact of CSA on poverty levels273. In this sense, the new Law on Social Welfare
enables the transformation of CSA into a modern social welfare instrument by linking it to activation
programmes that facilitate access to other services and ultimately lead to employment.

As indicated in section 1.1.7, the budget for the CSA is one of the lowest in the region. The new draft
Law on Social Welfare proposes higher social security levels for multi-member households, namely, a



271
    Residential institutions for children and youth., Residential institutions for adults and elderly, Shelters., Supported
housing for people with physical disabilities, Home care and help, Day care, Clubs for the elderly, Personal assistants,
Fostering for children and youth, Supported housing for young people leaving care.
272
    Residential institutions for children with severe and profound disabilities, Residential institutions for mentally ill persons
(persons with mental disorders), Shelter for human trafficking victims., Day care for youth with behaviour disorder,
Fostering for adults and elderly, Drop in centres for children and youth living in the streets
273
    “Options for Delivering Social Assistance: a Feasibility Study”, Oxford Policy Management (April 2007)

      118
                                           OP for Human Resources Development, 2012-2013                         2nd draft



new equivalence scale,274 which should improve the coverage of CSA among the poor and lead to
higher amounts of benefits. Legal provisions, however, are not sufficient to ensure that all people in
real need access benefits to which they are entitled.

Potential beneficiaries of CSA need better information about the eligibility criteria, and the
application process should be made easier. Procedures used by CSW staff for assessing the eligibility
of CSA beneficiaries need to be standardised, in order to improve the coverage of poor people, but
also to enable an adequate distribution of CSA across LSGs, in line with their levels of social and
economic development.

Better synergies between welfare and employment policies should be created. The concept of active
inclusion “combining in an integrated way adequate income support, inclusive labour markets and
access to quality services”275 , which is promoted throughout the EU, is still a new concept in Serbia
introduced for the first time by the new Law on Social Welfare.

One of the objectives of active inclusion policies is to make social protection systems for the most
vulnerable citizens (i.e. people who face a set of complex problems and are the most distant from
the labour market) more employment-friendly. This requires the establishment of strong links
between social services, social benefit schemes and active labour market measures. Currently, public
works are the only existing programme with such links. However, a recent study276 shows that public
works involving CSA beneficiaries rarely lead to long-term employment. The cooperation between
CSW and NES branch offices is not sufficiently developed277, although it is recognised that
cooperation would greatly improve the response to the needs of target groups, who are often
common to both institutions.

Active inclusion policies should also contribute to better targeting of cash benefits, excluding, for
example, those engaged in the informal economy, and including, on the other hand, those most in
needs, 278, thereby maximising the poverty alleviation impact of financial social assistance schemes.

The current financial crisis and rising unemployment rates makes it even more important to link
better social assistance, social benefits and active labour market measures, in order to prevent the
rise of long-term unemployment and the growth of the informal economy.

Within the social system in Serbia, beneficiaries of cash benefits do not have a case manager
assigned to his/her case, thus they are often not able to access other services that could make a real
change in their life. Active inclusion schemes would help change this situation. Based on an
individualised assessment of his/her needs and abilities, the beneficiary would be referred to the
relevant services ranging from public works engagement, retraining and additional training, and
adult education programmes to various types of therapy and social services. Case managers in CSWs
would be the cornerstones of successful activation policies, referring clients to the relevant services


274
    A rough estimate indicates that the new equivalence scale will raise expenditures for CSA by 69%, compared to the
current budget based on the Analysis of the Impact of Government Financial Assistance for the Poor, Goradan Matkovid
and Bosko Mijatovid (September 2008)
275
    COM(2008) 639 final - Commission Recommendation on the active inclusion of people excluded from the labour market
276
    Activation of MOP Beneficiaries in Serbia – First Stamp in Work Booklet, Marina Petrovic (2009)
277
    The current cooperation is classified as Level 3: multi-disciplinary teams of professionals, and in some locations limited
to Level 2: ad hoc, limited, reactive co-operation in response to crisis or other pressure by the Good Practices in Providing
Integrated Employment and Social Services in Central and Eastern Europe, Youth Employment and Management of
Migration in Serbia, ILO, Angela Taylor, 2009. The research uses the concept of “Integration Ladder” from the Council of
Europe report “Integrated Social Services in Europe” (Munday 2007)
278
    Reforms in Serbia: Achievements and Challenges

      119
                                      OP for Human Resources Development, 2012-2013                  2nd draft



across different sectors at the local level and facilitating cooperation between institutions and
synergies between different forms of assistance.

The priority is therefore to establish strong mechanisms of cooperation between the Employment
Advisor in NES branch office and the Case Manager in the CSWs, to harmonise their respective
programme of measures in favour of unemployed beneficiaries and ensure a clear demarcation of
roles and responsibilities among LSGs, CSWs and NES. In order to achieve this, NES and CSW have
just started developing a model of cooperation and information exchange linking their respective
activities, requirements and procedures.279 They must identify the needs of common beneficiaries
(single parents, financial assistance beneficiaries, long-term unemployed, older workers, Roma and
IDPs) in order to give simultaneous access to services available in both systems, regardless of which
one is approached first.

In addition to a strong cooperation between services across different sectors, active inclusion
policies are also dependent on the availability of a wide range of inter-connected community-based
services covering all the types of needs of target groups at the local level. As explained above, the
LSG plays a key role in providing those community-services. A number of ongoing initiatives are
promoting the delivery of decentralised services in the field of education, employment and health.
This creates the necessary momentum to promote greater integration of services across institutional
boundaries (social, employment, health and education) and pursue more ambitious active inclusion
policies in line with EU trends. It is also important to build capacity to mainstream the best initiatives
across the system.




279
  IOM, ILO, UNDP and UNICEF joint project ''Support to national efforts for the promotion of youth employment and
management of migration'' supports the development and piloting in six municipalities of the model of integrated
employment and social services from 2009 to 2011

      120
                                          OP for Human Resources Development, 2012-2013                         2nd draft




The table below summaries the main Strengths, Weaknesses, Opportunities and Threats (SWOT)
related to the social inclusion sector in Serbia.

                     STRENGTHS                                                       WEAKNESSES
   Social inclusion is recognised as top priority and           Poverty has increased with economic crisis and remains
    included in Government strategies and policies                high in rural areas, among refugees and IDPs, and Roma
   Income equality is comparable to levels in EU-27              people.
   Although it increased in 2009, poverty is still below        Low take-up and inadequate targeting of cash benefits
    2007 and 2006 levels                                          for the poorest
   Recent legal changes in social welfare improves              High percentage of beneficiaries of ‘cash assistance
    financial social assistance scheme to the poorest,            support’ (CSA) are unemployed but able-bodied
    promotes        active inclusion and regulatory              Lack of social activation of able-bodied vulnerable groups
    mechanism s supporting delivery of decentralised              as a first step to employment (Roma, women especially
    social services                                               single mothers, returnees through readmission, PWD,
   ¾ of LSGs established Social Policy Councils which            CSA beneficiaries, poorly educated,) etc.
    could play an important role in shaping integrated           Cash benefits schemes not linked to social inclusion
    services at local level                                       services and active labour market measures tend to trap
   Over 120 LSGs developed local social policy                   people into poverty and long-term social welfare
    strategies with increasing number, range and quality          dependency
    of community-based initiatives                               Insufficient availability, variety and quality of community
   Improved delivery of services at the local level in the       based social services for vulnerable groups, particularly
    education, health, social and employment sectors              cross-sectoral services;
    provides opportunity to deliver cross-sectoral               Weak capacities of LSGs to implement and coordinate
    community based initiatives to respond to multi-              social inclusion policies, especially in underdeveloped
    dimensional needs of beneficiaries                            areas
                                                                 Regional inequalities impacts unequal distribution of
                                                                  social welfare services in underdeveloped municipalities
                                                                 Licensing system in early development stage with low
                                                                  number of licensed local service providers
                                                                 National minimum standards for cross-sectoral services
                                                                  inexistent
                                                                 Low awareness among general population of issues
                                                                  relating to social exclusion

2.2 Strategic priorities
The Strategic Coherence Framework sets out an overarching goal for IPA components III and IV in
2012-2013, which is: to stimulate Serbia’s sustainable socio-economic development and accelerate
Serbia’s readiness to join the European Union.

This goal is broad in scope but sets a clear direction, and signals Serbia’s determination to meet the
standards of membership, as an equal and active partner in the European Union, by driving up
political, socio-economic and environmental performance and adopting the systems and structures
associated with the EU Member States.

The following three diagrams (overleaf) explain how this goal will be implemented through the OP
for Human Resource Development, through the three main operational priorities: employment and
labour market, education and VET and social inclusion.

Both the SCF and the OP takes, as their starting points, Serbia’s obligations in acceding to the EU, as
set down in the Stabilisation and Association Agreement, and the mid-term objectives in the
European Partnership (which will become an Accession Partnership, once Serbia becomes a
Candidate Country). These obligations and objectives are translated in operational terms in the
National Programme for Integration of the Republic of Serbia into the European Union, and, after
Candidate Country is secured, the National Programmes for the Adoption of the Acquis (NPAA).

    121
                                   OP for Human Resources Development, 2012-2013             2nd draft



These priorities for meeting the EU’s expected norms and standards, along with other parameters -
the IPA regulations, MIPD, Community Strategic Guidelines and Europe 2020 (described in section
1.2) - alongside Serbia’s own strategic priorities, set out in national and local strategies, programmes
and action plans (as described in section 1.1), define the overall policy envelope for analysis and
action.

Each diagram summarises the main themes in the socio-economic and SWOT analysis (as set out in
sections 1.1 and 2.1), and identifies the main challenges facing Serbia over the programme period to
benefit from existing strengths and potential opportunities, and to overcome existing weaknesses
and potential threats.

These medium-term challenges are then articulated in a series of strategic priorities, which have a
direct parallel in the objectives in the SCF. These are:

    1. To increase access to formal employment opportunities and enable a more inclusive labour
       market, by developing local employment policies, increasing the coverage and relevance of
       ALMP and improving labour standards in line with EU trends;

    2. To facilitate lifelong learning and greater relevance of education to the world of work, by
       developing further the NQF, building the VET system and promoting inclusive education
       from pre-school onwards;

    3. To support the social inclusion of disadvantaged and vulnerable groups and their long-
       term labour market integration, through cross-sectoral approaches and local partnership-
       based initiatives.

There is an additional strategic priority which relates to priority axis 4 (technical assistance): to
enhance and reinforce Serbian capacities, in the context of the EU pre-accession process, for
management of Structural Funds and the Cohesion Fund.

Cutting across each of these ‘vertical’ objectives is a commitment to ensure that ‘horizontal’
concerns are taken into due consideration in the preparation and implementation of programmes,
namely the need to foster gender equality and tackle discrimination, to promote sustainability and
to engage with civil society, wherever appropriate.

These strategic priorities will be realised through priority axes, each of which will be implemented
through lower-level measures, which in turn will form the basis for selecting operations for funding.
The priority axes and measures are described in detail in chapter 3.




    122
                                                                                                    OP for Human Resources Development, 2012-2013                                 2nd draft



                                      SAA / Accession Partnership – National Plan for Integration with the European Union / NPAA

                                                                                                                                 EU strategic priorities
                              National strategic priorities                                 +
                                             +                                                                                               +
                                                                           Socio-economic and SWOT analysis
       •    Established legal, strategic and institutional framework, including NES with branch office structure, emerging network of Local Employment Partnerships, and Labour Inspectorate
       •    Low employment rates and high unemployment rates; high levels of long-term unemployment; large proportion of the working-age population is inactive;
       •    Mismatch between labour demand and supply; labour force lacks skills needed by the economy
       •    High percentage of unemployed people belong to vulnerable groups with low employability
       •    Growing share of informal economy and high proportion of informal employment, particularly exposed to economic crises
       •    Low levels of labour mobility and regional disparities in employment and unemployment; ALMPs not sufficiently responsive to local labour market needs
       •    Economic recovery, growing SME sector and potential FDI presents new work opportunities, depending on business and investor confidence in private sector




                                                     Priority Axis 1 – Employment and Labour Market

   Medium-term challenges: benefiting from strengths and opportunities                                  Medium-term challenges: overcoming weaknesses and threats
  Support NES branch offices and local self-governments to implement Local                       Support social dialogue on local employment policies to reduce local
  Employment Action Plans                                                                          unemployment
  Implement the new Law on Vocational Rehabilitation & Employment of People                      Develop the range and relevance of ALMPs targeting disadvantaged groups. The
  with Disabilities                                                                                initiative will target the young unemployed without qualifications, long-term
  Expand ALMPs for the unemployed, particularly targeting unemployed youth with                   unemployed and people with disabilities
  low/no qualifications and long term unemployed (including redundant workers)                    Enhance policies and their implementation to bring Serbia in closer alignment to
  Encourage the transition from informal to formal employment to strengthen                       EU labour policy standards
  resilience of private sector and labour market for future economic development                  Strengthen the capacity of Labour Inspectorate to enforce legislation



                                                        SCF OBJECTIVE AND STRATEGIC PRIORITY 1:
      “To increase access to formal employment opportunities and enable a more inclusive labour market, by developing local employment policies,
                         increasing the coverage and relevance of ALMP and improving labour standards in line with EU trends”


                          Measure 1                                                  Measure 2                                                 Measure 3
                Support to the development of                              Increasing the effectiveness of                           Bringing the informal economy
                regional and local employment                               employment policies towards                                   into the mainstream
                            policies                                           disadvantaged groups




           Partnership, coordination, complementarities and synergies – national programmes; IPA components I,II,III and V; IFIs and bilateral donors



123
                                                                                                       OP for Human Resources Development, 2012-2013                               2nd draft


                                        SAA / Accession Partnership – National Plan for Integration with the European Union / NPAA

                                                                                                                                     EU strategic priorities
                                National strategic priorities                                  +
                                                +                                                                                                +
                                                                              Socio-economic and SWOT analysis
        •     Established legal, strategic and institutional framework, including vocational secondary schools and emerging network of Regional Training Centres; large scale reforms, including
              to Vocational Education and Training (VET)
        •     Free education at pre-school, primary and secondary education, but poor educational achievements compared with OECD average
        •     High numbers of illiterate and under-qualified adults
        •     Education system is reactive, rather than pro-active; mismatch between education and the world of work
        •     Partially completed National Qualifications Framework (NQF); absence of system for adult education (AE) and lifelong learning
        •     Lack of education coverage and high drop-out rates among children from vulnerable groups, minorities and in rural areas




                                                                   Priority Axis 2 – Education and VET

    Medium-term challenges: benefiting from strengths and opportunities                                    Medium-term challenges: overcoming weaknesses and threats
 Support the modernisation and improvement of quality and relevance of the VET                       Streamline and upgrade the network of VET schools in line with labour market
    and adult education sectors to labour market requirements                                         needs
 Develop further the NQF and facilitate recognition of skills and competences by                     Establish accreditation and certification mechanisms for VET and AE programmes
    defining NQF levels 1-5, progression routes and credit transfers system                           and providers
 Strengthening institutional capacity (the VET & Adult Education Centre, VET                         Strengthen the capacity of Regional Training Centres to become resource centres
    Council, NQF sectoral committees)                                                                 Support children from vulnerable and disadvantaged groups to access pre-school
 Support the implementation of the new Law on Pre-school Education and Law on                        education, through inclusive education initiatives which target drop-out among
    Foundation of Education System                                                                    ‘at risk’ children



                                                                      SCF OBJECTIVE AND STRATEGIC PRIORITY 2:
            “To facilitate lifelong learning and greater relevance of education to the world of work, by developing further the NQF, building the VET
                                               system and promoting inclusive education from pre-school onwards”


                                         Measure 1                                                                                  Measure 2
                            Improving the quality and relevance of                                                     Ensuring access and reaching higher
                              VET and adult education within the                                                      levels of education for children at risk
                              National Qualifications Framework




             Partnership, coordination, complementarities and synergies – national programmes; IPA components I,II,III and V; IFIs and bilateral donors



    124
                                                                                                         OP for Human Resources Development, 2012-2013                                   2nd draft


                                          SAA / Accession Partnership – National Plan for Integration with the European Union / NPAA

                                                                                                                                       EU strategic priorities
                                 National strategic priorities                                   +
                                                 +                                                                                                    +
                                                                                 Socio-economic and SWOT analysis
         •     Established legal, strategic and institutional framework, including the production of local social inclusion strategies and establishment of local Centres for Social Work (CSWs)
         •     Income equality levels comparable to EU-27; poverty levels have fallen, due to economic growth and policies targeting poverty reduction, but remain susceptible to recessions
         •     Poverty concentrated in rural areas, and among the unemployed and inactive, families, those with low and no education, Roma, internally displaced persons and refugees
         •     Inadequate targeting and low take-up of cash benefits for the poorest; social welfare spending is low;
         •     Ongoing decentralisation of service delivery and formation of local partnerships following decade-long reform process
         •     Regional disparities remain in social inclusion; still insufficient capacity at the local level to implement effective policies
         •     EU and donor support to the Government’s Social Innovation Fund, the delivery of improved local services, and social policy planning




                                                                       Priority Axis 3 – Social Inclusion

     Medium-term challenges: benefiting from strengths and opportunities                                     Medium-term challenges: overcoming weaknesses and threats
  Support further decentralisation of services in the area of social protection, health,               Increase the coverage of social assistance benefits among excluded groups not
     education and employment policies                                                                  covered by the social safety net, to lift them out of extreme poverty
  Broaden and strengthen community based services, responding to local needs, in                       Provide direct support to local self-government (LSGs) to coordinate the
     line with LSG action plans and in compliance with minimum quality standards                        implementation of social inclusion policies
  Build on existing partnership-based initiatives funded by the EU, World Bank,                        Disseminate best practice and support development of national minimum
     Norwegian and UK bilateral assistance                                                              standards for new cross-sectoral services
  Support cooperation between CSWs and NES branch offices to set up single entry                       Improve the employability of those furthest from the labour market, through
     services connecting their clients to the full range of opportunities and support                   active inclusion measures
 


                                                                        SCF OBJECTIVE AND STRATEGIC PRIORITY 3:
             “To support the social inclusion of disadvantaged and vulnerable groups and their long-term labour market integration, through cross-
                                                    sectoral approaches and local partnership-based initiatives”


                                          Measure 1                                                                                 Measure 2
                           Support to social inclusion through more                                                    Supporting the transition from welfare
                           diversified community-based services                                                           to work through active inclusion




              Partnership, coordination, complementarities and synergies – national programmes; IPA components I,II,III and V; IFIs and bilateral donors




125
                                           OP for Human Resources Development, 2012-2013   2nd draft



3 PROGRAMME STRATEGY

3.1 Priority axes and measures
Priority Axis 1 – Employment and Labour Market

Aim:

The priority axis will invest in active labour market policies, strengthen employment policy at local
level and look to reduce the scope of the informal economy through better intelligence,
enforcement of existing laws and inspectorate networks and awareness-raising.

EU legislation:

Acquis communautaire regulating the area of employment

Specific objective:

To increase access to formal employment opportunities and enable a more inclusive labour market,
by implementing local employment policies, increasing the coverage and relevance of ALMPs and
improving labour standards in line with EU trends.

Rationale:

After some amelioration in recent years due to a relatively favourable economic environment, the
unemployment rate started to rise again in 2008, in the wake of the global economic crisis. The
participation and employment rates remain among the lowest in the region. While the formal
economy does not generate enough jobs, the labour force also lacks the skills and competencies
needed to succeed in today’s workplace. Unless the unemployed are given more opportunities to
upgrade their skills and/or gain some work experience, they are at risk of remaining trapped into
unemployment.

A significant percentage of the unemployed also belongs to disadvantaged groups that are
considered the least employable: young people aged 15-29, women, older people, people with
disabilities, IDPs and refugees and Roma, long term unemployed280. Employment policy should
target those populations more effectively, including through a greater access to quality short-term
job-related training.

Although employment policy in Serbia has assumed more importance in recent years, ALMPs have
had only limited impact on the level of unemployment. This is partly due to budget constraints which
limit the coverage of ALMPs to a small portion of the unemployed. ALMPs are also not sufficiently
tailored to the specific needs of different disadvantaged groups and to the specific conditions of
local labour markets. This requires greater participation of social partners in employment policy-
making, as foreseen in the Law on Employment and Unemployment Insurance which provides
incentives for the creation of employment councils at local level. In this context, local stakeholders
(local self-governments, social partners and NES branch offices) must develop their capacity to
implement and monitor local employment action plans. NES branch offices across the country must
play a more active role in leading this process and implementing appropriate employment measures
agreed in partnership with local self-governments and social partners.

280
      National Employment Service register (March 2010)

       126
                                   OP for Human Resources Development, 2012-2013           2nd draft


Over one-fifth of all workers are estimated to be employed outside formal job structures, without
any access to social protection. Capacity is lacking to enforce the relevant provisions of the labour
law against the informal economy and to raise the awareness of both employers and employees
about the disadvantages and risks connected with informal employment. There is no systematic plan
to tackle the phenomenon at its roots and to articulate concrete actions to counteract its expansion.
Expertise is required to build the capacity of labour inspectorates and to explore possible policy
responses including the promotion of more flexible forms of employment in line with EU trends.

Description:

In line with the National Employment Strategy, this Priority Axis will seek to improve the
employability of the labour force through better implementation of employment policies and
services, in particular towards disadvantaged groups. The efficiency and relevance of employment
measures and services will be improved by supporting the decentralisation of employment policy
implementation, and by encouraging greater involvement and cooperation of local economic and
social development actors in employment and labour market issues. The role of local self-
governments in implementing employment policy will be enhanced through funding of concrete
employment measures, targeting specific disadvantaged groups in line with local employment action
plans. The focus of activities planned in this OP will be on establishing strong cooperation among
local stakeholders to implement relevant employment promotion measures in line with those action
plans. By doing so, the Priority Axis will encourage a greater involvement of social partners in the
implementation of local employment policy and contribute to locally-based solutions to
unemployment.

The Priority Axis will contribute to the objectives of the National Employment Action Plan, by
improving the relevance and effectiveness of NES services and ALMPs and increasing the coverage of
unemployed by employment policies, thanks to additional funding for ALMPs. NES will manage a
direct grant to expand the coverage of ALMPs , adjusted to the specific needs of disadvantaged
groups, in relation to the competencies and skills demanded by local employers. The Priority Axis will
also contribute to the development of employment measures and services in favour of people with
disabilities.

Policy responses to the informal economy will be improved through capacity-building of labour
inspectorates, the promotion of more flexible forms of employment and better information to
employers and employees on their labour rights and duties.

Targeting:

The greatest part of the resources under this Priority Axis will be devoted to the implementation of
active labour market measures, and strengthening the role of local self-governments and other local
stakeholders in the implementation of employment policy at local level through NES branch offices,
in cooperation withlocal employment councils. The aim will be to strike a balance between meeting
the enormous needs of the sector and learning from ‘demonstration projects’ prepared to EU
standards.

