Draft Report - Torino Process - Eastern Partnership and Russia


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Draft Report - Torino Process - Eastern Partnership and Russia

  2. 2. The contents of this draft paper are the sole responsibilityof the ETF and do not necessarily reflect the viewsof the EU institutions.© European Training Foundation, 2012
  3. 3. TORINO PROCESSREGIONAL REPORTKEY TRENDS AND ISSUES FORFURTHER VET DEVELOPMENT IN THEEASTERN PARTNERSHIP COUNTRIESAND THE RUSSIAN FEDERATIONDraft prepared by Manfred WallenbornETF, November 2012The Torino Process is a participatory process leading to an evidence-based analysis ofvocational education and training (VET) policies in a given country. In 2010 the EuropeanTraining Foundation (ETF) launched the first round of the Torino Process, in which 22 of its29 partner countries participated. In May 2011, the ETF organised a conference entitled ‘TheTorino Process – Learning from Evidence’, which brought together over 250 stakeholdersfrom all ETF partner countries, EU institutions, EU Member States and the internationalcommunity. In the final declaration of this conference, the participants welcomed the TorinoProcess approach, endorsed the findings of the first exercise and encouraged the ETF tobuild capacity in evidence-based policy making. In addition, partner countries confirmed theirinterest in taking part in the next round of the Torino Process, which is being carried out in2012.The Torino Process was launched in order to build consensus on the possible ways forwardfor VET policy and system development. This includes the determination of the state of the artand vision for VET in each country and an assessment of the progress that countries aremaking in achieving the desired results. The Torino Process embeds VET within the socio-economic context and ensures that the analysis is informed by relevant evidence and takesplace through a structured policy dialogue leading in all participating countries to a TorinoProcess country report 2012.This regional chapter analyses key trends for further VET system development in sevencountries of Eastern Europe. The countries are covered by the European Union’s (EU)instrument of European Neighbourhood Partnership East (ENP E) and comprise Armenia,Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The Russian Federation is also includedin this report. The chapter draws on two finalized country reports from the region draftedunder the 2012 ETF Torino Process. Other countries sent already advanced drafts. However,some country reports are not received yet in their final version. Moreover, this regionalchapter used recent ETF Human Resource Development reviews on the different countries,as well as other relevant literature. Previous reports of the Torino Process 2010 are alsoconsidered.Four of the seven countries underwent a self-assessment using the analytical framework forthe Torino Process designed by the ETF. An ETF led assessment has been undertaken in 1
  4. 4. Armenia, Georgia and Moldova using the same framework. This regional report builds on thefive building blocks of the analytical framework and the results of the assessments carried outin the respective countries.EXECUTIVE SUMMARYSince 2010 all seven Eastern European countries have developed VET policies andintroduced systemic changes, which focus strongly on the national context. This positive trendhas triggered country specific profiles of education systems, labour market structures, lawsand regulations. Ongoing discussions about vision (overall policy priorities) and reform tend toconnect societal objectives for socio-economic development with the potential VETcontributions to such progress. European policies and approaches play an important role: allcountries have either adopted or are creating national qualification frameworks (NQF).European quality assurance approaches are used and approaches for the validation of non-formal and informal learning are under consideration.These positive developments have been accompanied by new legislative frameworks andconsiderable stakeholder involvement (mostly employers) in strategic discussions and innational/regional VET councils. Employers participate in defining new professional standards,promoting NQF and revised curricula which are introduced in a growing number ofrehabilitated VET schools.Less demand of the learners caused by demographic decline is currently influencing theeducation systems and the population trends in nearly all countries. Population trend hasbeen in the period between 1990 and 2008 in Armenia (-13.2%), in Azerbaijan (21.2%), inBelarus (-5.0%), in Georgia (-21.1%), in Moldova (-16.7%), in Russia (-4.3%) and in Ukraine(-10.9%).All countries have experienced a positive economic growth in the past years except for theslowdown around 2009, which was followed by a further recovery. In 2011, the GDP growthranged between 1.0% in Azerbaijan to 7.0% in Georgia. The two larger countries (Russia andUkraine) plus Belarus are more comparable in their development than the smaller countries.These three countries still have, apart from a rapidly growing service sector, an importantindustrial sector which operates mainly with ISCED 3 and 4 qualifications. The smallercountries go, variably, in different ways. Even the capital intensive oil sector in Azerbaijanemploys only 1.5% of the national labour force. The smaller countries still have a hugeagricultural sector, which serves as a buffer in case of structural problems towards moreunemployment.The employment level in the Eastern European countries is rather high (between 50.1% inBelarus to 62.7% in the Russian Federation in 2010), except for the Republic of Moldova withthe employment rate of 39.4% in 2011. The unemployment is relatively low, especially in thetwo larger countries and Belarus. A different situation can be seen in Armenia and Georgiawhere 18.4% and 15.1% of the labour force were unemployed in 2011. Russia still attractsmigrants to cover existing labour demand and demographic decline. Consequently, it’s theonly country in the region with a negative balance of the in and outflows of remittances.All countries are still discussing substantial VET reforms. In Belarus the strong relationsbetween VET schools and enterprises contribute to effective employment of VET graduates.A well skilled labour force is constantly required, because the country loses 40,000inhabitants every year due to the aging phenomena. All other countries have problems withthe labour market relevance of many VET programmes and hence, with employability. Labour 2
  5. 5. market information and analysis is still minimal. In the past sporadic education and businesscooperation has been a way to cope with this problem and there is an overall awareness andtendency towards more cooperation.The four smaller countries face serious employment problems and additionally extremely lowemployment rates, most of all Moldova – a situation partly explained by high emigration. Thisis not the case in the other countries where the activity rates are 60% and beyond. In thesmaller countries the regional trend towards higher education does not necessarily implyemployment after university graduation. Consequently, a high percentage of universityleavers is unemployed or works on a lower level even in the informal sector.The declining number of VET students and the increasing share of university graduates in thelast decade had serious consequences for labour markets: over-education in the countrieswith minor employment problems (Belarus, Russia and Ukraine) led to a crowding out effect.Many university graduates are employed in jobs, which could be executed by lower skilled(VET) graduates. Simultaneously, the employers in these countries complain about skill gapswhich hamper economic growth and enterprise development because a well qualified workforce with middle level qualifications is hardly available. The reason for these gaps isquestionable educational streaming and the current VET system performance. However,experts of the region report, recently, an increasing demand for VET programmes.Over-education and simultaneous skill gaps are the consequence of the learner’s demand forhigher education. The learners react on certain signals from the labour markets: As long asthe returns and reputation of university education are in general higher than for middle levelqualifications and crowding out recruitment strategies are used by employers, there will bestrong demand for university education. In general countries lack attractive options for VETgraduates to continue studying for post-secondary or higher professional vocational educationand training or at a later stage in Continuing Vocational Training. Awareness campaigns,more permeability and attractive careers for ISCED 3 and 4 achievers could be an instrumentto influence educational streaming.In previous years all countries have concentrated funding on general and higher educationtaking into account that per capita costs of VET are higher than the costs in generaleducation. Modest resources for VET are a prevailing trend in all countries, hampering theincrease in quality, most of all in modern and capital intensive manufacturing and craftsprofessions. However, recent developments reveal an increasing demand for VET caused bythe high unemployment rates of higher education graduates and structural adjustments of theeconomies. Hence, the share of students enrolled in VET education at the upper secondarylevel is rather high in bigger countries, such as Russia (48.5% in 2009) and Ukraine (28.6% in2010). On the other hand, in countries such as Georgia and Armenia, VET plays a ratherminor role with 1.2% (2008) and 6.4% (2010) of students attending VET programmes at theupper secondary level.Apart from the financial problems which include serious restrictions for updating technicalequipment/buildings and a more efficient use of existing resources, there are three commonand interrelated areas for further reforms in all countries: governance, better linkages of VETto the economy in involving the business sector, and quality and relevance of the trainingprogrammes. Also entrepreneurial learning is an area in development. Moreover, there arecountry specific challenges.Although there is an increased involvement of social partners in policy dialogues in severalcountries, coherent and well working multi-level governance modes are missing despiteefforts towards decentralization and more involvement by stakeholders. The countries are 3
