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The Road to Stability and Prosperity in South Eastern Europe
A Regional Strategy Paper

Chapter 5: Social Inclusion and Social Change-Conditions for Peace and Prosperity in the SEE Region

5.1   Much of the prospect of creating peace, stability and prosperity in the SEE region will depend on the success of efforts to establish stronger cohesion among the countries of the region. One of the greatest casualties of war is the weakening of social capital and dissolution of bonds of trust between individuals, social groups and countries in the region. Even prior to the current conflicts, decades of state socialist systems have left civil society in South Eastern Europe weak and fragmented. Only with a greater tolerance and willingness of the people of the region to live side by side, will the dangers of renewed armed conflicts be contained, investments take place, orderly regional trade develop and economies flourish. Re-establishing and further developing social cohesion needs, therefore, to be one of the guiding principles when defining priorities and interventions in the region under the Stability Pact. Measures will need to be taken to mitigate the social exclusion created as a result of the Balkan wars and from the economic declines experienced in the region in the transition to market economies.

5.2   Social cohesion within and among SEE countries is also threatened by wide differences in living standards, some worsening social indicators and increasing poverty. Chapter 2 provides a summary of living standards and social indicators in the region. While SEE countries inherited and largely continue to have social indicators which are significantly better than countries of similar income levels in other parts of the world, there is large variation between SEE countries. Based on limited data available, poverty has increased significantly during the transition. In Bulgaria and Romania, poverty has risen from marginal levels at the outset of the transition to significant levels by the end of the 1990s. In all countries of the region, rural poverty is worse than urban, low educational levels of the household head is strongly correlated with poverty, and large families and families with unemployed household heads have among the highest poverty rates. In all SEE countries, the Roma stand out as very poor and persistently poor (see Chapter 2, Box 2.1). Poverty studies also point to limited access of the poor to public services, especially safe drinking water and sanitation, electricity, and secondary education. Many poor also have restricted access to health services, owing to inability to pay formal or informal charges.

5.3   The concept of social cohesion stems from a deep concern about social exclusion, which in itself is a process leading inevitably to a denial of human rights. The Council of Europe Report on Human Dignity and Social Exclusion (Duffy Report) has singled out social exclusion as one of the main threats to democracy, human rights, human dignity and stability. Conceptually social cohesion⁴⁴ has been seen as combining the political determination of governments to bring in social development policies and make a success of them with their citizens' aspirations towards greater solidarity. Social cohesion concerns the society as a whole and all its members. It aims to promote active participation in decision making, restore civic and social ties, and develop sound relationships between state, market, and civil society. As part of the efforts to create social cohesion, vulnerable groups, minorities, people with disabilities, ethnic groupings need to be assured integration into societies, access to social services and benefits and in satisfying their social needs.

B. The Need to Reduce Social Exclusion

5.4   Much of the social exclusion existing in SEE countries today results from conflict, from years of economic transition, and from underlying historical social patterns which predate the recent period of conflict. All SEE countries have minority populations and long histories of inter-ethnic conflict and, at times, accommodation and cooperation. The conflicts in Bosnia and Herzegovina, Croatia and Kosovo have led to separation of several ethnic groupings into new nation states. Many minorities have suffered atrocities and were forcibly displaced during recent conflicts. The memory of long periods of conflict and displacement has a lasting impact on the psyches and social fabric of war-affected societies, even after formal hostilities have ceased and many have returned home. UNHCR estimates that at least 1.7 million people, 6 percent of the population, are still displaced in the countries which formerly were Yugoslavia. Millions remain without access to property or stable livelihood. Others have not suffered these massive disruptions but remain disadvantaged and are prevented by a wide range of de jure and de facto obstacles from full participation in education, accessing public services and maximizing individual economic opportunities. Croats, Serbs, Albanians, Hungarians, Greeks and others are minorities in one country, yet majorities in adjoining societies. Roma live in all SEE countries and some neighboring countries. They have suffered from prejudice and exclusion for generations.

5.5   The Roma community is perhaps the most visible minority in the SEE region. Eastern Europe hosts most of the Roma communities, with largest groups in FYR Macedonia, Romania, Slovak Republic and Bulgaria. Most Romas live excluded from the social structures of their countries, while engaging in diverse economic activities which are often viewed by outsiders as being near the border of legality. For many Romas an extended family continues to be the focus of their existence, often more important than the increase of individual wealth and material well being.

