3. ASSESSMENT OF KEY ISSUES AND POLICY RESPONSES

Despite the fact that the 2013 Law on VET (no. 04/L-183) envisaged different management arrangements, MEST and municipal education directorates (MEDs) continue to manage 62 out of the 68 VET institutions, following earlier provisions of the 2011 Law on Pre-University Education. In these VET institutions, VET offers and enrolment planning primarily take account of the conditions prevailing in schools and the teaching staff available. There is little room or incentive to depart from this supply-driven approach: neither MEST nor MEDs have in the past years been making major adjustments to bring VET offers and enrolment numbers better in line with labour market demand.

According to MEST, progress in a decentralised system 'depends largely on the management capacity of the municipal and school levels' (MEST, 2016, p. 35). However, even if school principals want to offer different VET programmes, they have little autonomy, including over their budgets, staff and the courses on offer. Schools cannot top up the insufficient resources they receive from public sources by generating and reinvesting their own income. Thus, municipalities continue to take important decisions such as those concerning budgets and the recruitment of school directors or teachers, with such employment often linked to favouritism.

MEDs manage VET institutions much the same way as secondary general schools, although, for example, their educational norms and standards, teacher standards and teacher education, the content of general subjects, criteria for school buildings and education inspections are not always suitable for VET institutions. They do not take due account of the specificities of VET, such as the curriculum framework, subject-based syllabi, the cost of VET programmes, the need for workshop facilities or more practice hours.

Thus, the decentralised setting for managing VET institutions and their lack of autonomy have become major obstacles to the reforms required in Kosovo today, in particular with a view to 'rationalise the school network and improve the relevance and quality of vocational education' (Pupovci, 2019, p. 77) in line with the changed demographic, economic and social needs.

The case is different for the six CoCs, which are managed centrally by AVETAE. CoCs were set up from scratch with substantial donor support from LuxDev. They focus on specific sectors. Occupational profiles were identified and curricula developed, based on the needs of this sector. Intensive capacity building of CoC staff took place, including training of the teachers on the new curricula.

The current hierarchical structure in VET is summarised in Figure 1.

Figure 1: Hierarchical structure for the management of VET in Kosovo

Image

Source: adapted from Pupovci, 2019, p. 79

MEST is responsible for overall education policy and legislation, including for VET, higher education, lifelong learning, and research and development. Following the recent functional review of MEST (PPF of MEI, 2018), a separate VET department was established within MEST with three divisions: 1) school infrastructure, 2) curricula and labour market analyses, and 3) VET standards and quality assurance. However, for non-CoC VET institutions, crucial functions are currently only inadequately covered in the VET system. These include, for example, the development of qualification-based curricula or courses (modules) and teaching and learning materials, as well as the systematic professional development of VET teachers and trainers.

As per the VET law, the Council for VET and Adults (CVETA) is the tripartite body to advise government actors on the design and implementation of VET policies. The way this role has been defined suggests that MEST is very much in control. In addition, CVETA has been assigned the authority to approve occupational standards. CVETA is currently not operational. One reason is that members claim they do not get paid, which also reflects a lack of belief that council members could play a useful role and influence decision-making.

Both the NQA and the Kosovo Accreditation Agency (KAA) are independent bodies with important roles for quality assurance – one in the area of VET and the other in the area of higher education. The former is in charge of qualifications and the accreditation of providers. However, the NQA is currently blocked as it is not in a position to implement the legal requirement, according to which 'all qualifications are to be approved [by CVETA] and all VET providers accredited' (Pupovci, 2019, p. 78).

The current role of education inspectors remains unclear as regards quality assurance in VET and its specific emphasis on developing skills and competences, as required by the labour market.

