Thirteenth OSCE Economic Forum
Demographic Trends, Migration
and Integrating Persons belonging to National
Minorities:
Ensuring Security and Sustainable Development
in the OSCE area
Prague, Czech Republic
23-27 May 2005
Opening remarks by Mrs.
Brigita Schmögnerová,
Executive Secretary
Mr. Chairman, Ladies and Gentlemen:
It is a great pleasure
to address you at the opening session of
the 13th OSCE Economic Forum. The topic
of this year’s Forum: “Demographic
Trends, Migration and Integrating Persons
belonging to National Minorities: Ensuring
Security and Sustainable Development in
the OSCE area” combines many important
and timely economic, demographic and security
policy issues.
Ladies and Gentlemen:
Europe is in the midst
of a situation without parallel in demographic
history. Fertility is well below replacement
level, populations are rapidly ageing, and
most countries face imminent or anticipated
population decrease. If we add the intensifying
and diversifying migration flows, it becomes
clear that population trends could pose
serious challenges for the security and
economic stability in the UNECE region.
According to United Nations
projections, the combined population of
Europe increased by over 180 million between
1950 and 2000; it is projected to decrease
by about 96 million between 2000 and 2050.
This decrease will be most pronounced in
Central and Eastern Europe. It is also expected
to strongly affect Southern Europe.
The shift from sustained
population growth to marked decline will
have far reaching social and economic implications.
Some even argue that it will call into question
sustainable development in Europe and put
a strain on social cohesion. These concerns
are exacerbated by the differences in reproductive
behaviour and rates of growth among different
population sub-groups. Even though these
differences are diminishing, they may still
alter sensitive cultural and ethnic balances.
The decrease of the European
populations will be accompanied by rapid
shifts in their age structures, notably
a significant decline in the working-age
population. This progressive population
ageing has important consequences for public
and private savings and spending and for
future macro-economic performance in general.
There are fears that the anticipated huge
deficits in public pension schemes could
inflict serious macroeconomic damage, both
on the domestic economy and, in the case
of large industrial countries through international
linkages, on the world economy. The fears
are real and – even if not short-term
– they need adequate policy responses
now. What are adequate policy responses?
Firstly,
it is imperative to ensure that economies
adapt and grow at a sufficiently rapid and
sustainable pace. The type of growth should
be adjusted to the existing situation of
either labour supply/demand overhang. Increases
in labour force participation rates, higher
employment rates, as well as stronger investment
in modern, knowledge-intensive sectors are
part of the required policy response.
Secondly,
it will also be important to reform the
pension and health care systems.
The major challenge in
the current and future efforts to reform
the pension systems is to prevent a weakening
of the intergenerational solidarity, as
certain generations might end up being net
losers from the current reforms. In fact,
in my opinion, intergenerational fairness
is a prerequisite for the long-term financial
sustainability of a pension system if we
want to ensure its social inclusiveness.
Thirdly,
pro-birth policies:
The very low fertility
rates currently observed in Southern, Central
and Eastern Europe, but also in parts of
Western Europe, are in the spotlight of
both policymakers and the public at large.
The need to create an environment free of
barriers for men and women to freely decide
on their parenting status is currently among
the most important challenges of social
policy. There is evidence that in the emerging
market economies of the UNECE region, low
and decreasing fertility is strongly linked
to the degradation of the standard of living,
poor housing conditions and rising poverty,
all of which urgently need to be addressed.
Fourthly,
migration policy:
A question emerges: to
what extent can migration compensate for
the low fertility in Europe? Clearly, this
cannot be the solution, but it could be
part of the solution. Receiving countries
recognize that for economic, social and
demographic reasons immigration is a necessity.
The main challenge here is to devise policies
that manage migration in a positive way,
rather than emphasize control and repression,
and to create favourable conditions for
the rapid integration of immigrants.
Ladies and Gentlemen, with respect to migration
I would like to make one more point:
Frequently when we speak
about migration we focus only on the receiving
countries and ignore the countries of origin.
The implications for the latter are often
serious because of the difficult economic
conditions, the fiscal constraints and the
vulnerability of their societies. Clearly,
there are short-term benefits for the sending
countries for example migration tends to
reduce unemployment, and migrant workers
can be a source of significant remittances.
However, there is also
a range of problems created by migration.
I have already spoken about the fact that
populations in the UNECE region are projected
to age rapidly. Emigration exacerbates this
process in the countries of origin, as most
of the migrants are young people, hence
when they leave the age structure of their
native country gets further skewed towards
older persons. Those who emigrate are also
potential taxpayers and contributors to
the social security system, so the difficulties
of the pension schemes in these countries
are likely to be further accentuated.
A related issue is the
impact of emigration on the labour market,
especially in the modern knowledge-based
economy. The available data show that most
of the emigrants from the UNECE emerging
market economies are highly educated. This
“brain drain” depletes the human
capital base of a country and has a negative
impact on the growth potential of its economy.
We should not forget, however,
that the distinction between sending and
receiving countries is often vague, as the
same country could be both the origin of
migration flows and the destination of others.
This is certainly the case for many countries
in central and eastern Europe and the Commonwealth
of Independent States.
This situation raises two
issues. Firstly, while most of the emigrants
from these countries are highly educated,
the majority of the immigrants are low-skilled
workers. In some cases this could exacerbate
existing labour market imbalances. Secondly,
frequently the immigrants consider the countries
in central and eastern Europe and the Commonwealth
of Independent States only as a stepping
stone for further migration toward Western
Europe, and hence are not motivated to integrate
within the receiving communities.