The priority will be targeting the following groups:

       Unemployed youth with low/no qualifications (15-30);
       Long term unemployed (including redundant workers);
       People with disabilities aged 15-64;
       NES Headquarter and MoERD (Employment Department);
       NES branch offices;

    127
                                           OP for Human Resources Development, 2012-2013              2nd draft


           Local self-governments;
           Enterprises for Vocational Rehabilitation and Employment of people with disabilities;
           Training providers;
           Private employment agencies;
           Other institutions-providers of employment oriented services;
           Staff of labour inspectorates.

Measures:

Three measures have been considered for support under this priority axis:

       1. Measure 1.1 - Support to the development of regional and local employment policies;

       2. Measure 1.2 - Increasing the effectiveness of employment policies towards disadvantaged
          groups;

       3. Measure 1.3 - Bringing the informal economy into the mainstream

Delivery:

The Priority Axis will be delivered through a mix of service and supply contracts, and grant schemes
and a direct award to NES. The procurement rules will follow the PRAG281.

Targets and indicators:

Objective              Result        Definition        Unit    Baseline    Source of     Frequency    Target value
                     indicator                                   value    verification       of          (2016)
                                                                (2012)                   monitoring
To increase          Increased        Number of       Number       0       Project         Yearly       25,000
access     to          ALMP          unemployed                           monitoring
formal               coverage         people who                           reports;
employment                          benefited from                        NES Report
opportunities                       ALMPs, during
and enable a                               OP
more                               implementation
inclusive                            (at least 50%
labour                                women; by
market, by                          type of ALMP)
developing        Increasing the      Number of       Number      0        Project         Yearly       19,500
local              effectiveness     unemployed                           monitoring
employment               of          people from                           reports;
policies,          employment      specified target                       NES Report
increasing            policies        groups who
the coverage          towards       benefited from
and               disadvantaged     ALMPs, during
relevance of           groups              OP
ALMP      and                      implementation
improving                            (at least 50%
labour                                women; by
standards in                        type of ALMP)
line with EU
trends.




281
      See section 5.1.1

       128
                                         OP for Human Resources Development, 2012-2013                      2nd draft


Measure 1.1 – Support to the development of regional and local employment policies

Specific objective:

To improve the effectiveness of local employment policies and build the capacity of local
stakeholders in implementing employment policies tailored to the needs of target groups.

Rationale:

There are wide regional employment discrepancies in Serbia. While Belgrade and Northern Serbia
are doing much better than the rest of the country, Southern Serbia experiences higher than average
unemployment. These imbalances make a strong case for a greater involvement of local
stakeholders in the creation of employment policy. The decentralisation of employment policy
means strengthening local capacities for employment policy creation and implementation with
significant participation of NES branch offices and local stakeholders in order to achieve a well-
trained, effective local workforce, which will meet the current and future needs of the economy.

Despite available co-financing mechanisms from the central level, resources available at the local
level have been insufficient in the recent years for effective implementation of local employment
plans282. With support of the IPA 2011 project ‘Preparation of Serbian Labour Market Institutions for
European Employment Strategy, local employment councils will acquire the necessary knowledge
and skills for identifying local needs and designing local employment action plans. Advice and
support will be necessary for local stakeholders to draft project proposals and apply for grants to
finance ALMPs in line with the action plans.

Description:

In line with the new Law on Employment and Unemployment Insurance, the Measure will encourage
further decentralisation of employment policies and services delivery. A grant scheme under this
measure will be launched to support local employment promotion projects, in line with local
employment action plans approved by local self-governments. The measure will link directly to the
IPA 2011 project, which will help LSG develop those plans in line with local labour market needs.
Districts to be covered by this type of assistance will be selected according to the classification of
local self governments of the Development Fund of the Republic of Serbia283. Local self-governments
will have to cooperate with NES branch offices when implementing ALMPs. The Measure will
promote the development of partnerships in the design and delivery of employment promotion
activities among local authorities, NES branch offices and other bodies in the field of training, labour
market and regional development as well as representatives of business, and social partners. .
Employment promotion activities involving several municipalities will be encouraged. Assistance and
capacity building activities envisaged under this measure will help MoERD Employment Department
and NES with the preparation and management of the grant scheme. It will also support potential
applicants with drafting and implementing projects that contribute to the objectives of the local
employment action plans.




282
    State co-financing amounts to 70% for less developed regions and 50% for all others under the new Law on Employment
and Unemployment Insurance, adopted in May 2009.
283
    The Development Fund defines underdeveloped municipalities as those with below-average level of development, i.e.
group two, three and four. Group two includes municipalities with between 80% and 100% of the average development
level, group three consists of municipalities with level of development ranging from 60% to 80% of average and group four
is made up of municipalities below 60% of average development level.

      129
                                  OP for Human Resources Development, 2012-2013            2nd draft



Eligible actions:

The following actions are considered eligible for implementation:

       Assistance in developing local employment promotion grant scheme;
       Training and capacity building for grant scheme potential applicants and beneficiaries;
       Support with the implementation and monitoring of grant projects
       Support to local employment activities.

Selection criteria:

In addition to the selection criteria introduced for the Employment and Labour Market priority axis,
the following will apply specifically to this measure:

       Contribution to the development of strong employment partnerships at local level;
       Relevance of employment initiatives to the local needs in line with local employment action
        plans;
       Efficiency of operations proposed;
       Evidence of quality assurance of the proposed measures for the unemployed;
       Planned impact of prepared projects in terms of envisaged number of unemployed to be
        covered by stipulated measures;
       Track record of activity of local employment councils demonstrated by regular meetings and
        drafting and adoption of local employment action plans.

Grant scheme projects will be selected in in line with local employment action plans, their relevance
to the needs of target groups and the availability of co-financing.

Final beneficiaries:

The final beneficiary for procurement under this measure, in accordance with the IPA implementing
regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for Contracting and
Implementation within the Operating Structure and for grant schemes will be grant recipients. The
end recipients who will be responsible for the technical implementation of the operations and their
outcomes will be the National Employment Service and Ministry of Economy and Regional
Development (Employment Department).




    130
                                            OP for Human Resources Development, 2012-2013                 2nd draft


  Monitoring indicators:

Objective           Output            Definition        Unit      Baseline    Source of     Frequency      Target value
                   indicator                                        value    verification       of            (2016)
                                                                   (2012)                   monitoring
                 Participation of   Municipalities   Percentage       0       Project         Yearly       At least 20%
                       local         with adopted                            monitoring
                  institutions in         local                               reports
                implementation       employment
                     of active       action plans
The measure
                   employment       who apply for
will improve
                     policies       grants to fund
the
                                     employment
effectiveness
                                        policies
of local
                                     stipulated in
employment
                                         LEAPs
policies and
                   Approved           Number of      Number          0        Project         Yearly        at least 30
build the
                  projects for          project                              monitoring
capacity of
                    funding           applied for                             reports
local
                                    funding under
stakeholders
                                       the grant
in
                                     scheme that
implementing
                                         were
employment
                                     approved for
policies
                                        funding
tailored to
                 Effect of local      Number of                      0        Project         Yearly       Values cannot
the needs of
                 employment          persons who     Number                  monitoring                    be defined at
target groups
                    projects           received                               reports                      present. They
                                        support                                                                will be
                                     through the                                                           established in
                                    grant schemes                                                         the first year of
                                                                                                                 OP
                                                                                                         implementation.

  Measure 1.2 - Increasing the effectiveness of employment policies towards disadvantaged groups

  Specific objective:

  To increase the coverage and relevance of ALMPs to the needs of disadvantaged groups through
  better targeted employment policies and services.

  Rationale:

  One of the main objectives of the National Employment Strategy (2005-2010) is to tackle
  unemployment among disadvantaged groups more actively. Active labour market programmes
  targeting people with disabilities, the Roma, refugees and IDPs, women and youth are being
  implemented by NES, in line with annual National Employment Action Plans. In addition, MoERD is
  implementing several projects with the ILO to build the capacity of labour market institutions in
  designing, monitoring, implementing and evaluating active policies on youth employment.284 These
  projects constitute a useful resource base for developing comprehensive employment and training
  services tailored to the needs of vulnerable groups and integrated with social services.

  The coverage of ALMPs remains limited mostly for financial reasons. The annual budget allocated in
  2009 for ALMPs amounted to a mere 0.12% of GDP. Only a small portion of that money is earmarked
  for vocational training. Moreover, recent research shows that education and training is not
  284
    ILO project Youth Employment Promotion in Serbia (YEPS), MDG F project Youth Employment and Migration
  Management assisted establishment of the Youth Employment Fund in the National Employment Service

        131
                                        OP for Human Resources Development, 2012-2013      2nd draft


sufficiently targeted on low-skilled unemployed285. There is a need to expand the range and
relevance of ALMPs, putting more emphasis on vocational training and retraining measures to bring
disadvantaged groups closer to the world of work and increase their responsiveness to the demands
of labour market, and to address the persistent problem of mismatch between educational
attainment and employers’ needs for qualifications.

The purpose of this measure will therefore be to increase training, retraining and employment
opportunities for the unemployed youth with low/no qualifications and for long term unemployed
who lost the courage to look for a job as well as the required knowledge and skills.

People with disabilities are also discouraged from looking for a job, which is demonstrated by a
rather small number of PwD on NES register.286 The new law on PwD employment promotion
introduces many novelties and incentives for employment of PwD.. Consequently, NES staff will
require extensive in-service training and coaching to better match PwD with employment
opportunities. Enterprises for vocational rehabilitation and employment of people with disabilities287
have the role of promoting labour and social integration of people with disabilities, so that from
being passive recipients of social assistance, they become productive members of society. However,
their capacity and experience are still insufficient, and support is therefore required to help them
realise the potential of people with disabilities and ensure the sustainability of their activities.

Description:

The direct award of funds to NES will supplement NES resources available for ALMPs financed in line
with the annual National Employment Action Plan. It will particularly be directed to ALMPs targeting
unemployed youth with low/no qualifications, long-term unemployed (including redundant workers)
and different forms of measures aimed at vocational rehabilitation and employment of people with
disabilities. The majority of the funds available will be used for development and delivery of ALMPs
targeting these groups of the unemployed.

The Measure will improve the coverage of the unemployed benefiting from ALMPs, and help NES
and MoERD adjust ALMPs to the needs of disadvantaged groups, taking into account the lessons
from previous policies and future labour market trends. It will help NES expand effective services
such as the centres for career guidance and counselling, job clubs, etc. It will link to the IPA 2011
project ‘Preparation of Serbian labour market institutions for European employment strategy’ which
will improve NES methodologies for monitoring and evaluating ALMPs, forecasting labour market
trends, and better adjusting ALMPs to the specific needs of different target groups. Technical
assistance will be provided to build the capacity of NES in managing the direct award and developing
tailor-made ALMPs funded under this Measure.

Another important focus of the Measure will be on the implementation of the new Law on
Vocational Rehabilitation and Employment of People with Disabilities. The capacity of key
institutions (Employment Department of MoERD-staff dealing with PWD, NES Centre for vocational
rehabilitation and employment of people with disabilities, employment counsellors in NES branch
offices dealing with people with disabilities, and enterprises for vocational rehabilitation and
employment of people with disabilities) will be strengthened to deliver measures promoting the
inclusion of people with disabilities in the open labour market. Enterprises for vocational



285
    The Impact Analysis of Employment Policy and Active Labour Market Measures (2008)
286
    See Section 1.1.5
287
    A form of sheltered enterprises

      132
                                  OP for Human Resources Development, 2012-2013           2nd draft


rehabilitation and employment of people with disabilities will receive support in providing effective
vocational rehabilitation.

Eligible actions:

The following types of actions are considered eligible for implementation:

       Employment promotion measures for unemployed youth with no/low qualifications;
       Employment promotion measures for long-term unemployed (including redundancies);
       Employment promotion measures for people with disabilities;
       Subsidies in combination with initial training and mentoring to potential entrepreneurs to
        enter self-employment and set-up micro-enterprises;
       Technical assistance to NES to manage the direct award;
       Establishment of several more job clubs in NES to deal with the difficult-to-employ;
       Establishment of more Career Guidance and Counselling Centres in big NES branch offices;
       Employment caravans for outreach activities for marginalised groups in rural areas;
       Capacity building of NES Centre for Vocational Rehabilitation and Employment of people
        with disabilities and employment counsellors;
       Strengthening Enterprises for Vocational Rehabilitation and Employment of people with
        disabilities in preparing and conducting employment-oriented skills training for people with
        disabilities;
       Support to Enterprises for Vocational Rehabilitation and Employment of people with
        disabilities with preparing project documents for applying for funding;
       Capacity-building of professional workers in Enterprises for Vocational Rehabilitation and
        Employment of people with disabilities.

Selection criteria:

In addition to selection criteria introduced for the Employment and Labour Market priority axis, the
following will apply specifically to this measure:

       Contribution to better matching ALMPs for PWD to specific groups of PWD;
       Demonstration of the linkage between the project and improved employment services for
        people with disabilities.;
       Quality of the training programmes;
       Relevance of employment initiatives to the specific needs of the three target groups.


Final beneficiaries:

The final beneficiaries for procurement under this measure, in accordance with the IPA
implementing regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for
Contracting and Implementation within the Operating Structure and the National Employment
Service for the directaward of funds for ALMPs. The end recipients who will be responsible for the
technical implementation of the operations and their outcomes will be the National Employment
Service and Ministry of Economy and Regional Development (Employment Department).




    133
                                              OP for Human Resources Development, 2012-2013         2nd draft




   Monitoring indicators:

  Objective          Output           Definition        Unit       Baseline    Source of     Frequency    Target
                    indicator                                        value    verification       of        value
                                                                    (2012)                   monitoring   (2016)
                   Participation      People with      Number          0       Project         Yearly      4,500
                         of        disabilities from                          monitoring
                   unemployed         NES register                             reports;
                  PwD in ALMPs      who benefited                             NES Report
                                      from ALMPs
                                   funded through
                                        the direct
                                    award (at least
                                   50% women; by
                                       the type of
                                           ALMP)
                  Participation            Youth       Number         0        Project         Yearly     10,000
                        of           without/with                             monitoring
                  unemployed                low                                reports;
This measure      young people       qualifications                           NES Report
will seek to        in ALMPs            from NES
increase the                              register
coverage and                       benefiting from
relevance of                        ALMPs funded
ALMPs to the                          through the
needs of                           direct grant (at
disadvantaged                           least 50%
groups                             women; by the
through                             type of ALMP)
better            Participation         Long term      Number         0        Project         Yearly     5,000
targeted          of long term        unemployed                              monitoring
employment        unemployed          people from                              reports;
policies and       in ALMPs           NES register                            NES Report
services with                      benefiting from
special focus                       ALMPs funded
on short term                         through the
job related                        direct grant (at
training for                            least 50%
the                                women); by the
unemployed                          type of ALMP)
and labour           Self-             Number of       Number         0        Project         Yearly     2,000
market            employment          unemployed                              monitoring
inclusion                             people who                               reports;
initiatives for                     start their own                           NES Report
people with                              business
disabilities.                             through
                                      subsidies for
                                            self-
                                   employment (at
                                        least 50%
                                         women)
                   NES staff       No of NES staff     Number         0        Project         Yearly       40
                  capacity for      members who                               monitoring
                  dealing with           attended                              reports;
                     PwD            training (basic                           NES annual
                                    and advanced)                               Report
                                      for effective
                                      matching of
                                     PWD with the
                                       right ALMP


        134
                                        OP for Human Resources Development, 2012-2013      2nd draft


               Capacity of        No of staff    Number         0        Project      Yearly       50
               enterprises       members in                             monitoring
             for vocational    enterprises for                           reports
             rehabilitation       vocational
                  and           rehabilitation
              employment              and
               of PWD (I)      employment of
                               PWD trained in
                                 creation and
                              implementation
                                  of training
                                programmes
                                   for PwD
               Capacity of     Enterprises for   Number         0        Project      Yearly       25
               enterprises        vocational                            monitoring
             for vocational     rehabilitation                           reports
             rehabilitation           and
                   and         employment of
              employment       PwD that have
               of PWD (II)     the capacity to
                                provide skills
                              training to PwD

Measure 1.3 - Bringing the informal economy into the mainstream

Specific objective:

To encourage the transition from informal to formal employment through promotion of flexible
forms of work in line with EU trends and enforcement of national labour regulations

Rationale:

The informal economy has been a persistent problem in Serbia, absorbing a growing share of the
active population. It is associated with low earnings, poverty and vulnerability. The informal
economy has adverse effects on both individuals and society. Workers in the informal economy
forfeit their labour rights and social benefits; they are more exposed to exploitation and miss out on
training opportunities. The informal economy has also less obvious disadvantages for employers,
who cannot take full benefit of state incentives and subsidies, limiting their further business
expansion and growth. The informal economy distorts market competition, erodes tax revenues and
ultimately, undermines the national welfare system.

The consequences of the economic recession were felt much earlier in the informal sector with a
dramatic fall in employment and significant wages cut, affecting primarily the most vulnerable
groups who rely on the informal economy to support themselves and their families.

The work of the Labour Inspectorate has a direct impact on the transition from informal to formal
employment. However, the Labour Inspectorate is understaffed and lacks the necessary technology
to manage its workload and increase the efficiency of its controls. In the medium-term, the main
priority for the Labour Inspectorate is to upgrade its capacity, in particularly its IT system and to
create inter-linkages with the tax revenues, pension fund and health insurance and other state
inspections in line with the Government’s reform programmes of state inspections.

The utilisation of flexible work needs to be more vigorously promoted through a wide range of
activities and cooperation with social partners. The awareness of employers and employees about
the disadvantages of informal employment and the benefits linked to joining the formal economy
needs to be raised.

    135
                                   OP for Human Resources Development, 2012-2013            2nd draft


Description:

The Measure will provide technical support to the Labour Inspectorate to upgrade its Information
System with new software and hardware, and ensure it is connected to other relevant databases
across the Serbian administration, enabling prompt exchange of relevant information on each
individual case. Fast access to accurate and updated data will decrease the need for expensive on-
site inspections, and better coordination will significantly improve effectiveness and efficiency of
inspection. The development of IT capacity will also enable transparency of the work of the
Inspectorate, and automatic allocation of work to inspectors to mitigate corruption, on-line
reporting of any irregularities or violation of labour regulation by the employers. It will help design
procedures and protocols of cooperation with key state bodies, such as tax revenues, pension fund
and health insurance and other state inspections, to improve the overall response to the informal
economy.

The Measure will link to current efforts initiated by the Labour Inspectorate to modernise the way it
operates in particular through a more efficient use of its limited human and financial resources.

The measure will also support the development of new flexible forms of work in line with EU trends
and towards labour markets combining flexibility and security (flexicurity). It will encourage the use
of flexible work contracts, through capacity-building activities and cooperation with social partners,
drafting and disseminating guidelines and manuals and advice to employers’ associations and
business services. The measure will address the low public awareness among the employees,
employers, trade unions, and the general public on the issue of informal employment. It will support
national campaigns raising awareness about the dangers of informal employment and the
advantages connected with registered employment from the point of view of both employers and
employees.

Eligible actions:

The following actions are considered eligible for implementation:

   Technical assistance support to upgrade the Labour Inspectorate Information System, through
    the design and installation of software and, training of staff and procurement of necessary IT
    equipment;
   Capacity-building of the Labour Inspectorate to develop protocols of cooperation with other
    state bodies and related procedures for each partner.
   Support to the Labour Sector in implementing flexible work policies, drafting and disseminating
    guidelines and manuals;
   Capacity-building of social partners; and
   National awareness-raising campaign and social dialogue on informal economy and flexible
    forms of employment.

Selection criteria:

In addition to selection criteria introduced for the Employment and Labour Market priority axis, the
following will apply specifically to this measure:

   Contribution to the modernisation of Labour Inspectorate and to the greater efficiency of labour
    inspection controls;
   Impact on the level of awareness about the informal economy and flexible forms of
    employment; and
   Relevance and practicality of solutions proposed for promoting more flexible labour market.

    136
                                         OP for Human Resources Development, 2012-2013                       2nd draft


Final beneficiaries:

The final beneficiaries for procurement under this measure, in accordance with the IPA
implementing regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for
Contracting and Implementation within the Operating Structure. The end recipients who will be
responsible for the technical implementation of the operations and their outcomes will be the
Ministry of Labour and Social Policy (the Labour Inspectorate and Labour Sector).

Monitoring indicators:
  Objective          Output           Definition          Unit       Baseline    Source of      Frequency       Target
                    indicator                                         Value     measurement         of           value
                                                                      (2012)                    monitoring      (2016)
To               IT capacity and       Performed        % increase       0       Monitoring      Annually         30%
encourage        connectivity to    inspections and     in number                 Report, IT
the                other state          persons             of                  system record
                    agencies ‘          covered        inspections
transition
                    databases
from
                 Inspection staff   Staff trained in    # of staff      0        Monitoring      One-off          All
informal to          capacity        using new IT        trained                  Report                      inspectors
formal                                   system
employment       Transition form     Persons who       % increase      60%       Monitoring      Annually        75%
through            informal to         concluded       of persons                 reports,
promotion             formal         formal work                                 Inspection
of    flexible    employment        contract after                                 records
forms       of                         inspection
work in line        Level of         Inter-agency         # of          0        The Labour      Annually     1 protocol
with       EU     cooperation          protocol of      protocols               Inspectorate                    and 5
                   between            cooperation          and                    records,                    procedural
trends and
                    agency           adopted and       procedures                Monitoring                   guidelines
enforcement                          accompanied       developed                   Report
of national                           procedures
labour                                 developed
regulations        Degree of         Utilisation of    % increase                The Labour      Annually        20%
                   flexibility       flexible work     of flexible                 Sector
                                        contracts      contracts                  statistic,
                                                                                 Monitoring
                                                                                   report
                  Capacities of     Representatives    # of people               Monitoring      Annually         100
                 social partners       trained in        trained                   Report.                      people
                                        modern                                                                 trained;
                                     management                                                                    25
                                       concepts                                                               completed
                                                                                                                  ToT
                   awareness          Promotion        # number                  Monitoring                      20%
                 about informal         events         of events                  report                       increase
                  employment          organised                                                                of public
                                      across the                                                              awareness
                                       country




    137
                                   OP for Human Resources Development, 2012-2013             2nd draft



Priority Axis 2 – Education and VET

This priority axis will contribute to the modernisation of the education system in Serbia in line with
market needs and, in the perspective of lifelong learning, ensuring an adequate supply of labour to
meet the needs of the economy. It will also encourage greater inclusion of disadvantaged groups
into the education system.

EU legislation:

Not applicable.

Specific objective:

To facilitate lifelong learning and greater relevance of education to the world of work by developing
further the NQF, building the VET system and promoting inclusive education from pre-school
onwards

Rationale:

A majority of unemployed and inactive people have low or no education at all (see section 1.1.5).
Unless the education system provides young generations but also adults with the right skills and
competences to succeed on the labour market, the unemployment rate is likely to remain high, in
particular among young people and older workers. However, at present training in VET schools is
often based on outdated curricula and teaching methods unsuited to the needs of both students and
future employers. Despite ongoing reforms, the VET system is not responsive enough to the changes
taking place in the economy. There is a need to pursue the modernisation of vocational profiles,
initiated through pilot projects, on a much larger scale.

