Equitable Development: Reduction of Disparities in BiH through EU Accession

Prepared for:The Balkans by 2030: full members of the European Union Seminar

in organisation of ISS

Sarajevo, June, 2011

BiH Regional Disparity Assessment 2010

BiH Regional Disparity Assessment 2010 Background

• A useful innovation and addition to the existing resources and statistical findings

• User-friendly reference with select information in one place, at sub-entity administrative level especially

• Official data in one place for 17 different territorial units/regions and 142 municipalities.

• 43 different sets of inputs encompassing economic, poverty, social, infrastructural and other parameters.

• 19 indicators used for regional and 5 indicators for municipal ranking • Key summary section and analysis of findings on a regional level in the 7

distinct areas: Demography; Education; Access to Utilities (Electricity, Water and Sewerage); Quality of Life, Standard of Living, Transport Infrastructure and Health; Employment; Economic Disparity, Income and Poverty and Social Inclusion and Vulnerable Groups

BiH Regional Disparity Assessment 2010 Indicators

Indicators used for regional ranking Indicators used for municipal ranking

Employment rate (%)Unemployment rate (%)GDP per capita (KM)Salary -monthly average (KM)Average expenditure (KM) (Consumer Basket Cost)Poverty rate (%)Number of doctors per 1000 peopleTotal number of students per 1000 people Number of registered travel cars per 1000 people Percentage of households with sewerage systemShare of 4 member HHs without any income (%)Share of 4 member HHs with only one income source (%)Share of 4 member HHs with two or more income source (%)Number of hospital beds per 1000 peopleNumber of displaced persons per 1000 peoplePoverty gap (%)Percentage of households with potable water ILO Employment rate (%)ILO Unemployment rate (%)

Net salary (Ø 2008)Employment rate Unemployment rate Total number of students in all levels of education per 1000 people Number of population to one doctor

BiH Regional Disparity Assessment 2010 Sources

• Combining the findings of two largest household surveys conducted by statistical institutions in BiH:– Household Budget Survey (HBS) 2007 (n=7468); – Labour Force Survey (LFS) 2008 (n=9261); and– Administrative data

• Access to electronic HBS and LFS databases secured through MoU between BHAS and UNDP

• Team and timeframe: UN RCO/UNDP - May-June 2010• Final assessment document will be distributed to all interested parties in

due course• Purpose of the assessment multi-fold – for planning, more accurate

targeting, further research and assessment, advocacy and fundraising

BiH Assessment Regional and Municipal Maps

REGIONAL DISPARITIES MUNICIPAL DISPARITIES

BiH Regional Disparity Assessment 2010 Considerable regional disparities

• 5 Best ranked: Sarajevo, Hercegovina-Neretva, Istočno Sarajevo, Banja Luka and Zenica-Doboj

• 5 Worst ranked: Canton 10, Una-Sana, Bosnian Podrinje, Posavina and Bijeljina

Indicators: Best ranked: No: 1 Worst ranked: No. 17

GDP per capita (KM)Salary -monthly average (KM)Average expenditure (KM) (Consumer Basket Cost)Poverty rate (%)Number of doctors per 1000 peopleNumber of hospital beds per 1000 peoplePercentage of households with sewerage systemPoverty gap (%)ILO Employment rate (%)ILO Unemployment rate (%)Employment rate (%)Unemployment rate (%)

13,024 KM (Sarajevo)941 KM (Sarajevo)2,242 KM (Neretva)5.2% (Sarajevo)2.8 (Sarajevo)5.7 (Sarajevo)92.9 % (Sarajevo)18.8% (Sarajevo)43.1% (Doboj)14.7% (Doboj)33.7% (Sarajevo)30% (B. Luka)

3,953 KM (Canton 10)599 KM (Bos. Podrinje)1,086 KM (Foca)37% (Foca)0.8 (West Herz.)0 (West Herz.)9.1% (Posavina)39.4% (Bos. Podrinje)20.4% (Canton 10)38.8% (Central Bos.)13.8% (Canton 10)51% (Una-Sana)