Kosovo was actually the first in the Western Balkan region to adopt, in 2013, a genuine Law on VET (no. 04/L-183), departing from earlier ex-Yugoslav traditions of regulating pre-university education as one comprehensive system. The VET law was an attempt to re-design VET system governance structures, inputs and processes in a way that VET provision better responds to labour market requirements and develops learners' vocational skills and competences. However, this ambition has not yet been fully accomplished. The VET law is rather short and covers mainly initial VET delivered by public vocational schools and CoCs. The public vocational training centres (VTCs), which provide training for adults including jobseekers, stayed under the jurisdiction of a different ministry (MLSW) and agency (Employment Agency of the Republic of Kosovo – EARK).

Laws adopted earlier continued to be applied and new ones were adopted – all with elements relevant to managing the VET system. These laws include:

the 2008 Law on Education in the Municipalities of the Republic of Kosovo (no. 3/L-068);

the 2008 Law on National Qualifications (03/L-060);

the 2011 Law on Pre-University Education (no. 04/L-032);

the 2011 Law on Higher Education (no. 04/L-037);

the 2013 Law on Adult Education and Training (no. 04/L-143);

sublegal acts on AVETAE, EARK and numerous others.

This has resulted in a complex and at the same time fragmented legal framework for VET. Some responsibilities overlap, such as of CVETA and the Council of AVETAE. Others are not clearly defined. Key actors in the system, including VET school directors, may find it difficult to operate in such environments and may recede to an overly cautious, risk-avoiding behaviour. Hence, what is missing is clear regulation of all governance functions in VET, including those of ministries, executive agencies, social partner bodies at different levels, municipalities, VET institutions, and other authorities or partners, which would allow all stakeholders to act in a legally safe, independent manner.

Also, the VET law assigns to AVETAE the administration of all public VET providers, including CoCs, schools and adult education institutions. As mentioned above, AVETAE is successfully managing the six CoCs, but sublegal provisions and the necessary budget have not been endorsed for AVETAE to manage all VET schools. The functional review referred to above (PPF of MEI, 2018) concludes that the functioning and capacity of AVETAE remain a challenge.

The above suggests that key actors in Kosovo revisited governance arrangements in VET in a way that covered all key functions comprehensively and rationally, bearing in mind the overarching objectives of the VET system, how it should and could be organised, also in the context of making economies of scale with the backdrop of scarce resources. Subsequently, there is an issue of creating an all-encompassing, clear legal framework for VET, ensuring also coherence with the Law on National Qualifications and other relevant laws.

VET must increasingly become a valid alternative to academic education in Kosovo, because the labour market demands vocational skills. Hence, it is advisable to think of VET as one system that serves various clients, including young people and adults. The VET law could be turned into a law that covers VET for all target groups at different stages of people's lives, that is delivered in different forms and by different public, private or other providers and that leads to different levels of competence. Vocational education and vocational training institutions can share resources. A revised VET law could absorb provisions of the Law on Adult Education and Training. In the process of revising this law, innovations introduced by donors at pilot level could be assessed for their potential to be sustained and mainstreamed in Kosovo's VET system.

CVETA is suggested to be a self-steered, independent tripartite body that fulfils its advisory role to both the ministries for education and labour on all matters related to skills – or VET – for both young people and adults.

The inspectorate requires specific standards and criteria for VET which underpin its labour market orientation and are linked with the NQA criteria for validation and accreditation.

Local actors suggest that NQA and KAA be merged, as both have important regulatory functions at national level with regard to the quality of qualifications and providers.

A reorganisation of the network of VET institutions and their offers would help create economies of scale and enhance the relevance of VET programmes, which requires the management of VET institutions to be brought in line with the national level. AVETAE could take over this important role, as already envisaged under the current VET law. At the same time, AVETAE's remit could be extended to cover the coordination of curriculum design, teaching and learning materials and the CPD of all VET teachers and trainers in the system. It goes without saying that this requires that AVETAE is properly resourced to fulfil these enormous tasks.

MEST collects education statistics, including for each municipality, which helps to get a picture of the regional distribution of declining enrolments in general and secondary education. However, at the moment we are not aware of MEST drafting a short- to long-term plan for adjusting the network of schools and the number of staff.