5.6   Apart from their vulnerable political situation, Romas are one of the social groups which has suffered the most severe economic deprivation during the process of transition from a socialist to a market economy. They have generally been among the first to become unemployed and given their low skill level have found it difficult to find reemployment. Their health status is generally significantly poorer than that of their host communities. Access to health services remains limited due to remoteness from facilities and lack of participation in normal structure of service provision. Malnutrition is to be found among some Roma communities, mostly affecting children and young mothers. Illiteracy levels are high. A significant number of school-age children never attend school and therefore remain excluded from advancing in skill levels. With the support of NGOs and international organizations, special efforts are now being made by several SEE countries to reach out to the Roma community.

5.7   Animosity and distrust between ethnic groups represent significant impediments to the exchange of goods, services and ideas and present important barriers to trade and investment. De jure and de facto obstacles to participation of minority groups in education and economic opportunity deny the countries of SEE the full utilization of its store of human capital. The perpetuation of ethnic tensions and the threat of a return to conflict absorb the time and efforts of the leaders of governments and institutions of civil society. They limit the capacity to address pressing issues of economy and governance. Ethnic exclusion contributes to a perpetuation of an environment of conflict and undermines efforts to promote intra-regional cooperation.

5.8   But social exclusion does not affect ethnic groups only; societies are also divided along non-ethnic line. Years of warfare as well as painful economic restructuring have left a wide range of vulnerable groups in all segments of society and in all ethnic groups. Economic restructuring and demobilization of soldiers has and will continue to leave groups of able-bodied men and women without employment. In addition, children, pensioners, widows, orphans, war-disabled and other vulnerable groups need to be taken into account, and targeted safety net strategies be put in place to provide a minimum level of protection. The lingering frustrations of the disenfranchised, the unemployed, the socially marginalized fuel tension and unrest which could be redirected into crime and civil violence, much of which may easily become ethnically based. Special efforts need to be made to assure full inclusion of women. Gender based exclusion has not primarily resulted from conflict but represents an endemic element of social relations. In addition to the overall objective of gender equality from the standpoint of equity, inclusion and economic productivity, it is also important to recognize the special role that women and groups of women have played in the transition from conflict in other areas of the world. Women to varying degrees have played the role of peacemaker in many conflicts and the support of women's associations to build bridges across ethnic groups and national borders should be encouraged.

5.9   Of all the elements of social exclusion which prevent regional stability and a return to normalcy, the situation of the war-displaced is the most significant. Lasting peace requires a sustainable resolution of the current situation of displacement and consequent confusion of property rights of ethnic minorities within/between the Bosnian entities, Croatia and FRY. Millions of Serbs, Croats and Bosniacs are denied access to their homes and to their most valuable assets, residential and commercial properties. At least 20 percent of Bosnia and Herzegovina's population remains displaced from their homes and many more have varying degrees of access to their properties due to double occupation and destruction. 340,000 Serbs from Croatia remain as refugees in FRY and Bosnia and Herzegovina. Refugees and IDPs represent 13 percent of the population of Montenegro.⁴⁵ While this issue directly impacts only these countries, it represents one of the most serious constraints to regional stability and, in specific countries, prevents the development of a sustainable, long-term vision for development.

5.10   These figures highlight the high level of displacement which remains from the conflicts in South Eastern Europe. Numbers reflect those currently displaced and still seeking sustainable solutions, either the return home or integration. The true significance of the displacement problem must also take into account the wider effects of these displaced populations on the communities where they are temporarily settled. In addition, according to UNHCR figures, 209,000 citizens of BiH and FRY have sought asylum in Europe since 1990.

5.11   Continued insecurity of housing tenure leads to less incentive for individuals to invest in properties. This instability may also be detrimental to long-term economic planning and risk taking of households. The freezing of assets tied up in residential properties represents, to some degree, a potential store of small-scale investment capital which could otherwise be available for economic activity. As long as the property situation is uncertain, retention or distribution of "temporary" rights may represent a perquisite for political loyalty which could reinforce the position of political leaders and contribute to polarized extremist politics.

5.12   Resolution of the situation of Internally Displaced Peoples (IDPs) and refugees will require regional strategies and reciprocal agreements among affected countries in close alignment and sequencing with regional plans for productive investment. In addition to the political and social difficulties of reintegration, the poorly performing economies of many regions limit the options of refugees and IDPs to gain their livelihoods once they have returned home. Solutions will entail return of some populations and provision of viable alternatives for others when return is unlikely. The magnitude of these populations in some SEE countries implies that significant economic gains and stability will be dependent upon finding a sustainable solution to the return or permanent integration of refugees and IDPs.

