Poverty, inequities and social risks in Romania

Poverty, inequities and social risks in Romania Professor Marian Preda Dean of the Faculty of Sociology and Social Work, University of Bucharest Collombia, Bogota, July 31st 2014

During my presentation I will: 1. Describe the major social and demographic risks Romania has been confronting with 2. Describe and discuss some statistics on poverty and some anti-poverty social policies in Romania 3. Focus on social problems of Roma ethnic minority, the poorest social segment of Romania.

4. Promote the concept of social exclusion as a better alternative to that of poverty.

Romania –

the 27th EU country

Area

238,391 km2

Population

20 ,121,641

Density

84.4/km2

GDP (PPP) -2013

$285.131 billion

GDP per capita

$18,635[

Gini coefficient (2011)

33.2 (medium)

HDI (Human Development Index) (2013)

0.785 high · 54th in the World

Major social and demographic risks for Romania • The stable Romanian population has decreased from 23 million in 1989 to 20 million inhabitants in October 2011 (the last Census) – a population similar to that in 1968 • Compared to 1st of January 1990, the current Romanian population is smaller in size by 4.2 million (18%), and by 2.6 million, compared to the previous census, of 2002.

Note: The ages pyramid, population forecast and analysis based on census data from the end of 2011 are provided thanks to Professor Vasile Ghetau, Director of “Vladimir Trebici” Demography Institute Reference: Gheţău, V. (2012) A reevaluation of Romania’s demographic situation following the October 2011 census, Presentation at the Scientific Session of the National Institute of Economic Research "Costin C. Kirițescu", of 9th of May 2012

Population density at the census date is 84 inhabitants per sq. km., compared to 97 in 1989 and it is estimated to reach 62 inhabitants per sq. km. at the middle of the 21st century.

Population 65+ : - 14.9 % in 2010 - 28 % in 2050

Median age for Romanian population 2005 - 2050 60 50 40

36.6

38.5

40.1

42

2005

2010

2015

2020

44

45.8

48

2025

2030

2035

50.1

51

51.6

2040

2045

2050

30 20 10 0

Varsta Mediana [ani]

P(65+)=3,4 mil. =18,4%

P(65+)=4,0 mil. =24,7%

P(65+)=3,6 mil. =20,7%

P(65+)=4.1 mil. =27,7%

Total Population in China, Europe and the United States of America (compared to India, Brazil and Nigeria), 1950-2100

Source: United Nations, Department of Social and Economic Affairs, Population Division: World Population Prospects, The 2010 Revision. New York, 2011 (www.unpopulation.org)

.

One Country - huge disparities There is not just one homogenous “Romania” inside Romanian country and territory but many overlapping different “Romanias”; In the case of Romania there are (at least) 3 “specific” inequities resulted from: •Intergenerational disparities between social contexts and opportunities associated to successive generations of Romanians born, educated and employed in different periods •Regional/geographical disparities •Ethnic disparities between Roma on the one hand and Romanian majority and Hungarian minority on the other.

National values measured for economic and social development indicators fail to provide an accurate picture about the widely diverging conditions that characterize the regions, counties, towns and villages within Romania.

Territorial disparities • The number of salaried employees per 100 inhabitants varies from 13 in Botosani county to 48 in Bucharest • Bucharest’s GDP per capita is almost 5 times bigger than in the two least developed counties, Vaslui and Botoşani.

• The Bucharest-Ilfov area with 122% of the average European GDP/capita (PPS) has been an developed European region while the North-Eastern Region (29% of the European average) have been among the poorest regions in Europe. (EUROSTAT data for 2011 issued in 2014)

Number of wage earners/ 1000 inhabitants for each locality (Census data, year 2002)

Rural-urban disparities

Romania has the largest percentage of population living in rural areas within EU: 45% • Ratio of rural population living under the poverty threshold is three times bigger than that of the corresponding urban segment: 29.9% in villages in comparison to 9.2% in towns.

(National Statistics Institute, 2009, data for 2008) • Share of salaried employees in the occupied population is 36% in the rural area, in comparison to 92% in the urban area, • Percentage of higher education graduates is extremely low in the villages ( 3% of the occupied population), compared to 23% in the urban occupied population.

• Demographic ageing phenomenon (23.8% elderly people in rural and 15,9% in the urban area) • 89% of hospitals, 92% of medical cabinets (GPs) 79,5% of total drugstores/pharmacies are located in urban areas.

