PRISTINA, March 22, 2022 – Kosovo needs to reform its social protection programs to ensure they reduce poverty and bring about improvements in equity and human capital, says a new EU-funded situational analysis produced by the World Bank.
The analysis, presented today in Pristina, aims to support Kosovo in further developing its social protection system. It notes that the COVID-19 pandemic and subsequent economic crisis have highlighted challenges that prevent social protection programs from effectively protecting poor and vulnerable populations and from promoting their resilience in Kosovo.
“In the coming years Kosovo stands to benefit from a growing population of young people, but to reap the benefits it needs to invest in human capital while promoting employment and protecting the most vulnerable”, said Massimiliano Paolucci, World Bank Manager for Kosovo and North Macedonia. “A strong social protection system can play an important role in supporting job creation.”
“Fostering social inclusion and combating poverty are core values of the EU, and we strive for a social market economy that cares for the most fragile and leaves no one behind,” said Ambassador Tomáš Szunyog, the Head of EU Office in Kosovo/EU Special Representative. “While Kosovo spends a significant amount of money on social protection, allocations to beneficiaries of different social protection schemes are not adequate and equitable, and create inequalities. It is, therefore, time for the government to reform the social protection system and use it to eradicate poverty, increase employability, and provide decent living conditions for all.”
The analysis assesses the extent to which the social protection system fulfils its purpose. It outlines some of the main present challenges and proposes short, medium, and long-term reforms. It concludes that social assistance spending in Kosovo is skewed towards cash transfers that are unrelated to poverty, making the social protection system unbalanced despite a sizeable budget.
The analysis also underlines that the expenditures on social services are disproportionately low. Kosovo also spends little on employment and labor market policies, while its pension system is highly fragmented, leading to large inequities across the non-contributory pensions.