Efforts at school level should be connected with the development of the National Qualifications
Framework at the national level. At present, there is no organised system of qualifications to make it
easier for student to access and progress through the education system. Serbia needs to define
standards of knowledge, skills and competence for all occupational levels, chart clear progression
routes, develop a system of credit transfers and organise a quality assurance system to ensure that
schools meet minimum quality standards and deliver training in line with the needs of the economy

Opportunities to reintegrate people into the education system and to improve attainment and
prospects are limited, due to the underdeveloped adult education and lifelong learning system.
Participation of adults in lifelong learning is below the EU average and has not increased since 2001.
The development of adult learning is hindered by a lack of recognition of qualifications acquired
outside the formal education system, and by the absence of a well-structured NQF to connect formal
to non-formal and informal learning achievements.

One of the key challenges facing the education system in Serbia is the high drop-out rates and poor
performance of children from vulnerable and disadvantaged groups - children from Roma families,
from poor and low educated families, , rural regions and children with disabilities - compared to the
rest of pupils. Failure to access pre-school and/or to complete higher levels of education is an
important factor of social exclusion later in life. There are insufficient resources and capacity at the
local level to address the educational needs of those children through tailor-made programmes and
measures.




    138
                                  OP for Human Resources Development, 2012-2013            2nd draft



Description:

The National Qualifications Framework will be further developed, by organising and systematising
qualifications obtained through the Vocational Education and Training (VET) and adult education
sectors. Standards of knowledge, skills and competences, learning pathways and credit transfer will
be defined for all vocational profiles. The capacity of institutions and stakeholders involved in the
process will be strengthened.

The quality and relevance of Vocational Education and Training (VET) and adult education in the
perspective of lifelong learning will be improved, by supporting VET schools and training providers in
upgrading their training offers in line with market needs and in compliance with NQF requirements
and minimum quality standards. The institutional set-up for VET and adult learning will be
strengthened, in particular with the development of quality assurance systems.

The capacity of the education institutions to lead reforms and ensure quality standards in the sector
will be strengthened. VET schools and training providers in adult education and learning will receive
further support to upgrade teaching methods and environment, in line with labour market
requirements and modern educational trends.

Emphasis will also be laid on creating better conditions for the early inclusion of disadvantaged
groups into the education system, particularly Roma and the promotion of higher levels of education
among students at risk in local communities. Support will be available for local self governments,
local schools and other service providers need support in devising and implementing inclusive
education initiatives in a cooperative way in order to increase the participation of children from
disadvantaged backgrounds, primarily Roma into pre-schools and reduce the number of drop-outs in
primary and secondary education.

Targeting:

Resources under this priority axis will be committed to improving openness, relevance and quality of
education and training system from pre-school to secondary education. In this context, the priority
will be targeting the following groups:

       Pre-school and school children from disadvantage and vulnerable groups i.e. children from
        poor and low educated families, children with disabilities, children from rural areas and
        Roma children and children with ethnic and minority backgrounds;
       VET school students;
       Adults with no qualification or the ones seeking for new/additional qualifications; and
       Teacher at all levels of pre-university education, including adult education teachers
       Institute for Education Quality and Evaluation,
       the the National Education Council and National Council for VET and AE,
       the Regional training centres,
       VET schools and formal and non-formal adult education providers
       pre-schools, primary and secondary schools – state and non-state

Measures:

Two measures have been considered for support under this priority axis:

       Measure 2.1 - Improving the quality and relevance of VET and adult education within the
        National Qualifications Framework;


   139
                                         OP for Human Resources Development, 2012-2013                2nd draft


        Measure 2.2 - Ensuring access and reaching higher levels of education for children at risk.

Delivery:
The priority axis will be delivered through a mix of service and supply contracts and grant schemes.
The procurement rules shall follow the PRAG.

Targets and indicators:
Objective          Result         Definition      Unit   Baseline     Source of      Frequency of     Target value
                 indicator                                 value     verification     monitoring         (2016)
                                                          (2012)
               Relevance of       increase of      %        15%     MoE records         Yearly           80%
                   VET              students
                                  completing
To                               new, revised
 facilitate                       curricula in
lifelong                                VET
learning                           secondary
and                                   school
greater        Transparency      Programmes        #        0        Educational     One-off at the
relevance      of education      in initial and                        Gazette          end of
of                system               CVET                                           programme
education                           applying
to the                          ECVET system
world of      Equal access to     Increase in      %                  Monitoring        Yearly
work by         education        primary and                        report, School
developing                         secondary                         development
further the                          schools                          programme
NQF,                            implementing                        and plans and
building                            inclusive                       school reports
the VET                            education
system and                         initiatives
promoting                               and
inclusive                        programmes
education      Integration of     increase of      %        0        Monitoring         Yearly           50%
from pre-      children from    children from                        report, and
school        disadvanataged        targeted                         pre-school
onwards            groups            groups                            records
                                   attending
                                  pre-school
                                 education in
                                selected LSGs




    140
                                   OP for Human Resources Development, 2012-2013             2nd draft




Measure 2.1 – Improving the quality and relevance of VET and adult education within the
National Qualifications Framework

Specific objective:

To improve the quality, coverage and relevance of VET and adult education by developing further
the National Qualifications Framework, strengthening the capacity of VET schools and adult training
providers and ensuring better governance of the sector.

Rationale:

Serbia is implementing reforms to improve the quality and relevance of VET and adult education in
order to raise the employability and adaptability of its labour force. Efforts in this area have been
mostly invested in revising a range of vocational profiles at level 3 and 4 in line with market needs,
and pilot-testing them in selected VET schools.

These measures have resulted in higher teaching standards in participating schools, but the scale of
improvements remains modest compared to the needs of the sector.

Experience from past CARDS and IPA projects shows that extensive support is required to help VET
schools manage the transition to new profiles, revamping teachers’ knowledge and skills and
upgrading the teaching environment to meet higher standards of quality. Another lesson is the
necessity to insert effectively new profiles within the overall VET system to ensure that obtained
qualifications give access to higher levels of education. From this point of view, the absence of a
comprehensive NQF diminishes the impact of VET reforms conducted to date. With support from the
IPA 2007 project ‘Modernisation of VET education and IPA 2008 Education Quality Assurance’ and
IPA 2008 project ‘Support for Quality Assurance within the National Primary and Secondary
Education Examination System’, Serbia has, however, laid the foundations of the NQF by sketching
out the overall structure of the framework and by initiating the classification and description of
existing qualifications according to levels of learning outcomes and competences. Despite this
progress, there is still very little capacity to implement the NQF, both at the level of social partners
and among institutions in charge of supervising the process.

The establishment of an NQF is closely connected to the development of a quality assurance system
to promote consistent standards throughout the education system and ensure compliance with the
requirements of the NQF. Serbia has been putting in place elements of a quality assurance system
through past CARDS and IPA projects, notably by defining normative standards for revised profiles
and identifying basic criteria and indicators to measure quality in education, while laying down
procedures for self-assessment and external monitoring/evaluation that any future quality
assurance system will need to articulate. However, the creation of an effective quality assurance
system has been hampered by slow progress with the establishment of the Council for VET and AE.
The tasks in the area of VET and adult education are distributed between the VET and AE Centre
within the Institute for Improvement of Education, the Institute for Education Quality and
Evaluation, and the Council for VET and AE. It is necessary to strengthen their capacities to perform
the duties assigned to them. The recently established Council for VET and AE needs strong support
to become a strong institution to steer developments in the VET and adult education sectors, by
enabling and speeding up success of current and future reforms.

Challenges in adult education are similar to those of the VET sector. The development of adult
learning is hindered by a lack of recognition of qualifications acquired outside the formal education

    141
                                   OP for Human Resources Development, 2012-2013             2nd draft


system, and by the absence of a well-structured NQF to connect formal and with non-formal and
informal learning achievements through a transparent system of pathways and credit transfers.
Moreover, adult education suffers from inexistent monitoring and control mechanisms to ensure the
quality and relevance of training to the needs of the economy. VET schools rarely supplement their
training programmes with a corresponding CVET offer. Courses organised by private training
institutions have been growing in number in recent years, but there is still limited capacity and
experience in devising training responding to real labour market demands and tailored to the needs
of adults. However, Serbia has been taking recent measures to address the situation. A new law on
adult education is currently being drafted, which will provide incentives and improve conditions for
adult education. A network of eight Regional Training Centres (RTCs) is being established with EU
funding to promote adult and lifelong learning across the country and increase the variety of training
opportunities. The IPA 2008 project about to start, ‘Second Chance’– Systemic Development of
Elementary, Practice Based Adult Education in Serbia, will also make a significant contribution to the
development of the sector.

Description:

The Measure will continue the development of the National Qualifications Framework initiated and
supported with previous IPA assistance. Support will be available to classify education and training
qualifications in an easily readable and transparent framework, aimed at facilitating access to, and
mobility and progression within the education and training systems.

The emphasis will be on setting up and institutionalising consensus-building mechanisms to develop
the NQF through sector-based partnerships of stakeholders, who will cooperate to define and
regularly update standards of knowledge, skill and competence for all occupations in demand on the
labour market. Sectoral committees of experts involved in this process will receive extensive support
in carrying out their tasks from the description of qualifications, in terms of level, learning outcomes
and competences to the definition of clear progression routes, through the revision of vocational
profiles in line with the requirements of the economy.

The Measure will also help develop a transparent credit transfer system, in order to make it easier
for individuals at any stage throughout their lives to acquire new qualifications through the
recognition and validation of all their prior learning achievements. Comparability and compatibility
with the European Qualifications Framework will also be promoted throughout the process.

The capacity of national institutions responsible for overseeing the implementation of the NQF will
be strengthened. In particular, the role of the National Council for Vocational Education and Adult
Education will be reinforced through training and capacity building for its members. Assistance will
also target the Centre for VET and Adult Education within the Institute for the Improvement of
Education to plan and organise the NQF process and manage the work of sectoral committees and
the National Council. Assistance will be available to any other body established in order to develop
the NQF.

The Measure will also support national authorities in building an effective quality assurance system
for VET and adult education, in order to contribute to higher quality of education and training
provision in line with the requirements of the NQF. The Measure will help setting quality standards
for programmes and providers and promote their introduction through an accreditation and
licensing system. Capacity of the both Institutes will be strengthened to develop and implement
criteria and procedures for the quality assurance system.

The Measure will also promote a more effective governance structure for VET and adult education,
by helping reorganise and transform existing national bodies into real centres of excellence, capable

    142
                                   OP for Human Resources Development, 2012-2013              2nd draft


of researching and guiding developments in VET and adult education and promoting quality and best
practices.

Building on the outcomes and experience of previous CARDS and IPA projects, the Measure will help
roll out revised profiles throughout the VET system. VET schools will receive support in developing
outcomes-oriented and competence-based curricula in line with NQF requirements, and in
upgrading their capacity to fulfil licensing and accreditation criteria. To that effect, training will be
organised across all VET schools to familiarise teachers with new teaching methods, while
equipment will be supplied to schools offering the most demanded profiles.

The Measure will support the development of the still embryonic adult education sector. VET
schools will be encouraged to engage into CVET, by adapting their offer of training to the needs of
adults. Assistance will be available to adjust curricula and training materials and organise training of
teachers. The eight Regional Training Centres (RTC) established with previous EU assistance will
receive support to diversify their offer of training courses and strengthen their role as local
reference and focal points for the promotion of adult and lifelong learning in particular regarding the
recognition of prior learning. A programme of training and dissemination of best practices will be
organised by the RTCs targeting local training providers of adult education, which will be encouraged
to develop courses meeting NQF requirements and minimum quality standards, in order to obtain
licensing and accreditation.

Eligible actions:

The following actions are considered eligible for implementation:

       Capacity building for the VET and AE Centre/Institute for Improvement of Education, as well
        as for the Institute of Quality in Education;
       Support to the social partners/sectoral committees for cooperation with the Centre for VET
        and AE (Institute for Improvement of Education) and National Council for VET and AE;
       Support to the national body acting as the national qualifications authority (Council for VET
        and Adult Education);
       Support to further development of NQF, development of standards of qualifications, QA
        mechanisms, credit transfer system and recognition of prior learning system, etc
       Development of standards, accreditation criteria and procedures for programmes and
        providers;
       Revision of the vocational profiles in accordance with the labour market needs;
       Support to the Centre for VET and AE, and to selected VET schools in implementing new
        curricula.
       Training of teachers of vocational training, school directors and pedagogical advisors for the
        implementation of the new curricula; and
       Support to adult training providers, particularly RTCs

Selection criteria:

In addition to selection criteria introduced for the Education and VET Priority Axis, the following will
apply specifically to this measure:

       Strong experience in designing and improving NQF;
       Coverage of, and impact on secondary schools’ students;
       Impact on increasing participation of business sector;
       Coverage of the VET schools in the areas for the highest rate of unemployment;


    143
                                        OP for Human Resources Development, 2012-2013                   2nd draft


       Relevance for ethnical communities and gender equality;
       Impact on the promotion of adult education;
       Experience in designing a credit transfer system, and recognition and validation practices of
        learning achievements;
     Strong expertise and experience in developing adult education policies and its
        implementation at local/regional level.
Final beneficiaries:

The final beneficiaries for procurement under this measure, in accordance with the IPA
implementing regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for
Contracting and Implementation within the Operating Structure. The end recipients who will be
responsible for the technical implementation of the operations and their outcomes will be the
Ministry of Education and Science and the Institute for Improvement of Education – VET and AE
Centre and the Institute for Education Quality and Evaluation.

Monitoring indicators:

  Objective          Output           Definition       Unit     Baseline    Source of      Frequency      Target
                    indicator                                     value    verification        of           value
                                                                 (2012)                    monitoring      (2016)
                 Completeness        Levels of NQF     NQF                     NQF          Annually     Levels 1-5
                    of NQF              designed       level                                              defined
                 Credit transfer         Credit       profile      0           NQF          Annually       For 30
                    system           accumulation                                                         profiles
                                      and transfer
                                    routes defined
                  Capacity of in      Staff trained     %                  Monitoring       Annually    80% of staff
To improve         VET and AE        participate in                         report,                     trained and
the quality,         Centre,       developing NQF                                                       participate
coverage and       Institute for                                                                             in
relevance of        Education                                                                           developing
VET and adult      Quality and                                                                              NQF
education by     Evaluation and
developing          member of
further the          National
National             Council
Qualifications      Number of          Sectoral         #          0                        annually        12
Framework,           sectoral        committees
strengthening      committees         supported
the capacity        supported
of VET              Reform of            Revised        %         19%          NQF         Quarterly       90%
schools and         vocational         vocational
adult training       profiles       profiles in NQF
providers and                        system in line
ensuring                            with economy
better                               requirements
governance       Reform of VET        VET schools       #                   VET centre     Quarterly        250
of the sector       schools         implementing                             database
                                      modernised
                                        curricula
                    Technical      Equipped schools     #          0          Project      At the end   10 schools –
                 capacity of VET    covering more                           monitoring       of the         2000
                 schools and VET       than 2000                              report.       project      students
                     Centre             students                           Procurement
                                                                           specification




    144
                                      OP for Human Resources Development, 2012-2013          2nd draft




                Pedagogical           Teachers,      #     0        Project      Quarterly       250
              capacity of VET     trainers, school                 monitoring                 directors
                  school              directors,                    report                       30
                                    pedagogical                                              pedagogical
                                 advisors trained                                             advisers
                                          for
                                 implementation
                                  and monitoring
                                     of the new
                                      curricula
                  Training           increase in     %     45     Catalogue of    Yearly         50%
               opportunities       accredited AE                   accredited                increase of
                for adults (I)      programmes                    programmes                  accredited
                                                                                             AE training
                                                                                             programme
                Monitoring        AE programmes      %     0      Guidebooks,     Yearly         10%
              System in adult      and providers                   manuals,
                education        went through the                 monitoring
                                   M&E system                       reports
                 Training             increase       %                                          20%
               opportunities       Accredited AE                                              increase
               for adults (II)    courses offered
                                   by companies
                Capacity of         Number of        #     0       AE training   Quarterly      100
                  training         accredited AE                    providers
                 providers           providers                       registry
              Capacity of RTC      # schools and     #     0                     Quarterly    5 school
                                  providers each                                                 and
                                 RTC is supporting                                            providers
                                                                                               by RTC
                 System of       RTC performing                                                 8 RTC
               recognition of     recognition of
               prior learning     prior learning

Measure 2.2 - Ensuring access and reaching higher levels of education for children at risk

Specific objective:

To create better conditions for the early inclusion of disadvantaged groups into the education
system and promote higher levels of education among children at risk, by supporting inclusive
education and drop-out prevention initiatives in local communities.

Rationale:

One of the key challenges facing the education system in Serbia is its poor performance towards
children from vulnerable and disadvantaged groups – in particular Roma families, children from poor
and low educated families, Roma families, rural regions, and children with disabilities - compared to
the rest of pupils. Statistics show that children from those backgrounds are more likely to be left out
of education, a high proportion of them never enrolling into the system or dropping out at a very
early age. They have also rarely access to the best standards of education.

The quality of pre-school education has a clear impact on a child’s subsequent educational
achievements and has an influence on his/her overall life prospects. However, children from
vulnerable and disadvantaged groups, in particular Roma children, are often not included in pre-
school education. In order to address this issue, it is necessary to build the capacity of pre-school


    145
                                           OP for Human Resources Development, 2012-2013                     2nd draft


institutions and encourage a more active involvement of local self-governments in supporting the
development of an inclusive pre-school education.

In addition to policy measures which are required to reduce the selective nature of the Serbian
education system, specific teaching programmes and services have to be developed to address the
needs of disadvantaged and vulnerable children. Teaching staff must learn about inclusive
education, and acquire skills and experience with inclusive measures targeting children from
disadvantaged groups.

Children from vulnerable groups, in particular Roma, are at a disadvantage throughout the
education system. Their drop-out rate by the end of the primary education is significantly higher
than average. The same is also true at higher levels of education. As a result, there are still
differences of educational achievements between children with the lowest and the highest socio-
economic status.

As with pre-schools, this situation calls for specific measures targeting children from less-favoured
backgrounds, primarily from Roma people. In particular, more emphasis should be put on integrating
social and education initiatives at the local level. Primary and secondary schools and LSGs should
promote more actively the enrolment of children from disadvantaged background at all levels of
education. The use of inclusive teaching methods and supporting initiatives to prevent drop-outs
should be encouraged, as well as the continuous monitoring of educational progress among children
from disadvantaged groups.

Continuing support is required to build the capacity of LSGs in planning and promoting inclusive
education in their area and to support schools and key local stakeholders in devising and
implementing measures targeting the needs of children from vulnerable and disadvantaged groups.

Description:

The assistance under this Measure will support inclusive education at the local level, by building on
the lessons learned from other programmes288 and disseminating best practices.

The Measure will support LSGs and local pre-schools to devise and implement local plans together to
improve the quality of pre-school and encourage greater participation of children from vulnerable
groups in pre-school education, and primarily Roma children. The local plans will promote the
development of teaching programmes and supporting services addressing the specific needs of
children and their families, the delivery of training for teachers in pre-school education to learn how
to work with children from vulnerable groups, the adaptation of teaching materials and upgrading of
equipment, etc. Technical assistance will provide examples of successful methods and initiatives of
inclusion of children from disadvantaged groups into pre-school, and support the development of
concrete projects in line with the objectives of the local plans. The best initiatives will be selected
and funded through a grant scheme.

The Measure will also promote the development of inclusive education in primary and secondary
schools, by implementing the best initiatives identified in school development plans to increase
access and prevent drop-outs among children from vulnerable groups. The capacity of schools in
selected municipalities will be strengthened to design project initiatives in favour of children from
disadvantaged groups, in line with school development plans. Technical assistance will provide
examples of successful methods of inclusive education and disseminate best practice to encourage a
more active engagement of students in learning, increase the attractiveness of the teaching process,

288
      World Bank DILS programme, IPA 2008 ‘Education for All’ and IPA 2009 ‘Improvement of Pre-school Education’

       146
                                   OP for Human Resources Development, 2012-2013            2nd draft


adjust teaching activities to the needs of children at risk of drop-out and monitor progress of
education on a constant basis, establish a mentorship system, introduce extra-curricular activities,
better integrate students into the school community, and establish better communications with
parents to arouse their interest in the education of their child and the life of the school. Preference
will be given to initiatives developed in partnership with LSGs, civil society organisations and other
relevant local stakeholders. The best initiatives will be selected and funded through a grant scheme.

Eligible actions:

The following actions are considered eligible for implementation:
     Capacity building of MoE staff and National Education Council in developing inclusive
        education and steering the implementation process, disseminating best practices and raising
        awareness on inclusive education and drop-out prevention;
     TA to develop manuals, guidelines, web-based syllabi, serving as support to teachers for
        inclusive teaching practices;
     Capacity-building of selected local authorities in design and implementation of policies
        aiming at enhancing access of vulnerable children to pre-school education and provision of
        high quality pre-school education;
     Capacity-building of schools to design and subsequently implement inclusive programmes
        and initiatives in line with school development plans;
     Support to LSGs to support implementation of concrete actions and interventions to
        facilitate greater access and quality of pre-school education of vulnerable children, in line
        with the local plans; and
     Support to schools to implement actions towards inclusive school ethos, as defined in their
        development plans.

Selection criteria:

In addition to selection criteria introduced for the Education Priority Axis, the following will apply
specifically to this measure:

       LSGs with high share of population from vulnerable groups, and availability of co-financing;
       Impact on the capacities of the LSGs to provide quality pre-school education for all;
       Impact on the level of awareness on inclusive education at local level;
       Relevance of initiatives for the needs of target groups;
       Sustainability and ownership of the proposed interventions

Final beneficiaries:

The final beneficiaries for procurement under this measure, in accordance with the IPA
implementing regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for
Contracting and Implementation within the Operating Structure. The end recipients who will be
responsible for the technical implementation of the operations and their outcomes will be the
Ministry of Education and Science (Sectors for pre-school education, primary and secondary
education).