  6. 6. either still on their way to new governance modes or do not opt for the participation of allstakeholders. Additionally, transition means more democracy and transparency, which is along lasting social process rather than a ‘decision today’ in order to introduce bettergovernance tomorrow. However, many countries are convinced of the advantages of newgovernance modes and consider ways to give greater responsibilities to schools and try tostep ahead, a process which should be further supported by policy dialogue.In all countries there is room for improvements in pre- and in-service teacher education andfor better professional teacher careers, a core issue for better quality in education. Labourmarket relevance requires (from teachers and VET schools) new forms of cooperation withthe private sector in order to maintain quality and update training programmes in time. Thereare already successful modes of cooperation in the region which could be extended towardssystemic consequences for initial and continuing VET in a lifelong learning perspectiveupdating, as well, the existing post secondary VET offers as a viable alternative to highereducation and offering more entrepreneurial learning for different target groups.The policy dialogue and applied research promoted by the Torino Process 2012 should stressfurther the need to design VET policies which build on evidence and on solutions derived fromcountry specific contexts and commonly agreed objectives. Simultaneously, the capacities forimplementing reform and innovation must be strengthened. Good practice from Europe couldcontribute to improvements as it has already in the past and measures for capacity buildingshould complement policy design and implementation.1. CONTEXT THAT SHAPES THE DEMAND FOR KNOWLEDGEAND SKILLS BY EMPLOYERS AND INDIVIDUALS – SOCIO-ECONOMIC CHARACTERISTICSThe region consists of five small countries (with between 3 million and 9 million inhabitants)and two large countries (Ukraine and Russia, with 46 million and 142 million inhabitants,respectively). The total population is around half that of the EU population of 2009. Theproportion of the population made up of people of working age is higher than the EU averageof 67% in all the countries. However, the region also has a shrinking and ageing populationand is rapidly becoming one of the ‘oldest’ regions in the world (World Bank, 2007). Althoughthe shrinking population of young people provides some relief in relation to the financing ofthe education system, both initial and continuing vocational training provision face seriousdifficulties in coping with skills mismatches.Armenia, Georgia, Republic of Moldova and Ukraine belong to the lower-middle-incomecountries, whereas Azerbaijan, Belarus and Russia are upper-middle-income countries. Untilthe global crisis, their economies were developing extremely rapidly, with growth in grossdomestic product (GDP) above 8% in 2007 (except in the Republic of Moldova and Ukraine).It even reached 25% in Azerbaijan, as a result of the country’s vast oil revenues and aconstantly increasing oil price.However, the income levels of these countries represent major constraints in terms of publicinvestment in education in general and in vocational education and training (VET) inparticular, with new demands on VET systems. Learners are more likely to invest in highereducation rather than in VET, which has led in many countries to an uncontrolled expansionof the higher education sector and unbalanced demand on the labour markets describedbelow. 4
  7. 7. The seven countries share a common past as part of the former Soviet Union, where VETwas centrally planned and structures were very similar. Following independence, they all hadto cope with tremendous changes and with the heritage of a central approach to VETgovernance. Over the past 20 years substantial progress has been made and the countrieshave established their own VET identities in the specific national context. This process is notfinished because serious problems in the VET systems remain unsolved as described in thefollowing chapters.Since the societies and education systems tend to favour academic education over VET,academic drift in education has become more marked. VET has also been negatively affectedby education policy choices over the past two decades and education and businesses remain,in the majority of the countries, separated worlds (ETF, 2011). As a result, there is a majorproblem with skills mismatches, and in particular there are pronounced skills shortages,further exacerbated by labour migration, whether from lower- to upper-middle-incomecountries in the region, or to high-income countries outside the region. This has a furthernegative impact on skills supply, particularly in the lower-middle-income countries.More attention has been paid in the reform process to initial VET rather than continuing VET(CVET). This focus had well justified reasons. However, the Torino Process 2010 revealedthat the transformation of the economies and the demographic trends have generated strongdemands for training and retraining of employed and unemployed adults, which haveremained unaddressed and which have generated an ETF regional project on CVET inEastern Europe.All countries suffered a ‘lost decade’ with high social costs in the previous centurycharacterized by economic stagnation/decline, industrial restructuring, emerging informalsectors (OECD, 2009) and high figures of hidden and registered unemployment. From 2000onwards, the countries passed a remarkable and constant period of economic growth andconsolidation of public and private institutions suddenly interrupted by the crisis in 2008 and2009. However, economic recovery is back since 2010 (as the following table reveals).TABLE 1 GDP GROWTH (%), 2008–11 2008 2009 2010 2011Armenia 6.9 -14.2 2.1 4.6Azerbaijan 10.8 9.3 5.0 1.0Belarus 10.3 0.2 7.7 5.3Georgia 2.3 -3.8 6.3 7.0Republic of Moldova 7.8 -6.0 7.1 6.4Russian Federation 5.3 -7.8 4.3 4.3Ukraine 2.3 -14.8 4.1 5.2Source: World Bank (http://data.worldbank.org/indicator/NV.AGR.TOTL.ZS, accessed 20 August 2012)While there has been substantial economic growth in all the countries, the drivers of growthvary according to national characteristics (e.g. the export-oriented oil and gas sector inAzerbaijan, and exports to Russia in Belarus). The structure of the economies indicates anongoing trend to an expanding service sector in nearly all countries. Azerbaijan’s hugeindustrial sector is country specific and related to the oil sector. Economic restructuring is notyet finished. However, the key trend towards more services reveals an ongoing andsubstantial transition towards market economies. 5
  8. 8. TABLE 2 SHARES OF AGRICULTURE, INDUSTRY AND SERVICE SECTORS AS % OF GDP, 2008–11 2008 2009 2010 2011 A I S A I S A I S A I SArmenia 18.4 43.5 38.1 18.9 35.8 45.3 19.6 36.0 44.5 20.7 37.1 42.2Azerbaijan 6.0 70.2 23.8 6.6 61.1 32.3 5.8 64.7 29.5 5.8 66.8 27.4Belarus 9.8 44.3 46.0 9.4 42.3 48.3 9.2 43.9 46.9 8.1 41.0 50.9Georgia 9.4 21.9 68.7 9.4 21.9 68.8 8.4 23.2 68.4 7.2 18.2 74.6Republic of 10.7 14.3 75.0 10.1 13.1 76.8 14.3 13.2 72.5 13.5 12.4 74.2MoldovaRussian 4.4 36.1 59.5 4.7 33.7 61.6 4.0 36.7 59.3 m.d. m.d. m.d.FederationUkraine 7.9 33.6 58.5 8.3 29.6 62.1 8.2 30.9 60.9 8.3 31.4 60.3 Notes: m.d. = missing data; ‘A’ = agriculture; ‘I’ = industry; ‘S’ = services. Source: World Bank (http://data.worldbank.org/indicator/NV.AGR.TOTL.ZS, accessed 20 August 2012). Special attention must be given to the small and medium sized enterprise (SME) development. The countries are using different criteria for the definition of SME. However, the data in Table 3 reveals that the SME are the backbones of the national economies, with the exception of Russia. VET policies must take into account the relevance of (informal) SME for employment opportunities and the specificities, which SME might have in terms of professional standards, qualification profiles and gaps in entrepreneurial competences. However, awareness about these skills needs and the demands they pose to education and training is increasing in the countries. TABLE 3 PERCENTAGE OF SMEs OF ALL ACTIVE BUSINESSES Armenia 97.7 (2010) Azerbaijan 94.0 (2011) 1 Belarus 97.0 (2010) Georgia 93.1 (2008) Republic of Moldova 97.7 (2009) Russian Federation 33.2 (2010) Ukraine 99.4 (2011) Notes: Armenia – the value refers to registered entities only; SMEs are entities with up to 249 employees in Armenia, the Republic of Moldova and Ukraine; and with up to 100 employees in Georgia and the Russian Federation; Azerbaijan – SMEs are entities with up to 5 to 40 employees depending on a sector. Sources: Small and Medium Entrepreneurship Development National Centre of Armenia (www.smednc.am/?laid=1&com=module&module=menu&id=189, accessed 4 September 2012); Ministry of Economic Development of Georgia (2009), Entrepreneurship in Georgia, Tbilisi.; National Bureau of Statistics of the Republic of Moldova (http://statbank.statistica.md/pxweb/Dialog/Saveshow.asp, accessed 4 September 2012); Russian Federation Federal State Statistics Service (2011), Russian Statistical Yearbook, Moscow.; State Statistics Committee of Ukraine (www.ukrstat.gov.ua/, accessed 4 September 2012); The State Statistical Committee of the Republic of Azerbaijan (2012), Statistical Yearbook, Baku. The activity rates of the population are quite different in the region, where Belarus but most of all Moldova reveal very low rates, not only compared with EU targets of 70% but as well with other countries in the region. This could be explained by the fact that emigrants are classified as inactive by the national statistics because they work abroad. Russia has high activity rates, which explains the migration trend to the country. Ukraine and Azerbaijan are performing on similar 1 The figure for Belarus is derived from OECD et al. (2012a). SMEs in Belarus include enterprises up to 250 employees. 6