GENERAL DEVELOPMENT AND LIVING STANDARDS PER TERRITORIAL UNIT IN BiH - INDICATORS

Areas

INDICATORS

Empl

oym

ent r

ate

(%)

Une

mpl

oym

ent r

ate

(%)

GD

P p

er c

apita

(BAM

)

Sala

ry -m

onth

ly a

vera

ge

(BAM

)

Ave

rage

exp

endi

ture

(BAM

) (C

onsu

mer

Bas

ket C

ost)

Pove

rty

rate

(%)

Num

ber o

f doc

tors

pe

r 100

0 pe

ople

Tota

l nu

mbe

r of

stu

dent

s

per 1

000

peop

le

Num

ber o

f reg

iste

red

trav

el

cars

per

100

0 pe

ople

Perc

enta

ge o

f hou

seho

lds

w

ith s

ewag

e sy

stem

Shar

e of

4 m

embe

r HH

s w

ithou

t any

inco

me

(%)

Shar

e of

4 m

embe

r HH

s w

ith

only

one

inco

me

sour

ce (%

)

Shar

e of

4 m

embe

r HH

s w

ith

two

or m

ore

inco

me

sour

ces

(%)

Num

ber o

f hos

pita

l bed

s pe

r 10

00 p

eopl

e

Num

ber o

f dis

plac

ed p

erso

ns

per 1

000

peop

le

Pove

rty

gap

(%)

Perc

enta

ge o

f hou

seho

lds

with

pot

able

wat

er

ILO

Em

ploy

men

t rat

e (%

)

ILO

Une

mpl

oym

ent r

ate

(%)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

BIH 21.9 40.6 6,429 752 1,655 18.2 1.5 160 185 47.7 1.6 34.3 64.1 3.5 32 26.2 94.1 33.6 23.4

FBiH 22.6 44.0 6,718 751 1,777 17.0 1.6 174 192 55.3 2.0 32.5 65.5 3.5 24 25.2 96.9 31.8 25.0

Una-Sana 15.0 51.2 4,060 686 1,719 19.5 1.0 165 146 45.2 9.1 40.1 50.8 2.6 15 25.3 97.2 26.8 27.7

Posavina 15.5 50.3 4,274 656 1,822 11.7 1.2 144 176 8.1 7.5 38.7 53.8 2.3 14 23.2 96.4 34.0 20.0

Tuzla 20.4 50.8 5,802 707 1,459 26.5 1.7 173 182 50.2 1.1 41.6 57.3 2.9 39 28.1 95.6 33.0 23.4

Zenica-Doboj 22.6 45.6 5,588 621 1,483 23.5 1.2 173 167 60.3 1.7 32.0 66.3 2.6 12 24.0 98.7 35.5 23.5

Bosnian-Podrinje 16.8 46.6 4,238 599 1,350 29.2 1.1 141 145 68.9 0.0 27.4 72.6 2.2 106 39.4 95.3 34.5 25.5

Central Bosnia 18.5 49.0 4,445 608 1,739 15.3 1.1 173 168 46.0 0.9 34.4 64.7 5.1 31 21.8 99.2 26.1 38.8

Neretva 22.5 40.9 7,592 822 2,242 9.9 2.0 174 234 38.7 0.0 25.6 74.4 3.9 21 19.2 94.0 38.9 16.7

West Herzegovina 19.6 39.9 4,860 616 1,880 7.5 0.8 190 263 14.7 0.0 68.6 31.4 0.0 2 18.8 97.4 28.7 21.7

Sarajevo 33.7 34.5 13,024 941 2,207 5.2 2.8 186 253 92.9 0.9 16.3 82.8 5.7 22 21.4 99.2 31.4 24.6

Canton 10 13.8 46.7 3,953 676 1,492 19.6 1.0 121 147 25.0 0.0 28.6 71.4 1.1 20 30.1 79.9 20.4 33.6