Occupied population in rural area (gender and age categories , 2008 (%)

100% 80%

32

19

25 60%

18

RURAL 29

20

38

37

37 53

61 24

27

47

85

15

22

77

12

19

40%

56 83

16

20% 0%

30

35

34

24 10

15

24

15-24 25-34 35-44 45-54 55-64 65 ani Total ani ani ani ani ani şi peste Masculin

21

31

15

29 14

3.00 INFORMAL, eventual + SGOSP 16

18

4

17

4.00 S GOSPODARIILOR

16

2.00 FORMAL + INFORMAL si/sau SGOSP 1.00 FORMAL

15-24 25-34 35-44 45-54 55-64 65 ani T otal ani ani ani ani ani şi peste Feminin

Date: IEHH Septembrie

Both deprived areas, North-East and South are demographically dependent But, is obvious that the south is gradually deserted by young families with children Percentage of “60+� population/locality (Census, 2002)

Inter-generational Inequities in Romania Milestones for Romanian generations: • 1945 - the beginning of the communist regime, • 1966 - antiabortion decree of Ceausescu

• no of newborns doubled in 1967 compared to 1966 • a huge cohort of 527,000 newborn in 1967

• 1989 Romanian “revolution”

Consequences: – Almost 1 million abortions in 1990 – TFR dropped from 2.3 to 1.3 (cohorts around 215,000 newborn/year)

• 2011 – a first cohort of less than 200,000 newborn since 1950’s

G1, G2, G3 – 3 Different generations Age Pyramid for Romanian Population

Man

Women

G1

G2 G3 No persons per cohort [thousands]

Age

No persons per cohort [thousands]

Data source: “Romania – Population Green Paper 2006”

G1 – The “communist generation” cohorts born between 1945 and 1966 • - Increased access to high school and higher education , good quality teachers - Entered labour market between 1961 – 1982 , jobs guaranteed, no formal unemployment - Free access to state-owned dwellings that became private properties after 1990 - Generation that “has grasped” the power in Romanian organizations in 1989 and it is still holding it.

- Retirement period 2005 – 2031 ( in fact many of them are already retired at an average real retirement age of 53 years in 2005 and 60 years in 2012. Pension budget deficit more than 3bn Euro/year - There were 2.5 millions pensioners in 1989 and there are almost 5,5 millions nowadays

• • • • • •

G2 – The “decree” generation Cohorts borne between 1967 and 1989 270 000 new born in 1966 – 520 000 in 1967

Quality in education has decreased since a primary school teachers must teach to classes of 40 pupils. The same schools, for those significantly larger cohorts. Only 10% access to higher education.

Increase competition for rare places in good high schools and in higher education; perverse effects - almost generalised private lessons increased inequality in access to education 1983-1989 - undeclared unemployment, after 1990 huge official unemployment – consequence: 2.5 million migrants - Very difficult access to housing; Number of new houses/apartments has decreased dramatically since 1985.

- Decrease in fertility (TFR2.3 to 1.3) and increase in number of abandoned children - Retirement period 2032 – 2054 ( in fact retirement age will probably increase till then). Who is going to pay pensions for G2 in a “pay as you go” system and with a G3 reduce through low TFR and through migration

•

G3 – The “transition” generation Cohorts borne between 1990 and 2010 - Dramatic decrease in TFR and number of new born. Total

population reduced with more than 4 millions in 22 years • - Increased opportunities in access to higher education . Number of high school graduates has decreased with about 40% between 2008 and 2011. “Unlimited” number of places in higher education; opportunities to study abroad (especially in EU countries).

• - Better quality primary and secondary education - Entered labour market between 2008 – 2026 (if /when no crisis there will be better opportunities) Anyway, better salaries and opportunities to work abroad.

• - Better prices for dwellings - Retirement period 2055 – 2072 (?) Will benefit from private pensions (pillars II and III).

A partial conclusion on “generations” and their rights: :

"Then I say, the earth belongs to each of these generations during its course, fully and in its own right. The second generation receives it clear of the debts and encumbrances of the first, the third of the second, and so on. For if the first could charge it with a debt, then the earth would belong to the dead and not to the living generation. Then, no generation can contract debts greater than may be paid during the course of its own existence." (-Thomas Jefferson to James Madison, 1789. ME 7:455, Papers 15:393 ) ....