  9. 9. levels. In Armenia and Georgia, a big share of activities in the informal sector and in the ruraleconomy is included in the activity rates.TABLE 4 ACTIVITY RATES (%), 15+, 2008–11 2008 2009 2010 2011Armenia (15-75) 59.5 59.2 61.2 63.0Azerbaijan 63.5 63.9 64.3 m.d.Belarus 55.4 55.1 55.5 m.d.Georgia 62.6 63.6 64.2 65.2Republic of Moldova 44.3 42.8 41.6 42.3Russian Federation (15-72) 67.8 67.8 67.7 m.d.Ukraine (15-70) 63.3 63.3 63.7 64.3Notes: m.d. = missing data; data for Belarus and Azerbaijan are ILO estimates.Sources: National Statistical Service of the Republic of Armenia (2011), Labour Market in the Republic of Armenia,2006-2010, Yerevan (www.armstat.am/en/?nid=80&id=1305); KILM database(http://kilm.ilo.org/KILMnetBeta/default2.asp, accessed 28 August 2012); Geostat(www.geostat.ge/index.php?action=page&p_id=146&lang=eng, accessed 29 August 2012); National Bureau ofStatistics of the Republic of Moldova (http://statbank.statistica.md/pxweb/Dialog/Saveshow.asp, accessed 24 August2010); Russian Federation Federal State Statistics Service (www.gks.ru/bgd/regl/b11_36/Main.htm, accessed10 May 2012); State Statistics Service of Ukraine (www.ukrstat.gov.ua/, accessed 10 May 2012).The employment structure of the main economic sectors also varies; in 2007, whileagriculture still played a key role in absorbing employment in Georgia (53%) and Armenia(39% in 2010), industry in Belarus (34% in 2011) and both industry (21% in 2011) andservices (62% in 2011) in Ukraine continued to be very important. Furthermore, most newjobs created between 2000 and 2007 were in the informal sector. In Armenia, for example,the informal sector now makes up 50% of total employment (ETF, 2010) in Moldova aboutone third of the employment. Across all countries employment opportunities in the agriculturaland the manufacturing sector decreased while new employment opportunities emerged in anexpanding service sector, claiming for different skills than in the socialist economy.Armenia and Georgia have particularly high unemployment rates. This indicates thateconomic growth is not necessarily linked to more employment opportunities. Georgia’scountry specific way of deregulation of the labour market was ineffective in terms ofincreasing employment rates and renewed Government’s attention towards unemploymentclaiming unemployment as problem number one in the country (Government of Georgia, 22012) . Azerbaijan, Russia and Ukraine are recovering after the crises as table 5 reveals.2 Unemployment of higher education graduates is higher than the shares of unemployment of graduates from othereducation levels (Castel Branco, 2012). 7
  10. 10. TABLE 5 UNEMPLOYMENT RATES (%), 15+, 2008–11 2008 2009 2010 2011 T M F T M F T M F T M FArmenia (15- 16.4 14.4 18.6 18.7 17.8 19.9 19.0 17.0 21.2 18.4 m.d. m.d.75)Azerbaijan 6.1 7.1 4.9 6.0 5.2 6.9 m.d. m.d. m.d. m.d. m.d. m.d.Belarus(16-59 for 0.8 0.7 0.9 0.9 0.8 0.9 0.7 0.7 0.7 0.6 0.6 0.6males, 16-54for females)Georgia 16.5 16.8 16.1 16.9 18.1 15.4 16.3 17.9 14.5 15.1 16.7 13.1Republic ofMoldova 4.0 4.6 3.4 6.4 7.8 4.9 7.4 9.1 5.7 6.7 7.7 5.6RussianFederation 7.0 7.5 6.4 8.4 9.0 7.8 7.5 8.0 6.9 m.d. m.d. m.d.(15-72)Ukraine (15-70) 6.4 6.6 6.1 8.8 10.3 7.3 8.1 9.3 6.8 7.9 8.8 6.8 Notes: m.d. = missing data; data for Azerbaijan are ILO estimates; data for Belarus refer to administrative data only. Thus, only those people who are registered with public employment services are considered as unemployed. Since many people may decide not to register, the unemployment rates may be underestimated. On the other hand, the employment is still largely guaranteed in Belarus, as, for example, a compulsory job allocation of graduates in publicly financed HE and also VET is exercised, which guarantees a first job for young people. Sources: National Statistical Service of the Republic of Armenia (2011), Labour Market in the Republic of Armenia, 2006-2010, Yerevan (www.armstat.am/en/?nid=80&id=1305); KILM database (http://kilm.ilo.org/KILMnetBeta/default2.asp, accessed 28 August 2012); Geostat (www.geostat.ge/index.php?action=page&p_id=146&lang=eng, accessed 29 August 2012); National Bureau of Statistics of the Republic of Moldova (http://statbank.statistica.md/pxweb/Dialog/Saveshow.asp, accessed 24 August 2010); Russian Federation Federal State Statistics Service (www.gks.ru/bgd/regl/b11_36/Main.htm, accessed 10 May 2012); State Statistics Service of Ukraine (www.ukrstat.gov.ua/, accessed 10 May 2012). Massification of higher education led in nearly all countries to more unemployment of higher education graduates, which do not differ significantly from secondary education unemployment rates. In the case of Georgia they are even much higher than for secondary education graduates. The crowding out effect in Russia and Ukraine is a reason for avoiding higher unemployment rates for university graduates. 8
  11. 11. TABLE 6 UNEMPLOYMENT RATES BY EDUCATION (%), 15+, IN THE YEAR 2011 Russian Armenia Republic Azer- Federa- Ukraine Georgia (2010, 15- of baijan tion (2010, (15-70) 75) Moldova 15-72)Primary 3.5 4.5 4.0 5.4 19.8 -Basic 10.4 15.1 12.2 7.2 16.8 6.9Secondary general 13.7 19.0 4.2 7.7 11.6 8.8Primary vocational/vocational (Armenia)/ 10.3 20.3 5.7 7.2 7.9 -secondary professional(Moldova)Secondary vocational/specialised secondary or 7.2incomplete tertiary 13.4 20.3 7.1 5.2 5.8(Armenia, Moldova, (basic/full)Ukraine)Higher 20.5 19.5 6.2 6.0 4.0 6.7Total 15.1 19.0 5.4 6.7 7.5 7.9Note: Data for Belarus are not available.Sources: Geostat (received directly from Geostat); National Statistical Service of the Republic of Armenia (2011),Labour Market in the Republic of Armenia, 2006-2010, Yerevan; National Bureau of Statistics of the Republic ofMoldova (http://statbank.statistica.md/pxweb/Dialog/Saveshow.asp, accessed 24 August 2012); Russian FederationFederal State Statistics Service (www.gks.ru/bgd/regl/b11_36/Main.htm, accessed 28 August 2012) (ETFcalculation); State Statistics Service of Ukraine (2012), Economic Activity of Population in Ukraine 2011, Kiev.Armenia has a considerable share of long-term unemployed among the population. Thismight be an indicator that new skills required in a market economy were not achieved by acertain segment of the population. Moreover, the agricultural sector, which is a buffer in timesof structural change and reform, expanded as well in the country. On contrary, Azerbaijan andBelarus have low shares of long-term unemployed. Georgia doesn’t have an employmentservice collecting correspondent figures. 9
  12. 12. TABLE 7 SHARE OF LONG-TERM UNEMPLOYED AS % OF ALL UNEMPLOYED (%),2008–11 2008 2009 2010 2011Armenia (15-75) 64.2 54.6 60.2 m.d.Azerbaijan 4.1 3.4 3.0 3.0Belarus (15-59 men; 15-54 women) 8.2 6.2 6.4 5.8Georgia (15+) m.d. m.d. m.d. m.d.Republic of Moldova (15+) 31.3 27.9 30.8 32.6Russian Federation (15-72) 33.3 28.7 29.9 m.d.Ukraine (15-70) 28.7 18.4 33.9 28.4Notes: Long-term unemployment refers to the unemployment longer than 12 months; data for Belarus and Azerbaijanrefer to administrative data; Armenia – the calculation based on the length of unemployment from the termination of ajob; Russia – the calculation based on the length of job search; m.d. = missing data.Sources: National Statistical Committee of the Republic of Belarus (2012), Labour and Employment in the Republicof Belarus, Minsk; National Bureau of Statistics of the Republic of Moldova(http://statbank.statistica.md/pxweb/Dialog/Saveshow.asp, accessed 4 September 2012); State Statistics Service ofUkraine (www.ukrstat.gov.ua/, accessed 4 September 2012); National Statistical Service of the Republic of Armenia(2011) Labour Market in the Republic of Armenia, Yerevan.; State Statistical Committee of the Republic of Azerbaijan(received from the country); Federal State Statistics Service (www.gks.ru/bgd/regl/b11_36/IssWWW.exe/Stg/d1/01-62.htm, accessed 4 September 2012).2 DO KNOWLEDGE AND SKILLS MATCH THOSEDEMANDED BY EMPLOYERS AND INDIVIDUALS?After more than 20 years of transition nearly all countries (exception Belarus) haveconsiderable problems with a skill mismatch (ETF, 2011a, 2011b, 2011c, 2012b, 2012c,2012d and 2012e) and/or employment. Belarus reveals excellent figures for the transition ofVET graduates due to the government’s responsibility to find a first job for all VET graduates.All other countries have a serious problem with ‘over qualification’ and partly a high demandfrom the business sector for skilled workers of ISCED 3 and 4 levels, which led in Georgiaalready to higher enrolment rates in VET institutions. The quality of the skills that are currentlyprovided at these levels is frequently unsatisfactory in the view of employers, a reason whyhigher enrolment rates should be linked to quality enhancement. 3The structural misbalances on the labour markets are partly triggered by learner’s demandand correspondent educational policies which historically neglected the VET system in 4previous years. Even the required fees for higher education could not reduce the demand .These fees are obligatory in many countries because the public offers only a restricted shareof free enrolments. Between 1990 and 2008, enrolment in Russia in higher education tripledalmost from 2.82 in 1990 to 7.42 million in 2008 with the consequence that many work placeswhich require middle level skills are today covered by higher education graduates. In nearlythe same period the number of graduates from ISCED 4 VET programmes decreased from1990 (100%) to 42.3% in the year 2009 (ETF, 2011a). The structural misbalance is linked withan overall decreasing quality of educational services, also affecting higher education, whichhas seen in the past the over multiplication of institutions in the absence of quality criteria.3 Students which enrol in Russia in higher education are not obliged to go to the two years military service.4 In Azerbaijan 60% of higher education students are paying fees (Deij, 2011). 10