RS 20.6 33.9 5,906 755 1,463 20.1 1.4 138 166 33.8 0.6 37.9 61.5 3.4 47 27.5 89.6 37.3 20.5

Banja Luka 22.7 30.0 6,659 773 1,526 19.5 1.6 139 175 40.0 0.0 41.0 59.0 4.4 32 31.3 91.2 33.8 22.0

Bijeljina 17.2 39.3 4,899 749 1,431 18.7 1.0 129 160 18.7 1.8 41.6 56.6 1.7 57 26.1 89.5 41.5 18.4

Doboj 17.2 37.4 4,255 646 1,411 20.2 1.1 121 158 29.6 0.0 30.0 70.0 2.7 52 26.3 88.2 43.1 14.7

East Sarajevo 22.0 34.5 6,672 782 1,590 17.3 1.5 133 160 33.1 0.0 13.8 86,2 3.6 57 20.0 92.8 42.7 17.0

Foca 17.9 42.2 5,667 810 1,086 37.0 2.4 116 121 62.5 0.0 45.5 54.5 5.1 63 23.4 98.9 29.9 26.7

Trebinje 24.9 34.6 6,846 740 1,367 22.9 1.6 151 178 36.9 3.7 47.5 48.7 2.5 91 20.3 73.6 31.9 34.8

DB 25.5 42.3 7,681 730 1,395 25.8 1.5 163 268 57.3 1.5 42.4 56.1 3.8 15 26.2 88.9 25.1 31.9

*The data displayed in this table is a compilation of the most relevant findings presented in the rest of the document wh ich contains refference to the sources of information.

GENERAL DEVELOPMENT AND LIVING STANDARD PER REGIONS IN BIH – INDICATOR RANK

Areas

REGION RANK BY INDICATORS

Empl

oym

ent

rate

(%

)

Une

mpl

oym

ent

rate

(%

)

GD

P p

er c

apita

(BAM

)

Sala

ry -m

onth

ly a

vera

ge

(BAM

)

Ave

rage

exp

endi

ture

(BAM

) (C

onsu

mer

Bas

ket C

ost)

Pove

rty

rate

(%)

Num

ber o

f doc

tors

pe

r 100

0 pe

ople

Tota

l nu

mbe

r of

stu

dent

s

per 1

000

peop

le

Num

ber o

f reg

iste

red

trav

el

cars

per

100

0 pe

ople

Perc

enta

ge o

f hou

seho

lds

po

sses

sing

sew

age

syst

em

Shar

e of

4 m

embe

r HH

s w

ithou

t any

inco

me

sou

rce

(%)

Shar

e of

4 m

embe

r HH

s w

ith

only

one

inco

me

sour

ce (%

)

Shar

e of

4 m

embe

r HH

s w

ith

two

or m

ore

inco

me

sour

ces

(%)

Num

ber o

f hos

pita

l bed

s pe

r 10

00 p

eopl

e

Num

ber o

f dis

plac

ed p

erso

ns

per 1

000

peop

le

Pove

rty

gap

(%)

Perc

enta

ge o

f hou

seho

lds

with

pot

able

wat

er a

vaila

ble

ILO

Em

ploy

men

t rat

e (%

)

ILO

Une

mpl

oym

ent r

ate

(%)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Una-Sana 16 17 16 10 6 9 16 7 15 8 17 10 15 11 13 10 6 14 13 Posavina 15 15 13 12 4 4 10 10 7 17 16 9 14 13 15 7 7 7 5

Tuzla 8 16 7 9 11 15 4 5 5 6 11 12.5 10 8 7 14 8 9 8 Zenica-Doboj 5 11 9 14 10 13 9 6 10 4 13 7 7 10 16 9 4 5 9

Bosnian-Podrinje 14 12 15 17 16 16 12 11 16 2 4.5 4 4 14 1 17 9 6 11 Central Bosnia 10 14 12 16 5 5 11 5 9 7 9.5 8 8 2 9 6 1.5 16 17