"The conclusion then, is, that neither the representatives of a nation, nor the whole nation itself assembled, can validly engage debts beyond what they may pay in their own time." (-Thomas Jefferson to James Madison, 1789. ME 7:457, Papers 15:398n)

Poverty rate in Romania 2007-2012 Source: Eurostat

EU 27 average: 16%

Year Poverty rate

2007

2008

2009

2010

1011

2012

25%

23%

22%

21%

22%

23%

Table 1. Poverty rate, following occupational status, 2010 Source: Author’s calculations based on ABF, NIS data

Table 2. Poverty rate, by age groups, 2010 Source: Calculations based on ABF, NIS data Age interval

%

0/17

8

18/24

8,2

25/34

5

35/44

4,6

45/54

4,6

55/64

2,9

65/max

2,7

Roma/gypsy – the dependent minority • 622,000 (3.3% of the population) self-identified at 2011 national census as Roma • 89% Romanians , 6.5% Hungarians and 1.2 other ethnic minorities But many Roma did not declare their ethnic identity at national census. There were about 1.5 millions hetero-identified Roma/Gypsy (6.7% of the population) in a national representative research carried out in 1998.

• Between 2002 and 2011 the percentage of self-identified Roma increased from 2.5 to 3.3%.

• 24% of those over the age of 10 never went to school • About 50.000 did not have any ID paper in 1998. The number has decrease to a few thousands nowadays.

• 21% did not have legal property of their dwelling in 1998 • Aprox. 50% of Roma live in extreme poverty

Roma/gypsy – the dependent minority (cont) A large part of the roma population is living in miserable dwelling conditions impacting on other important aspects of life (especially education and health).

Non-government sources indicate that in 2004 the number of homeless living in the street or in specialised shelters was estimated at 11.000 – 14.000, the value remaining the same in 2007.

•Only approximately 53% of the roma men and 23% of the roma women have a paid job, but only 36% of the roma men who have a job are salaried employees, in comparison to 77% of non-roma men.

•As a share of the total adult population (including elderly), only 19% of roma men and 11% of roma women are employed (get a salary), in comparison to 40% of men of other ethnic groups and, 31% of women of other ethnic groups, respectively.

•The precarious labour occupation is directly reflected in the quality of dwelling: •Approximately 15% of the roma people have no electric power in their houses, in comparison to 2.1% of the total population (that includes them).

•Only 27% of the roma people living in the urban areas have running water, in comparison to 90% of the people of other ethnic groups; •53% of the roma households had a refrigerator in 2007, in comparison to 92% of the non-roma households;

Examples of anti-poverty Social Policies in Romania • 1997 - a successful deinstitutionalising and protection campaign for institutionalised children was initialised • 2001 CASPIS was founded (National Commission for Anti-Poverty and Social Inclusion) which designed a national anti-poverty strategy; • 2001- The first Governmental Strategy for improving life conditions of the roma population • 2001- National Strategy for Employment Rate, • 2004-2006, 2007-2013 and 2014-2020 - National Development Plans

Strategies on paper for the sake of the international partners (EU, WB, IMF, UN divissions)

- The process of strategic planning was fragmented and incoherent. (As in the case of other former communist countries, until recently the approaches of the international organizations were sometimes conflictual, not complementary) - Most of the documents of this kind have been the result of similar European models Romania not enough adapted - Most of the Romanian strategies have been left at the level of diagnosis and action course setting, without establishing precise targets and, which is more important, without any monitoring and evaluation processes.

The Presidential Commission for Social and Demographic Risk Assessment (September 2009)

The main problems of the social protection system in Romania are the following: •The lack of institutional and visionary coherence, of strategic planning based on data, as well as of monitoring and evaluation as system correction practices.

•Inefficiency, waste, the unbalance of the social protection budgets •Various and severe inequities in the social resources distribution •Current and especially future major social risks occurring in some of the constituents of the social protection system, caused by the population evolution patterns and by the economic crisis.

At-risk-of-poverty rate before and after social transfers, 2012 (1) (%) Source: Eurostat http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Income_distribution_statistics

Social Policies for Roma Even with low impact at national level, some of the national policies have had a positive impact on the life chances of the roma people at risk: - The free meal provided at school for pupils, called „Milk and Croissant” initiative, introduced in 2002 was assessed as “very useful” by about ¼ of the parents and about 90% of Roma parents. Despite the constant recommendations to focus it using means testing (social criteria) all governments have maintained it universal. As a consequence, in reach communities it is wasted and in poor communities it is not enough.

- The child universal allowance, family allowance, and Guaranteed Minimum Income have all had targeted a large proportion of Roma with positive impact on their level of poverty.

