Understanding inequality in Southeast Europe is crucial for its solution

Sep 14, 2015

PHOTO: ARIEL RUBIN


There is a considerable amount of credible evidence that inequalities in income and wealth are higher today than ever before. According to recent estimates, the world’s 85 richest people have the same wealth as the 3.5 billion people. 

Most of the research data comes from the world’s wealthiest economies. Far less is known about post-communist countries in Europe and Central Asia—including those in Southeast Europe.

Therefore, in Zagreb gathered economists and stakeholders, led by Branko Milanović, one of the world's best known experts on the issue of income inequality and long-time analyst for the World Bank. During the two-day conference organized by the United Nations Development Programme (UNDP) and The Institute of Economics, Zagreb, they will discuss about inequalities, its causes and consequences in the region. The crucial issues of today, such as the long-term unemployment and the refugee crisis, bring all noticeable disparity into the foreground. 

„Technological advances, globalization and politics contribute to inequality. With an equal distribution of capital ownership, the level of inequality can be affected because it increases the number of the middle class members. This way only the one percent of richest people control the ownership of the capital,” said Branko Milanović

According to the UNDP Humanity Divided report from 2014, most of the world population lives in societies that are less equal than 20 years ago. Consequently, income inequality widened the gap in the quality of life of the rich and the poor. It should be taken into account that income inequality is only one dimension of mismatch in the broad concept of inequality, and others include health, education, access to services, and political participation. Inequality reduces the opportunities for sustainable development.

Although there is a generally accepted point of view that since the economic crisis in 2008, the social and economic inequalities within and between countries of South Eastern Europe have become more pronounced, there is still a lack of reliable indicators for its understanding. After 25 years of economic transition, armed conflicts and demographic changes, there are major challenges in this region which can be remedied by UNDP through its programs and projects within the Sustainable Development Goals; number 10, which is entirely devoted to reducing inequality. 

„UNDP aims globally to combat poverty, all forms of inequality and exclusion which is recognized in the Sustainable Development Goals, which will be adopted in a few days at the UN General Assembly in New York, with the goal of improving the lives of the poorest and the most vulnerable people”, said Rastislav Vrbensky. To be able to address the causes and consequences of inequality, first of all we must have the accurate data. 

“Many studies on inequalities point to lack of timely and reliable data, and indicate that conclusions can be very different depending on the sources of data. The research efforts of the Institute are increasingly directed towards encouraging joint regional research inequalities, but also to policy makers and statistical offices in order to provide researchers access to data and to listen to their suggestions regarding the data they need for such research”, concluded Dubravka Jurlina Alibegović, Director of the Institute of Economics, Zagreb. 

Over the next two days, leading experts from Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia will present various researches on this subject: from gender inequality, the status of women in the labor market to inequalities in access to education. Their conclusions and recommendations will be taken into consideration for the special issue of the Croatian Economic Survey, and will be used for the upcoming edition of the UNDP's regional report on inequality in Europe and Central Asia. 

*References to Kosovo shall be understood to be in the context of Security Council resolution 1244 (1999).