    147
                                         OP for Human Resources Development, 2012-2013                     2nd draft


Monitoring indicators:

  Objective          Output            Definition          Unit         Baseline        Source of     Frequency      Target
                    indicator                                             value        verification       of          value
                                                                         (2012)                       monitoring     (2016)
                 Capacity of MoE      Trained MoE            %                         Monitoring      Annually        80%
                  staff and NEC      staff and NEC                                      report,
To create           members             on policy
better                                measures for
conditions for                           inclusive
the early                               education
inclusion of       Local funding       Increase of       % Increase     % for pre-     Monitoring      One-off at      20%
disadvantaged     for pre-school      local funding       of local        school        report,        the end of
groups into         education         allocated for       funding      education in      local        programme
the education                          pre-school                      local budget     budgets
system and                             education –                      of selected
promote                                 including                           LSG
higher levels                       investment and
of education                        running costs in
among                                selected LSGs
children at      Capacity of pre-         Trained         # of LSGs         0          Monitoring       Yearly         15
risk by          school teaching    teachers in pre-      where all                      report,
supporting            staff                school        pre-school                     MoE and
inclusive                             education to        teaching                     pre-school
education and                             develop         staff are                     records
drop-out                              programmes           trained
prevention                           responsive to
initiatives in                       children from
local                                  vulnerable
communities.                              groups
                 Capacity of pre-    # pre-schools           #              0          Monitoring       Yearly         30
                   schools in           delivering                                       report,
                    inclusive            inclusive                                      MoE and
                   education          programmes                                       pre-school
                                                                                        records
                  Access to pre-       Increase of           %         # of children   Monitoring       Yearly         50%
                     schools          children from                        from          report,
                                     disadvantaged                    disadvantaged     MoE and
                                          groups                         groups in     pre-school
                                     attending pre-                    selected pre-    records
                                          school                          schools
                                        education
                 Inclusiveness of      decrease of           %        Average % of     Monitoring      One-off at     20%
                    education        drop-out rates                    drop-outs        report,        the end of   decrease
                                      in supported                     before the        school       programme
                                     schools at the                     support         records
                                        end of the
                                    implementation
                                          period
                   Capacity of      Schools              Number of          0          Monitoring       Yearly         30
                  teachers and      teachers      and     schools                       report,
                 management in      management                                           school
                  primary and       (both primary                                       records
                   secondary        and secondary)
                     schools        trained         in
                                    inclusive
                                    education and
                                    drop-out
                                    prevention
                                    programmes



    148
                                   OP for Human Resources Development, 2012-2013            2nd draft




                  Capacity of   # of drop-out   # of drop-out    0         Monitoring    Yearly         15
                  primary and    prevention      prevention                 report,
                   secondary       projects        school                    school
                   schools in                      project                  records
                    inclusive                    developed
                   education
                  Mentorship    # of LSG with     # of LSG       0         Monitoring    Yearly     30 LSGs
                     system      mentorship                                  report,
                                   system                                    school
                                 functioning                                records,



Priority Axis 3 – Social Inclusion

Aim:

This priority axis will promote the long-term integration of disadvantaged and vulnerable groups into
the labour market, by improving the design and delivery of social inclusion policies that ultimately
enhance employability. The capacity of local stakeholders in identifying the needs of disadvantaged
groups will be strengthened, as well as their ability to develop effective and coordinated responses
across institutional boundaries.

EU legislation:

Not applicable

Specific objective:

To support social inclusion and long-term labour market integration of disadvantaged and vulnerable
groups, through cross-sectoral approaches and local partnership-based initiatives

Rationale:

As part of the ongoing reforms of the social welfare system, efforts have been taking place in recent
years to improve the delivery of social policies at the local level. The reform of the system has been
led at several levels and is now translated into the new Law on Social Welfare. The capacity of local
self-government to effectively lead social policy at local level is has been strengthening. CSWs have
been modernized with the introduction of case management which radically changed the way CSWs
operate. The main public function of the CSWs is to administer entitlements and refer client to
appropriate social services according to his/her individual needs. Since clients are primarily referred
to services supporting life in the community, case management is also strong driver for planning and
developing the network of community-based services. The reform is also focussing on the
development of regulatory mechanisms and the definition of national minimum standards to
promote better quality services provided by a plurality of service providers.

Parallel efforts to improve delivery of services at the local level are taking place in the education,
health and employment sectors, notably through the World Bank DILS programme. However, better
coordination and cooperation among these various services would represent a significant
improvement for disadvantaged and vulnerable people seeking assistance and facilitate their
inclusion. It would also result in more cost-effective solutions, which are particularly needed in the
context of the current economic crisis.



    149
                                   OP for Human Resources Development, 2012-2013             2nd draft


The capacity of local self-government is still very fragile to lead coordinated responses to social
inclusion needs at the local level and to promote new approaches to service delivery in the
community. Their role should be reinforced to devise and implement social inclusion policies in
partnership with a wide range of stakeholders. Community-based services should be developed to
help with the implementation of social inclusion policies and address the needs of local
disadvantaged and vulnerable groups.

Until recently, social assistance benefits failed to reach those most in need. The new Law of Social
Welfare will improve the distribution and amounts of social benefits to the most disadvantaged and
vulnerable people in order to promote their inclusion into society. In addition, it regulates active
inclusion elements that will enable beneficiaries capable of working to access the wide range of
social and employment services to support their labour market inclusion. However, this system is
still not functioning across the country and consequently people from vulnerable and disadvantaged
groups on social benefits tend to be trapped in social welfare dependency. There is a need to
promote, develop and implement active inclusion policies. This will require clear model of work and
cooperation between CSW and NES to link social assistance benefits to active labour market
measures and other social inclusion services -. In parallel, capacity of LSGs should be strengthened
in particular regarding the promotion of a wide range of community-based services on which
CSW/NES can rely when referring their beneficiaries.

Description:

Local self-government will receive support to lead cross-sectoral social inclusion policies in line with
local needs and to broaden and strengthen available community-based services. Local providers will
be encouraged to improve service delivery, and develop innovative and coordinated responses to
the needs of disadvantaged and vulnerable groups, in cooperation with local self-governments.

Active inclusion of vulnerable groups will be promoted through closer coordination and cooperation
between Centres for Social Work and NES branch offices, in order to reduce welfare dependency and
facilitate the inclusion of disadvantaged and vulnerable groups into the labour force. Supporting
activities will be implemented at local level to improve the take-up of the minimum guaranteed
income among the poorest people and contribute to their inclusion into society.

The capacity of the MoLSP will be strengthened in overseeing and guiding developments at the local
level, developing national minimum standards for social services, capitalising on lessons learned,
mainstreaming the most successful schemes and raising awareness of social inclusion.

Targeting:

Resources under this priority axis will be committed to supporting social inclusion and long-term
labour market integration of disadvantaged and vulnerable groups, through cross-sectoral
approaches and local partnership-based initiatives. In this context, the priority will be targeting the
following groups:

       Beneficiaries of social assistance benefits;
       Persons with physical, learning and mental disabilities;
       Roma people;
       People from rural areas;
       Refugees and IDPs;
       Returnees according to readmission agreements;
       Drug addicts;
       Ex-offenders;

    150
                                           OP for Human Resources Development, 2012-2013           2nd draft


          Single parents;
          Youth at risk; and
          Women.
          Local self-governments and local Social Policy Councils,
          State and non-state (private and NGOs) service providers.

Measures:

Two measures have been considered for support under this priority axis:

          Measure 3.1 - Support to social inclusion through more diversified community-based
           services;

          Measure 3.2 - Supporting the transition from welfare to work through active inclusion.

Delivery:

The priority axis will be delivered through combined service contracts and grants scheme in line with
EU procurement rules

Selection criteria at the level of priority axis shall, beside the specific selection criteria given at the
measure level, include the following:

          Strong expertise in local social inclusion policies, their implementation and development of
           social inclusion initiatives and experience in similar assignments;
          Strong expertise in guaranteed minimum income schemes and active inclusion policies at
           national level and experience in similar assignments in other EU countries;
          Strong expertise in capacity building in the area of social inclusion services;
          Impact on the poverty level and social exclusion;
          Sustainability and ownership of the activities proposed;
          Relevance to the needs of target groups;
          Clear link with national social inclusion priorities set by legislation and relevant strategies.

Targets and indicators:

  Objective            Output         Definition     Unit   Baseline    Source of     Frequency       Target
                      indicator                              value     verification       of           value
                                                                                      monitoring      (2016)
To      support     CSA targeting     increase of     %                RSO, MoLSP      One-off          30%
social                               people living                       register
inclusion and                            below
long-term                               absolute
labour market                        poverty line
integration of                        covered by
disadvantaged                             CSA
and                 Mainstreaming        cross-       %        0       Monitoring       Yearly          #
vulnerable          cross-sectoral      sectoral                         report,
groups,                services       services for                      adopted
through cross-                        which joint                      standards
sectoral                               standards
approaches                             have been
and         local                     developed
partnership-                          by relevant
based                                     line
initiatives                            ministries



     151
                                    OP for Human Resources Development, 2012-2013            2nd draft


               Relevance of   Beneficiaries    Number of    0       Beneficiary     Yearly
                 the new      satisfied with    people              satisfaction
                 services        the new                              survey
                supported        services


Measure 3.1: Support to social inclusion through more diversified community-based
services

Specific objective:

To strengthen the capacity of local self-governments (LSGs) in leading partnership-based social
inclusion policies and improve the range and quality of community-based services providing cross-
sectoral solutions to vulnerable and disadvantaged groups.

Rationale:

In order to develop quality community-based social services addressing the needs of vulnerable
groups, the MoLSP has pursued ambitious reforms to reinforce the capacity of local self-government
in managing local social policies, modernise the network of Centres for Social Work (CSWs) and
develop the regulatory framework for decentralised social services. As a result, a majority of local
self-governments established local Social Policy Councils and approximately 120 of them have
adopted strategies or plans to address the needs of vulnerable groups289.

The range and outreach of community-based social services have improved in some municipalities
which started to cooperate with a wider variety of service providers to run day care, shelters,
supported housing, etc. However, their availability throughout Serbia remains limited290. It is
essential that more municipalities develop well-coordinated community-based services to meet the
multiple needs of their beneficiaries in the most efficient manner. In this context, support is required
to strengthen existing services and to create new ones tailored to the needs of vulnerable groups.

Local self-governments are currently facing challenging times with reduced transfers from the
central level and limited ability to raise their own revenues. The capacity of local authorities should
therefore be reinforced to make better use of means available for social inclusion, and encourage
cooperation and coordination among the various providers involved in the implementation of
policies.

The delivery of local services is being improved in related sectors such as education and health
thanks to major donor-funded initiatives (e.g. World Bank-funded DILS programme). These initiatives
create the necessary momentum to promote greater co-operation among services across
institutional boundaries (social, employment, health and education) and pursue ambitious social
inclusion policies in line with EU trends. The Roma community is among the largest ethnic groups,
but at the same time the poorest and most vulnerable group in Serbia exposed to multiple exclusion.
Cross-sectoral initiatives at the local level to support their social inclusion should be further
supported.

 National minimum standards need to be defined for other existing social services, new services to
be mainstreamed but also for cross-sectional services. The relevant sectors/ line ministries should
cooperate on this issue to facilitate the introduction of the most successful community-based
services across the whole country. A licensing system of social services providers is being developed,
289
  See section 2.1.4
290
   90% of the most developed municipalities have home care, compared with 57% among the least developed
municipalities

      152
                                   OP for Human Resources Development, 2012-2013              2nd draft


but procedures and mechanisms for its implementation need to be enforced. Service providers
should be encouraged to develop new services and apply for licensing.

The delivery of local services is being improved in related sectors such as education and health
thanks to major donor-funded initiatives (e.g. World Bank-funded DILS programme). These initiatives
create the necessary momentum to promote greater co-operation among services across
institutional boundaries (social, employment, health and education) and pursue ambitious social
inclusion policies in line with EU trends.

Description:

In line with the new Law, the capacity of selected LSGs will be strengthened to carry out regular and
comprehensive needs analyses of vulnerable citizens and to promote the development of adequate
services to meet those needs. Skills and competencies of LSGs staff will be enhanced to implement
more effective social inclusion policies ranging from the development or revision of action plans,
budgeting of those plans, selection and contracting of local service providers through an open
competition procedure, to monitoring and evaluation of supported services, including collecting
clients and workers views. The Measure will also improve the quality of data available on vulnerable
groups and promote inter-municipal cooperation, towards economies of scale and budget efficiency.

Community-based social services available for vulnerable groups will be developed in line with LSG
action plans in selected municipalities/districts. A grant scheme will strengthen the network of
existing community-based social services, but also encourage the development of new/cross-
sectoral approaches in service delivery. For existing services, service providers will be required to
comply with national minimum standards and complete the licensing procedure in line with the new
Law. The measure will encourage inter-municipal cooperation in social service delivery (cluster
approach). The grants scheme will also support initiatives promoting the inclusion of Roma people .

The MoLSP will get support in mainstreaming the most successful initiatives and adopting national
minimum standards for social services, including the development of joint standards for cross-
sectoral services in cooperation with other relevant ministries. The Measure will also support the
MoLSP to manage further decentralisation of social policies and services, provide guidance and
support to LSGs in the process, monitor and evaluate the process, disseminate best practices and
raise awareness on social inclusion policies.

The assistance will be a logical and necessary continuation of almost a decade-long reform process.
It will be based on lessons learned from partnership-based initiatives supported through EU
assistance, World Bank, DFID, NMFA and other donor programmes.

Eligible actions:

The following actions are considered eligible for implementation:

       Capacity-building for local authorities in implementing social inclusion policies: identification
        of needs, development/revision of action plans, preparation of call for proposals, financing,
        monitoring and evaluating of implemented policies;
       Capacity-building to LSGs to design community-based social inclusion initiatives in line with
        needs identified in the LSG action plans through building local partnerships and stronger
        inter-sectoral networking (social, employment, health and educational services);
       Grant schemes for LSGs to support concrete community based social inclusion services to
        meet the multiple needs of vulnerable and disadvantaged population, and to support
        outreach services to socially excluded groups, including Roma;


    153
                                   OP for Human Resources Development, 2012-2013             2nd draft


       Capacity-building at national level in steering process, disseminating best practices, raising
        awareness on social inclusion, performing licensing of local service providers, developing
        joint standards;
       Support to development of joint national standards for cross-sectoral services and training
        of policy- and decision-makers in relevant ministries, for mainstreaming and monitoring
        locally developed initiatives; and
       Training for service providers on compliance with minimum standards linked to licensing
        procedure.

Selection criteria:

In addition to selection criteria introduced for the Social Inclusion Priority Axis, the following will
apply specifically to this measure:

       Impact on the capacities of the LSGs to lead social inclusion policies at local level;
       Existence of the local social policy/inclusion documents and availability of local co-financing;
       Contribution to cluster approach among LSGs in developing social inclusion initiatives;
       Participation of underdeveloped municipalities
       Contribution to partnership and cross-sectoral approach and cooperation;
       Impact on the level of awareness on the social inclusion at local level;
       Relevance of the services for the needs of target groups as identified in local strategic
        documents; and
       Sustainability and ownership of the proposed interventions

Final beneficiaries:

The final beneficiaries for procurement under this measure, in accordance with the IPA
implementing regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for
Contracting and Implementation within the Operating Structure. The end recipients who will be
responsible for the technical implementation of the operations and their outcomes will be the
Ministry of Labour and Social Policy (the Family Care and Social Welfare Sector)




    154
                                          OP for Human Resources Development, 2012-2013                  2nd draft


Monitoring indicators:

  Objective          Output             Definition       Unit   Baseline    Source of      Frequency       Target
                    indicator                                     value    verification        of           value
                                                                 (2012)                    monitoring      (2016)
                 Capacity of LSG        # of LSGs         #                 Monitoring      One-off       30
                    developed to      implementing                         report, local
                     implement       social inclusion                       decisions,
                  social inclusion       policies                               local
                       policies                                               budgets
                 Underdeveloped               % of        0                 Monitoring      One-off       15 %
To strengthen           LSGs         underdeveloped                           report,
the capacity       implementing        municipalities                           local
of local self-    social inclusion     implementing                         decisions,
governments            policies       social inclusion                         Local
(LSGs) in                                   policies                          budgets
leading          Local funding of       % increase of     %        0        Monitoring       Yearly       20%
partnership-          CBBSs             local budgets                      report. Local
based social                               for CBBSs                          budgets
inclusion         Availability of        Number of        #        0        Monitoring      Quarterly     30
policies and         CBSSs               CBSSs both                        report, local
improve the                              existing and                      decisions on
range and                                 innovative                         extended
quality of                            /cross-sectoral                          rights
community-                           implemented in
based services                       supported LSGs
providing         Cross -sectoral         Increase in     %        0        Monitoring      Quarterly     10%
cross-sectoral     cooperation         cross-sectoral                          report,
solutions to                               initiatives                     reports from
vulnerable                                                                      LSGs
and                 Access to          increase of        %                 Monitoring      Quarterly     30%
disadvantaged      community          beneficiaries                            report,
groups.           based services                                           reports from
                                                                                LSGs
                    Quality of           Services         #        0        Monitoring      One-off at
                     service         providers that                           reports,      the end of
                    providers        are licensed by                        registry of    programme
                                       the MOLSP                           the licensed
                                                                               service
                                                                             providers



Measure 3.2: Supporting the transition from welfare to work through active inclusion

Specific objective:

To increase the coverage of guaranteed minimum income among socially excluded groups, and
promote the transition from welfare to work through active inclusion and better integrated social
and employment services.

Rationale:

The incidence of absolute poverty is particularly high in rural areas, among Roma, refugees and IDPs,
and families with children. Social assistance benefits are playing a major role in lifting people out of
extreme poverty.

The Cash Social Assistance programme (guaranteed minimum income) suffers from weaknesses in
its implementation (not all eligible people receive benefits and some people receiving benefits are


    155
                                       OP for Human Resources Development, 2012-2013                    2nd draft


not eligible), which compound weaknesses in its design (not all poor people are eligible and not all
eligible people are poor). There is also very low take-up among beneficiaries in underdeveloped
municipalities with low living standards and significant social problems. The reasons for such a
situation are poor information available to potential beneficiaries regarding eligibility and
application process, complex administrative procedures, high application costs, social stigma and
different approaches among staff in the CSWs in assessing eligibility of potential beneficiaries. Since
the guaranteed minimum income is the main benefit against poverty and social exclusion, there is a
great need to improve its targeting by addressing all of these weaknesses.

The new Law on Social Welfare introduces the concept of active inclusion for the first time in Serbia.
It creates opportunities for promoting active inclusion among beneficiaries of social benefits, and
paves the way for active inclusion policies based on a strong cooperation between CSWs and NES.
This system needs to be developed, and its implementation strongly supported across country. Until
present, social benefits schemes have no systemic link to other services and to the labour market. As
a result, they tend to trap people into poverty and long-term social welfare dependency. Public
works are the only existing programme that links social assistance and employment service, with
relative success in achieving longer-term employment of guaranteed minimum income beneficiaries.
Current cooperation between the CSWs and the NES can be characterised as ad hoc and reactive (i.e.
responding to crisis or other pressure), although there is recognition of the need to develop mutual
cooperation due to common target groups. Despite encouraging initiatives in some areas291, the
integration of people excluded from the labour market remains a real challenge in Serbia. The Law
on Social Welfare will create new opportunities for promoting active inclusion among beneficiaries
of social welfare, and pave the way for active inclusion policies based on strong cooperation
between CSWs and NES throughout the country, which need to be encouraged and supported.

Description:

The measure will support the implementation of the new Law in the part relating to more efficient
social benefits scheme for the poorest people. It will help target better social assistance benefits on
the poorest people and link social benefits schemes to measures promoting active inclusion.
Assistance will focus mostly on the Family Care and Social Welfare Department within MoLSP, the
network of CSWs and NES branch offices.

The measure will support the MoLSP in drafting and disseminating guidelines for CSWs to help them
assess in a uniform manner clients’ eligibility and to monitor social benefits schemes. This will also
involve training of CSW staff working on social benefits. A better targeting of the guaranteed
minimum income will also be ensured through the design and implementation of outreach activities
and through the review of the application process and application costs. Outreach activities will
consist of information campaigns to raise the awareness of the most vulnerable groups about their
entitlements and to help them in applying for social protection. Civil society organisations dealing
with targeted vulnerable groups could also be mobilised for outreach activities through the social
inclusion grant scheme implemented under measure 3.1.

The measure will support active inclusion of vulnerable groups by helping CSWs and NES branch
offices set up single entry services connecting their clients to the whole range of opportunities and
support available under social assistance benefits, social inclusion services and active labour market
measures. Core teams in CSWs and NES will be trained and supported with exchange of information
and peer transfer of knowledge on active inclusion across the country. This will also include the

291
   IOM, ILO, UNDP and UNICEF joint project ''Support to national efforts for the promotion of youth employment and
management of migration'' will pilot the model of integrated employment and social services as a response to complex
problems faced by particularly vulnerable groups of unemployed young people 2009/2011.

      156
                                   OP for Human Resources Development, 2012-2013            2nd draft


design and delivery of capacity building packages for both CSW and NES staff, including joint training
for multi-disciplinary teams, manuals, guidelines, etc. The measure will also encourage NES and
CSWs to cooperate in identifying relevant services addressing the specific needs of vulnerable
groups and proposing their development under Measure 1.1 (employment promotion) and Measure
3.1 (social inclusion).

Eligible actions:

The following actions are considered eligible for implementation:

       Assistance to MoLSP in designing outreach campaign and activities and implementing them
        locally;
       Assistance to MoLSP in reviewing application procedures and designing standardised work
        procedures for social assistance benefits to be applied in CSWs;
       Training of CSW staff in applying new procedures and monitoring social assistance benefits
        schemes for the poorest;
       Support in implementing an active inclusion system linking income support, inclusive labour
        market policies and quality services in NES and CSWs through joint training and peer
        knowledge transfer; and
       Contribution in designing social activation services customised to the individual needs of
        vulnerable groups and based on EU best practices

Selection criteria:

In addition to selection criteria introduced for the Social Inclusion priority axis, the following will
apply specifically to this measure:

       Impact of the intervention on socially excluded people;
       Impact on efficiency of the social assistance benefits scheme;
       Effective implementation of systems linking income support, inclusive labour market policies
        and quality social inclusion services;
       Relevance of the services to the needs of target groups

Final beneficiaries:

The final beneficiaries for procurement under this measure, in accordance with the IPA
implementing regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for
Contracting and Implementation within the Operating Structure. The end recipients who will be
responsible for the technical implementation of the operations and their outcomes will be the
Ministry of Labour and Social Policy (Family Care and Social Welfare Sector).




    157
                                         OP for Human Resources Development, 2012-2013                   2nd draft


Monitoring indicators:

  Objective         Output         Definition        Unit       Baseline     Source of      Frequency       Target
                   indicator                                     value      verification        of           value
                                                                                            monitoring      (2016)
                 Trained staff     Appointed          %            0         MoLSP and        Yearly        90% of
To increase       of NES and     NES and CSWs                               NES human                        staff
the coverage         CSWs           trained in                             resource data,                 appointed
of                               implementing                                monitoring                   in all NES
guaranteed                         integrated                                  report                     and CSWs
minimum                           employment                                                               in Serbia
income                              and social
among                                 service
socially          Training of      Core CSWs          %            0          MoLSP           Yearly
excluded          CSWs CSA           CSA staff                               records,
groups and           staff          trained in                              monitoring
promote the                        monitoring                                 report,
transition                              CSA
from welfare                      beneficiries
to        work                    and referaal
through                               to case
active                            management
inclusion and    CSA coverage      Increase of        %                       MoLSP          One-off        30%
better                            beneficiaries                              database
integrated       CSA targeting    Decrease in         %           46%      MoLSP records     One-off        20%
social     and        (I)        share of able-
employment                            bodied
services.                         beneficiaries
                                    receiving
                                   guaranteed
                                    minimum
                                      income
                 CSA targeting   Disadvantaged    # of people      0       MoLSP records    Quarterly         #
                      (II°            people       receiving
                                  benefiting of      active
                                       active       support
                                     inclusion
                                  measures (at
                                    least 50%
                                     women)




    158
                                  OP for Human Resources Development, 2012-2013           2nd draft




3.2 Technical assistance
3.2.1 Priority axis 4 - Technical Assistance

Aim:

This priority axis will support the effective and efficient management of the OP, the absorption of
IPA assistance, and preparation for future programming periods, including the design and
development of strategies, and identification of operations for elaboration into mature and high-
quality proposals.