Positive discrimination for Roma in high-schools and higher education • granting special places in high schools and universities, rather proves that social inclusion is possible; - Since 1994 each year about 600 places have been allocated to Roma students, apart from those enrolling without positive discrimination. • Also each high school in Romania has to provide each year 2 places for Roma students. • That has increase the percentage of Roma graduates of higher education from 0.2 % in 1992 to 1.5% in 2011. In the same time for total population the percentages increased from 7% to 14%

Defining Poverty we pre-design anti-poverty social policies Poverty has been defined as a general scarcity or the state of one who lacks a certain amount of material possessions or money.

A deficit of money measured in terms of income or consumption of one person/family.

Absolut poverty refers to the deprivation of necessary resources for basic human needs (such as food, water, sanitation, clothing, shelter, health care and education).

Relative poverty is defined as economic inequality in the location or society in which people live (For EU, Relative poverty line = 60% of the median income in a country)

Consequences of using Poverty or social exclusion as main concept Static consequence

Dynamic Process

Consequences of using concepts of Poverty or social exclusion/inclusion

Onedimensional: Income/consum ption

Poverty

Process of impoverish ment

-Non-contributory financial aid (zero sum game) - Minimum income guaranteed

Multidimensional

Deprivation

Social exclussion

- Positive sum game: complex intervention/support (not necessary financial support) for creating opportunities for the target groups: education/qualification in order to get a job, jobs, social dwellings etc in order to eliminate the sources of social exclusion.

Social inclusion of Roma • The main cause of poverty and exclusion for Roma is the vicious circle: lack of education - lack of competences – lack of jobs – lack of incomes - …

• It can’t be permanently broken by financial aid; education, training, jobs, especially for the young generation are the only ways for social inclusion of Roma • When (hopefully) the economic crisis will pass Romania will probably need more employees. Why bringing immigrants from other countries and paying the price of their integration when young Roma, Romanian citizens, are near us?

Social inclusion means, first of all providing opportunities for getting education and employment • In Romania a minority of about 5 millions salaried employees plus remittances of the 2.5 millions Romanians working across EU are supporting most of the economy of Romania, the state budget and the rest of the population.

• The groups that are mostly exposed to unemployment risk are: the youth, the population in the rural setting, the roma population, women, the low educated and low-qualified population. For instance, 40% of the people working in the informal sector are young people ages 15 to 34.

• Cumulating the features associated to employment risks: if the young people come from the rural setting, are also women and, on top of it, are roma, the chances to get employed in the formal economy are minimal.

Conclusions • The values of the indicators for large numbers of people cover the differences under the veil of averages or labels.

• The different realities imply different approaches; the sub-national approach of social problems is essential for – monitoring development indicators at these levels – supporting effective and better focused programs and projects.

• If we split the indicators on regions, communities or social groups we get the arguments for better targeting resources and for reducing disparities and inequities.

Conclusions (II) • Improving social conditions and social indicators for the weakest parts of Romania and Romanian social system is the best way to a better situation of Romania as a whole.

• Instead of providing a money for buying a fish, we better train a poor person to fish.

• The unidimentional concept of poverty looks to meless efficient than the multidimentional concept of social exclusion » Thank You

References • • •

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Preda, M., Pop, L.M. & Bocioc, F. (2006). Gender Aspects of Social Security Reform in Romania - In Fultz, E. (Ed.) „The Gender Dimension of Social Security Reform in Central and Eastern Europe: case studies of Romania and Slovenia” 2006, International Labour Organization – Budapest, (pp.11-73) Preda, M. & Grigoraş, V. (2011). The Public Pension System in Romania: Myths and Facts. Transylvanian Review of Administrative Sciences, No. 32 E/2011, pp. 235-251, http://www.rtsa.ro/en/files/TRAS-32E-2011-15Preda-Grigoras.pdf Preda M. (2011). Improving the Efficiency of Social Protection, www.peer-review-social-inclusion.eu/.../2011.

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**** • **** (2009). The Presidential Commission for Social and Demographic Risk Assessment - Extensive Report - http://cparsd.presidency.ro/upload/CPARSD_raport_extins.pdf • **** Casa Nationala de Pensii si Alte Drepturi de Asigurari Sociale - www.cnpas.org (The National Agency for Pensions and other Social Insurance Rights) • **** Legea 263/2010 privind Sistemul Unitar de Pensii Publice ( Law no. 263/2010 regarding the Integrative System of Public Pensions), available at http://codfiscal.money.ro/act-pdf/LEGEA-263-2010-Sistemul-unitar-de-pensii-publice.pdf • **** General Government Expenditure Statistics http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tec00023 •

**** Anuarul statistic. 2009, 2010. INNSE (Statistical Yearbook 2009, 2010, National Statistics Institute)