In addition, the authorities have access to multiple reports and analyses that illustrate and illuminate the country's various human capital challenges. These include, inter alia, skills needs analyses at national level, such as:

the survey of the labour market demand by the Alliance of Kosovo Businesses in 2014 (quoted in USAID, 2015);

From University to Employment: Higher Education Provision and Labour Market Needs – Country report Kosovo (EC, 2016);

Job Diagnostics Kosovo (Cojocaru, 2017);

skills gap analysis undertaken by the SDC-funded EYE project and the American Chamber of Commerce in Kosovo (Hapciu, 2017);

Labour market needs assessment by the EU-funded ALLED I and II projects (ALLED, 2016a and Krasniqi, 2019).

Furthermore, the vacancy database of the EARK covers skills demand. Kosovo ministries and agencies in charge of education and employment are committed to further developing their datasets, to expanding information collection, and to linking the labour market and education management information systems. The objective is to create an integrated, comprehensive overview of data and information on students and graduate flows, vacancies and overall labour market and social dynamics, although that may be ambitious.

Skills needs analyses carried out at sectoral level include:

the Information and Communication Technology (ICT) skills gap analysis (Kosovo Association of ICT – STIKK, November 2013a) and Kosovo ICT market analysis (STIKK, November 2013b);

the study report for the main agribusiness subsectors in Kosovo (University "Haxhi Zeka", April 2014);

market assessment for the construction sector (Strategy & Development Consulting, June 2015);

market system analysis of traditional sweet producers (EYE project, 2015);

skills assessment for the wood processing sector (Strategy & Development Consulting, March 2016) – all by the SDC-funded EYE project;

mechanical engineering, agriculture and food processing sector profiles by the EU-funded ALLED project (2016b).

Donors who commissioned the above-mentioned skills needs analyses have been using these to inform (mostly their own) newly developed qualifications, curricula and training provision. As regards decisions by MEST and MEDs concerning VET school enrolments and adjusting VET programme offers, this link is not obvious. Such decisions are often taken based on the conditions prevailing in schools and the subject teachers available. VET schools and their governing boards cannot, as a rule, decide freely about which courses to offer.

Adequate use of educational and labour market data would need to support VET planning. An adjustment of the network of education institutions and staff would allow the Kosovo government to make economies of scale and to invest saved funds into upgrading facilities and improving the quality and outcomes of education and training.

In an international market, Kosovo needs to develop subsectors, including human capital, where the country can excel in the global value chain through concentrating resources. According to the Kosovo Investment and Enterprise Support Agency (KIESA[10] For more information about KIESA, see: https://kiesa.rks-gov.net/page.aspx?id=2,18
), key sectors with growth potential include:

ICTs, with the possibility to offer business services, such as software development or call centres, to local and foreign clients. Kosovo claims to have a certain advantage here, as English language skills are relatively common and internet penetration is high compared to other countries in the region (76.6% based on users and 84.8% based on households);

food processing and packaging, with Kosovo having 588 000 hectares of agricultural land with fertile, nutrient-rich soils and a strong tradition in agribusiness;

mining and metal processing, as Kosovo is rich in natural resources, such as lignite, aluminium, gold, lead, zinc, copper, bauxite, magnesium, asbestos, chromite, limestone, marble and quartz. While the majority of the resources remain unused, the World Bank considers Kosovo's natural resources a great potential for future growth. Kosovo's government is currently working on a new strategy for the Trepca Mines – at the time one of the largest companies in Yugoslavia with about 23 000 employees;

energy, with significant potential for renewable energy sources, including hydro, wind, solar, biomass and thermal energy;

textile and leather processing;

wood processing, with an estimated 53 million m³ of wood available from public forests and a tradition in exporting raw materials, semi-finished and finished products (doors, windows, kitchens and furniture);

tourism, offering opportunities for all sorts of mountain, adventure, farm, cultural/spiritual and thermal bath tourism.

