WASHINGTON, October 14, 2017 - World Bank Vice-president for Europe and Central Asia Cyril Muller and Minister for National Economy Mihály Varga signed today a reimbursable advisory service (RAS) agreement – a form of technical assistance - to support Hungary in its efforts to strengthen the inclusiveness of its economic growth through better insertion of jobseekers into the labor market.
The Hungarian labor market has been gradually recovering at a steady pace since the financial crisis of 2008. Nevertheless, a significant number of young Hungarians leave the education system without the requisite skills to find good quality employment. Skills mismatches in the labor market, rates of early school leaving above the EU average and higher unemployment risks for low-skilled and vulnerable individuals add further pressures to the country’s long-term growth prospects. To address some of these challenges, Hungary has recently introduced a series of measures to enhance job-seekers’ profiling.
“We are extremely happy to work with Hungary in providing the analytical tools and policy options to help bring more people into the labor market”, said Cyril Muller, World Bank Vice-president for Europe and Central Asia. “This partnership with a high-income country is a reflection of Hungary’s commitment to spread the benefits of growth and ensure that enhanced prosperity touches every Hungarian household.”
The World Bank will provide technical assistance to the Hungarian Ministry for National Economy over a period of 18 months. The focus of this support will be twofold:
- First, strengthen labor market analytics to improve the profiling of jobseekers and ensure that at-risk categories in search for a job are adequately classified and supported in accessing employment opportunities;
- Second, formulate policy options to support the needs of vulnerable categories of jobseekers through accessing international best practices to tackle their specific challenges, alongside improvements in integrating human development programs into labor market programs to achieve better employment results.
About the World Bank Group
The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID).
The World Bank Group has deepened its partnership with Hungary in particular since 2012 when a Memorandum of Understanding between the Government and the Bank was signed for the provision of advisory services. IBRD provided technical assistance through two advisory services agreements on long-term pension strategy development and planning, and social inclusion. This assistance was complemented by IFC’s partnership with the Hungarian Exim Bank on provision of IFC advisory work, and MIGA’s provision of guarantees for Exim Bank-issued bonds. Hungary benefited from other analytical and advisory work as part of regional studies and assessments, including on social inclusion and labor market.