Elena Flocos:

1. Elena Flocos: Social and Economic Policies for Child Rights with EquityRoyal Orchid Sheraton Hotel and TowersBangkok, Thailand, 16-20 July 2012Cost of non – action of implementing the Reform of institutional child care system in Moldova

2. MOLDOVA AT GLANCE • Population as of 1 Jan 2012- 3 559 thousand • Children below 18 as of 1 Jan 2012- 727 000 • Economic growth rate in 2011- 6.4 % growth in comparison to 2010 • Lower middle income country since 2008 • Poverty – 40% of rural households with 3 or more children remain poor

3. MOLDOVA AT GLANCE • Poverty and migration have substantially weakened the family institution • Institutional care has become the most demanded service to for children from vulnerable families or those left with no parental care- tradition preserved from the Soviet period • Unjustified separation of children from their family • In 2007 11 500 children placed in institutional care out of them 9 000 had one or both parents alive • In July 2007 -National Strategy and Action Plan for reform of institutional child care system for the years 2007 -2012

4. National Strategy and Action Plan –overall objectives • To reduce by 50% the number of children living outside a family environment. • To reorganize institutional care according to the general transformation plan.

5. 7 components of the Action Plan • Changes in the legislative and policy environment • Objective: To adjust the legal and the institutional framework for child and family protection to international policies [with a] view to ensuring and respecting the child’s right to grow up in a family environment. • Objective: To ensure an adequate coordination of all activities under the Institutional Childcare System Reform • Development of community and family based services - Objective: To provide access to the child and his/her family to quality family-type and community-based services

6. 7 components of the Action Plan • Capacity building of child protection professionals • Objective: To set up a national In-Service Training and Re-Qualification System for child and family protection professionals • Transformation of residential care institutions • Objective: To redirect the residential care system towards the community and family

7. 7 components of the Action Plan • Redirection of government financial resources from residential care to community-based care services • Objective: To develop an efficient and flexible financial mechanism to redirect financial resources from the residential system to community-based and family-type services • Monitoring and evaluation of the Action Plan • Objective: To strengthen the monitoring capacity at all levels of the child and family protection system • Objective: To improve the quality of child & family protection services in accordance with quality standards • Social mobilization and communication of the change

8. Study on the cost of non action in the implementation of the National Action Plan on Reforming the Institutional Child Care System- Key Findings • UNICEF Moldova initiated a case study to assess the cost of non-action in the implementation of the National Strategy and Action Plan – objectives – analyzing the economic, financial and social impact and the mid term and long term perspectives for the children integration into the society. • Identified the basic indicators, considered necessary to perform the analysis , which were grouped according to the following dimensions: • Statistical and demographic aspects • Financial dimensions • Labor market • Education • Health • Conflict with the law

9. Forecasted scenarios contour the following features • Scenario 1 – takes into account the provisions of the framework plan for transforming the institutional child care system of October 2009. The goal for reducing the number of institutionalized children is 6000 children ( by the end of 2012) as opposed to 9 196 children in 2008. Following 2012, the forecast on the number of institutionalized children is made by adjustments to the natural flow rate • Scenario 2 – is for the case when the reform is ceased at the 2008 level. Based on a number of 9196 institutionalized children ( end of 2008) , to which is applied the natural flow rate, the total number of institutionalized children is forecasted to reach 8 418 children in 2012 , and 8 240 in 2020.

10. Two Scenarios

11. Two Scenarios

12. Key findings • Not sufficient measures in reforming the legal and institutional framework • Decline in the number of institutionalized children recorded in the last 3 years was due to the reduction of the natural rate ( decrease of the number of children under age 14)- 36 % of the cases and 64 % of the cases due to the reform activities

13. Key findings • After the reform was launched, the public expenditures allocated to the institutional care increased 50 % in comparison to 2006.In the case, the reform is stopped the upward trend will be maintained both, in the medium and long term; in case reform is implemented full, the total cost of institutional care will decline by 20 % in the mid term as compared to 2008-Should the reform be stopped at the current level, then the cost of institutional care would exceed by 48 % in the mid term and by 67 % by 2020 the costs incurred in case the reform is implemented.

14. Key findings • Already in 2009, the institutional child care would save 4, 2 million MDL. By 2012, the amount of savings would have reached 100 million MDL. By 2020, the level of 180,1 million MDL, which amounts for ¼ of the budget estimates in the situation when reform is stopped. • Saving would increase at a slower path from 3,8million MDL in 2009 to 50 million MDL by the end of reform, having reached the amount of 75,6 million MDL by 2020 – due to additional costs , layoff of the existing personnel and de-I of 2700 children and their maintenance in alternative social assistance forms

15. Key findings • In case of implemented reform- changes in the expenditure structure by the main economic categories. The share of operating and direct expenditures will grow essentially , while the capital expenditures would continue to hold the smallest share of up to 2 % of the total expenditure

16. Key findings • In both simulated situations the maintenance costs per child will follow a continuous upward trend. However, in case the reform is stopped, the average maintenance cost per child would increase even faster. The overall cost per child in the institutions in 2012 would be twice as much as the cost per child in community based care (18 thousand MDL), which proves once again the financial ineffectiveness of the residential child care system.

17. Key findings • The graduates of residential institutions are exposed to a higher risk to be unemployed: 39% of graduates become unemployed, while the unemployment rate in the country for the target group aged 15-24 years made up 15,4% (Quarter II, 2009). • If those circa 39% of the residential institution graduates (circa 500 juveniles) get unemployment allowance in the minimal amount of 758,7 MDL (30 per cent of the average monthly salary in the national economy in 2008), during six months, there would be an impact of 2,3 million MDL

18. Key findings • The data available show that there is no substantial difference between the morbidity incidence per 1000 people amongst the children from the institutions aged 0-18 years (95 new cases) and amongst the children from outside the system (103 new cases). Apparently, the data look better in the case of the institutionalized children; this fact can be explained in part by the continuous surveillance of children within the institutional care.

19. Key findings • In comparison with the children who live in the family environment, the graduates from the institutions go primarily to vocational education institutions, and 8 times less frequently go to the higher education system.

20. Key findings • The saved resources – preferably transferred to improve the quality of education within the transformed residential institutions , including training of the residential institution staff, • while the infrastructure (spaces/premises and fixed funds) that remained after closing down of institutions could be used to cover the needs for spaces of other education institutions as well as reorganized in day-care centers, centers for youth.