  13. 13. Russia is a good example for these misbalances in nearly all countries of the region. Data intable 7 provided by the union of VET school directors compares for Russia output and 5demand for different education levels and for the year 2010 (Umarov, 2011, p 31) :TABLE 9 EDUCATIONAL OUTPUT AND LABOUR MARKET DEMAND, 2010 (%) Higher VET ISCED 4 VET ISCED 3 No qualification education level levelOutput of the 60 13 18 9education systemLabour market 35 22 37 6demandUkraine – the second largest country of the region – reports similar misbalances on the labourmarkets. 44.4% of the employers stated that the shortage of qualified blue collar workers isthe biggest obstacle for the country’s enterprises to grow further (Sondergaard, 2012). Thehigh enrolment rates in higher education and decreasing VET enrolment led to crowding outeffects: 62% of professionals (which are blue-collar jobs) are filled by university graduates(ETF, 2011b) and employers complain that newly contracted staff is missing technical and 6non-technical skills required in the world of work .Belarus meets country specific targets of VET driven labour force development quite well interms of employment, because the country still has the mechanism of compulsory first jobs forVET graduates. However, Belarus employers complain as in Moldova and Georgia aboutsimilar problems of skill gaps also as in Russia and Ukraine. 41.5% in Moldova and 26.5% ofGeorgian employers identify inadequately educated workforce as a major constraint andobstacle for enterprise development (Sondergaard, 2012) and ‘although many companiesacross all sectors have been trying to find new employees in the past 12 month, only abouthalf of them have succeeded’ (Ministry of Economy and Sustainable Development of Georgia,2012). The reasons are the same: poor quality of VET and consequently low enrolment rates,insufficient CVET and ‘over qualification’ of university graduates with labour market irrelevantcertificates caused structural misbalances on the labour markets.Big companies usually have the option to further train their staff. A forthcoming report (ETF,2013) however reveals existing problems of CVET in the region. The countries havehighlighted the obsolescence of the existing legislation, the lack of cooperation betweenpublic and private sector, the insufficient expertise to carry out training need analyses, thelack of quality criteria, funding issues etc. as key factors that negatively affect CVET.Looking at employer’s opinions on the relevance of human capital for enterprise developmentthe above mentioned results are confirmed und documented in the graph below: In the threelarger countries – Belarus, Russia and Ukraine – around 50% of employers indicate that aninadequately trained workforce hinders company performance and development(EBRD/World Bank, 2010). Employer perceptions deteriorated in all countries except Georgiabetween 2005 and 2009 (Figure 1).5 There are however, different explanations for labour market shortages. Gimpelson et al. (2012) write that imperfectlabour market mechanisms impede the reallocation of better skilled workers in the Russian manufacturing sector.6 The permeability of the education system is well used by the learners, because ‘two thirds of all students completegeneral secondary education alongside their vocational education’ (ETF, 2011d) and many of them enrol aftergraduation in higher education. 11
  14. 14. FIGURE 1 AN INADEQUATELY EDUCATED WORKFORCE AS AN OBSTACLE TOCOMPANIES (%), 2005–09 100% 7 12 16 90% 24 29 27 33 34 37 39 80% 43 49 43 55 70% 60% 50% 94 81 85 40% 73 71 71 67 66 63 61 54 30% 55 49 42 20% 10% 0% A zerbaijan 0 5 A zerbaijan 0 9 A rmen ia 05 A rmen ia 09 G eo rgia 05 G eo rgia 09 Belarus 05 Belarus 09 M oldova 0 5 M oldova 0 9 Rus sia 0 5 Rus sia 0 9 U krain e 05 U krain e 09 DK/ NA It is not an obstacle It is an obstacleNote: The 2005 and 2009 data are not fully comparable owing to methodological changes.Source: EBRD/World Bank (2010).However, since the returns to education correlate in Armenia (Corradini, 2012), Georgia andMoldova (ETF, 2011c) and most likely as well in the other countries positively with the level ofeducation the propensity of many learners and their families is to enrol in the higher educationsector, regardless if the fields of study are labour market relevant or if the graduates need toaccept employment opportunities on a lower level, which could equally be covered from lowerskilled graduates. This issue is not necessarily complemented by lower unemployment rates 7of the better educated and ‘in Armenia and Georgia […] one-fifth of highly educated peoplewere unemployed’ (ETF, 2011e, pp. 185-186).The Russian and Ukrainian case reveal that the misbalance of over qualification and skills 8gaps on ISCED 3 and 4 levels is typical for the labour market (ETF, 2012) and notunemployment per se. Russia still attracts migrants from other countries and Ukraine hasmoderate unemployment rates. Another case is Moldova with the lowest employment rate inthe region of only 38.5% in 2010 (ETF, 2011c). Consequently, micro enterprises in theinformal sector and as an alternative against poverty are mushrooming. Similar trends arenotable in Georgia with serious employment problems and in Azerbaijan, where the boomingoil and gas ‘sector is good for two thirds of GDP, but employs less than one in seventyworkers’ (Deij, 2011), which means approximately 1.5% of the workforce.7 In Georgia, the unemployment rates of higher education graduates are higher (Castel Branco, 2012) thanunemployment rates from graduates of other education levels, a consequence of the previous deregulation of thehigher education sector which is meanwhile amended due to a more severe accreditation policy for higher educationinstitutions. This does not undermine the country specific trend to create an education system based on credibilityand quality, including private providers on all levels and the elimination of corruption.8 ‘Skill gaps appear in periods of economic restructuring when the new jobs created require different types of skills tothose destroyed, before the education and training system has been sufficiently updated to match the pace of change(ETF, 2011d, p. 187). 12
  15. 15. The limited availability of jobs in the smaller countries, modest wages in poorly functioninglabour markets and the subsequent poor quality of life have meant that labour emigration andthe associated brain drain have become major features of the region, contributing in Armeniain 2011 with 12.1% to the GDP (Corradini, 2012). On the contrary, Russia absorbs the largestnumber of migrants (in 2005, 1–2 million from Ukraine, around 1 million from Azerbaijan andnearly half a million from Armenia), followed by Europe. Ukraine has the highest number ofemigrants abroad: more than 6 million in 2005. The highest share of emigrants has Moldova,where they represented 25% of the workforce in 2010. Although skills range across all levels,many migrants are young (aged 20–40 years) and educated.However, most migrants work in low-skilled or unskilled jobs abroad and there is a commonpattern of skills wastage. The net labour migration in 2010 is presented in the table below andconfirms the trend towards Russia which attracts most of the migrants and the employmentproblems in Armenia, Georgia and Moldova.TABLE 10 NET LABOUR MIGRATION, 2010Armenia -75,000Azerbaijan 53,264Belarus -50,010Georgia -150,000Moldova -171,748Russian Federation 113,5737Ukraine -40,006Source: World Bank (http://data.worldbank.org/indicator/NV.AGR.TOTL.ZS, accessed 4 Sepbember 2012)Labour migration is also indicated in the negative or positive balance of the monetary inflowsand outflows of remittances, such as Armenia +839, Azerbaijan +471, Belarus +485,Georgia +756, Moldova +1,275, Russia -13,532 and Ukraine +5,583 (in millions USD in 92010) . Russia is the outstanding attractor of human capital from other countries, followed byAzerbaijan which a decade ago exported labour.3. VISIONS AND DEVELOPMENTS IN VETNew visions and VET policies/strategies have emerged throughout the region thatendeavours to respond to country specific socio-economic challenges. They even relate tothe CIS development strategy 2009–11, which includes science, innovation and education asimportant areas of cooperation. The strategies of all countries recognize the importance ofVET for the economic and social development and all countries (with the exception of 10Belarus ) are using the word ‘reform’ in the context of their policies for VET systemdevelopment. Some of the countries claim VET even for sustainable development and privatesector contributions in terms of funding and VET delivery.Initially, many of these initiatives for designing visions and VET strategies have been drivenby donors. Today, the situation is different: the tremendous decline of VET enrolment rates in9 http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:22759429~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html (accessed 16 October 2012)10 The key words in this country are ‘innovative development and competitive growth’ in increasing by 30% the shareof highly skilled VET graduates. 13