EU legislation:

Not applicable.

Specific objective:

To enhance and reinforce Serbian capacities, in the context of the EU pre-accession process, for
future management of Structural Funds and the Cohesion Fund

Rationale:

The greatest challenge facing national authorities in managing EU, national and IFI funds is to
maximise both its absorption and its impact, while ensuring that spending is efficiently administered
and completely aligned with all relevant regulations and agreements. This triple focus on spending
fully, correctly and wisely will be the basis of IPA programme management by Serbian institutions
under the decentralised implementation system (DIS), and in the longer term, the administration of
Structural Funds and the Cohesion Fund as an EU member state. The raison d’être for IPA is
pedagogical as much as developmental, with an explicit goal of preparing accession candidates for
the tasks ahead of them. The structures and systems under IPA component III and IV are designed to
facilitate ‘learning by doing’, but at a smaller scale of disbursement and hence a lower level of
absorption risk.

Nevertheless, the transition from the traditional pre-accession environment of CARDS and IPA
component I, under centralised management, is not an easy one. IPA III and IV introduces entirely
new challenges for the Serbian authorities based on multi-annual programme implementation,
including flexibility in programme expenditure (under the N+3 rule), and managing, monitoring and
evaluating the OP to optimise the use of resources to achieve its strategic objectives, including
switching resources across operations, measures and priority axes, if appropriate. Decentralised
management means procurement, grant scheme management and contracting is transferred to the
Ministry of Finance, with ex ante approvals by the EU Delegation, and responsibility for drawing
down finance from the EU, and making payments (and recoveries and repayments, if necessary)
transferred wholly, with ex post controls only.

Moreover, the management of IPA component IV will involve extraordinary costs that do not form
part of the Serbian administration’s traditional operating expenses. This includes: information and
publicity on IPA; the development of monitoring indicators and an EU funds Management
Information System; the commissioning of external, independent experts for interim and ongoing
evaluations; and the costs of managing and implementing the IPA programmes.



    159
                                    OP for Human Resources Development, 2012-2013              2nd draft


Finally, the programme period of 2012-2013 will shortly be followed by the 2014-2020 financial
perspective. The direction of the Europe 2020 strategy, adopted by the EU’s European Council of
Ministers, indicates that employment, education and social inclusion will remain pivotal to ensuring
Europe’s future prosperity and hence will play a guiding role in the governance of future EU funds.
Serbia needs to be fully up-to-date in its strategic planning and put in place an active pipeline of
potential projects for funding, which correspond with this agenda.

Description:

The priority axis will provide technical support to all aspects of OP implementation, including
promotion, project appraisal and selection, procurement, grant scheme management, contracting
and contract management, financial management and control, monitoring, evaluation, reporting,
audit and any necessary revisions to the OP.

The priority axis will ensure that the public and beneficiaries are well informed about IPA support
from the EU, and future end recipients are able to generate and prepare concepts, elaborate viable
ideas into eligible and high quality proposals, and apply for IPA assistance in future funding
perspectives. It will finance studies, analysis and strategic planning, with a view to ensuring
successful programming and absorption in 2014-2020.

It will facilitate close working relationships across the Operating Structure and with the rest of the
IPA administration, and promote networking and cooperation with the wider partnership of
economic, social and environmental partners and civil society. It will enable the Operating Structure
to apply the horizontal themes of equality of opportunity, tackling discrimination and ensuring
sustainability

Most importantly, technical assistance under this priority axis will embody the ‘learning by doing’
principle, strengthening the administrative capacity for sound management of the OP, and
enhancing its effectiveness and efficiency.

Targeting:

It is proposed that the activities under this priority axis are fully aligned with the eligible activities
allowed in the IPA implementing regulation, without exception.

The assistance under the priority axis will be directed towards end recipients who will be responsible
for the technical implementation of the operations and their outcomes, and the members of the
Operating Structure. Ultimately, this assistance will include: members of the Sectoral Monitoring
Committee, Project Selection Committees and evaluation committees for tenders and grant
schemes; end recipients of assistance under the other priority axes; works, supplies and service
contractors and grant recipients; and economic, social and environmental partners, civil society, the
general public and the media.

Measures:

Two measures are proposed for support under this priority axis:

       Measure 4.1 – Programme management, information and publicity;

       Measure 4.2 – Preparation of studies, programmes and projects




    160
                                        OP for Human Resources Development, 2012-2013               2nd draft


Delivery:

A ‘road map’ of activities under this priority axis will be elaborated in a Technical Assistance Plan,
which will be prepared by the Head of Operating Structure and submitted to the Sectoral Monitoring
Committee for discussion and agreement. The operations which will be performed under this
priority axis will then be specified in the Operation Identification Sheet (OIS) for submission to the
European Commission for approval. Service and supply contracts will be awarded through
competitive tender, according to EU procurement rules and will be tendered and contracted by the
Central Finance and Contracting Agency, as the Body Responsible for Contracting and
Implementation within the Operating Structure, subject to ex ante controls by the European
Commission.

The following criteria must be fulfilled in selecting operations (through the preparation of the OIS)
under this priority axis:

        Eligibility under Article 151 of the IPA implementing regulation and relevant provisions of
         the OP Financing Agreement;
        Absorption of funds within the limits of the financial table and the ‘N+3’ rule for disbursing
         expenditure;
        Ensuring achievement of the performance targets set for the outputs and results indicators;
        Optimising the ‘learning by doing’ benefits for the IPA administration in Serbia.

The priority axis will complement past and ongoing EC technical assistance projects. Any overlap
with projects to be financed under other priority axes of the OP or IPA component I will be avoided.
Approximately 6% of the total budget of the OP is allocated to this priority axis.

The use of funding for technical assistance under this priority axis will be addressed specifically
within the annual and final implementation reports.

Targets and indicators:

  Objective         Result          Definition        Unit    Baseline     Source of      Frequency      Target
                  indicator                                     value     verification        of          value
                                                               (2012)                     monitoring     (2016)
                 Staff trained    Officials of the   Number       0         Project       Quarterly     Minimum
                                    Operating                              monitoring                      150
                                    Structure,                              reports
                                      Sectoral
                                    Monitoring
To enhance
                                 Committees and
and reinforce
                                   possible end
Serbian
                                    recipients
capacities, in
                                  participating in
the context of
                                   OP-financed
the EU pre-
                 Absorption          Incurred          %         0         Annual and      Annual         95%
accession
                 of OP funds       expenditure                                 final
process, for
                                 declared by the                         implementation
future
                                    NAO to the                               reports
management
                                     European
of Structural
                                 Commission and
Funds and the
                                 accepted by the
Cohesion Fund
                                  latter without
                                   corrections,
                                  deductions or
                                      seeking
                                    recoveries


    161
                                      OP for Human Resources Development, 2012-2013        2nd draft


                Effective use     Evaluation       Ex post     0       Ex post     Completion   Positive
                of OP funds         findings      evaluation          evaluation     of OP       report
                                  reporting a     by the EC             report
                                positive impact                     commissioned
                                   from OP                              by EC
                                 expenditure

Measure 4.1 - Programme management, information and publicity

Specific objective:

To ensure effective OP management and implementation, information and publicity, and develop
the institutional capacity for managing and absorbing IPA

Rationale:

Absorption rates under CARDS and IPA I have been consistently high, as programming and
management have been highly centralised. When Serbia adopts decentralised management, as an
essential pre-condition for receiving funds under IPA components III and IV and an important step to
membership status, it is likely that the absorption of funds will come under pressure initially, based
on the experience from other countries which have gone down this path. The administration lacks
experience in the direct management of EU funds, particularly the processes of project appraisal and
selection, contracting, project management and control, including payments, verification and
monitoring.

Description:

This measure will support the strengthening of the newly established structures and underpin the
foundation of OP management in two ways.

First, it will enable the procurement of consultancy and training services, for the benefit of the
Operating Structure, which will provide valuable advice and capacity-building during the lifetime of
the OP. This will help consolidate and enhance the competences and capabilities of the Serbian
administration, building on the momentum from previous technical assistance under IPA component
I, and focus on transfer of knowledge, skills and techniques. It is essential that the Serbian
administration is able to train and retain a body of technically competent and committed staff,
which can ensure high levels of absorption and be capable of putting in place programmes for the
next financial perspective.

Second, it will co-finance specific implementation costs of the OP, including information and
publicity, project appraisal, monitoring and evaluation activities, including services, equipment and
supplies, software and hardware. These constitute items of expenditure arising entirely from OP
management, which the Serbian administration would not normally bear in the course of its
conventional day-to-day activities.

Eligible actions:

The following actions are considered eligible for implementation:

       TA consultancy support (including advice and training) to the Operating Structure regarding
        any aspect of management, project appraisal and selection, monitoring, control, audit,
        evaluation, visibility, publicity and control, including grant scheme management and
        procurement (for example, fees for expert assessors and evaluators of project applications)
        and interpretation of the horizontal themes;

    162
                                   OP for Human Resources Development, 2012-2013             2nd draft


       Preparation and implementation of information and publicity strategy and specific activities;
       Setting up and maintaining an information exchange system (through the internet, media,
        brochures, folders, CDs etc) for potential beneficiaries and end recipients, on the contents of
        the assistance, and accessibility of the IPA funds for implementation of specific projects;
       Support (including advice and training) to socio-economic partners and civil society, to
        engage them on the delivery of the OP, performance, progress and any planned revisions;
       TA support to the Operating Structure in the preparation of guidelines for potential
        applicants;
       Development of the monitoring arrangements and establishment, maintenance and
        upgrading of the Management Information System, including hardware, software and
        training;
       Aid to enhance the specification, collection and use of statistics for effective monitoring and
        evaluation;
       Costs of external evaluators engaged for interim and ongoing evaluations;
       Expenditure related to the organisation and administration of meetings of the Sectoral
        Monitoring Committee and Operation Selection Committees, including interpretation
        services, ad-hoc hiring of meeting rooms and audio-visual and other necessary equipment,
        provision of documentation and related facilities, fees for the participation of experts and
        travel expenditure in accordance with EC rules;
       Exchanges of experience for staff involved in OP management through study visits and
        internships;
       Organisation of briefings, seminars, conferences and workshops;
       Provision of translation and interpretation services.

Salaries and allowances of members of the Sectoral Monitoring Committee (and any sub-
committees) incurred in the context of their participation in such committees, will not be eligible.

Selection criteria:

The Operating Structure will apply the selection criteria at priority axis level to all operations under
this measure, based on the Technical Assistance Plan prepared at the priority axis level and
approved by the Sectoral Monitoring Committee. Assistance will be commissioned through one or
more procurement contracts. Tenders will require the successful bidders to demonstrate a track
record of similar activities, named key experts with appropriate skills and experience, and a viable
and cost-effective methodology.

Final beneficiaries:

The final beneficiary for procurement under this measure, in accordance with the IPA implementing
regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for Contracting and
Implementation within the Operating Structure.




    163
                                        OP for Human Resources Development, 2012-2013                 2nd draft



  Monitoring indicators:

     Objective           Output        Definition          Unit      Baseline    Source of     Frequency     Target
                        indicator                                      value    verification       of         value
                                                                      (2012)                   monitoring    (2016)
                        Training      Total training      Hours          0       Project          Six-      Minimum
                        activity       provided to                              monitoring      monthly       1500
                                     officials of the                            reports
                                        Operating
To ensure effective
                                         Structure
OP management
                                    (including study
and
                                         visits and
implementation,
                                       internships)
information and
                                      and Sectoral
publicity, and
                                        Monitoring
develop the
                                        Committee
institutional
                      Monitoring    Meetings of the      Number         0        Project         Six-         10
capacity for
                      committees          Sectoral                              monitoring      monthly
managing and
                                        Monitoring                               reports
absorbing IPA
                                        Committee
                                       successfully
                                     organised and
                                         attended
                        Publicity       Successful      Percentage      0        Project         Six-        100%
                        measures         launch of                              monitoring      monthly
                                      information,                               reports
                                      publicity and
                                          visibility
                                         measures
                                       identified in
                                             the
                                    Communication
                                        Action Plan

  Measure 4.2 - Preparation of studies, programmes and projects

  Specific objective:

  To ensure the future absorption of IPA funds, through the development of sector planning and
  programming documents and the generation of a pipeline of mature, eligible and high quality
  projects.

  Rationale:

  Like all countries receiving EU funds, Serbia needs to ensure that absorption is maximised, but that it
  is also well-targeted, to have the maximum positive effect on the problems and challenges facing the
  country.

  The preparation for IPA III and IV in 2012-2013 is Serbia’s first experience of multi-annual
  programming under EU funds. Unlike IPA component I, IPA IV takes a medium-term rather than
  annual perspective, and organises priorities for expenditure, which govern the selection of
  operations for funding, based on robust sector analysis, a clear hierarchy of objectives and outcomes
  and widespread consultation. This places new obligations on the Serbian administration to plan its
  programming and to ensure national strategies and plans are up-to-date and aligned with the
  timeframes and opportunities of EU funding.



       164
                                   OP for Human Resources Development, 2012-2013             2nd draft


At the same time, while there are databases of projects in various stages of preparation and
readiness, such as the ISDACON Information System at the national level and the SLAP database for
municipalities, there are insufficient projects which are fully implementation-ready for future
programme needs and to required standards. Moreover, many potential end recipients do not have
the necessary knowledge and techniques to prepare projects to the level required for approval
under EU regulations and conventions.

Description:

Serbia needs to prepare itself fully now for the next financial perspective. While the preparation of
the next set of operational programmes for the 2014-2020 financial perspective will be supported by
technical assistance under IPA component I (2011 programme), this measure will support the
development of strategic documents, and researching and producing sector strategies relevant to
eligible activities in the IPA implementing regulation. The measure will also finance the preparation
of a future project pipeline and support relevant institutions and potential beneficiaries in the
preparation of required documentation. This includes the generation of project ideas and their
elaboration into mature and high-quality proposals with all the supporting technical documents, and
will involve both advice and training services. This measure complements other priority axes, which
allow for the development of project documentation within the specific and narrow scope of eligible
actions under the measure, by looking at emerging needs in the preparatory phase for the 2014-
2020 programmes.

Eligible actions:

The following actions are considered eligible for implementation:

       Support with the preparation of sector studies related to the strategic priorities of the OP
        and future programming documents;
       TA to identification of project ideas and preparation of project pipeline for future IPA
        assistance;
       Consultancy and training in project conception, design, preparation and implementation;
       Organisation of seminars, conferences and workshops;
       Printing, publishing and provision of translation and interpretation services.

Selection criteria:

The Operating Structure will apply the selection criteria at priority axis level to all operations under
this measure, based on the Technical Assistance Plan prepared at the priority axis level and
approved by the Sectoral Monitoring Committee. Assistance will be commissioned through one or
more procurement contracts. Tenders will require the successful bidders to demonstrate a track
record of similar activities, named key experts with appropriate skills and experience, and a viable
and cost-effective methodology.

Final beneficiaries:

The final beneficiary for procurement under this measure, in accordance with the IPA implementing
regulation, will be the Ministry of Finance’s CFCU, as the Body Responsible for Contracting and
Implementation within the Operating Structure.




    165
                                             OP for Human Resources Development, 2012-2013                          2nd draft



  Monitoring indicators:

        Objective          Output          Definition          Unit        Baseline         Source of      Frequency       Target
                          indicator                                          value         verification        of           value
                                                                            (2012)                         monitoring      (2016)
                          Training            Staff of        Hours            0            Project         Annually      Minimum
To     ensure     the     activity        potential end                                    monitoring                        750
future absorption of                        recipients                                      reports
IPA funds, through                         participating
the development of                        in training on
sector planning and                           project
programming                                preparation
documents and the
generation of a
pipeline of mature,
eligible and high
quality projects.

                          Adopted            Strategy        Number            0            Project          Annually     Minimum
                          strategic        documents                                       monitoring                         2
                         documents        approved by                                       reports
                        and prepared      Ministers or
                          projects       Government,
                                          and projects
                                            ready for
                                           submission
                                         for Operating
                                         Structure and
                                          EC approval,
                                            including
                                           completed
                                            Operation
                                         Identification
                                          Sheets with
                                           supporting
                                           documents

  3.3 Horizontal issues
  3.3.1 Equal opportunities for men and women

  Political will and commitment to build gender equality policy by introducing modern standards in
  gender issues is enshrined in the Constitution of the Republic of Serbia, which prohibits all forms of
  discrimination (Article 21) and guarantees the equality of women and men and developing equal
  opportunities policy (Article 15). This proclamation is underpinned by legislation, namely the Gender
  Equality Law, the Law on the Prohibition of Discrimination, the Family Law, the Labour Law, the Law
  on Employment and Unemployment Insurance292, the Criminal Code293, Election laws294, and the
  Ombudsman Law295.

  Various institutions are involved in the promotion and protection of gender equality in Serbia,
  namely, the Parliamentary Committee for Gender Equality; Government Council for Gender Equality,
  the Directorate of Gender Equality within the Ministry of Labour and Social Policy, the Committee on

  292
      See Annex B
  293
      It penalises domestic violence and marital rape and defines human trafficking as organized crime
  294
      It sets a system of quota of 30% for the less represented gender for the national, provincial and local elections
  295
      The gender issues are one of the priorities

          166
                                   OP for Human Resources Development, 2012-2013             2nd draft


Gender Equality within the Assembly of the Autonomous Province of Vojvodina, and the Provincial
Secretary for Labour, Employment and Gender Equality, while Local Municipal Committees for
gender equality exist in majority of Serbian LSGs.

The objectives of the National Strategy for Improved Status of Women and Gender Equality
Promotion are in line with the recently adopted Strategy for Equality between Women and Men in
Europe 2010-2015. The EU Strategy identifies five priorities: equality in the field of economy and
labour market, equal pay, equality in senior positions, tackling issues of gender violence and
promoting equality beyond the EU. It spells out a series of actions such as facilitating the entry of
women into the labour market and putting forward targeted initiatives to get more women into top
jobs in economic decision-making, promoting female entrepreneurship and self employment;
instituting an annual European Equal Pay Day and EU-wide cooperation against women violence.

The principles of equal opportunities have been applied throughout the programming process:

       Priority axis 1 puts a strong emphasis on enhancing the employability of women through
        ALMPs, and increasing job search for unemployed women. Depending on the situation at the
        local level, women might be identified as a specific target group in local employment action
        plans, which will receive support under Measure 1.1 supporting the development of regional
        and local employment policies. Under Measure 2.1, which will implement ALMPs tailored to
        the needs of disadvantaged groups such as PwD, young people and long-term unemployed,
        50% of beneficiaries will have to be women. The strengthening of Labour Inspectorate under
        measure 1.3 should contribute to a better protection of women against all forms of work
        discrimination specific to women (sexual harassment, pregnant women rights, etc).

       Within priority axis 2, measure 2.2, which will promote inclusive education policies from
        pre-school onwards and addresses early school leavers, will pay special attention to girls
        from vulnerable groups i.e. girls with disabilities, Roma girls, and girls from the rural areas.

       Within priority axis 3, measure 3.1 will support the development of community-based social
        services to vulnerable and disadvantaged groups, including those targeting women victims
        of violence, pregnant teenagers, single mothers, in line with local needs. Measure 3.2, which
        will promote the transition from welfare to work through active inclusion measures, will
        include targets to ensure equal opportunities among beneficiaries.

The impact of the OP on equality of opportunity will be factored into its implementation, as will also
tackling discrimination against minorities and other vulnerable and disadvantaged groups. To ensure
that these principles are taken into account at all levels of implementation, the following procedures
will be adopted:

       The requirement to ensure gender equality and non-discrimination in the operation of IPA
        projects will be included in information and publicity campaigns, and materials provided to
        potential contractors during the tendering process and to potential grant recipients during
        calls for applications, with the use of case studies and examples;

       Applicants for IPA assistance for non-major projects will be expected to demonstrate how
        their project promotes equal opportunities or otherwise takes account of potential gender
        bias (for example, by describing the efforts the project to overcome any barriers to equality)
        and/or ensures that its actions do not compound and reinforce discrimination;

       Gender and anti-discrimination implications will be taken into account through the project
        appraisal process and selection criteria;


   167
                                  OP for Human Resources Development, 2012-2013           2nd draft


       The requirement to observe equality of opportunity and avoid discrimination during project
        implementation will be built into agreements with end recipients and contractors, and will
        be checked, as part of the verification process;

       The outputs and results indicators for projects will be broken down by gender where
        appropriate, for the purposes of project and programme monitoring;

       Commentary will be prepared on operations linked to equal opportunities in the annual and
        final implementation reports of the Operational Programme;

       The impact of the OP on gender equality will be written into the terms of reference for its
        interim evaluation, where relevant;

       Representatives of Government bodies with related responsibilities and relevant NGOs as
        members of the Sectoral Monitoring Committee, to monitor implementation of the
        principle of gender equality and anti-discrimination.

The Operating Structure will make sure that all operations co-financed by the IPA programme are in
compliance with, and contribute to, the equal opportunities policy and legislation of the European
Union. Support to the Operating Structure in developing and interpreting guidelines on ensuring
equal opportunities will be provided under the technical assistance priority axis through consultancy
and training (measure 3.1).

3.3.2 Environmental protection and sustainable development

The Republic of Serbia has adopted the Sustainable Development Strategy (“Official Gazette of the
RS” no. 57/08), which is harmonised with the objectives from other national strategies (National
Strategy of Serbia for the Accession of Serbia and Montenegro to the European Union, the Poverty
Reduction Strategy, The Serbian Strategy of Economic Development 2006–2012), as well as the EU
Sustainable Development Strategy, EU Lisbon Strategy and UN Millennium Development Goals.

The objective of the Sustainable Development Strategy is to establish a balance between the three
key factors of sustainable development, embracing them in one whole supported by an adequate
institutional framework:

       sustainable economic growth and economic and technological progress;
       sustainable social development, based on social balance; and
       environmental protection accompanied with reasonable use of natural resources.

These objectives refer to EC priorities from Community Strategic Guidelines 2007-2013 and Europe
2020.