C.  Investing in Social Cohesion and Institutional Capacity

5.13   Social cohesion will only develop if the peoples of the region are prepared to strive for peace and collaboration. This requires, inter alia, national leaderships determined to pursue these objectives, values imbedded and taught in SEE societies which make social cohesion and regional collaboration a desirable behavior, policies which enforce mutual collaboration and interaction. Social cohesion will further be developed through functioning institutions which bring together ethnically, socially, economically diverse groupings, and provide possibility for participation, representation and dispute resolution. This will require strengthening of public as well as non-governmental institutions, professional associations, universities, women's associations, trade unions and other groups. Equally important is the support of media open to all members of society which supports participation and inclusion.

5.14 Higher education for leadership formation. The importance of education as an instrument of social change as well as for human capital formation cannot be overemphasized. Special higher education programs will be needed to form new élites from the region able to perform leadership functions within the near future. New leadership in the SEE region is needed to provide political and social guidance to its peoples which will encourage tolerance, respect of human rights, cooperation and collaboration. Different education initiatives have started to be launched under the enhanced "Graz Process" which has been assigned under the Stability Pact as the "Lead Agency" to coordinate and present education initiatives.⁴⁷ The formation of élites in multicultural settings, including students and learners from SEE countries as well as non-SEE countries is essential. The establishment of Centers of Learning in such multicultural settings, possibly through the establishment of a University for the South East European Region, similar as the Central European University, or establishing a center of Higher Learning which resembles the "College de Brugge" in the European Union, are being debated. A proposal to establish a Dubrovnik Foundation for Education and Culture has been advanced in order to foster these objectives.⁴⁸ Large scale student exchanges within the SEE region and with other countries could be an essential element for the reconciliation of future generations-as they have been in the period after the Second World War to support the reintegration of Germany into the international system and the assure the rapprochement between the German and French youth as part of the French-German Friendship treaty.

5.15   Education to establish peace and stability in the next generation. Education of today's youth in the SEE countries will be essential for laying the foundations for tomorrow's peace and prosperity. Much of the support provided needs to focus on the "youth" as their values and actions will be the foundation for a more peaceful future. A well-trained population which values diverse, multicultural, democratic systems, supports their peaceful interaction and cooperation, is needed that Stability Pact's objectives of peace, stability and prosperity may become reality in the region. Education systems which too narrowly focus within their own national setting and do not reach out to the international community and especially other SEE countries, could well run counter to these objectives. Under the enhanced Graz Process education programs have been discussed under: (i) Higher Education and Its Role in the Development of Civil Society; (ii) History and History Teaching; (iii) Education for Democratic Citizenship; (iv) Education and the Management of Diversity; and (v) Vocational Education and Training and its Role in the Development of Civil Society.⁴⁹

5.16   Education for human capital formation. Well-trained human capital is essential for economic development. Poverty in the region is strongly correlated with educational attainments (see Chapter 2, Box 2.1). In comparison with other countries of similar income levels, the SEE region has achieved and maintained good education indicators. There is high demand for education amongst people of the region. Participation rates have remained high by international standards. Governments of the region and their citizens often articulate pride in the traditions of education in their countries. Yet, public allocations to education remain low in all countries, except FYR Macedonia. Fiscal allocations as shares of GDP have decreased during past years in Albania and Bulgaria due to a decline in overall fiscal envelopes. As all countries have experienced significant declines in GDP throughout the transition, the education resource envelope available for each student has declined significantly. In several countries the institutional capacity in the education sector has been weakened with dilapidated infrastructure, poorly paid, trained and motivated teachers, outdated education materials, curricula and teaching styles.

5.17   Human capital formation and the reforming and strengthening of education systems is a long-term process which requires substantial ongoing support. Most of the region's educational systems must re-align to meet the needs of market economies and open societies. All must reform their governance structure. In virtually all of the SEE countries, the needs for physical rehabilitation of school buildings and the provision of furniture, equipment and learning materials are daunting. Even more important are measures to improve the quality of education, the development of institutions and capacities to manage and operate the education systems so that they can fulfill their re-articulated objectives will be a long and costly process. It is important that the support for the establishment of performing education systems should not be overlooked in the zeal to find solutions which will have quicker, visible impacts under regional initiatives. In improving the performance of education systems, one important issue in the SEE region is the rising dropout rate of poor students from secondary schooling-even if the returns to education are estimated to be high. This phenomenon comes out clearly in a number of poverty studies, most prominently for Albania.⁵⁰ As secondary education is important for skill formation and access to the labor market, declining enrollments of the poor in secondary schools can lay the foundation for further segmentation of societies, by eroding their future employment options.