  16. 16. 11nearly all countries, the lack of skilled blue collar workers with negative consequences foremployment and the growth of enterprises (Sondergaard, 2012) and the ‘over qualification’ ofthe (unemployed) university graduates claim for suitable long term solutions in the educationsystem which better support the increasing demand for VET.The specific vision of VET, however, varies by country according to national priorities. Mostcountries link their new strategies to both competitiveness and social agendas; some also linktheir vision to additional objectives (Armenia to national security goals and sustainability,Belarus to socio cultural goals and Ukraine to sustainability). Countries have started to putVET higher on their national policy agendas. The Moldova National Development Strategy2020 has the alignment of skills to the labour market through better quality of education andtraining at the top of the priorities. The support to the SME Sector Strategy is similarlyindicating competence and human capital as one key objective. In Azerbaijan, however, VETpolicies are still being reformulated. The country is aware that the booming export of oil andgas with spill over effects to the rest of the economy requires well skilled human capital onsecondary and post-secondary VET level. Consequently, objectives to formulate a nationaland non-donor driven VET strategy are currently high on the agenda.All countries made efforts in order to further develop their VET systems and their articulationto the environment. Positive results are notable, mainly in three areas:• legislation,• strengthening institutions, and• the involvement of employers.The policies and strategies of all countries recognize the added value of systemicallyimplemented stakeholder involvement and explicitly the relevance of qualification frameworksand their compliance to the EQF. These frameworks stimulated the quality discussion in VETand a more systematic stakeholder involvement as well. However, only in Armenia andGeorgia is a national framework already in place and the other countries are still working toclose the gap between visions, policy design and the implementation in the countries’ realitywhich does not work through mere adoption of regulations although is driven by longer lastingsocial processes on which regulations can build. But care needs to be taken to ensure thatframeworks are, at least at the outset, simple and affordable.All countries have developed new VET strategies and laws. In addition, specific legislationrefers mainly to the development and implementation of national qualification frameworks, thenew design of professional standards/curricula, quality assurance, decentralization efforts andin the case of Georgia liberalization towards an educational market in higher education andVET, which is today steered by accreditation and quality control instruments.All countries reformed VET departments in ministries, created national VET agencies/councilsand are in the process of rehabilitation of the existing VET schools. Schools have been partlyclosed in order to support and concentrate available resources on centres of excellenceaccording to the needs of different regions. The further training of school directors andteachers is an ongoing process to support quality and to improve professional careers. Thebusiness sector contributed to the equipment of schools and specialized national (VET)agencies have been set up to manage accreditation, teacher education and quality control.11 This transition problem is less dramatic in countries with higher shares of well qualified VET graduates. Belarusreports that employment for VET graduates is increasing achieving 99.05% (Umarov et al., 2011). However, Russiawith a high share of VET students has a growing shortage of skilled manual workers and technical specialists,because many VET students continue in higher education programmes (ETF, 2011a). 14
  17. 17. The sporadic and unsystematic involvement of the business sector is a characteristic of thefast changing realities in market driven economies. Involvement ranges from participation innational VET councils to consultancy and advice in curriculum development, participation inschool and assessments boards (ETF, 2011). Trade unions are hardly involved in VETactivities. The involvement of stakeholders is an ongoing social process which might lead aswell to more relevant and systematic consequences for the overall VET system, e.g. changingthe character of internships more to longer phases of practical learning in enterprises, whichcould be an option for better learning, because many VET schools are not well equipped.Georgia’s reform process is the most advanced towards the privatization of VET institutions.Currently, only 14 public VET centres are funded largely through a voucher scheme whichprioritizes professional areas with high demand on the labour markets. Moreover, 71 privateinstitutions are operating in the country and their offers must be fully covered by tuition fees ofthe learners (Castel Branco, 2012). It’s still too early to determine whether such a VETsystem, in the future, will cover the human capital requirements.The structural misbalances on the labour markets in terms of shortages of qualified labourand so called ‘over education’ are, in all countries, the focus of policy makers triggering 12serious attention from respective governments . This has led in all countries to moreawareness of the relevance of VET for societal objectives and the formulation of VET policieswhich focus on broader development socio-economic goals and on a more demand drivenperspective (learners and enterprises) of the strategies and policy documents – involvingmore systematically employers in the outline of VET programmes.Awareness has been raised through a review in 2011 of the country policies in support ofSME, using criteria inspired by the EU Small Business Act (OECD et al., 2012a). The reviewreveals shortages in entrepreneurial learning and in training support for female entrepreneurs.Several countries meanwhile decided to tackle this issue.All countries are aware of the importance of career guidance and its contribution in avoidingfuture labour market distortions. However, for career guidance, many countries concentratenew policies and activities too much on initial VET and have not included such services for 13employed and unemployed adults . This is even more crucial in the larger countries andBelarus with an aging labour force where these problems could be partly alleviated with moreintegration of adults in the work force through vocational guidance and (further) training.There are three other commonalities among the countries. They still have an initial VET offerand a ‘secondary’ VET for intermediate qualifications of technicians. A difference exits in thesystem’s permeability: VET programmes are, in some countries, dead ends (as in Georgia,which nevertheless recognizes the problem) but in many countries the possibility still exists tocontinue with higher education. However, in practice few VET graduates are continuing theireducation after the secondary level. Georgia is advanced in deregulating the VET system, butencounters severe problems in terms of financing in restructuring the whole sector with publicand private providers.The issue of lifelong learning is a good example for the importance of vision/policydevelopment which is not necessarily followed by sustainable implementation and action.However, Moldova and Georgia have already made systematic efforts in the recognition ofnon formal learning. Moreover, lifelong learning is in many countries understood as adulttraining. Figures for Russia, Ukraine and Moldova reveal that the shares of adults - employedand unemployed - participating in training programmes are still modest, such as 5–7% of12 Moreover, ‘institutional and social dialogue, capacity, and leadership of implementation will be among the keyelements for successful and sustainable reforms’ (Castejon et al., 2011, p. 162).13 The employment services of Azerbaijan and Ukraine have as well a focus on adult job seekers. 15
  18. 18. adults for Russia, where 1/3 of adult population expressed further education needs (ETF,2011a), for Ukraine, where the extractive and manufacturing sector provided outstandingshares of further training with 7,4% and 5,2% respectively (ETF, 2011b) and 0.95% in 2010 of 14all population between 24 and 64 years for Moldova respectively (ETF, 2011c) .The lifelong learning issue and similar delays in other policy areas are significant for a seriousgap between policy design and implementation on all levels of the VET systems. Some mainreasons for modest progress in implementation are:• lack of institutional capacities,• lack of returns on retraining,• low motivation and/or resistance against decisions taken in a non participative manner and top down implemented measures,• lack of resources and incentives complementing innovation.Higher education benefited most from educational policies during the transition phase.Secondary VET was often neglected at policy level and managed with outdated governancemodes. This process was reinforced by the demand of the learners, which are even ready topay high fees for university graduation (ETF 2011a, 2011b). The growing demand led mostcountries to opt for liberalised higher education policies by opening up to fee-based publicand private universities. Most enrolment is in academic higher education (ISCED 5A);enrolment in vocational higher education (ISCED 5B) has been decreasing since the early2000s (in 2008, the rates ranged between 12% in Republic of Moldova and 27% inAzerbaijan). Professional areas such as engineering, manufacturing and construction (whichplay a prominent role in the EU New Skills for New Jobs agenda) have seen the lowestincreases and even decreases in enrolment compared with other fields (UNESCO, 2010).The four smaller countries (Armenia, Azerbaijan, Georgia and Moldova) have limited researchcapacities in the VET sector and hardly funds for complementing VET system developmentwith targeted research carried out with national resources, which would create more evidence 15for further decisions and would support the design of new visions/policies . On the contrary,Belarus makes efforts in skills forecasting and the larger countries have better developedresearch capacities.4. ARE INSTITUTIONAL ARRANGEMENTS, CAPACITIES ANDBUDGETS ADEQUATE FOR BRINGING ABOUT THE DESIREDCHANGES IN VET?4.1 VET governance on different levelsDespite the existing planning traditions and the emerging development of VET strategies inmost countries, the accountability of stakeholders from civil society is still weak. There aredifficulties in implementing long-term visions/policies in VET pilot projects and mechanismsare missing for extending the pilots to the overall system level. One reason for that isoutdated governance modes, which still operate the VET system. The MoE’s planning14 Crossover the region the private sector should have a stronger voice and incentive driven further training schemes,which should be linked to qualification frameworks and sound accreditation policies for providers (Bodewig et al.,2011).15 Azerbaijan is an exception in the small countries. Several times publicly financed research was launched ondifferent VET issues. 16