Neretva 6 8 3 2 1 3 3 3 4 10 4.5 3 3 5 11 2 10 4 2 West Herzegovina 9 7 11 15 3 2 17 1 2 16 4.5 17 17 17 17 1 5 13 6

Sarajevo 1 2 1 1 2 1 1 2 3 1 9.5 2 2 1 10 5 1.5 11 10 Canton 10 17 13 17 11 9 10 15 15 14 14 4.5 5 5 16 12 15 16 17 15

Banja Luka 4 1 6 5 8 9 5 12 8 9 4.5 11 9 4 8 16 12 8 7 Bijeljina 12 6 10 6 12 7 14 14 12 15 14 12.5 11 15 5 11 13 3 4

Doboj 13 4 14 13 13 11 13 16 13 13 45 6 6 9 6 13 15 1 1 East Sarajevo 7 5 5 4 7 6 8 13 12 12 4.5 1 1 7 4 3 11 2 3

Foca 11 9 8 3 17 17 2 17 17 3 4.5 15 13 3 3 8 3 12 12 Trebinje 3 3 4 7 15 12 6 9 6 11 15 16 16 12 2 4 17 10 16

Brčko District 2 10 2 8 14 14 7 8 1 5 12 14 12 6 14 12 14 15 14

BiH Regional Disparity Assessment 2010 Municipal Disparities

• 89 municipalities in total or 62% are underdeveloped or extremely underdeveloped

– 34 extremely underdeveloped municipalities – 55 underdeveloped municipalities

• Some municipalities are too small/diverse to constitute useful units of measurement. Differences in municipal population:

– East Drvar - 110 residents; Petrovac – 259 residents; VS– Sarajevo - 304,614 residents; Banja Luka - 223,641.

Indicators: Best ranked: No: 1 Worst ranked: No. 17

Net salary (Ø 2008)Employment rate Unemployment rate Total number of students in all levels of education per 1000 people Number of population to one doctor

1,069.21 KM (SA Centar)67.9% (SA Centar)14.5% (SA Centar)17.2% (Prnjavor)235/229 (SA C/Lukavica)

81 (SA Centar)

481.83 KM Usora3.2% Vukosavlje79.7% Teocak77.7% Sapna0/7 Dobretici/Ravno

4,618 KalinovikNo doctor in Istocni Mostar, Osmaci, D. Zabar, Vukosavlje...

Equitable Development, BiH EU Accession and EU Policies to alleviate poverty and disparities

Key issues in rural areas of BiH and agriculture sector

• Most of BiH is rural - average population density is 75.1 people per km2• 47% of area is agriculture land • Only 20% of area is adequate for intensive farming• Rural population accounts for 60% of the population, farms provide

income/livelihoods for approx. 20% of population• Issue of depopulation and aging population of rural areas• Poor infrastructure and services, outdated technology• Overlapping institutional competences and functions in Agri sector• Poor market orientation/difficult to export to EU/low competitiveness• No product standardisation/lack of laboratory certification• Fragmented supply chains, expensive logistics, limited access to finance• Small-sized family farms/small land plots/limited commercial farming• Only 2-3% of BiH budget dedicated to agri sector that contributes approx.

10% to GDP (13% in RS, 6 in FBiH)-ongoing underinvestment in the sector• BiH remains net importer of agricultural and food products• Poor care for the environment / Rural dev. policy still of marginal interest

EU principle of regional equitable development EU Regional / Cohesion Policy

• EU Regional Policy – Implemented through structural funds - The European Fund for Regional Development (EFRD), European Social Fund (ESF) , Cohesion Fund contribute to three objectives:– Supporting Development in the Less Prosperous Regions– Regional Competitiveness and Employment– European Territorial Cooperation

• In the period 2007-2013, cohesion policy benefits from 35.7% of the total EU budget or 347.41 billion EUR aimed at Member States whose Gross National Income (GNI) per inhabitant is less than 90% of the Community average (all non EU-15 member states + Spain)

• Europe is divided into various groups of regions corresponding to the classification known by the acronym NUTS (for collection of statistics, analysis, framing of EU policies)

EU Map – NUTS division

• Remote rural areas of EU (more than 45 mins drive to a town with 50,000 inhabitants) experience similar problems as rural areas in BiH (depopulation, aging population, etc.)