E.  A Focus on Youth-Creating Opportunities for Employment and Integration

5.18   Years of war, economic declines, and the transition from planned to market economies have resulted in high levels of unemployment. Lack of possibility to gain employment has exacerbated the situation of many refugees and IDPs. Unemployment is especially high among young people. Long disconnects between the completion of school and entering into the labor market affect work habits and values of future generations. Unemployed youth often seek refuge in illegal activities and criminal organizations posing serious obstacles to economic development and stability in the region. The possibility to work and be an active part of society is perceived by most members of society as a value of itself. Finding employment for demobilized soldiers will pose a special challenge. As a substantial demilitarization of many SEE countries is required, additional employment opportunities will need to be created for soldiers to be redeployed into the regular labor force. Without such formal absorption of military personnel, it is unlikely that significant gains will be made in demilitarization.

5.19   Employment not only provides the opportunity to gain an economic livelihood. It also provides a sense of dignity and self-worth among most individuals, which is essential for the creation of cohesive as well as inclusive societies. The need for employment, ideally for all, but especially for youth, is important to put to economic use underutilized human capital. Equally important is the need to utilize the socialization which comes along with structured employment to foster cohesion and inclusion in the presently segregated societies in the SEE region.

5.20   Efficient employment will depend importantly on economic growth brought about through stability in the region, economic reforms, and investments in labor intensive industries. Yet, in the short term, employment generation might be supported by employment generation schemes targeted on youth and/or war affected areas with high unemployment and poverty. These schemes would need to be designed in such a way that they will not distort labor markets or lead to economic efficiency. Selected employment schemes might also need to be considered to further encourage the return of refugees and IDPs. Special vocational training and re-absorption programs might need to be considered and could be financed from part of the savings achieved through demilitarization. Employment and/or vocational training programs for youth in post-conflict programs in the regions could well be complemented through specific youth programs organized around culture, sport and civil activities, to ensure that the younger generation find incentives to integrate in the society and resist the temptation of moving to criminal activities or join extremist groups. Such programs, while generally rather inexpensive in cost, can provide important directives to young people and provide fora in which active forms of participation and inclusion can be exercised.

5.21   To foster youth involvement in social development activities, youth participation in civic activities, cultural processes, entrepreneurial undertakings, and entertainment, needs to be encouraged. Pilot projects should be launched which foster social integration and community-based peace building. One example of pilot project would be the promotion of cultural youth networks, one for each country, by relying on telematic technology and community-based youth cultural centers. The network would have a web site with pages designed to respond to socio-cultural needs and preferences of youth, as evidenced by social analysis. Residents and expatriates of the country's diaspora in the world and neighboring countries would be able to interact through a number of peripherals placed in Youth Centers in country's urban or rural nodes or in equivalent Internet-connected communities abroad. The audience will access the site to: (a) draw from it, but also; (b) nourish it with content generated by the audience itself, as a result of organizing (and not only recording) community/city events, cultural interviews, entertainment programs, seminars on "education for life", reading of new books, visits to the region's cultural heritage monuments, and contests.

F.  Creating an Inclusive Civil Society

5.22   Efforts will need to be made to strengthen all elements of civil society which add to social cohesion and inclusiveness. This will require some well-targeted visible interventions which carry sufficient momentum so that they reach beyond localized initiatives. Civil society groupings which are exclusive in nature, organized for example along ethnic identities or religious extremism, can add to the segregation of a society and push communities apart. Strengthening civil society along overarching themes, such as professional organizations, chambers of commerce, and trade associations has proven effective in other societies to reach for integration. An important role can be played by Western European civil society organizations in trying to help and support groups in SEE that would support integration and reconciliation and giving these groups means to develop and expand.

G.  Opening Media and Knowledge Transfer

5.23   In an increasingly globalized world, the SEE countries will benefit from integration into the knowledge transfer through provision of technology and multiple access to media. Opening up of multiple media channels will increase the possibility of different groups in society to make themselves not only heard and understood, but also to control propaganda which might be disseminated through controlled media systems. A modernized media system also allows for knowledge transfer to large number of people and to connect the people of SEE countries to an increasingly integrated world.