Integration of environmental issues in other sectoral policies in one of the principles of the
Sustainable Development Strategy. This has been introduced through the promotion of integration
of economic, social and environmental approaches and analyses and support of use of instruments,
such as the Strategic Environmental Assessment (SEA). During its preparation, the OP will be subject
to an independent SEA (SEA), in line with practices established by EU Directive, set out in the
“Handbook on SEA for Cohesion Policy 2007-2013”. This will assess systematically the expected and
potential environmental impact of the OP, and ensure that the OP has taken into consideration any
material consequences for the environment, subjected them to public consultation, and that the
measurement of environmental effects is built into the monitoring system. The SEA will be



   168
                                 OP for Human Resources Development, 2012-2013            2nd draft


appended to the final draft of the OP. The results of the SEA will be central to future evaluations
(interim and ex post) of the OP, as well as to the monitoring of performance.

The effect on the environment will be taken into consideration in the implementation of all
measures of the OP, where relevant. To ensure that sustainability and environmental protection are
taken into account throughout programme management and implementation, the following
procedures will be adopted:

      The requirement for IPA to promote environmental protection & sustainable development
       will be included in both information and publicity campaigns, and materials provided to
       potential contractors during the tendering process and to potential grant recipients during
       calls for applications, with the use of case studies and examples;

      Applicants for IPA assistance will be expected to demonstrate that their project will not have
       a detrimental environmental impact, to certify that it is environmentally neutral, and/or to
       present how the project will make a positive contribution to sustainable development; these
       factors will be taken into account through the project appraisal process and selection
       criteria, if appropriate; where appropriate, projects should be compliant with EU
       Environmental Impact Assessment standards

      Any consequences of the appraisal of environmental impact during the selection stage will
       be reflected in agreements with end recipients and contractors, and will be checked, as part
       of the verifications process;

      Commentary will be prepared on operations linked to environmental protection &
       sustainable development in the annual and final implementation reports of the Operational
       Programme;

      The impact of the OP on environmental protection & sustainable development will be
       considered as part of its interim evaluation, where relevant;

      Representatives of Government bodies with related responsibilities and relevant NGOs as
       members of the Sectoral Monitoring Committee, to monitor implementation of the
       environmental effects of the OP.

All activities carried out in the framework of the OP should be carried out in compliance with EU
environmental legislation.

3.3.3 Participation of civil society

Civil society organisations (CSOs) will be engaged in the preparation of the OP, as described in
section 1.3 on partner consultations, and will be involved in supervising its implementation as
members of the Sectoral Monitoring Committee. The active involvement of civil society will be
encouraged through the opportunity for social partners and NGOs to participate as individual grant
applicants. Civil society actors will also benefit, from improved cooperation between the
Government and socio-economic partners and civil society organisations, to support strategic
planning and future programming including partner consultation.




   169
                                     OP for Human Resources Development, 2012-2013            2nd draft



3.4 Complementarities and synergies with other forms of assistance
The measures proposed for funding under this OP have been selected to complement other national
and international interventions to facilitate human resources development in Serbia, starting with
the State Budget and taking into account other EU programmes, and bilateral and multilateral
assistance.

These synergies take many forms. In some cases, this national and international assistance sets a
broader context for action, by intervening in complementary areas which will not be targeted in the
OP. In other cases, past funding has laid the ground, by instigating studies and projects which are
eligible for implementation through the OP. There are also recent and ongoing projects which will
operate in parallel with the OP and thereby will strengthen the impact of funded actions.

The guiding principle in programming the OP is to maximise coordination, complementarities and
consistency, while concentrating limited resources to achieve the maximum impact from the
programme’s implementation. In this way, the OP seeks to prevent deadweight and duplication, and
to ensure the optimal deployment and added value of IPA resources.

The OP places a particular weight on continuity. The measures and operations under the OP are
mainly based on experiences and lessons learned from national programmes (for example, active
labour market policies) past and ongoing IPA projects (for example, education reform and social
inclusion), and multilateral and bilateral donors (such as the World Bank ‘DILS’ programme, tackling
education and social inclusion at the local level).

3.4.1 Coherence with national programmes

Total budget allocations of relevant line ministries in the year 2010 are shown in the table below.
Since the programme budgeting is still in its pilot phase, figures presented below include both
programmes and annual running costs of relevant ministries. Programmes which are relevant to the
OP include:

State budget 2010 allocations to relevant ministries
                                                                *
                                                       Budget       Comment
Ministry of Economy and Regional Development            €37m        Active Labour Market Programmes
                                                                    implemented       through     National
                                                                    Employment Service
Ministry of Education and Science                      €20.75m      Preparatory pre-school programme
                                                       €0.07m       Professional      development       of
                                                                    preschool    teaching     staff   and
                                                                    associates
                                                        €0.1m       Professional development of primary
                                                                    school teaching staff
                                                       €0.06m       Professional      development       of
                                                                    secondary school teaching staff




    170
                                             OP for Human Resources Development, 2012-2013                        2nd draft




Ministry of Labour and Social Policy                              €323.74m          Social protection allowances for
                                                                                    children and families (Maternity
                                                                                    Allowance, Parent allowance, Child
                                                                                    allowance,       Reimbursement          of
                                                                                    preschool costs, other children and
                                                                                    family allowances)
                                                                  €165.44m           Other social protection allowances
                                                                                     (Carer allowance, Disabled
                                                                                     allowance, Financial support to
                                                                                     families, Costs for centers for social
                                                                                     work, other allowances)
                                                                    €0.18m           Programmes implemented through
                                                                                     Budget fund for protection
                                                                                     programmes of disabled persons
                                                                    €2.7m            Programmes implemented through
                                                                                     Budget fund for programmes of
                                                                                     social protection and humanitarian
                                                                                     organisations
*
    EUR equivalent for 2010 was calculated on the basis of average exchange rate for the period of the first 6 months of 2010.

Budgets are set out on an annual basis in the Republic of Serbia and hence may fall or rise,
depending on economic circumstances and political priorities. Each approved budget includes
expenditure projections for the following next two years. The Government has introduced
programme budgeting on a pilot basis with launch of the GOP (yearly operational planning) process
in 2005.

In addition to the ministries identified in the table above which will form the Operating Structure for
this OP (see chapter 5), the National Investment Plan (NIP) is supporting a set of infrastructure
related projects linked to the development of capacities in the area of social protection and social
service delivery, including the financing of the construction of apartments for youth stepping out of
the social protection system (as an alternative to half-way houses), the adaptation, reconstruction
and renovation of facilities for the placement of youth without parental care at local levels, social
housing for war veterans and housing support for persons.

3.4.2 Coherence with other IPA Components

The preparation of this OP has been closely coordinated with actions under IPA components I and III
in particular, building on the activities funded under the previous CARDS programmes.

In the four annual programmes approved by the European Commission since 2007, IPA component I
(transition assistance and institution-building) has financed projects in the HRD sector worth over
€130 million, mainly focused on education reforms and social inclusion, as presented in Annex J.

           For employment and labour market policy, assistance has been targeted at the National
            Employment Service (NES) to upgrade analysis and forecasting of labοur market trends and
            monitoring and evaluation of active labour market programmes.

           Education and VET support is strengthening institutional capacities and support reforms of
            the VET system, develop the National Qualifications Framework, design and implement
            quality assurance systems with primary and secondary education and VET, promote the
            inclusion of children from marginalised and special needs groups in the system of pre-school
            and elementary education, and establish a system of ‘second chance’, practice-based

       171
                                        OP for Human Resources Development, 2012-2013                       2nd draft


         elementary education for adults, and improving the quality of higher education teaching and
         infrastructure.

        In the area of social inclusion, IPA assistance has also been directed to house, advise, train
         and reintegrate internally displaced persons (IDPs), refugees and returnees, to improve their
         living conditions and facilitate income generation support, and to foster social inclusion by
         strengthening national and local institutions that oversee and provide community-based
         social protection services for different target groups (including children and the mentally ill).

After granting Candidate Country status to Serbia, it is expected that the future allocation of IPA
component I resources to HRD will be minimal. In the meantime, programming of IPA 2011 is
ongoing. The projects listed provisionally in Annex J, which are directly relevant to the OP-HRD, have
been proposed for the Commission’s approval, with a total value of €17.6 million.

In addition, there are cross-cutting projects under IPA component I, currently running and proposed
for the 2011 programme, relevant for management of IPA component IV, such as project
preparation facilities and support to the decentralised implementation system for these two IPA
components.

As can be seen in Annex J, which also sets out previous EU assistance under the CARDS programmes
since 2003, the vast majority of projects under IPA 2007-2010 will be operational during the lifespan
of this programme, and hence active management and synchronisation of their activities and
outcomes will be important for ensuring the success of the OP. The table overleaf explains how the
measures proposed under this OP will build upon the foundations of previous EU funding, based on
the principles of continuity and coordination.

Relationship between OP-HRD measures and CARDS / IPA I assistance
Proposed OP measure       Past and ongoing projects               Comment
Measure 1.1 - Support to the   CARDS 2006 – Twinning project - Support to     The measure will build on the results of
development of regional and    the development of national employment         IPA assistance by further improving the
local employment policies      policy (€1.5m);                                effectiveness of local employment
                               CARDS        2006       -Twinning   project-   policies, through supporting National
                               Modernisation of NES (€1.5m);                  Employment Service (NES) branch offices
                               IPA 2008 – Forecasting and NES data            and local employment councils to prepare
                               management (€1.5m);                            and implement Local Employment Action
                               IPA 2011 - Preparation of Serbian labour       Plans. It will support delivery of the local
                               market         institutions for European       employment policies designed through
                               Employment Strategy (€3.5m)                    IPA 2011.
Measure 1.2 - Increasing the   CARDS 2006 – Support to the development        The measure will build on established
effectiveness of employment    of national employment policy (€1.5m);         mid-term labour market forecasts,
policies            towards    IPA 2008 – NES forecasting and data            evaluation of ALMPs and local labour
disadvantaged groups           management (€1.5m);                            market needs assessed, under the
                               IPA 2011 - Preparation of Serbian labour       previous IPA programmes, by enabling
                               market         institutions for European       the provision of a range of existing and
                               Employment Policy (€3.5m)                      innovative         ALMPs           targeting
                                                                              underdeveloped regions, poor rural areas
                                                                              and hard-to-employ vulnerable groups
Measure 1.3 - Bringing the     -                                              This represents a new area of
informal economy into the                                                     intervention for EU support.
mainstream




    172
      OP for Human Resources Development, 2012-2013   2nd draft




173
                                         OP for Human Resources Development, 2012-2013                         2nd draft




Measure 2.1 - Improving the     CARDS 2003, 2005, 2006 – VET reform              The measure will build on foundations
quality and relevance of VET    programme (€17.0m);                              developed within of the IPA assistance by
and adult education within      CARDS 2006 – Equipment for VET schools           further supporting NQF development and
the National Qualifications     (€3.0m);                                         quality assurance system in vet and adult
Framework                       IPA 2007 – Modernisation of the VET system       education. Support will expand to
                                (€4.0m);                                         activities not covered by previous
                                IPA 2008 – Support for quality assurance         assistance, specifically new economy
                                within the national primary and secondary        sectors, levels 1,2 and 5, elements of NQF
                                education system (€4.0m);                        not defined such as recognition of prior
                                IPA 2008 – Second chance: systemic               learning, and credit transfer system, etc,
                                development of elementary, practice-based        support additional schools in providing
                                adult education in Serbia (€7.5m).               reformed profiles through teachers
                                IPA 2011 - General education and human           training and procurement of necessary
                                capital development (€10.0m)                     equipment, support to providers of adult
                                                                                 education programmes and support that
                                                                                 certificates and qualifications gained
                                                                                 through adult training programs are
                                                                                 recognised in NQF.
Measure 2.2 - Ensuring          IPA 2008 – Education for all: increasing the     The measure will build on capacity built of
access and reaching higher      availability and quality of education for        the national and local stakeholders and
levels of education for         children from marginalised groups (€3.0m);       model of inclusive practices developed by
children at risk                IPA 2009 – Improvement of pre-school             rolling out to other LSGs across Serbia not
                                education (€5.0m)                                covered by previous interventions
Measure 3.1 - Support to        CARDS 2003 – Social Innovation Fund              The measure will build on the market of
social inclusion through more   (€7.5m);                                         social services providers created and local
diversified community-based     IPA 2008 – Fostering social inclusion by         social policy plans and methodologies for
services                        strengthening institutions that provide          development of community-based social
                                community-based social protection services       services by extending best practice
                                for children (€5.5m).                            examples to other LSGs across Serbia and
                                IPA 2011 - Enhancing the position of             focusing on the vulnerable groups among
                                residents in residential care institutions for   adult population. The model of integrated
                                persons with mental disability and mental        social and health services will be further
                                illness and creation of conditions for their     supported and applied to integrated
                                social inclusion in the local community          approaches with other sector, for
                                (€5.17m)                                         example employment
Measure 3.2 - Supporting the    IPA 2009 - Supporting access to rights,          The model of employing IDPs within
transition from welfare to      employment and livelihood enhancement of         health and social service sector as a good
work through active inclusion   refugees and IDPs in Serbia (€ 13.8m)            model of activation policies toward
                                                                                 vulnerable groups will be extended to
                                                                                 other vulnerable groups and considered
                                                                                 to be integrated into system of the
                                                                                 national activation policies based on the
                                                                                 thorough evaluation.

Serbia also receives support under multi-beneficiary IPA, which is accessible by all the Candidate
Countries and Potential Candidate Countries in the Western Balkans and Turkey. Serbia’s
participation in the TEMPUS programme, targeting reform of higher education, has been
continuously supported by €7 million of IPA funding each year since 2007. Serbia will also benefit
under IPA 2010 from:

        The ‘regional initiative for Roma integration’, worth €3.3 million, which will operate between
         2011 and 2014, and aims to improve the quality of life and access to rights of the Roma,
         Ashkali and Egyptian (RAE) communities in the Western Balkans;

        The ‘Youth in Action’ programme, worth €1.5 million, which is designed to promote the non-
         formal education and youth sector in the Western Balkans; and



    174
                                   OP for Human Resources Development, 2012-2013               2nd draft


       Two projects under Erasmus Mundus, with a combined value of €20 million, providing
        scholarships to enable highly qualified graduates from the Western Balkans and Turkey to
        engage in postgraduate study at European universities and to obtain qualifications and/or
        experience in the European Union and EFTA-EEA States (€8 million) and enabling the
        exchange of academic staff and students at all levels between Western Balkans and EU
        member state institutions, thereby enhancing their knowledge and skills (€12 million).

Concerning IPA component II (cross-border cooperation), Serbia participates in cross-border
programmes (CBPs) with its six neighbouring countries and in two trans-national programmes
(TNPs). In each case, Operational Programmes already have been prepared and the following areas
of support identified:

Programme                    Scope of interventions
Adriatic TNP                 Economic, social and institutional cooperation, natural and cultural resources
                             and risk prevention and accessibility and networks
Bosnia and Hercegovina CBP   Social and economic cohesion through actions to improve physical, business,
                             social and institutional infrastructure and capacity
Bulgaria CBP                 Development of small-scale infrastructure and enhancing capacity for joint
                             planning, problem solving and development
Croatia CBP                  Sustainable socio-economic development
Hungary CBP                  Infrastructure and environment and economy, education and culture
Montenegro CBP               Socio-economic cohesion through joint actions to improve physical, business,
                             social and institutional infrastructure and capacity
Romania CBP                  Economic and social development, environment and emergency preparedness
                             and promoting “people to people” exchanges
South-East Europe TNP        Facilitation of innovation and entrepreneurship, protection and improvement
                             of the environment, improvement of the accessibility and development of
                             trans-national synergies for sustainable growth areas.

Experiences and lessons learned from CBC programmes have been taken into account during
drafting of the OP. The key task concerning future coordination will be implementation of specific
grant schemes.

In each case, the priorities of the programme are realised through projects on each side of the
border. In the implementation of OP-HRD measures, the Operating Structure will coordinate with
the relevant CBPs and TNPs, to ensure that the scope of intervention is well-targeted (for example,
in the designing of calls for proposals) and that no applicant receives funding through more than one
programme for the same project.

The relationship with IPA component III (regional development) has been firmly established
through the Strategic Coherence Framework, as the overarching reference document for both the
OPs for Economic Development (OP-ED) and Human Resources Development (OP-HRD). The SCF
notes the importance of the interaction of the supply and demand sides of the economy in creating
jobs and strengthening Serbia’s productivity and competitiveness. Improving transport infrastructure
rejuvenates the economy, increases the efficiency of trade, reduces costs and eases access to
employment in growth centres, by reducing travel times and improving safety performance.
Spending on environmental infrastructure creates uplift in living standards, especially in poorly
served and remote communities, and improves the outlook for attracting investment and job
generation, reducing unsustainable demands on natural resources and boosting tourism potential.
Encouraging enterprise, enabling investment and innovation, and spending on education and skills
are all proven generators of higher productivity in the economy. At the same time, boosting activity
and employment rates leads to GDP growth, as the economy moves towards full employment and


    175
                                       OP for Human Resources Development, 2012-2013                       2nd draft


makes greater use of its most important asset, its people. Promoting a more inclusive labour market
and wider society spreads the gains from wealth generation to all communities and sections of the
population, and should particularly benefit those who are presently most disengaged and
disadvantaged.

The cross-over between the two OPs is inevitably constrained by the scale of resources available
under IPA III and IV, relative to the scale of need. However, wherever possible and appropriate, the
resources of the OPs will be concentrated spatially to exploit synergies to maximum effect,
particularly on under-developed municipalities. For example:

        Investments in environmental (waste and water) infrastructure and business-related
         infrastructure under OP-ED will target poorer localities, which will also be the focus of
         measures under OP-HRD for employment, education & VET, and social inclusion;

        Support to SME development under OP-ED will include consultancy advice to businesses on
         human resources, which dovetails with the support to businesses in employing and training
         young people and adults who are unemployed and inactive under OP-HRD.

Concerning IPA component V (rural development), the preparation of the Rural Development
Programme (IPARD), in line with article 184 of the IPA Implementing Regulation, is taking place in
parallel with drafting of the OP-HRD. There is very limited scope for overlap, given the IPARD is
focused on production in the dairy, meat, fruits and vegetable sectors, but any sectors funded under
this OP will be excluded from IPARD and vice versa. The actions envisaged under OP-HRD will
support rural employment, through active labour market policies, and enhance the prospects of
rural communities through education and VET and help to tackle rural poverty.

3.4.3 Coherence with bilateral and IFI assistance

IPA assistance builds upon an extensive reform programme, covering labour market policy,
education at all age levels, and social welfare and services, through the support of World Bank, EIB,
UNDP and bilateral aid from Austria, Canada, Germany, Italy, Netherlands, Norway, Spain, Sweden,
Switzerland and the United Kingdom, as presented in Annex K. Switzerland leads the donor
coordination group for education, while coordination of social sector reform is primary responsibility
of the UK’s DFID and Norway. It is important to mention that Serbia also participates in the Progress
Community Programme.

The table overleaf below explains how the measures proposed under this OP will take forward
previous bilateral and IFI assistance, based on the principles of continuity and coordination.

Relationship between OP-HRD measures and donor assistance
Proposed OP measure                 Past and ongoing projects                  Comment
Measure 1.1 - Support to the        Sweden - Serbian Labour Market             Developed capacities of the key
development of regional and local   Institutional Capacity Building (€1.7m);   stakeholders and good practice models of
employment policies                 WB and UK – Employment Promotion           ALMPs will be further supported through
                                    Project ($4.5m);                           delivery of local employment policies
                                    Austria – Severance to job (€2.0m )        within this measure




    176
                                         OP for Human Resources Development, 2012-2013                       2nd draft




Measure 1.2 - Increasing the          Italy – Youth employment promotion        Inclusive labour market policies and
effectiveness of employment           ($1.2m);                                  services designed and piloted in NES
policies towards disadvantaged        Spain – Support to national efforts for   branch offices within past assistance will
groups                                the promotion of youth employment         create solid base for its systematic
                                      and management of migration ($6.1m);      implementation throughout the country
                                      Sweden, Switzerland, Norway, UNDP -       and application of the model and
                                      Strengthening capacity for inclusive      methodology to other hard-to-employ
                                      local development in Southern Serbia      vulnerable groups (women, older
                                      (€ 5.4m)                                  workers, etc)
Measure 1.3 - Bringing         the    Norway      –   Modernisation      and    The past assistance created a good
informal economy into          the    integration of the labour inspection      foundation for the further improvement
mainstream                            system in accordance with ILO and EU      of the capacity of Labour Inspectorate
                                      standards and practice (€0.2m)            and labour policies planned under this
                                                                                measure.
Measure 2.1 - Improving the           Austria – TourReg and ECONET              The model od support to schools with the
quality and relevance of VET and      (€2.56m);                                 network of trainers and teachers training
adult education within the            Germany – VET reform programme            programmes accredited will be used as a
National Qualifications Framework     (€2.0m);                                  basis for designing support to schools not
                                      Switzerland – Support to the              covered by the past interventions in
                                      establishment of a teacher training       providing reformed profiles.
                                      system (€2.0m);
                                      EIB loan – School modernisation
                                      programme (€100m)
Measure 2.2 - Ensuring access and     World Bank – Delivery of improved         The developed inclusive education
reaching higher levels of education   local services ($12.0m)                   polices,        school       programmes
for children at risk                                                            implemented, teachers training delivered
                                                                                and drop-out analysis present a firm basis
                                                                                for designing roll-out to other LSGs and
                                                                                schools and pre-school institutions within
                                                                                the measure
Measure 3.1 - Support to social       World Bank – Delivery of improved         Good practices implemented for social
inclusion through more diversified    local services (€5.2m – social sector     policy     planning,    budgeting     and
community-based services              only);                                    development       of    community-based
                                      Norway and UK – supporting the            services will be used as a model in
                                      implementation of the Social Welfare      designing support to LSGs. Accredited
                                      Development Strategy (€4.19m);            training programmes will be utilised as an
                                      Norway      –     Development      and    important pillar in quality assurance of
                                      implementation of the accreditation       services developed and provided.
                                      system for social care professionals in
                                      Serbia (€0.52m);
                                      Norway - Combating sexual and
                                      gender-based violence (€3.0m)
Measure 3.2 - Supporting the          World Bank – Delivery of improved         IT system implemented within DILS
transition from welfare to work       local services (€5.2m – social sector     support on material support Beneficiaries
through active inclusion              only);                                    will enable clients’ analysis and
                                      Spain – Support to national efforts for   understanding of needs in designing
                                      the promotion of youth employment         activation policies. Model piloted and
                                      and management of migration               implemented on integrated employment
                                      ($8.04m)                                  and social services presents condition to
                                                                                roll-out of the model through out CSW
                                                                                and NES network in the country which is
                                                                                planned within this measure.