Recommendations for human capital development are broadly to do with better translating economic priorities and labour market opportunities at national, sectoral and regional (intra-country) levels into the overall planning of vocational and higher professional education for both young people and adults. Continuing efforts are fine for analysing job vacancies and trends in line with the International Standard Classification of Occupations (ISCO) and NACE[11] NACE = 'Nomenclature statistique des activités économiques dans la Communauté européenne', which is the Statistical Classification of Economic Activities in the European Union.
and to fill gaps concerning VET data, such as the number of VET teachers trained, VET students benefiting from work-based learning arrangements, VET completion rates and employment rates of recent graduates. However, it is important to also use the available evidence to inform policy and adjust provision.

Furthermore, entrepreneurship, digital and other skills are important key competences relevant across all sectors, which is why there is an issue of nurturing them as cross-curricular competences and along the education continuum. Skills training for (unemployed) adults could be combined with ICT training and support to business start-ups.

The reasons for the partly overlapping problems of high youth unemployment and female inactivity are complex and require multifaceted responses to tackle them. MLSW's Action Plan summarises the main actions (MLSW, 2017b). However, progress with implementation of this plan has generally been slow to date.

Apart from the overall sluggish labour demand, policy priorities to address the problems with early school leaving and the poor alignment of VET with labour market requirements have been discussed in sections 2.3, 2.4 and 3.1.

To address the urgent challenges of labour market participation, the government has developed an employment strategy (MLSW, 2018) and has introduced a new employment agency with a suite of support programmes designed to help people into employment.

Employment policies consist of the services and activities of the public employment service (PES), including career guidance and counselling, job placements, services to employers, labour market monitoring and skills needs analyses, as well as active labour market policies (ALMPs). The latter aim to activate unemployed jobseekers and other target groups, and typically comprise training, start-up incentives, public works and wage subsidies.

The EARK is a young institution that was established in 2017 by outsourcing employment policies from the Ministry. Continuous capacity building has been a positive step. However, the capacities of the EARK remain limited to implementing an effective active labour market strategy in line with Kosovo's sector strategy of the MLSW (2018).

Expenditure on labour market policies increased in 2017, compared to 2016, but have not yet reached 2015 levels. Expenditure as a percentage of gross domestic product (GDP) is very low.

Table 15: Expenditure on labour market policies, in euros

	2013	2014	2015	2016	2017
Expenditure on labour market policies	84.956,50	1.224.922,18	1.424.922,18	946.841,07	1.221.982,70
Expenditure on labour market policies (% of GDP)	0.001%	0.017%	0.021%	0.0014%	0.0017%

Source: MLSW 2013, 2014, 2015, 2016 and 2017

During 2017, 9 173 out of a total of 93 866 registered unemployed jobseekers – or 9.7% – benefited from active measures, which corresponds to 79% of the EARK target for 2017.

Over two thirds (69%) of the ALMP beneficiaries in 2017 took part in vocational training, 9.5% in public works, 7.9% in internships, 7.8% in wage subsidies, 5.2% in on-the-job training and 0.4% started self-employment (MLSW, 2018, p. 13).

This means that the bulk of funding goes on vocational training as an ALMP, while subsidised employment, which in neighbouring Albania is the most efficient and most frequently used measure, remains underexplored as an ALMP in Kosovo.

Groups that benefited the most from ALMPs are jobseekers with upper secondary education (about 56%), followed by those with lower secondary education (28%). Young people aged 15 to 24 account for around 34% of those who benefited from programmes (i.e. 7 pp lower than the target rate for 2017). The percentage of men who benefited from ALMPs was 66%, compared to women with 34%. If we look at ethnic-based figures, then about 93% of beneficiaries were Albanians, 2% Serbs, 3% other communities, and 3% Roma, Ashkali and Egyptians. In vocational training, 39.6% of the participants were young people aged 15 to 24 and 34% were females (MLSW, 2018, p. 13).

This means that low-skilled, older and female jobseekers, as well as those from Serb and ethnic minorities (including Roma, Ashkali, Egyptians and other communities) are underrepresented among ALMP beneficiaries. On the one hand, such a provision bias is understandable, as labour demand concentrates around medium-level qualifications. On the other hand, low-qualified jobseekers are even more in need of training and other support measures.