5.24   A special focus should be placed on providing technology so that knowledge transfer can take place. Special programs to provide access to the internet, directed to institutions of higher learning, secondary schools, government and parliamentary organizations, public institutions, civil society, etc. could be an important tool in bringing new objectives and ideas to inspiring leaders in SEE countries and to reach conciliation. The attractiveness of surfing the internet and communicating together across borders might quickly entice young people in SEE countries to adjust their aspirations and reach out beyond the restricted horizons in which they otherwise live. The technological means to connect to a broader world, shaped according to different values, might prove to be a more potent means of inclusion-allowing possibly for both, knowledge and value transfers.

H.  Protecting Social Rights

5.25 Protection of social rights will be essential to further strengthen social cohesion within and among SEE countries. The European Social Charter, which is regarded as the counterpart of the European Convention on Human Rights in the economic and social sphere, was signed in 1961. The Social Charter has subsequently been updated by a series of protocols; the revised Charter is dated 1996. The Social Charter safeguards nineteen fundamental rights plus another four enshrined in its additional Protocol of 1988. These rights can be divided into several groups: rights relating to work, the right to organize and to bargain collectively, rights relating to the protection of workers, rights relating to vocational training and the rights of foreign workers. Among SEE countries, Albania, Bulgaria, Croatia and FYR Macedonia have signed, Slovenia and Romania have ratified the Charter. While rights embedded into the European Social Charter will need to be interpreted within the economic realities of the SEE countries, the charter presents the social rights that SEE countries should strive towards in order to assure and strengthen social cohesion inclusive of all members of their societies. In addition to the rights enshrined in the European Social Charter, the European Code of Social Security (revised) of the Council of Europe guarantees a minimum level of social security protection and lays out a common framework of social standards. Albania, Bulgaria, and FYR Macedonia have asked for assistance from the Council of Europe to develop their social protection system towards these standards. It will, however, take time for SEE economies to achieve sufficiently high levels of labor productivity, employment, and economic performance with sufficient fiscal revenue to sustain a social protection system as outlined in the European Code of Social Security.

I.  Conclusion

5.26   Governments, civil society, international partners need to pursue multiple avenues to support social cohesion and inclusion in the SEE region and within SEE countries. These should include the development of élites and leaders from SEE countries which respect and support the values of open, multi-ethnic and diverse societies. Educational programs, especially in higher education, exchanges within SEE and with other countries are essential. Cultural programs, support to allow access to media and to the "Global knowledge system" are important to allow the people of the SEE region to share and absorb values which are shaped by other considerations than the pursuit of nationalist objectives. Multiple efforts will be needed to make domestic institutions inclusive to all members of societies and to hold them accountable to its citizens. A special focus on youth is essential to allow for the development of an open, tolerant future generation. Providing perspectives, possibilities for productive employment and engagement within the region and the SEE countries will be essential for fostering cohesion and building foundations for a stable and prosperous region.

5.27   The formation of open, tolerant and cohesive societies require access to social services and efforts to constrain poverty. But education systems need to be utilized not only for the transfer of knowledge and the development of skills, but as a process of modernization and value change. Changes in curriculum, teacher behavior, learning content, and learning styles are essential in order to assure that education will lead to development of values and behavior which are consistent with objectives of social cohesion and inclusion. Social rights to be protected are most comprehensively presented in the European Social Charter which most of the SEE countries have already signed. It lays out an important road map to the guarantees of social rights, which SEE countries should strive to achieve within the limitations of their own economic development objectives and possibilities.

⁴³   Council of Europe (1997) Final Declaration, Second Summit of Heads of State and Governments of the Council of Europe.

⁴⁴   Council of Europe (1998) Opportunity and Risk: Trends of Social Exclusion in Europe.

⁴⁵   These figures are based upon UNHCR statistics.

⁴⁶   1994 census.

⁴⁷   See Conclusions of Working Table on Democratization and Human Rights, Geneva, October 18/19, 1999.

⁴⁸   See CEPES, The Future of Education and Training in South-East Europe, Brussels, October 1999.

⁴⁹   See International Conference on South Eastern Europe "Educational Co-operation for Peace, Stability and Democracy", Expert Conference in the Framework of the Enhanced Graz Process, Stability Pact for South Eastern Europe, Working Table 1.

⁵⁰   See Box 2.1.

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