All this underscores the
importance of comprehensive national and
international approaches toward migration,
and the necessity to create incentives for
retaining highly educated young people.
The impact of these policies will be greater
if they are coordinated at the local, national
and regional levels and if all stakeholders,
including employers associations, participate
in the conception, implementation and monitoring
of these policies.
When speaking about migration
we also have to address the issue of migrant
workers’ remittances. Globally they
represent the second largest financial flow
after FDI. Remittances are large and critical
in many UNECE member countries, some of
which in relative terms are among the world’s
largest recipients. In Albania, Armenia,
Bosnia and Herzegovina, the Republic of
Moldova and Tajikistan, remittances are
greater than any category of capital inflows,
and account for more than 5 per cent of
GDP (in some cases even reaching 25 per
cent).
Economists focus on remittances
as a source of financing, but such transfers
could contribute to continuous external
dependence, or lead to the appreciation
of local currencies and aggravate trade
imbalances. Most importantly, the remittances
are used mainly for consumption, so the
challenge that policymakers face is how
to encourage the recipients of remittances
to invest rather than spend on consumption
and contribute to already existing external
imbalances.
Ladies and Gentlemen:
The UNECE region is very
diverse in economic, social and other terms.
The levels, trends and implications of demographic
change vary significantly among various
parts of Europe depending on the level of
economic development, health situation,
cultural background and other factors. For
example, dramatic differences exist in life
expectancy between Western and Eastern Europe.
On average, the life expectancy at birth
in the CIS countries is 7 to 8 years lower
than in Western Europe. Even though recently
there have been signs of improvement, special
efforts are needed to diminish this gap.
Many of the countries with
emerging market economies face weakened
health care infrastructure and limited access
to quality health care. They have also experienced
growth in inequality and poverty, collapse
of support systems and environmental degradation.
The negative tendencies in morbidity and
mortality are compounded by major irregularities
in the age structures in these countries,
triggered by the effects of wars, civil
strife and population policy interventions
in the pre-transition time. More importantly,
the economic difficulties, the fiscal constraints
and the vulnerability of the societies undergoing
transition put to a critical test their
capacity to adequately respond to the future
demographic change. All these represent
serious threats to security.
Ladies and Gentlemen:
I wish to conclude my remarks
with a few words about the OSCE Strategy
Document for the Economic and Environmental
Dimension and its implementation. Specifically,
I would like to focus on measures related
to the review of OSCE commitments.
The Report of the UN Secretary-General’s
High-level Panel on Threats, Challenges
and Change mentions economic and social
threats such as poverty and environmental
degradation among the six main clusters
of threats with which the world must be
concerned now and in the decades ahead.
It also urges the UN to cooperate more closely
with regional and sub-regional organizations.
The Secretary-General’s report is
even more explicit: it sees very close links
between development, security and human
rights, and on the basis of this it proposes
to reform the Security Council, the Economic
and Social Council, and to transform the
Human Rights Commission into a Human Rights
Council.
It appears that the close
cooperation between the UNECE and OSCE over
the last few years has been fully in line
with this recommendation of the report.
Similarly, by virtue of the topics addressed
and work undertaken either separately or
together, both the UNECE and OSCE have recognized
the importance of economic development and
the state of the environment for strategies
aiming at conflict prevention and minimization
of security threats.
Most importantly, UNECE
and OSCE member States recognized that the
two organizations working together could
address these new challenges more effectively
than alone. That is why they instructed
the Secretary-General of the OSCE and myself
to develop a Memorandum of Understanding,
which was signed last December in Sofia.
By doing this, the UNECE and OSCE laid the
foundations for an even closer relationship
than in the past.
As you all know, the UNECE
has since 1996 been providing reports to
the Economic Forum on the implementation
of OSCE commitments in the economic and
environmental dimension. Tomorrow, the UNECE
staff will present yet another report reviewing
OSCE commitments in the area of “Integration,
trade and transport”. Two additional
UNECE presentations will also be made outlining
in more detail policy issues in the areas
of trade facilitation and transport.
With respect to integration,
there are many political motivations behind
closer cooperation between countries. Enhanced
security, increased bargaining power and
integration as a tool to lock-in policy
commitments are only some of them. While
political incentives appear to play a dominant
role in integration decisions, it is also
critical to understand the economic consequences
of various design choices.
Integration is not only
important because it has the potential to
promote peace directly through closer economic
cooperation. Integration – or greater
openness towards the flow of foreign goods,
services, capital, labour and information
– also contributes indirectly to peace
through a potentially positive impact on
economic growth and real incomes per head.
This is significant because still too many
UNECE countries have low per capita GDP.
And poverty – as I noted earlier –
is a root cause of many unfavourable demographic
and migratory phenomena.
In conclusion, economic
integration through its development effects
can contribute to making UNECE member States
better off, their citizens better governed
and their societies better informed. A move
towards an even more effective integration
within the UNECE region therefore deserves
closer attention from policymakers.
Lastly, I wish to congratulate
the Slovenian Chairmanship-in-Office for
achieving a successful year. And looking
forward, I extend my best wishes to the
government of Belgium for their forthcoming
chairmanship. UNECE stands ready to continue
its cooperation with OSCE under Belgium’s
chairmanship.
Thank you for your attention.
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