  19. 19. 16traditions in Russia, Ukraine and Belarus (ETF 2011a, 2011b, 2011f) impede a more flexibleand accountability driven development of VET institutions. Public entities still decide in acentral manner and intervene a lot into the content and structure of training programmesinstead of involving private sector initiatives, which would articulate demand according to the 17requirements of the enterprises . Here, Georgia is more advanced. However, the duties,rights and obligations of the National VET Council are not well defined.An important step was taken in Russia towards further decentralization of VET governanceand administration and the foreseen ‘implementation of regional TVET developmentprogrammes’ catches up the decentralization paradigm (Umarov et al., 2011) for Russia’sVET system whereas the federal centre of VET will only be strengthened in order to regulatebetter the emerging market for education and to enhance the quality and transparency ineducation and training.In Armenia recent VET policy documents, which have been prepared with the support ofinternational experts, are not yet owned by policy makers. However, and in order to stimulateimplementation, the Ministry of Education and Science, the Armenian Union of Employers andthe Chamber of Commerce signed a memorandum of understanding on VET cooperation, todefine the involvement of employers in VET development and provision. Ukraine hasestablished an inter-agency working group in an effort to shape educational planning in line 18with the demands of the economy .Where social partners especially employers become involved the situation changes and theadvantages of modern governance modes are increasingly discussed. In Ukraine the 2012law on ‘Professional development’ lays the basis for CVET according to the needs and withparticipation of the social partners. In Moldova various sector committees are working onthese issues. Federal and centralized governance modes are questioned in the entire regionand decentralization at least suitable for huge countries like Russia and Ukraine. The raisingawareness includes in Russia legal issues, where regional legislation is gaining groundagainst the previous centralized model.In Russia, a law from 2007 opened the door for the involvement of employers in VET policyformulation and in the recent years the Russian Union of Industrialists and Entrepreneurs(RUIE) contributed more systematically to VET system development. Moreover, the futuresystemic involvement from employers is codified by an agreement between the ministry andthe Russian employer organization.In Ukraine, in spite of the active recent involvement of employers in developing andmodernizing VET, the implementation of reforms and initiatives is constrained by the lack oftechnical capacities (such as expertise in competence based and occupational standards andmodern quality assurance mechanisms) and both institutional and financial resources. Theongoing crisis has affected the implementation of the National VET Development Programmefor 2011-15 because the planned financial resources are not available. As regards theimplementation of the NQF adopted by the government decree in 2011 a number of employerled pilot projects have been initiated to develop new occupational standards with a view todeveloping a model for engaging the labour market actors in competence based standards.16 The sectoral orientation of many educational institutions has been preserved as well as the orientation to largeenterprises.17 Belarus’, Russia’s and Ukraine’s educational institutions developed meanwhile first cooperation forms withenterprises for anticipating demand, in-service practice and training, developing standards etc. (ETF, 2011f).18 This approach can already build on good practice: ‘the Kiev VET school of jewellery works in close cooperationwith the Jewellery Association to provide training for workers from all regions, offering 100% employment for allgraduates’ (ETF, 2011e). There is as well a legal base that experienced workers can move to VET institutions asteachers. 17
  20. 20. However, the lack of technical competences and the absence of a single coordinatingqualification agency is a serious impediment for boosting and scaling up the NQFimplementation. Solutions are sought through new legislative initiatives (Draft Law onProfessional Qualifications) and funding mechanisms (an initiative on the establishment of anational training fund is under discussion).Hence, most countries are today on the way in modifying the system of governance on twodifferent levels: the system level itself which might include in the future e.g. instruments likeindependent external evaluation for better and more informed governance. The secondaspect is the institutional level of schools, which should operate in the future with moredegrees of freedom. The third aspect is the progressive involvement of the social partners.Also the MoE of Belarus cooperates today more systematically with employers. The strongawareness of Belarus employers for human capital investments for maintaining thecompetitiveness of the manufacturing sector is supporting this process.There are some common problems left in all countries. This is predominantly capacity buildingfor stakeholders involved in new governance modes. This includes in a multi-levelgovernance model not only the federal level but also sector and regional organizations andthe VET schools, where teachers and school directors must be further trained in order toassume different tasks and more accountability towards the learners and the local economy.Pre service and in service teacher education and training is per se a crucial and critical issue 19in all countries . In the future, policy makers, trainers, teachers and school managers mustbe prepared in their educational careers for such new governance approaches.There is very strong case for greater school autonomy especially as it is much discussed (andeven agreed) but little implemented. The case is intertwined with the question ofdecentralisation / ‘de concentration’ either to municipal or school level. Decentralisationimplies financial responsibility at local level but requires national uniform technical guidelinesin areas such as occupational standards, vocational qualifications and core curricula. It alsoneeds to address the local/regional involvement of the social partners. Decentralisation canalso signify delegation by ministries of technical responsibilities to bodies at national level(standards/qualifications/finance etc.).Concerning local commercial activities, if the school has greater autonomy, then it needs tobe spelled out either in legislation or regulation or in the school’s own statutes that the schoolcan engage in commercial activities and that it can retain the income (and what the limitationsare).There might well then, be a regulatory framework for schools to become more autonomous inthe light both of their responsibility for income generation and their need for responsiveness tothe local market and enterprises, taking into account the obligations of school boards andmanagement committees.4.2 Resources and budgetsIn the last 20 years of transition, the policy makers and the learners gave priority to generalsecondary and higher education – including corresponding budget resources. Combined withthe low attractiveness of VET the learners’ preferences influenced negatively initial trainingand the modest efforts in further training, because governments spent more money ongeneral secondary and higher education. Hence, many countries have low shares of VET19 Ukraine established meanwhile a compulsory in-service training for teachers. Every five years they must assist to afurther training programme. 18
  21. 21. students compared with the number of students in all programmes on the same educationlevel and funding is linked in all countries to the educational streaming towards differenteducational sub systems.TABLE 11 TOTAL NUMBER OF VET STUDENTS COMPARED TO THE TOTAL NUMBEROF PUPILS AND STUDENTS BY EDUCATION LEVEL Armenia Azerbaijan Belarus Georgia Moldova Russia Ukraine 2010 2010 2010 2010 2010 2009 2010Lower 193,364 666,277 468,270 166,586 207,720 6,403,704 2,289,065secondary(ISCED 2) n.a. n.a. n.a. n.a. n.a. n.a. n.a. 210,649 131,625 88,060 396,397 99,899 3,209,844 843,907Upper 5,433 1,580secondary 5,618 176,337 35,513 1,556,758 241,706(ISCED 3) (2.6%) (1.2%) (6.4%) (44.5%)* (35.4%) (48.5%) (28.6%) (2007) (2008) 108,991 6,076Post sec. 37,367 1,861 134,750 182,607 n.a. 108,991 6,076non 37,367 1,861 134,750 182,607tertiary n.a. (100%) (100%)(ISCED 4) (100%) (100%) (100%) (100%) (2007) (2008) 153,696 179,579 601,352 102,710 128,240 9,178,199 2,599,426Tertiary 29,986 34,659 166,637 6,403 17,048 1,665,080 354,226(ISCED 5) (19.5%) (19.3%) (27.7%) (6.2%) (13.3%) (18.1%) (13.6%)Notes: The first figure shows the number of students in all programmes for a specific education level, the second andthird one the number of VET students at a corresponding level and as a share of the first figure respectively.n.a. = not applicable; (*) According to national data and calculations in the Torino Process country report forAzerbaijan, the share of VET students at the ISCED 3 level has been estimated at the level of 11.2%, which is muchlower than the UNESCO estimates.Source: UNESCO Institute for Statistics(http://stats.uis.unesco.org/unesco/TableViewer/document.aspx?ReportId=136&IF_Language=eng&BR_Topic=0,accessed 10 May 2012).Typical for initial VET is the ISCED 3 level – an exception is Belarus, which concentrates onISCED 4 – where the shares of VET students compared to all students on this level are forArmenia 6.4%, for Azerbaijan 11.2% (referring to national data and calculations in the TPcountry report – ETF, 2012f), for Belarus 2.6%, for Georgia 1.2%, for Moldova 35.5%, forRussia 48.5% and for Ukraine 28.6%. None of the countries exceeds 50% and in somecountries the shares of VET students are extremely low. Consequently, Armenia which is onecountry with low shares of VET students, spent in 2010 only 4.8% of public expenditure foreducation on VET (Corradini, 2012) and Georgia will spend 4.1% in 2012 respectively (Castel 20Branco, 2012) .20 The share of VET spending out of total educational spending is only available for these two countries. Belarus is toa certain extend exceptional, because spending for VET infrastructure nearly doubled between 2005 and 2008 (ETF,2011e). The Georgian figures do not include that in 2012 the share of 13.25% of all VET students pay the full amountof their training programme, due to the considerable number of private training institutes. 19