The issue is particularly serious for women, who are generally discriminated against on the labour market and represent 55% of all registered unemployed people (EARK, 2018). The Kosovo government has acknowledged this challenge and included a respective performance indicator in its ERP 2019–2021: 'The number of women benefiting from ALMPs in 2017 amounted to 3 022. The target for 2022 is to have 3 654 women benefiting from ALMPs' (Kosovo government, January 2019, p. 94).

Furthermore, the Kosovo government plans to modernise and strengthen the capacities of the EARK; develop curricula for vocational training; implement ALMPs focused on young people and women (including new self-employment and entrepreneurship programmes); support voluntary work initiatives that contribute to youth employment; and provide in-service training for higher education graduates (ibid., p. 93 ff.).

While all these efforts are praiseworthy, with the small ALMP coverage rate and the limited duration of these measures, no sizable labour market impact can be expected.

Employment offices are still not considered the primary place for people to start their job search. They may approach the office only when their individual efforts have been unsuccessful. Registering as unemployed is a condition for receiving social assistance benefits and enrolling in training at VTCs. Not all registered unemployed people are actively searching for jobs. The high case load and the highly restricted range of services and active measures make it almost impossible for employment office staff to successfully contribute to people's labour market integration. Message boards are used in individual offices to publish vacancies in the absence of functioning ICT connections and a national vacancy database (ibid., p. 27 ff.). However, there are a number of private employment agencies who maintain online vacancy databases, including jobs abroad, and individual mediation services to which especially young, more highly skilled people refer.

The general public perception is that the PES deals mainly with low-skilled and long-term unemployed people, which in turn makes the employment service less attractive for employers when trying to fill their vacancies. The high number of unemployed people registered and the few job opportunities available nurture a general belief that employment offices cannot offer much of a service. Furthermore, incidences of the PES mediating jobs in companies that offer rather unfair contracts and/or irregular salary payments have not contributed to a more positive image (ibid., p. 27 ff.).

In addition to the PES programmes, measures for activation and training and to start up or grow businesses are also integrated in numerous donor projects in Kosovo. Donors, with the help of local non-governmental organisations (NGOs), are implementing integrated and individualised support measures. These are more costly but also more effective at helping disadvantaged people into jobs. More integrated interventions and partnership approaches at the local level are necessary to tackle the labour market challenges of young people or other categories of unemployed or inactive people.

The following projects are therefore also relevant: The Support to Economic Diversification of Rural Areas in Southeast Europe (SEDRA; implemented in 2018 to 2021), which 'strengthens the capacities of local actors and public/private stakeholder networks in order to support community-led and area-based development. The project follows the LEADER approach, which stands for “links between the rural economy and development actions” and has been a success story in supporting rural areas across Europe since 1991. Only a bottom-up approach, which builds on broad, cross-sectoral partnerships between administration, civil society and the private sector, can mobilise resources and pool energies that enable an area or a region to develop further and its people to successfully integrate'[13] Information taken from the GIZ project website: https://www.giz.de/en/worldwide/71939.html
.

Also, innovative measures for activating unemployed jobseekers such as mechanisms for the recognition of prior learning, combined with vocational training, can be of great benefit for semi-skilled jobseekers and returning migrants.

Youth employment requires a multifaceted approach ranging from developing practical skills to targeted training and job opportunities by employment services and employers

In response to employers' claims that they cannot find people with the right skills despite the high youth unemployment levels, continuous efforts are needed to further align education and training with labour market requirements, to help young people in their career orientation and to improve their practical skills. Structured cooperation of vocational schools, VTCs and HEIs with businesses could lead to more practical assignments and work-based learning opportunities for students, as we have seen for example in Albania. Setting up career centres in educational establishments could be a way for pupils and students to make more informed choices about educational and future job careers, as are being suggested and established in VET schools, for example by the EYE project (Business Foundation for Education/Helvetas, 2018).

