Unemployment in Montenegro

1. Unemployment in Montenegro Thessaloniki, May 2005 Branka Racković

2. Unemployment in recent 20 years YEAR TOTAL WOMEN • 1985 40,001 23,446 • 1990 53,744 30,566 • 1995 56,614 33,593 • 2000 81,069 48,304 • 2001 79,960 48,277 • 2002 76,293 46,208 • 2003 68,625 39,264 • 2004 59,002 30,980 • May 2005 57,155 28,281

3. Unemployment on May 23rd 2005 Montenegro Women

4. Number ofunemployed Nominal difference Index Municipality Unemployment trends in municipalities

5. Unemployment according to level of qualification/education Unemployment in 2000 Unemployment in 2004 Level of education/ qualification Differ. No. of unemp. No. of unemp.

6. Unemployment according to job seeking time Up to 1 year – 35.3% • over 1 year: 64.6% • 1 to 3 years – 18%, • 3 to 5 years – 12.3% • 5 to 8 years - 12.4% • over 8 years – 22% • Average time of job seeking is about 4 years • First time job seekers: 58.5% • Average age: 32 years

7. Unemployment according to age Unempl. in 2000 Unempl. in 2004 Index Differ. Age No. of unemp. No. of unemp.

8. General characteristics of Montenegrin labour market (December 31st 2004) • 59,002 unemployed persons • Unemployment rate: 22.6% • 14% less then in December 2003 • Participation of women: 52.7% • Structure of unemployed persons: • Without qualification (I and II): 32% • Qualified workers (III and IV): 61.8% • VI and VII level: 6.2% • Supply of workforce 2 times bigger than demand • Surplus workers: 13.57% • Disabled persons: 4.6%

9. Unemployment rate • 2000 – 32.7% • 2001 – 31.5% • 2002 – 30.45% • 2003 - 25.82% • 2004 – 22.6 % • May 2005 – 21.8% Feasibility Study for Serbia and Montenegro “… At the moment Montenegro is renewing labour legislative in order to improve flexibility of the labour market. Montenegro, as well, stimulates with great success opening of new job positions through reduction of taxes and contributions for employers, and in first 6 months in 2004 unemployment was reduced for about 10%. …”

10. Participation of young persons up to 25 years in total unemployment: 13,348 or 22.64% (March 2005) Qualification Up to 25 % I 2,929 4.97 II 330 0.56 III 5,157 8.75 IV 4,538 7.70 V 10 0.02 VI1 272 0.46 VI2 2 0.003 VII1 110 0.19 VII2 - / VIII - / TOTAL 13,348 22.64 Young persons without education/qualifications In total employment participate with 5.32% -         with completed primary school: 2.777 or 4.71% -         without any grade completed: 87 or 0.015% -         completed 4 grades: 132 or 0.22% -         completed 5-7 grades: 143 or 0.24%

11. Discord between supply of and demand for workforce Data basis according to: • survey among employers; • published job vacancies; • structure of hired non-resident persons Relation between supply and demand on EAM records On EAM records exist 922 types of occupations • expressed demand for 750 occupations, from which: • for 487 offered occupations demand exists, • for 263 occupations expressed demand – no persons with such qualifications (mostly III and IV level: 167 occupations; VII-1 and VII-1 level: 86 occupations ), • for 435 existing occupations demand is not expressed

12. Relation between supply and demand • The biggest surplus within III and IV level of qualification - 1 demand: 4,02 persons and • among persons with I level - 1 demand: 3,66 persons. • The biggest deficit of supply is within VII-1 level demand bigger than offer - 1 demand: offer of 0.62 persons. • The less deficit is within VII-2 level: 0,13.

13. Programs of the active employment policy Training Programs (professional training, pre-qualification, specialisation, courses) • 1999 – 2004: realised 360 programs (114 for particular employer + 246 for labour market), • Included: 9,919 unemployed or employed persons (2,100 for particular employer - techno-economic surplus: 1,175 and 8,431 for the labour market), • 2004: 2,053 persons or 3.48% of total number of unemployed • May 2005: in course training programs for 1,164 persons • Two pilot-projects: “Training for Occupations in Catering and Tourism” and “Training of Craftsmen” • Program of seasonal employment (2004 employed 4,507 persons) • Employment program for trainees (IV, VI and VII level)– on annual level includes about 1,000 persons/mostly aimed for young persons

14. Program for self-employment • Montenegrin Government realises Program through EAM from 1991, and continuously from 1999 • Program goal: development of entrepreneurship and opening new job positions • From 1999 approved 5,471 programs in total value of 26,836,254 € for opening of 9,000 new job positions • Most programs in agriculture, trade, crafts and personal services, production, … • In 2004 realised 63 public works • Hired 879 unemployed persons (hard-to employ persons) • Partners: local communities, institutions of culture, NGOs, medical institutions, … Program of public works

15. Government Program »Legalisation of Existing and Opening New Job Positions« BEGINNING OF 2003 • “Regulation on Tax Exceptions for Newly Employed persons” & • “Regulation on Work of Non-resident Persons” – enabled employment for 62,071 persons from which over 25,000 on permanent basis • Realisation of 14 credit lines • approved 652 credits • opened 1,424 job positions • invested 9,629,044 € AIMS: • Legalisationof work within “grey economy”, • Developmentof economy and society through opening new job positions (crediting self-employment and new employment).

16. MIGRATIONS of population Population in Montenegro: Census 2003 Census 1991 Absolute Index Montenegro617,740 591,269 591,26926,471 104.5 Montenegrin population abroad: Census 2003 Census 1991 Absolute Index Montenegro54,816 23,766 31,050 230.6

17. Municipalities in which was recorded reduction of inhabitants Census Census Municipality Absolute Index

18. Growth of population Reduction of inhabitants

19. Mygrations of labour force in Montenegro • low (small salaries, accomodation) • from north to central and south parts • seasonal character • to other countries • education, economic reasons HIRING NON-RESIDENT PERSONS Seasonal jobs • tourism & catering (46.55%) • agriculture (20.8%) • civil engineering (14.3%) • trade (9.4%), ... Countries of origin • Serbia (56%) • Bosnia and Herzegovina (27%) • Kosovo (11%) • Macedonia (3%) • Other – 3%

20. Hired non-resident persons in 2003 and 2004 Number of persons with work permits 2004 Number of persons with work permits 2003 Number of days 2003 Number of days 2004 Municipality

21. Financing and financial resources According to the Law on Employment, measures of active employment policy are financed from: • contribution for employment (1% calculated on gross salary) • sold shares in privatised enterprises (approximately 6%) • funds from the Republican Budget for trainees with university education Additional source: • Tax for work of non-resident persons Basic purpose: Investment in training programs for deficit occupations REMARK: Budget is insufficient • Low salaries – low contribution • Privatisation/selling of shares in next years will be reduced – low income from this source

22. Plans for 2005 • Realisation of Employment Activity Plan for 2005 and development of Plan for 2006 • Foundation of Centre for Information and Professional Advising • Participation in development of the Certificate Law and Law on National Qualifications (CARDS II) and other laws and bylaws • Participation in development of particular training programs for: unemployed, illiterate persons, Roma population, persons with special needs (talents and disabled persons), ... • Problems: • Expected great number of techno-economic surplus workers, mostly older persons, • Professional treatment of persons with special needs, marginal groups, • Funds, …

23. Thanks for your attention