    177
                                                                                           OP for Human Resources Development, 2012-2013       2nd draft




4 FINANCIAL TABLES

                                                                                                             CC                           IPA           For
                                                                           Total Public        EU                         Private
                                Year 2012                                                                  National                   cofinancing   information
                                                                           Eligible Cost       IPA                     (indicative)
                                                                                                            Public                        rate           IFI
                                                                              (x+y)              x            y            (z)         x/(x+y+z)
Priority Axis 1: Employment and the Labour Market                          €11,466,691      €9,746,688    €1,720,004       €0            85%
Measure 1.1: Support to the development of regional and local
                                                                           €3,415,927       €2,903,538    €512,389         €0            85%
employment policies
Measure 1.2: - Increasing the effectiveness of employment policies
                                                                           €7,074,949       €6,013,706    €1,061,242       €0            85%
towards disadvantaged groups
Measure 1.3: Bringing the informal economy into the mainstream              €975,815         €829,443     €146,372         €0            85%
Priority Axis 2: Education and VET                                         €7,318,418       €6,220,655    €1,097,763       €0            85%
Measure 2.1:Improving the quality and relevance of VET and adult
                                                                           €4,879,189       €4,147,311    €731,878         €0            85%
education within the National Qualifications Framework
Measure 2.2: Ensuring access and reaching higher levels of education for
                                                                           €2,439,229       €2,073,344    €365,884         €0            85%
children at risk
Priority Axis 3: Social inclusion                                          €4,880,617       €4,148,524    €732,093         €0            85%
Measure 3.1: - Support to social inclusion through more diversified
                                                                           €3,904,494       €3,318,820    €585,674         €0            85%
community-based services
Measure 3.2: - Supporting the transition from welfare to work through
                                                                            €976,123         €829,705     €146,419         €0            85%
active inclusion
Priority Axis 4:Technical Assistance                                       €1,414,526       €1,202,347    €212,179         €0            85%
Measure 4.1: - Programme management, information and publicity              €926,798         €787,778     €139,020         €0            85%
Measure 4.2: - Preparation of studies, programmes and projects              €487,729         €414,569      €73,159         €0            85%
TOTAL 2012                                                                 €25,080,252      €21,318,214   €3,762,038                     85%

Please note: measure allocations are indicative


          178
                                                                                           OP for Human Resources Development, 2012-2013       2nd draft



                                                                                                             CC                           IPA           For
                                                                           Total Public        EU                         Private
                                Year 2013                                                                  National                   cofinancing   information
                                                                           Eligible Cost       IPA                     (indicative)
                                                                                                            Public                        rate           IFI
                                                                              (x+y)              x            y            (z)         x/(x+y+z)
Priority Axis 1: Employment and the Labour Market                          €12,016,889      €10,214,356   €1,802,533       €0            85%
Measure 1.1: Support to the development of regional and local
                                                                           €3,579,831       €3,042,857    €536,975         €0            85%
employment policies
Measure 1.2: - Increasing the effectiveness of employment policies
                                                                           €7,414,421       €6,302,257    €1,112,163       €0            85%
towards disadvantaged groups
Measure 1.3: Bringing the informal economy into the mainstream             €1,022,637        €869,242     €153,396         €0            85%
Priority Axis 2: Education and VET                                         €7,669,572       €6,519,136    €1,150,436       €0            85%
Measure 2.1:Improving the quality and relevance of VET and adult
                                                                           €5,113,304       €4,346,308    €766,996         €0            85%
education within the National Qualifications Framework
Measure 2.2: Ensuring access and reaching higher levels of education for
                                                                           €2,556,268       €2,172,828    €383,440         €0            85%
children at risk
Priority Axis 3: Social inclusion                                          €5,114,800       €4,347,580    €767,220         €0            85%
Measure 3.1: - Support to social inclusion through more diversified
                                                                           €4,091,840       €3,478,064    €613,776         €0            85%
community-based services
Measure 3.2: - Supporting the transition from welfare to work through
                                                                           €1,022,960        €869,516     €153,444         €0            85%
active inclusion
Priority Axis 4:Technical Assistance                                       €1,482,398       €1,260,039    €222,360         €0            85%
Measure 4.1: - Programme management, information and publicity              €971,267         €825,577     €145,690         €0            85%
Measure 4.2: - Preparation of studies, programmes and projects              €511,131         €434,461      €76,670         €0            85%
TOTAL 2013                                                                 €26,283,659      €22,341,111   €3,942,549                     85%



Please note: measure allocations are indicative




          179
                                                                                         OP for Human Resources Development, 2012-2013       2nd draft




                                                                                                            CC                          IPA            For
                                                                                              EU                        Private
                             Year 2012-2013                                Total Cost                    National                   cofinancing   information
                                                                                              IPA                    (indicative)
                                                                                                          Public                        rate           IFI
                                                                             (x+y+z)          (x)           (y)          (z)         x/(x+y+z)
Priority axis 1: Employment and the labour market                          €23,483,580    €19,961,043   €3,522,537       €0             85%
Measure 1.1: Support to the development of regional and local
                                                                           €6,995,759      €5,946,395   €1,049,364       €0            85%
employment policies
Measure 1.2: - Increasing the effectiveness of employment policies
                                                                           €14,489,369    €12,315,964   €2,173,405       €0            85%
towards disadvantaged groups
Measure 1.3: Bringing the informal economy into the mainstream             €1,998,453      €1,698,685   €299,768         €0            85%
Priority axis 2: Education and VET                                         €14,987,989    €12,739,791   €2,248,198       €0            85%
Measure 2.1:Improving the quality and relevance of VET and adult
                                                                           €9,992,493      €8,493,619   €1,498,874       €0            85%
education within the National Qualifications Framework
Measure 2.2: Ensuring access and reaching higher levels of education for
                                                                           €4,995,497      €4,246,172   €749,325         €0            85%
children at risk
Priority axis 3: Social inclusion                                          €9,995,417      €8,496,105   €1,499,313       €0            85%
Measure 3.1: - Support to social inclusion through more diversified
                                                                           €7,996,334      €6,796,884   €1,199,450       €0            85%
community-based services
Measure 3.2: - Supporting the transition from welfare to work through
                                                                           €1,999,083      €1,699,221   €299,863         €0            85%
active inclusion
Priority axis 4:Technical Assistance                                       €2,896,925      €2,462,386   €434,539         €0            85%
Measure 4.1: - Programme management, information and publicity             €1,898,065      €1,613,355   €284,710         €0            85%
Measure 4.2: - Preparation of studies, programmes and projects              €998,860       €849,031     €149,829         €0            85%
TOTAL 2012-2013                                                            €51,363,912    €43,659,325   €7,704,587                     85%


Please note: measure allocations are indicative




          180
                                   OP for Human Resources Development, 2012-2013              2nd draft




5 IMPLEMENTATION PROVISIONS

5.1 Management and control structures

This chapter describes the systems and arrangements in place, as they are known at the time of the
preparation of the first draft OP and which have formed the basis of stages 0 and 1 of the
preparation of the decentralised implementation system (DIS). As with the rest of the OP, the chapter
will be subject to negotiations with the European Commission and the recommendations from the
upcoming ex ante evaluation, and hence the bodies within the Operating Structure may be subject to
change, not least as they are directly linked to the formulation of priority axes and measures in
chapter 3. In addition, the precise allocation of responsibilities within the Operating Structure may be
subject to adaptation, through DIS stage 2 and subsequent stages of assessment and accreditation,
but the totality of responsibilities and functions of the Operating Structure will always remain entirely
consistent with Article 28 and other relevant provisions of the IPA Implementing Regulation, as will
be set out in the Financing Agreement, to which the OP will be annexed.

5.1.1 Bodies and authorities

Based on the IPA Implementing Regulation, the Government of Serbia has adopted the Law on
Ratification of the Framework Agreement Between the Government of the Republic of Serbia and
the Commission of the European Communities on the Rules for Co-operation Concerning EC-
Financial Assistance to the Republic of Serbia in the Framework of the Implementation of the
Assistance Under the Instrument for Pre-accession Assistance (IPA), which will designate specific
bodies for IPA management and implementation roles.

Under the management and control provisions, the following bodies have been established and
specific functions assigned through Government Conclusions:

       National IPA Coordinator
       Strategic Coordinator for the regional development and the human resources development
        components
       Competent Accrediting Officer
       National Authorising Officer
       National Fund
       Audit Authority
       Operating Structures

National IPA Coordinator (NIPAC)

The role of the National IPA Coordinator will be performed by:

Deputy Prime Minister for European Integration
The Government of the Republic of Serbia, Nemanjina 11, Belgrade

The specific tasks of NIPAC in relation to the IPA programme include:


    181
                                   OP for Human Resources Development, 2012-2013          2nd draft


    a) to ensure partnership between the Commission and the beneficiary country, and a close link
       between the general accession process and the use of assistance under the IPA Regulation;

    b) to bear overall responsibility for:

               the coherence and co-ordination of the programmes provided under this Regulation;
               the annual programming for the transition assistance and institution building
                component at national level;
               the co-ordination of the participation of the beneficiary country in the relevant
                cross-border programmes, both with Member States and with other beneficiary
                countries, as well as in the transnational, interregional or sea basins programmes
                under other Community instruments. The national IPA co-ordinator may delegate
                the tasks relating to this co-ordination to a cross-border co-operation co-ordinator;

    c) to draw up and, after examination by the IPA monitoring committee, submit the IPA annual
       and final reports on implementation as defined in Article 61(3) to the Commission with a
       copy to the national authorising officer.

The operational support in the fulfilment of the NIPAC role will be provided by the NIPAC Technical
Secretariat - the Department for Programming and Management of EU funds and Development
Assistance, under the Ministry of Finance.

Strategic Coordinator (SCO)

The role of the Strategic Coordinator for IPA Components III & IV will be assumed by:
Deputy Director
European Integration Office

As set out in Article 23 of the IPA Implementing Regulation and the Serbian Government’s Decision,
number: 119-214/009-5 from 13th February 2009 and Government’s Conclusion 05 Number 119-
6858/2010 from 30th September 2010, the Strategic Coordinator coordinates assistance in the
regional development and human resources development sphere, drafts the Strategic Coherence
Framework and ensures coordination between sectoral strategies and programmes.

Competent Accrediting Officer (CAO)

The role of Competent Accrediting Officer (CAO) will be performed by:
Minister of Finance
Ministry of Finance, Kneza Miloša 20, Belgrade

As set out in Article 24 of the IPA Implementing Regulation and the Serbian Government’s Decision,
number: 119-3192/2008, dated 21st August 2008, the CAO is responsible for issuing, monitoring and
suspending or withdrawing the accreditation of the National Authorising Officer and the National
Fund.




   182
                                   OP for Human Resources Development, 2012-2013            2nd draft


National Authorising Officer (NAO)

The role of the National Authorising Officer (NAO) will be performed by:

State Secretary
Ministry of Finance, Kneza Miloša 20, Belgrade

The NAO is the head of the National Fund and has overall responsibility for the financial
management of the EU funds in Serbia, as defined under Articles 25 and 27 of the IPA Implementing
Regulation and the Serbian Government’s Decision, number: 119-416/2009 dated 29th January 2009.
The NAO is responsible for the following specific tasks:

    1. As the head of the national fund, he shall bear overall responsibility for the financial
       management of EU funds in the beneficiary country. He shall be responsible for the legality
       and regularity of the underlying transactions. For these purposes, he shall in particular fulfil
       the following tasks:

        a)    provide assurance about the regularity and legality of underlying transactions;

        b)    draw up and submit to the Commission certified statements of expenditure and
              payment applications; the national authorising officer shall bear overall responsibility
              for the accuracy of the payment application and for the transfer of funds to the
              Operating Structures and/or final beneficiaries;

        c)    verify the existence and correctness of the co-financing elements;

        d)    ensure the identification and immediate communication of any irregularity;

        e)    make the financial adjustments required in connection with irregularities detected,
              according to the provisions of Article 50 of the IPA Implementing Regulation;

        f)    be the contact point for financial information sent between the Commission and the
              beneficiary country.

    2. He shall be responsible for the effective functioning of management and control systems
       under the IPA Regulation. For these purposes, he shall in particular fulfil the following tasks:

        a)    be responsible for issuing, monitoring and suspending or withdrawing the
              accreditation of the Operating Structures;

        b)    ensure the existence and effective functioning of systems of management of
              assistance under the IPA Regulation;

        c)    ensure that the system of internal control concerning the management of funds is
              effective and efficient;

        d)    report on the management and control systems;

   183
                                 OP for Human Resources Development, 2012-2013          2nd draft




       e)    ensure that a proper reporting and information system is functioning;

       f)    follow-up the findings of audit reports from the audit authority, in accordance with
             Article 30(1) of the IPA Implementing Regulation;

       g)    immediately notify the Commission, with a copy of the notification to the competent
             accrediting officer, of any significant change concerning the management and control
             systems.

   3. Pursuant to the responsibilities laid down in 1 and 2 above, the National Authorising Officer
      shall draw up an annual statement of expenditure to be presented to the Commission by 28
      February each year, with the copy forwarded to the competent accrediting officer. The
      statement of assurance shall be based on the NAO’s actual supervision of the management
      and control systems throughout the financial year.

   4. Following receipt of the reports and opinions from the Audit Authority, the National
      Authorising Officer shall:

       a) decide whether any improvements to the management and control systems are
          required, record the decisions in that respect and ensure the timely implementation of
          those improvements;

       b) make the necessary adjustments to the payment applications to the Commission.

National Fund (NF)

The National Fund will operate in the Ministry of Finance and will act as a central treasury entity
through which the EU funds are channelled. It will be in charge of the financial management of
assistance under IPA, as per Article 26 of the Implementing Regulation and the Serbian
Government’s Decision, number: 110-1740/2008-2 from 5th February 2009.

It shall in particular be in charge of organising the bank accounts, requesting funds from the
Commission, authorising the transfer of funds received from the Commission to the Operating
Structures or to the final beneficiaries, and the financial reporting to the Commission.

Audit Authority (AA)

The Audit Authority is currently in the process of being established. The Audit Authority will be
functionally independent of all other parts of the management and control system and responsible
for the following tasks:

       a)    during the course of each year, establish and fulfil an annual audit work plan which
             encompasses audits aimed at verifying:

              the effective functioning of the management and control systems;

              the reliability of accounting information provided to the Commission.


   184
                                  OP for Human Resources Development, 2012-2013           2nd draft


        b)    submit the following documents as required and described by the Article 29 of the IPA
              Implementing Regulation:

               an annual audit activity report following the model to be found in the framework
                agreement;

               an annual opinion as to whether the management and control systems functions
                effectively and conforms to the requirements of this Regulation and/or any other
                agreements between the Commission and the beneficiary country;

               an opinion on any final statement of expenditure submitted to the Commission by
                the national authorising officer, for the closure of any programme or of any part
                thereof.

With regard to the methodology for the audit work, reports and audit opinions required by this
Article, the audit authority shall comply with international standards on auditing, in particular as
regards the areas of risk assessment, audit materiality and sampling. That methodology will take into
account any further guidance and definitions from the Commission, notably in relation to an
appropriate general approach to sampling, confidence levels and materiality.

Operating Structure (OS)

Functions

The Operational Programme for Human Resources Development (OP-HRD) will be managed by the
Operating Structure, which in compliance with Article 28 of the IPA Implementing Regulation will be
responsible for the following functions:

        a)    drafting the annual or multi-annual programmes;

        b)    programme monitoring and guiding the work of the Sectoral Monitoring Committee as
              defined in Article 59, notably by providing the documents necessary for monitoring
              the quality of implementation of the programmes;

        c)    drawing up the sectoral annual and final implementation reports defined in Article
              61(1) and, after their examination by the Sectoral Monitoring Committee, submitting
              them to the Commission, to the national IPA co-ordinator and to the national
              authorising officer;

        d)    ensuring that operations are selected for funding and approved in accordance with the
              criteria and mechanisms applicable to the programmes, and that they comply with the
              relevant EU and national rules;

        e)    setting up procedures to ensure the retention of all documents required to ensure an
              adequate audit trail, in accordance with Article 20;

        f)    arranging for tendering procedures, grant award procedures, the ensuing contracting,
              and making payments to, and recovery from, the final beneficiary;


   185
                                   OP for Human Resources Development, 2012-2013            2nd draft




       g)     ensuring that all bodies involved in the implementation of operations maintain a
              separate accounting system or a separate accounting codification;

       h)     ensuring that the national fund and the national authorising officer receive all
              necessary information on the procedures and verifications carried out in relation to
              expenditure;

       i)     setting up, maintaining and updating the reporting and information system;

       j)     carrying out verifications to ensure that the expenditure declared has actually been
              incurred in accordance with applicable rules, the products or services have been
              delivered in accordance with the approval decision, and the payment requests by the
              final beneficiary are correct. These verifications shall cover administrative, financial,
              technical and physical aspects of operations, as appropriate;
       k)     ensuring internal audit of its different constituting bodies;

       l)     ensuring irregularity reporting;

       m)     ensuring compliance with the information and publicity requirements.

Composition

The Operating Structure will be composed of the following bodies

      Ministry of Economy and Regional Development
      Ministry of Education and Science
      Ministry of Labour and Social Policy
      Ministry of Finance’s “CFCU”

The organisation of the Operating Structure is represented by the following diagram, which shows
responsibilities for OP, Priority Axes, Measures, and Contracting & Implementation. Each body also
contains an internal audit unit which will be responsible for regular independent reviews of the
functioning of the IPA IV management and control systems within the Ministry, in accordance with
Article 28(2)(k) of the IPA Implementing Regulation, and Accreditation Criteria (4)(a).




   186
                                  OP for Human Resources Development, 2012-2013           2nd draft




                                             Figure 64

Please note that it is also proposed that measure 1.2 will be mainly delivered through a direct award
(without call for proposals) from CFCU to the National Employment Service, for the purpose of
expanding the coverage of its ALMPs (in addition to ALMPs financed by the state budget). The
selection of NES for a direct award is fully compatible with PRAG section 6.3.2 of the PRAG, being a
body with technical competence, a high degree of specialisation and administrative power to
implement ALMPs on behalf of the Government in the Republic of Serbia. The direct award will allow
NES to implement employment promotion measures, such as:

       Operating costs: to expand its in-house provision of advisory and training services (for
        example, self-service systems, centres for career guidance and counseling, job clubs…);
       Competitive tenders: to sub-contract the provisions of skills training and re-training (in
        accordance with Annex IV to the grant contract);
       Re-granting to third parties: to provide conditional subsidies to employers to create jobs,
        subsidies to employers for on-the-job training followed by subsequent employment, and
        subsidies for workplace adjustment for employers hiring persons with disabilities;
       Granting to individuals: to provide subsidies to potential entrepreneurs to enter self-
        employment and set up micro-enterprises. in combination with initial training and
        mentoring services;
       Other employment oriented activities in line with the National Employment Action Plan



   187
                                      OP for Human Resources Development, 2012-2013       2nd draft


It is proposed that the direct award is subject to derogations from PRAG, to allow the re-granting to
third parties to exceed the maximum levels in section 6.3.2 of €10,000 per third party and total
amount of €100,000 (granting to individuals would remain below the personal limit of €5000,
however, and would not require a derogation).

The heads of the bodies constituting the Operating Structure are responsible for the tasks assigned
to their respective bodies, in accordance with Article 28 (3) of the IPA Implementing Regulation:

The Assistant Minister for Employment in the Ministry of Economy and Regional Development will
act as the Head of Operating Structure (HOS). In accordance with Article 11(3) of the IPA
Implementing Regulation and Article 27 of the Financing Agreement, the Government of Serbia will
ensure that the HOS and the other heads of responsible bodies listed in the Table above are enabled
to exercise their duties, including in cases where there is no hierarchical link between them and the
bodies participating in that activity, through the preparation, implementation and enforcement of an
Operating Agreement. The Agreement shall clearly identify the functions to be delegated by the
Head of the Operating Structure to each body and authority, and shall respect the principle of
segregation of duties. The final responsibility for the tasks delegated shall remain with the Head of
the Operating Structure.

Description of functions

The Ministry of Economy and Regional Development, as the Body Responsible for the OP, will
support the Head of Operating Structure (HOS) by executing the following functions:

         Coordinating the preparation of the OP, including taking into account the findings and
          recommendations of the ex ante evaluation296;

         Establishing and maintaining the management and control system for the OP;

         Ensuring information on and publicity for the OP297;

         Establishing and organising the Sectoral Monitoring Committee (SMC) meetings for the
          OP298;

         Proposing the general criteria for selecting operations to the SMC, and ensuring that all
          operations are properly prepared and selected in accordance with the Financing
          Agreement299;

         Following the approval of each operation by the European Commission, preparing an End
          Recipient Agreement (ERA) for signature by the HOS and the designated representative of
          the End Recipient, and monitoring and managing the End Recipient Agreement;

         Ensuring that the national contribution for the OP is secured each year;


296
    See also sections 1.4 and 5.2.6
297
    See also section 5.3
298
    See also section 5.2.1
299
    See also section 5.2.4

      188
                                       OP for Human Resources Development, 2012-2013                     2nd draft


         Ensuring all reporting and information requirements of the European Commission, NIPAC,
          Strategic Coordinator, NAO and National Fund are met300;

         Preparing annual & final Implementation Reports on the OP301;

         Contributing to the preparation of annual & final Implementation Reports on IPA as a whole,
          if required by the NIPAC Technical Secretariat;

         Advising the HOS as a member of the annual IPA Monitoring Committee298298 on upcoming
          issues and papers;

         Ensuring the interim evaluation of the OP by independent evaluators, using funds under
          priority axis 4;

         Ensuring the OP achieves its objectives, its financial targets (to avoid budgetary de-
          commitment) its outcome targets (outputs and results), and the application of horizontal
          issues302, and proposing to the HOS any adjustments necessary to ensure these objectives
          and targets are met, including reallocation of funds across measures and priority axes
          and/or changes to implementation arrangements, as applicable.

The Department for Employment will also perform an annual accreditation of the National
Employment Service (NES), as a condition of the NES receiving a direct award under Measure 1.2 to
design, implement, monitor and evaluate active labour market measures.

Each Body Responsible for Priority Axis303 will execute the following functions in relation to its OP
priority axis:

         Contributing to the preparation of the OP;

         Implementing any tasks assigned in the Communication Action Plan relating to information
          and publicity in relation to its priority axis, as required by the HOS297297;

         Contributing to the preparation of general selection criteria by the Body Responsible for OP,
          and participating in selection committees , as required by the HOS299299;

         Participating in the SMC298298 and coordinating inputs to the annual and final
          Implementation Reports for the OP301301 and for the whole of IPA, as required by the HOS;

         Monitoring performance of its priority axis, in terms of achievement of its objectives, its
          financial targets (to avoid budgetary de-commitment), its outcome targets (outputs and
          results)301300 and the application of horizontal issues302302, and if necessary, proposing OP
          adjustments to the HOS.