Incentives could be given to employers who hire young people up to a certain age. Internship schemes with guidelines, forms for implementation, and training for coordinators, practice teachers and company instructors could become more commonplace. However, we also recommend that the business liaison coordination function in schools be institutionalised and that company internships – for school or university students or jobseekers – be regulated at national level. The aim must be that the misuse of such schemes by employers is prevented and maximum benefits for interns are ensured in terms of enhancing their skills and work experience. Again, several countries in the Western Balkan region, including Albania, are preparing such a national regulation.

Working on the supply-side or skills issues alone will not suffice in the current context of job shortages. Entrepreneurship and self-employment are typically seen as alternatives and could be promoted at national level through embedding entrepreneurial skills into curricula and training teachers, by organising dedicated training sessions and providing adequate levels of grant financing and coaching to start up and run businesses. Economic cluster approaches that link together different businesses in one region or along a specific value chain (see e.g. USAID, 2008) can help new businesses start or grow and people to acquire new skills. However, issues pertinent to Kosovo's business environment also need to be addressed.

Partnerships between VTCs, public and private employment agencies, local youth centres and NGOs could be fostered to provide services for young people. Partnership agreements could include an exchange of information on vacancies and the provision of certain services for vulnerable groups. Targeted ALMPs for young people must include individual skills profiles and training and employment plans, following a 'coaching for employment' approach to the extent possible. The option for VTCs to generate and reinvest their own income and to open up access to training could be explored, as well as continuous efforts by VTCs to widen the range of courses on offer. Employers could be further encouraged to take on students or young graduates to develop their practical skills and acquire work experience. Better information on courses on offer in the country or online could induce more young people to pick up such opportunities. Professional recruitment agencies could help companies identify the right job profiles and candidates for positions to be filled. The Kosovo government could underpin such efforts by general awareness-raising campaigns, information and databases, respective instructions, programmes and performance objectives for the PES, incentives for companies, and special allowances and support for poor people, people with disabilities and young mothers.

Adopting a joined-up, cross-governmental approach to promote female participation as part of the gender equality agenda

Increasing women's participation in Kosovo's labour market would require a joined-up approach across many government departments and policy changes on multiple fronts. A dedicated workshop organised by the World Bank, jointly with MLSW and EARK, in June 2018 came to the conclusion that the ability of women to work is contingent on:

high-quality, affordable child and elderly care, particularly outside the capital and in rural areas (see respective suggestions by Kosovo Women's Network, 2016a);

changing labour regulations to improving working hours and conditions for women with children and to shifting part of the financial burden for maternity leave away from employers, which discriminates female job candidates (see Kosovo Women's Network, 2016b);

improving education and skills of women;

increasing the property ownership rate of women;

increasing female entrepreneurship (see Riinvest, 2017);

other factors, including improved information on job vacancies and employment services, the creation of professional networks and adequate transport facilities (see World Bank, 2018b, p. 5, and Democracy for Development Institute, 2017).

Employers see women's 'competing demands given their family obligations' and the 'higher costs of employing women' as the most severe constraints to recruitment – more severe than, for example, the lack of skills (World Bank, 2018b), which is why care facilities and lowering employment costs become key.

While most of the above-described measures go beyond the remit of labour authorities, the latter can adopt a variety of labour and employment policies that take into account women-specific barriers for labour market entry and make programmes more 'gender-sensitive'. These range from women-friendly communication and outreach campaigns, to safe spaces, flexible schedules, proper career guidance, training to enhance women's self-esteem, positive discrimination in the selection of jobseekers to benefit from ALMPs, childcare facilities during the attendance of ALMPs, linking training to job placements, strengthening women's professional networks, setting up female entrepreneurship schemes, and targeted measures addressing women from poor backgrounds and with multiple disadvantages on the labour market (see e.g. OECD, 2012; Otobe, 2014; GIZ, 2015; Buvinic and O'Donnell, 2016; Datta and Kotikula, 2017; Kring, 2017).