  22. 22. One has to take into account that current enrolment in VET does not automatically mean thatthe students end up in employment according to their VET qualifications. Countries withrelatively high shares of VET students (like Russia) have a high permeability in the system.Hence, students enrol after initial VET in higher education programmes. Moreover, theISCED 4 level has the potential to meet the demand of both the employers and the students’expectations and the desire to progress. The enhancement and expansion of the offer of thepost-secondary level should therefore receive attention and investment on part of thegovernments.The overall spending on education remains in four countries considerably below UNESCOrecommendations.FIGURE 2 PUBLIC EDUCATIONAL SPENDING AS % OF GDP AND % OF TOTALPUBLIC EXPENDITURE, 2006 AND 2009 25.0 20.0 15.0 10.0 2009 2006 5.0 0.0 % of % of % of % of % of % of % of % of % of % of % of % of % of % of GDP gov. GDP gov. GDP gov. GDP gov. GDP gov. GDP gov. GDP gov. exp. exp. exp. exp. exp. exp. exp. Armenia Azerbaijan Belarus Georgia Republic of Russian Ukraine Moldova FederationNotes: Russian Federation – data refer to the years 2004 and 2008; Ukraine – data refer to the years 2006 and 2007.Source: UNESCO Institute for Statistics (http://stats.uis.unesco.org/unesco/TableViewer/tableView.aspx, accessed14 May 2012).Moldova was outstanding on educational spending – even in the years of the crisis, but stillremains with an inefficient network because of a declining population and lowteacher/students relations, but high maintenance and heating costs. From 2012 onwards thenumber of schools will be reduced. This makes educational spending more effective and theschools should be more intensively used by launching CVET programmes includingentrepreneurs. Five countries increased educational spending. However, the majority remains 20
  23. 23. below the UN recommendation of 6%. Moldova and Ukraine achieved the recommendation in 21the past – more updated data is not available .Initial VET is more costly than general secondary education and the reform initiatives must beseen in the context of available resources. Especially those countries which have not yetsystematically developed education and business cooperation in initial VET have seriousproblems in updating the existing infrastructure in schools and in purchasing new textbooks.Donor support has its limits in VET financing and could even reinforce structuraldiscrepancies in the countries between the VET institutions. This led in Armenia to thesituation that 12 regional state colleges are relatively well equipped – coping multi functionallywith initial and further training. However, the rest of the VET school remain in the samesituation in terms of infrastructure and equipment (Corradini, 2012). Azerbaijan rehabilitated inthe 2007–12 as well 20 VET schools, which is less than 20% of the school network.Enormous constraints in terms of technical equipment, school buildings and furniture are a 22common problem in all countries , which can only partly be solved by the schools running 23some educational services for clients . The human resources (teachers, trainers and schoolmanagers) need in all countries more and constant updating, linked with more attractiveprofessional careers.It is very important to remember that reform strategies cannot exist without a budget lineattached and that, quite simply for each country four key questions need to be answered (ETF2007):• What are the current and future sources of finance?• How will they be collected and by whom?• How will they be dispersed, by whom and by what criteria?• What measures are in hand to reform current finance mechanisms?Preoccupations in each of the countries need to be:• the capacity of line ministries to continue to steer the system in face of pressures toward greater decentralisation;• the decisive role for the overall budget negotiations of the Ministry of Finance;• the projected role of the municipalities and/or regions;• the nature of so called school autonomy;• the role of intermediate bodies (such as an Employment Bureau or VET Council or Centre) detached from government but still at central level.5. WHAT FURTHER REFORMS ARE NECESSARY TOMODERNISE THE VET SYSTEM?Despite considerable progress made in many areas of VET, there are in all countries crucialissues remaining for further improvement. This should happen in the context of enhancedcompetitiveness and with a better response to the demand of learners and the businesssector, which is already partly outlined in the visions and policies of the countries. Apart from21 Azerbaijan developed a country specific approach for analysing public educational spending in leaving out the vastand dominating oil and gas sector in terms of GDP creation. Hence, the net share of education expenditures of thestate budget without this sector amounted in 2010 to 5.5%.22 The MoE of Azerbaijan stated that still 78 out of 107 VET schools need restructuring (Deij, 2011).23 Ukraine is on a good way in not creating additional structures for the further training of adults/unemployed. VETschools are used for this task reinvesting the money in school infrastructure and increasing teacher salaries. 21
  24. 24. constraints with the technical infrastructure and with refurbishing VET schools, all countriesstill have problems in three interconnected technical areas:• a multi-level and stakeholder driven governance of the system including decentralization in large countries;• the quality and labour market relevance of the training offers in the initial and in the underdeveloped continuing VET systems; and• better linkages between publicly driven VET and the business sector on various levels.Moreover, future actions in VET system development should better link evidence and thedesign and implementation of new policies to capacity building measures for the stakeholdersinvolved.These serious problems could be solved in the mid-term by more commitment, timelystakeholder participation, more cooperation in the region and sticking systematically to goodpractice already available in the countries. In many cases, EU policies and good practice fromEurope have been already one of the main drivers of local efforts and could be furtherdiscussed in terms of utility in the national context of the countries.Thematic platforms for policy dialogue are available at the European level. All countries, withthe exception of Russia, have joined the Eastern Partnership. Dialogue on more effectivemigration management and tackling related skills challenges has been launched by the EUMobility Partnerships signed by Armenia, Georgia and Moldova which will be continuouslysupported by the ETF.5.1 Complexity requires decentralized action and sound decisions bycompetent stakeholdersVET systems have complex relations to their environment. Differently from other educationalsub systems, they are directly affected by changes in technological developments, by nonpredictable variations on markets, adjustments of economic sectors, by changes in workorganisation and by migration. The influence on the VET system of such extra systemicdrivers (Wallenborn, 2012) is increasing in a globalized world with shorter innovation cyclesand strong imperatives for rapid adjustments of the human capital stock. 24Such challenges should have consequences for the governance modes on national andinstitutional level and for the self perception of VET experts (teacher, trainers, managers,decisions makers etc.). Teachers and other VET personnel in the public sector cannot be fullyaware about the relevant changes in the world of work and the consequences for skillsdevelopment. Hence, information channels and decision making mechanisms must becreated in a modern VET system which assures that skills acquired in VET fit effectively inworld of work contexts. Moreover, flexibility and short time adjustments of training 25programmes are outstanding characteristics of effective training .Such information channels must assure that the voices of the world of work reportauthentically about relevant changes and suggest consequences for training in terms ofadjustment of professional standards, curricula and infrastructure. National, regional or sector24 Georgia already adopted in 2011 a social partnership agreement for VET. However, it does not contain informationhow social partnership should operate in terms of activating employers, unions etc. (Castel Branco, 2012).25 One alternative for better governance on the institutional level of VET providers are school councils comprisingemployers, trade unions, teachers, students etc. ETF supported in Armenia the effectiveness of such councils withcapacity building programmes. 22