300
    See also section 5.2.3
301
    See also sections 5.2.5 and 5.3.6
302
    See section 3.3
303
    Ministry of Economy and Regional Development (PA1 and PA4), Ministry of Education and Science (PA2), and Ministry
of Labour and Social Policy (PA3)

      189
                                     OP for Human Resources Development, 2012-2013               2nd draft


Each Body Responsible for Measure304 will execute the following functions in relation to its OP
measure:

         Contributing to the preparation of the OP;

         Implementing any tasks relating to information and publicity in relation to its measure, as
          required by the HOS297;

         Ensuring projects are prepared for the measure in accordance with the Operation
          Identification Sheet (OIS) 299;

         Contributing to the preparation of general selection criteria by the Body Responsible for OP,
          and participating selection committees, as required by the HOS;

         Ensuring that the national contribution for the approved operations under its measure is
          secured each year;

         Contributing to the preparation of tender documentation and other activities related to
          procurement and calls for proposals for submission to the CFCU as the Body Responsible for
          Contracting and Implementation;

         Participating in the SMC299 and providing inputs to the annual and final Implementation
          Reports301301 for the OP, and for the whole of IPA, as required by the HOS;

         Monitoring performance of its Measure, in terms of achievement of its objectives, its
          financial targets (to avoid budgetary de-commitment), its outcomes targets (outputs and
          results) and the application of horizontal issues302302, and if necessary, proposing OP
          adjustments level to the HOS;

         Preparing documents for submission to the SMC on the quality of OP implementation;

As the Body Responsible for Contracting and Implementation, the CFCU will execute the following
functions as Contracting Authority for all OP priority axes and measures:

         Implementing any tasks relating to information and publicity, and ensuring operations
          respect the EU visibility guidelines for external action297297;

         Follow any procedures from the NAO on establishing, maintaining and reconciling bank
          accounts for payments to contractors and beneficiaries under the OP;

         Preparing procurement plans, tender dossiers (procurement) and application packs (grant
          schemes), based on the approval decision of the European Commission on the OIS, in
          compliance with the Practical Guide to Contract Procedures for EC external actions;

         Organising the tender process for procurement of services, supplies and/or works, from
          forecast, through procurement notice, receipt of tenders, evaluation, selection and

304
  Ministry of Economy and Regional Development (M1.1, M1.2, M4.1 and M4.2), Ministry of Education and Science
(M2.1, M2.2 and M2.3), and Ministry of Labour and Social Policy (M3.1 and M3.2)

      190
                                  OP for Human Resources Development, 2012-2013            2nd draft


        publication, in compliance with the Practical Guide to Contract Procedures for EC external
        actions, seeking ex ante approvals from the EU Delegation as appropriate;

       Organising calls for proposals under grant schemes, from forecast, through calls for
        proposal, receipt of applications, evaluation to selection and publication, in compliance with
        the Practical Guide to Contract Procedures for EC external actions (PRAG), seeking ex ante
        approvals from the EU Delegation as appropriate;

       Publicising the selected contractors and grant beneficiaries, and sending award notices for
        contracts to the EC for publication297297;

       Preparing and signing contracts with service, supplies and works contractors and grant
        beneficiaries, including approving or rejecting contract adjustments, within the framework
        of any approved adjustments to the priority axis or measure;

       Ensuring the smooth and timely flow of funds by: forecasting commitments and cash-flow;
        providing information to the NAO and National Fund for expenditure declarations to the EC,
        financial adjustments, corrections and re-use; requesting funds transfer from the National
        Fund; and recovering irregular expenditure, or unused / overpaid funding from contractors
        and beneficiaries;

       Managing contracts and making payments, once checked and approved, to grant
        beneficiaries and contractors, including expenditure verifications, and project / contract
        monitoring; the verifications shall cover administrative, financial, technical and physical
        aspects of the operations;

       Ensuring that the National Fund and NAO receive all necessary information on the
        procedures and verifications carried out in relation to expenditure;

       Maintaining a separate accounting system or codification covering all contractual and other
        financial operations;

       Participating in the SMC298298 and providing inputs to the annual and final Implementation
        Reports for the OP301301, and for the whole of IPA, as required by the HOS, and providing
        inputs to monitoring reports prepared by each Body Responsible for Measure if requested
        and appropriate.

The internal audit units of the Ministries within the Operating Structure will be responsible for
conducting regular audits of the management and control system and reporting to senior
management on its effectiveness and efficiency, with recommendations for corrective action. Each
responsible body within the Operating Structure which is subject to internal audit will cooperate
fully with the internal audit department and follow-up its findings. The information on the audit
plans and their execution, the audit findings and the follow-up actions shall be made available to the
HOS, the NAO and the authorised external audit or control bodies

In addition, there are functions which apply to, and will be executed by, all bodies within the
Operating Structure, as follows:



   191
                                        OP for Human Resources Development, 2012-2013               2nd draft


            Ensuring clear planning of steps needed to deliver objectives, ensuring that the quantity and
             quality of resources (staff, equipment, premises and other facilities) necessary for the
             performance of tasks and responsibilities are secured in a timely fashion, ensuring assets
             and data are kept secure from interference and damage, and ensuring that significant risks
             to continuity are identified and contingency plans are put in place where possible;

            Ensuring that all bodies and individuals have the full legal authority to fulfil their functions,
             and managing human resources, including identifying sensitive posts, ensuring segregation
             of duties305, performing workload analysis and training needs analysis, developing training
             plans, and providing training and performance appraisal;

            Identifying and managing risk, and preventing, detecting, reporting and correcting
             irregularities, corruption and conflicts of interest; cooperating fully with the activities of the
             Ministry’s internal audit unit, and cooperating fully with all external audits and verifications;

            Maintaining an adequate audit trail, establishing a filing and archiving system, ensuring all
             documents are retained in line with the Financing Agreement and PRAG, ensuring that
             significant risks to continuity (for example, concerning loss of data, absence of individuals
             etc) are identified and contingency plans put in place where possible, and ensuring that
             assets and data are kept secure from interference or physical damage;

            Meeting the information and reporting requirements of the HOS, participating in regular
             coordination meetings of the Operating Structure, and organising coordination meetings at
             priority axis or measure level, as appropriate;

            Carrying out verifications, active supervision and quality checks over the tasks delegated to
             the subordinates;

            Ensuring that the HOS, the National Fund and the National Authorising Officer receive all
             necessary information on the procedures and verifications carried out;

            Ensuring exceptions and variations to normal practices are always recorded and logged and
             reviewed at appropriate levels, and ensuring that the registration of any internal control
             weakness identified from any source and that management responses are recorded and
             followed-up;

            Providing confirmations and annual statements of assurance/management declarations to
             the HOS and NAO, based on the actual supervision of the management and control systems,
             including:

                   A confirmation of the effective functioning of the management and control system;
                   A confirmation regarding the legality and regularity of underlying transactions;
                   Information concerning any changes in systems and controls, and elements of
                    supporting accounting information;



305
      See also section 5.1.2

       192
                                   OP for Human Resources Development, 2012-2013          2nd draft


       Ensuring the implementation of the recommendations by internal audit, the Audit Authority
        and other authorised audit bodies.

Role of the EU Delegation

The EU Delegation will execute ex ante control in all the areas to be laid down in the Commission
Decision on conferral of management powers, until the Commission allows for decentralised
management without ex ante controls, as referred to in Article 18 of the IPA Implementing
Regulation.

5.1.2 Separation of functions

In accordance with the Article 21.2 of the IPA Implementing Regulation and with Article 6, Paragraph
3 of the Law on Ratification of the Framework Agreement Between the Government of the Republic
of Serbia and the Commission of the European Communities on the Rules for Co-operation
Concerning EC-Financial Assistance to the Republic of Serbia in the Framework of the
Implementation of the Assistance Under the Instrument for Pre-accession Assistance (IPA) [Official
Gazette of RS NO. 4046/07], as well as the DIS “Implementing Agreements” and “Operating
Agreements”, which are to be adopted by the Government of the Republic of Serbia, and the
abovementioned Government decisions appointing functions and bodies, the appropriate
segregation of duties will be ensured between and within the designated bodies.

Separation of functions between the bodies

The separation of functions results from a division of tasks as described above.

This includes the following principles:

       there shall be a clear separation between verifications, controls, and evaluations to be
        carried out by the Operating Structures and by the National Fund;

       there shall be clear separation between the audits carried out by the Audit Authority and the
        implementation and payment procedures.

Separation of functions within the bodies

The organisational structure of the bodies and their internal management and control procedures
will take into account an adequate separation of functions. This includes the following principles:

       before an operation is authorised, the operational and financial aspects shall be verified by
        members of staff other than the one responsible for initiation or implementation of the
        operation;

       certificates of statement of expenditure shall be drawn up by a person or department within
        the National Fund that is functionally independent from any services that approve claims;




    193
                                   OP for Human Resources Development, 2012-2013            2nd draft


       the initiation, the ex-ante, and the ex-post controls are separate functions, to be carried out
        by different persons, functionally independent from each other.

Division of duties is such that no individual will have responsibility for more than one of the three
functions of authorisation, execution and accounting of sums charged to IPA.

Please note, in executing its responsibilities for OP management, the CFCU will ensure that separate
units are tasked with first, the functions assigned to the Body Responsible for the OP, priority axis 4
and measures 4.1 and 4.2, and second, its functions as the Body Responsible for Contracting and
Implementation (Contracting Authority). This will ensure that there is a segregation of the CFCU’s
duties in programming and monitoring on the one side, and tendering, contracting and payment on
the other side. The principle of separation of functions will also apply, particularly in terms of the
sensitive posts involved in executing CFCU’s responsibilities as Contracting Authority, and the need
for double-checks of all steps in a transaction based on the ‘four-eyes’ principle. Where the CFCU is
a beneficiary under the OP (priority axis 4), it should be noted that the section responsible for
execution of the operations and the section responsible for their verification will be separate.

5.2 Monitoring and evaluation
5.2.1 Monitoring arrangements

Monitoring Committees

In order to ensure coherence and coordination in the implementation of the IPA components,
programmes and operations as well as to follow the progress in the implementation of IPA
assistance, the following monitoring committees should be established:

       IPA Monitoring Committee;
       Sectoral Monitoring Committees attached to components or programmes

IPA Monitoring Committee

The Republic of Serbia has established an IPA Monitoring Committee to ensure coherence and
coordination in the implementation of all five Components of IPA. The first meeting was held on 17
June 2009.

Sectoral Monitoring Committee

The Head of the Operating Structure for the OP for Human Resources Development will establish a
Sectoral Monitoring Committee within 6 months after the entry into force of the Financing
Agreement.

The Sectoral Monitoring Committee for Human Resources Development (SMC-HRD) will be co-
chaired by the Head of the Operating Structure for the Operational Programme for Human
Resources Development, and a representative of the Commission. Its member will include:

       The National IPA Coordinator or his/her representative;

       A representative of the Commission;

   194
                                         OP for Human Resources Development, 2012-2013                      2nd draft


         A representative of the Strategic Coordinator for Components III and IV;

         Representatives of each body of the operating structure for the programme - Ministry of
          Education and Science, Ministry of Labour and Social Policy and Ministry of Finance;

         The Sectoral Monitoring Committee includes representatives from the civil society and
          socio-economic partners, regional or national organisations with an interest in and
          contribution to make to the effective implementation of the programme306;

         The National Authorising Officer;

         A representative of the National Fund.

The composition of the Sectoral Monitoring Committee can be reviewed and extended by the Head
of the Operating Structure in agreement with the Commission in order to guarantee sufficient
representation and membership.

The Sectoral Monitoring Committee will be assisted by a permanent secretariat provided by the
Operating Structure for the preparation of papers for discussion by the committee or for clearance
by written procedure. This secretariat will be located within the Sector for Employment in the
Ministry of Economy and Regional Development, as the Body Responsible for the OP.

The SMC-HRD will report to the IPA Monitoring Committee. Its tasks will include to:

      (a) consider and approve the Communication Action Plan, and monitor its implementation;

      (b) consider and approve the general criteria for selecting the operations and approve any
          revision of those criteria in accordance with programming needs;

      (c) receive information on operations under the OP, which have been or will be submitted to
          the Commission for approval, and the decision of the Commission;

      (d) review at each meeting progress towards achieving the specific targets of the Operational
          Programme on the basis of documents submitted by the Operating Structure;

      (e) examine at each meeting the results of implementation, particularly the achievement of the
          targets set for each priority axis and measures and interim evaluations, carrying out this
          monitoring by reference to the indicators agreed;

      (f) oversee the effectiveness and quality of the programme implementation, and monitor the
          financial absorption capacity of the different interventions;

      (g) examine the sectoral annual and final reports on implementation, including OP summary
          tables;

      (h) be informed of the annual audit activity report or of the part of the report referring to the
          operational programme;
306
   A mechanism for cooperation with civil society organisations will be developed during the coming months and will be
used also as the basis for identifying members of SMCs.

      195
                                  OP for Human Resources Development, 2012-2013           2nd draft


    (i) receive the final report from the interim evaluation and consider its findings and
        recommendations;

    (j) examine any proposal to amend the financing agreement of the programme and propose to
        the operating structure any revision or examination of the programme likely to make
        possible the attainment of the programme's objectives or to improve its management,
        including its financial management, as well as to oversee the cross cutting themes and
        publicity measures.

The Sectoral Monitoring Committee shall confirm or make proposals to the Head of the Operating
Structure, the Commission, the Strategic Coordinator and the National IPA Coordinator to revise the
programme following where relevant an evaluation, including the results, output and financial
indicators to be used to monitor the assistance.

The Sectoral Monitoring Committee will set up its rules of procedure in agreement with the
Operating Structure and the IPA Monitoring Committee. It will meet at least twice a year and upon
request by the Commission. Intermediate meetings may also be convened as required.

In order to better perform its role, the SMC may appoint working groups, particularly for monitoring
activities of horizontal issues and seek opinions of independent experts.

As a principle, the Sectoral Monitoring Committee will aim to take decisions by reaching consensus.

5.2.2    Management Information System

The Head of the Operating Structure is responsible for the efficiency and correctness of
management and implementation and in particular for setting up, maintaining and updating
regularly a reporting and information system to gather reliable financial and statistical information
on implementation, for the monitoring indicators and for evaluation and for forwarding this data in
accordance with arrangements agreed between the NIPAC and the Commission.

This system will be developed into one or several computerised system(s), in a form chosen by the
Operating Structure, which will enable it to:

       monitor and manage the implementation of operations and projects, from the moment of
        tendering and call for proposal to the closure of the OP, in particular results whenever
        feasible and outputs;

       carry out and monitor financial transactions; and

       ensure the reporting requirements on the implementation of the OP.

The Operating Structure and all other bodies involved in the implementation of the OP shall if
possible have access to this system. There are preliminary plans to develop the MIS. Until this
system becomes operational, reporting and collection of date will be done manually.




   196
                                   OP for Human Resources Development, 2012-2013             2nd draft



5.2.3 Monitoring system and indicators

The quantitative and qualitative progress made in implementing the programme as well as its
efficiency and effectiveness in relation to its objectives will be measured by the use of monitoring
indicators related to the results and outputs of the individual measures.

In identifying appropriate monitoring indicators, account has been taken of the methodologies,
guidelines and lists of examples of indicators issued by the Commission, in particular the "Indicative
guidelines on evaluation methods: Monitoring and evaluation indicators" (August 2006, working
document No. 2 for the programming period 2007-2013).

The Head of the Operating Structure is responsible for programme monitoring. In this context, the
Operating Structure will collect performance data (outputs, results and expenditure) from
operations and projects. It will establish, maintain and update the reporting and information system
by taking this project-level data and aggregate it to measure, priority axis and whole OP levels. Data
on individuals who are the ultimate beneficiaries must be collected for each project and used for
aggregation at measure and priority level. On this basis the Operating Structure will assess the
progress of the OP at each level against objectives and targets, prepare reports to the Sectoral
Monitoring Committee, draft the sectoral annual and final reports on implementation and to launch
interim evaluations if required.

In the context of monitoring and for the purpose of using indicators, the role of the Operating
Structure will also be to ensure that:

        a)    monitoring requirements are built into the calls for tender and proposals documents
              (application forms and guidelines for applicants);

        b)    project applications (when appraised and selected) include proposed outputs and
              results, as well as data on individuals, that are consistent with the OP indicators for
              the appropriate measure;

        c)    provision of data is built into the contract with beneficiaries as an obligation, and that
              performance data is provided systematically and in a timely manner by beneficiaries
              alongside the project reimbursement claim.

5.2.4 Selection of operations

All service, supply, works and grant contracts shall be awarded and implemented in accordance with
the rules for external aid contained in the Financial Regulation and in accordance with the "Practical
Guide to contract procedures for EC external actions" (Practical Guide) as published on the
EuropeAid website at the date of the initiation of the procurement or grant award procedure. The
standard templates and models provided for in the Practical Guide shall be used in order to facilitate
the application of the applicable rules.

All operations which are implemented by final beneficiaries other than national public bodies shall
be selected through calls for proposals, in accordance with Articles 49-51 of the Financing
Agreement.



   197
                                         OP for Human Resources Development, 2012-2013                      2nd draft


For operations which are identified and prepared in parallel with the programming of the OP, and do
not require calls for proposals, the relevant OP Working Group307 will ensure that the documentation
is fully and properly prepared before submission to the Commission for approval, and that it has
been selected in accordance with Articles 50 and 51 of the Financing Agreement. It will review
Operation Identification Sheets (OIS) to check that the project documentation is both complete and
accurate (to minimise rejection and re-work), and that the OIS is fully in line with eligible activities
and expenditure, measure-level selection criteria, the financial limits of the priority axis, the
implications of the ‘N+3’ rule relating to automatic de-commitment, and the results targets at
measure level.

Procurement and calls for proposals for grant schemes shall also follow the above mentioned
contract award procedures. Tender selection committees308 will be established for the evaluation of
service, works and supply tenders, and grant applications will also be assessed on a transparent and
competitive basis, using the PRAG.

5.2.5 Sectoral annual and final reports on implementation

Sectoral annual and final reports on implementation will be prepared by the Operating Structure in
accordance with article 169 of the IPA Implementing Regulation. These reports will assess the
implementation progress covering the attainment of set objectives, the problems encountered in
managing the programme and the measures taken, the financial execution as well as monitoring and
evaluation activities carried out. They will include specific progress reports on each major project, in
accordance with the format to be agreed with the Commission. They will be discussed at the spring
meeting of the Sectoral Monitoring Committee meeting of each year, in order to ensure the
operating structure meets the deadline of 30 June for submission of the report to the Commission,
the NIPAC and the NAO.

5.2.6 Evaluation arrangements

Evaluations are a tool for assessing the relevance, efficiency and effectiveness of the financial
assistance, as well as the impact and sustainability of the expected results. An ex ante evaluation and
one interim evaluation will be carried out under the responsibility of the Head of the Operating
Structure, in accordance with the principles laid down in the IPA Implementing Regulation and
guidance provided by the Commission.

The evaluation arrangements and activities of each programme will fully respect the principle of
proportionality.

Types of evaluations

Ex ante evaluation

Under the responsibility of the Operating Structure, an ex ante evaluation of the OP for Human
Resources Development will be carried out under a Framework Contract, which is (currently) being
tendered by the EU Delegation under IPA component I, and will be annexed to the programme. A

307
   See section 1.3
308
   In the terminology of the European Commission’s Practical Guide to Contract procedures for EU external actions
(PRAG), these are known as “Evaluation Committees”

      198
                                   OP for Human Resources Development, 2012-2013            2nd draft


summary of the results of the ex ante evaluation, and the way the evaluation was conducted, will be
set out in section 1.4.

Interim evaluation

During the implementation of the OP-HRD, the interim evaluation to complement the monitoring of
the programme will be carried out and to provide data on any indicators agreed upon in the OP that
cannot be obtained through the monitoring system. In addition, strategic evaluations or thematic
evaluations can be carried out under the responsibility of the operating structure. The results will be
sent to the ad hoc committee on evaluations, to the Sectoral Monitoring Committee and to the
Commission.

Evaluation function

The Head of the Operating Structure is responsible for ensuring that adequate evaluations of the
Operational Programme are carried out. The evaluations will be carried out by external experts or
bodies, functionally independent from the management and control systems, due to the lack of
necessary capacity within the Operating Structure.

In order to ensure that evaluation requirements from the IPA Implementing Regulation are followed,
an officer will be designated with responsibility for preparations for the interim evaluation and
acting as the lead beneficiary and counterpart for the external evaluators, once selected. In order to
ensure the capacity of the evaluation officer, training related to evaluation principles and methods
will be provided under priority axis 4.

The evaluation officer’s objective will be to ensure the successful planning and implementation of
the interim evaluation(s) of the OP-HRD. He/she will also ensure that the findings and
recommendations are communicated to the HOS, the Sectoral Monitoring Committee and other
interested parties, and that the outputs become inputs for future programming cycles.

Evaluation activities and timing

It is intended that there will be only one interim evaluation during the 2011-2013 programming
period, at the mid-point of the programme under the ‘N+3’ rule. The evaluation activities will be
designed in accordance with Commission guidelines.

5.3 Information and publicity
5.3.1 Introduction

Information and publicity are important aspects of pre-accession assistance and in particular to the
successful design and delivery of the operational programmes, given the partnership basis on which
they are undertaken. Communicating for a successful management and implementation of the
operational programmes can be broken down into a series of information and publicity activities.

Accordingly, article 62 of the IPA Implementing Regulation sets out certain requirements regarding
the information to be provided and publicity of programmes and operations financed by the EU,
addressed to citizens and beneficiaries with the aim of highlighting the role of EU funding and
ensuring transparency.

    199
                                    OP for Human Resources Development, 2012-2013             2nd draft


The information to be provided by the operating structures should include inter alia the publication
of the list of final beneficiaries, the names of the operations and the amount of EU funding allocated
to operations. The Commission must also ensure the publication of the relevant information on
tenders and contracts in the official Journal of the European Union and other relevant media and
websites.

Article 63 of the IPA Implementing Regulation provides further that the Commission and the relevant
authorities of the beneficiary country shall agree on a coherent set of activities, to be funded from
the TA priority of the Operational Programme, to make available and publicise information about IPA
assistance.

In accordance with the above provisions, the Ministry of Economy and Regional Development, as the
Body Responsible for the OP, shall be responsible for the information and publicity activities under
the programme, within the context of the EU communications strategy and the strategy for IPA as a
whole, prepared by the NIPAC. The information shall be addressed to the citizens of Serbia and to
European citizens in general, and to the (potential) beneficiaries. It shall aim to highlight the role of
the EU and ensure that IPA assistance is transparent.

5.3.2 Partnership and networking

Bodies that can act as relays for the programme and disseminate the information concerning the
general public are the following:

       Professional and trade associations and organisations;

       Economic and social partners;

       Non-governmental organisations;

       Educational institutions;

       Organisations representing business;

       Operators;

       Information centres on Europe and Commission representations in Serbia;

       Other main stakeholders of each priority.

The Operating Structure will work in close cooperation with the above-mentioned bodies for the
dissemination of information regarding the programme and IPA pre-accession assistance strategy.

5.3.3 Internet

The ISDACON website will host information on the operational programme (also for IPA component
IV) and will be linked to the websites of DEU, and the Directorate-Generals for Regional Policy,
Employment, Social Affairs and Inclusion, and Enlargement.



    200

				
DOCUMENT INFO