It is a privilege to be with you today to launch with the representatives of the Government of Romania and with our key partners – the Ministry of Public Finance and with the Ministry of Education and Scientific Research – a project that I consider fundamental for the future of education in Romania: the Romania Secondary Education Project (ROSE).
This project is the result of our joint commitment to improving education in Romania. For the World Bank it represents the largest education engagement in the Europe and Central Asia region of 200 million Euro. The core objective of the project is to increase students’ chances of successfully completing upper secondary education and continuing studies in tertiary education.
My fellow speakers will provide you with detailed technical information about the project and its design, but I would like to highlight what we expect to achieve. Our data show that that in the academic year 2011- 12, over 100,000 school students either failed to pass, or did not take the Baccalaureate. In addition, there were 20,000 tertiary education students who were at risk of dropping out university in the first year of study.
There are three main causes for which Romanian students drop out of high school or fail to pass the Baccalaureate: pedagogical, financial and personal. Pedagogical causes relate to low quality of education; financial causes have to do with cost for attending high school; and personal reasons include lack of motivation, discrimination, or emigration of parents.
We have met many students while conducting surveys in the country during consultations on how to design this project. Let me share with you the example of Mihai, a 17 year old high-school student from Bacau with dreams of becoming an engineer. Mihai loved studying but he was forced to drop out of school when his mother left Romania to work abroad. Mihai’s only hope for the future to have a source of income was to turn to agricultural work – badly paid since he has no qualification. Or Mihai could emigrate like his mother, hoping to find unskilled work abroad, most likely in constructions.
I am recounting Mihai’s story, a young man with potential to develop and contribute to Romania’s economic growth but with a bleak future because the ROSE project will support young people like him, giving them a future.
At global level, the World Bank is working with countries to end extreme poverty by 2030 and to boost shared prosperity. We believe that education is essential to reduce poverty, inequality and increases a country’s democratic process. Secondary and tertiary education in particular can provide the higher level skills that are needed for students to succeed in the labor market. Skills shortages are a major constraint to economic growth, together with labor participation. Surveys of employers indicate fundamental skills shortages, as graduates routinely leave the school system without the minimum knowledge levels needed to find a job. This explains the persistently high unemployment rate for youth in Romania, which is over 24 percent, and the high probability of a graduate immediately becoming unemployed (which is 60 percent of the probability of finding a job).
That is why our most recent Country Partnership Strategy for 2014-2017 - our engagement framework under which we operate in Romania, and under which the ROSE Project has been developed - puts so much emphasis on education. Education is fundamental for governance, growth and inclusion – the three pillars of our country partnership.
In Romania the World Bank has been supporting improvements of the education sectors since the early 1990s. We have been engaged from early childhood education to life-long learning. We have invested over 200 million Euro in developing the education system and empowering students. The World Bank has provided support in revising school curricula, trainings for teachers, infrastructure investments, improving access to education for students in rural areas, and social inclusion in school for Roma children.
Romania has registered significant progress in many areas, including regarding enrollment in upper secondary education - from 75 percent in 2005 to 94.9 percent in 2012. The World Bank has provided input into the strategies adopted this year to reduce early school leaving; to increase tertiary education attainment, quality and efficiency; and for lifelong learning. The country has committed to EU convergence and to the EU2020 targets - for reducing school drop-out rates below 11.3 percent and at least 26.7 percent of 30-34–year-olds completing third level education.
However, important challenges remain for Romania and I would like to focus on two: the demographic challenge and the employment challenge. First - one in five Romanians is income poor today and about 42 percent of the population is at risk of poverty and social exclusion. The changing demographics between 2014 and 2020 will dramatically alter the labour market. By 2020 the number of individuals of working age is predicted to have declined by 4.5 percent. Old-age dependency rate—defined as the ratio of people older than 65 to the working-age population—will double over the next four decades, reaching 55 percent by 2050.
Romania will have to mobilize all potential workers and invest in education and skills to make them more productive. Lack of employment opportunities and low labour earnings are strongly associated with poverty. Romania cannot growth without investing in its citizens especially in the context of demographic projections showing a decline in the number of students by 40 percent in 2025. Only by drastically improving quality of education, to provide the adequate skills, can Romania compensate for its demographic decline.
Second - data about access to education and learning outcomes from students coming from different socio-economic and cultural backgrounds show that Romania is a country with significant disparities in schools. In rural areas, the graduation rate in lower secondary education is only 71.4 percent compared to 94.7 percent in urban areas. In upper secondary education the enrollment rate of non-Roma is almost four times higher than for Roma. There are striking differences between the quality of education in rural and urban areas and between educational achievements for the Roma and non-Roma population.
The urban-rural education gaps are reflected in the employment structure, which has direct implications for income levels and job opportunities. In 2013, one-quarter of the rural employed consisted of non-salaried family workers, while another third were self-employed. In contrast, in urban areas, over 90 percent of the workforce comprises salaried employees. Roma men and women are largely excluded from labor market opportunities in Romania. This reflects their low labor market participation, stemming from knowing of limited prospects of finding work. The labor force participation rates of working-age Roma (57 percent among men and 34 percent among women) are lower those of their non-Roma neighbors (67 percent among men and 42 percent among women).
Considering Romania’s shrinking labour force and aging population, to overcome the demographic and employment challenges, we must also invest in young people. Education can transform societies and help people escape poverty. There is evidence that earnings increase an average of 10 percent for every year of education for employed workers. Education also helps people understand that a diverse society promotes growth.
Let me conclude by thanking you all for your participation today and commitment to make a difference for Romania’s students and citizens. And let me congratulate again Mr. Curaj, the Minister of Education and Ms Dragu, the Minister of Public Finance, as well as the staff in both ministries for their work to make this project a reality. My appreciation equally goes to the previous Ministers of Education and Finance for their leadership during project preparation and continued oversight; to the World Bank Education team led by Ms. Costin and Mr Aedo, and especially to the Education Staff in the Romania Country Office, for their effort and commitment.
Thank you for your attention.