  25. 25. VET councils could be adequate forums for discussing changes, future challenges and newmeasures in order to increase effectiveness and efficiency of VET delivery.Decentralization according to training needs in different sectors and regions of large countriesis appropriate for the diversification of training programmes and to cover regional or localcharacteristics. Stakeholder involvement on decision making on the operational levels of VETsystems (school boards, sector committees, chambers etc.) are suitable instruments to betteract in today’s complexity where nobody of the experts knows everything, but everybody fromthe world of work can contribute authentically with knowledge, relevant for VET systemdevelopment, because ‘the basis of organisation (from trade unions and employers) lies at thelevel of enterprises or workplaces (ETF, 2012a, p. 10).The VET systems in Ukraine and Belarus are still largely centralized, which has negativeinfluence on the flexibility of the training programmes towards more labour market relevance.Combined with barely existing mechanisms to collect constantly labour market information,such approaches previously have built on successes of the past rather than on participationand flexibility required in the future. Wherever possible, the decision about the relevance ofcertain training programmes should be shifted to local VET institutions involving stakeholdersof the civil society and the current policy developments in many countries are aiming toimprove new governance modes, relevant for effective VET system development. The ETFsupports such efforts in a region of Ukraine where stakeholder consultation and labourmarkets surveys aim at adjusting VET offers to the regional demand.5.2 Quality and relevance require practical learning and support throughlifelong learningThe countries did a lot to increase the quality of the training programmes: Quality assuranceinstruments, national qualification frameworks and the design of new professions andprofessional standards are clear indicators for progress. This progress was one incentive forRussian employers for playing a key role in developing a NQF. Previously they complainedabout the low quality of technical and non-cognitive skills of VET graduates being even worsefrom 2000 onwards than in the early 1990s (ETF, 2011a). The technological development inthe modern handicraft, manufacturing and service sector differs more and more from therealities in VET schools. Successful work based learning which covers skills acquirement inmany cases better and which is suitable for professions operating at the technological limits 26cannot be implemented in workshops of schools . There are structural limits in terms of newinfrastructure and competences of teachers, trainers and school managers to constantlyupdate school based VET programmes according to technological and economic changes.Cooperation with the business sector and new learning sequences in the world of work areurgently required to cover an already existing skills gap. 27The implementation of new regulations (standards, frameworks , curricula etc.) led in thepast to more stakeholder involvement in the national VET dialogue. It was an opportunity tothink about expectations of the business sector and about learning outcomes. Standards havebeen formulated and new curricula designed. A main challenge will be to implement this in thelearning practice and reflect on suitable modes like work based learning, complementinglearning in schools for better pathways and more practical and employment relevant skills.26 Georgia decided by law to dedicate 40% of all VET curricula to practical training (Castel Branco, 2012).27 NQFs led in Armenia, Georgia and Ukraine to new legislation and they are expected to generate results in the nextmonths in Azerbaijan and Russia. 23
  26. 26. However, regulations and standards can only be effectively applied if trainers, teachers andschool managers are sufficiently updated to fulfil new tasks and when outdated professionsare continuously sorted out. Such capacity building of institutions and experts must becomplemented by new infrastructure, textbooks, new methodological approaches and a newmixture of learning outcomes comprising technical, individual and social skills in order torespond to the challenges of globalization. There are no sustainable solutions ifcorrespondent activities stick only to new laws, regulations and constructs like frameworksand curricula: laws and regulations are only one part of complex VET systems, which must beaddressed holistically. A lot of other VET system parts must predominantly be improved, ifnew regulations should work effectively. Hence, well qualified teachers and trainers are key inthe quality discussion, but currently all countries (an exception is Belarus) are lacking behind 28in staff development including the working conditions for teachers (Umarov et al., 2011), orin other words: ‘Wage increases are essential in tackling the shortages of highly skilledvocational teachers and trainers (ETF, 2011e).Other proposals in the region (Ukraine) suggest to strictly divide educational delivery fromquality control which should be carried out from another authority (Prokopenko, 2008) andrepresentatives of the world of work should be systematically involved in professionalstandard and curriculum development. Russia tends to opt for more external evaluations ofthe VET system and the different training programmes. Simultaneously, private sectorrepresentatives will be involved in governing boards of educational establishments (Umarovet al, 2011). However, such approaches only work well, when corresponding degrees offreedom and mechanisms for collective bargaining of the different stakeholders are welldefined and institutionalized as a preferred governance model. Independent evaluation per semight remain ineffective if the ground for innovation and change is not sufficiently prepared.Wherever possible, lifelong learning activities should be the responsibility of the stakeholdersinvolved, mainly the social partners. Improved competitiveness and skill shortages in agingsocieties require urgently more efforts towards lifelong learning and specifically in continuingVET. The governments are responsible for suitable legal frameworks, which could includeregulations for financing continuing training. There is good practice in Europe where thecountries might benefit from. Large firms launched already further training programmes fortheir employees. However, the SME are still the forgotten majority, which would need betterpolicies – including CVET - and competent further training providers which offercomprehensive technical and entrepreneurial programmes (ETF, 2013).5.3 Close cooperation between VET institutions and businessIncreasing and more sophisticated technology in the region, shorter innovation cycles andmore competitiveness on global markets highlighted structural limits of conventional VETschools towards innovation and change. Financial resources are limited. However, catchingup with technological development in modern crafts and industrial trades would requireenormous investments which are normally not available through public budgets.Hence, ministries and public VET institutions must understand to use the crisis better (a crisiswhich many VET institutions are suffering) as a chance for more cooperation with the world ofwork and not as another opportunity to justify outdated VET programmes and mereeducational objectives. Any kind of extension of (supervised) practical learning in theeconomy goes in the right direction. Internships and (part time) apprenticeships enhance the28 Despite of good intentions the retraining system for VET teachers in Azerbaijan has declined (Deij, 2011), mostlydue o bureaucratic reasons. 24
  27. 27. relevance of the skills acquired by learners and compensate missing opportunities forlearners, because the schools cannot create suitable learning environments required in manynewly structured professions.As examples already reveal in all countries of the region (ETF 2011), many employers arekeen to extend practical training in firms and to enhance their relations with VET schools,donate equipment and give advice for modified professional standards and curriculumdevelopment. In Ukraine, the employers have been actively promoting the modernisation ofqualifications and the relevance of skills vis-à-vis the labour market demand and the recentlegislative initiatives stipulates employers’ rights to participate in national education policyformulation and in reviewing the national skills standards.Well organized firms offer excellent opportunities for continuing training either for employed orunemployed persons. They could be the first step in ‘shifting away from government-definedprogrammes towards a well regulated market of private and public providers that delivertraining services to both working and unemployed adults’ (Sondergaard et al., 2012, p. 14). Itshould be avoided to implement new structures either for initial and continuing training. It’sbetter to use existing infrastructure in workshops of VET schools and in enterprises for both 29modes of training , including the post-secondary non tertiary VET programmes, which existin all countries and which could be within education business cooperation a sound alternativeto university education.Whenever possible in terms of legal frameworks, commitment and infrastructure VETprogrammes should be delivered in cooperation with the business sector, which leads tohigher foundation skills (OECD, 2012). This is not easy in societies, where educators andemployers approach VET differently: the first argue for more universal profiles, while the latter‘ask for a closer link between educational and professional standards’ (ETF, 2011, p. 4) – aclear indicator that the educational debate about functions and perspectives of educationalsub systems in a globalized world is not yet finished in the region. Moreover, post secondaryVET and CVET might play an important role in the policy outlines for more education andbusiness cooperation fostering vertical mobility of the learners and a diversification of VETprogrammes in terms of education levels and technological standards.Entrepreneurial learning cannot be reduced to formal and/or classroom learning. Thebusiness sector is an excellent learning environment for promoting more entrepreneurialcommitment. Context and sector specific advantages of the business sector should be moresystematically used for this kind of learning, which should address as well the labour force ofthe informal economy taking into account that a lot of (micro) business is carried out bywomen.5.4 Policy design should always be based on evidence asimplementation should be linked to capacity buildingThe complexity of modern societies makes decisions difficult on educational policies. Theinterrelations of the VET system with labour markets, technological developments, theeconomy etc. require informational support of decisions about mid and long term VETstrategies in the countries. Applied research and correspondent research capacities shouldbe available to support national decisions with evidence: ‘Evidence can take many forms,such as experience and evaluation of practice, the results of scientific analyses, quantitative29 Ukraine could be a reference for such an approach: 300 out of 900 VET schools will be substantially rehabilitatedin order to cover new training needs. Seventy are already reequipped. Moreover, schools are cooperating with thebusiness sector and offering as well programmes in the CVET area for job seekers. 25