• EU regional development statistical, monitoring and planning tools:

– EUROSTAT Regional Yearbook– EU Regional Lisbon Index– EU Regional Competitive Index– EU Quality of Life Survey– EU Analysis on Remote Rural

Regions– Regional Challenges in the

Perspective of 2020 (EU Regional Disparities and Future Challenges)

EU Support to Agricultural and Rural DevelopmentCAP – Common Agricultural Policy

• CAP benefits 48% of the total EU budget (480 billion EUR 2007-2013) – implemented through European Agricultural Guarantee Fund (EAGF), European Agricultural Fund for Rural Development (EAFRD):– Promotes a viable and competitive agricultural sector– Contributes to sustainable development of rural areas, protecting the

environment and climate change, improving quality of life in rural areas– Promotes the EU agricultural sector in world trade

• EAGF finances direct payments to farmers and measures to regulate agricultural markets – 2009 budget was 41.13 billion EUR

• EAFARD – 20% of CAP budget – 2009 budget was 13.97 billion EUR– Axis 1: Improving the competitiveness of the agricultural and forestry sector – Axis 2: improving the environment and the countryside – Axis 3: quality of life in rural areas and diversification of the rural economy – Axis 4: LEADER (implementation of local development strategies through LAGs)

Finacing of agriculture in BiH

• 2011 FBiH subsidies/agriculture contributions – 55 million KM• 2011 RS subsidies/agriculture contributions – 60 million KM• FDI inflow in BiH in the period 1994-2009 amounted to 5.8 billion EUR, The average

FDI contribution to GDP, in last period, was 5.8%.

FDI inflow in BiH by sectors – dismal investments in Agriculture?

 

       Source: Central Bank of BiH; MoFTER,FIPA

What EU future holds for BiH?Case of Croatia

• SAPARD 2005-2006 (Special Accession Programme for Agriculture & Rural Development) for structural adjustment of beneficiaries countries agricultural sectors and rural areas, and implementation of the Acquis concerning the CAP and related legislation (2006 SAPARD support to Croatia was 25 MEUR)

• SAPARD was succeeded by Component V for Rural Development of the IPA programme.

• Croatia IPARD funds 2007-2011 – EU contribution 129.4 MEUR (75.25%), total public aid to programme 171.97 MEUR and anticipated private contribution of 135.5 MEUR – Total: 307.5 MEUR

• Overall IPA 2011 for BiH is envisaged to be 102 MEUR - BiH IPARD would make considerable contribution to agricultural and rural development in the country – but is BiH ready?

EU Instruments – Post AccessionCAP 2009 Expenditure

European Agricultural Guarantee Fund

(EAGF)

European Agricultural Fund for Rural Development

(EAFRD)EU Total EUR 46.47 billion EUR 13.97 billion

Czech Republic EUR 557.4 million EUR 409.0 million

Slovenia EUR 104.4 million EUR 136.5 million

Slovakia EUR 274.1 million EUR 282.7 million

Romania EUR 598.3 million EUR 1.5 billion

Bulgaria EUR 227.9 million EUR 456.8 million

Poland EUR 2.03 billion EUR 1.97 billion

Bulgaria Romania Poland Czech Republic Slovenia Slovakia

37% 45% 53%70% 76% 79%

Absorption of EAFRD in 2009

Conclusions

• Agriculture and rural potential not tapped in BiH• Equitable development crucial – geographical disparities in BiH are

considerable• Rural areas stagnate and need to become more attractive• Agricultural sector needs to become more competitive• EU pre and post accession funds would play crucial injection for

revitalization of rural areas and agricultural sector in BiH• BiH IPARD important next step to address a number of

rural/agriculture/poverty systematic issues• Development of absorption capacities at all levels (including municipal)

needs to become priority for all development actors