More Investment in Human Capital Needed to Support Long-Term Prosperity in Serbia

Belgrade, 1 June 2022 - Serbia has seen steady progress in human development outcomes, but more investments are needed to boost productivity and address the rapid aging of the population.

The Building Human Capital for Long Term Prosperity Report, published by UNICEF Serbia and the World Bank, which was discussed today with the Serbian Association of Economists, shows that human development sectors – education, health, and social protection – are essential to boost human capital and support long-term inclusion, well-being, and productivity growth.

Serbia’s human development sectors deliver high education attainments and almost universal coverage of basic health services. However, the rapid ageing of the Serbia population requires directing public resources to enhance human development outcomes in areas where inequalities persist to ensure that every child, youth, and adult can realize their full productive potential.

“The report highlights that reforming the size, structure and efficiency of public expenditure could help Serbia overcome the challenges of ageing, low productivity, and inequality. These reforms could ensure that all children are reached and provided with opportunities, particularly those living in poverty or lagging their peers. Importantly, the coverage and quality of services for children could be improved through savings in existing expenditure,” believes Deyana Kostadinova, UNICEF Representative in Serbia.

Standards of living in the Republic of Serbia has significantly improved in the past two decades, but they still lag those in the European Union. Further improvements in living standards, economic inclusion and labour productivity depend on promoting a pattern of economic growth that is geared at building human capital, including through higher and better spending on human development sectors.

“The ageing of the Serbian population requires increases in productivity to spur sustained economic growth. As this Report shows, investing in people and addressing human capital inequalities are essential policy ingredients to achieve long-term prosperity in Serbia. Similarly, doing so will allow the country to converge with its European peers faster,” said Nicola Pontara, the World Bank Country Manager for Serbia.

“This joint UNICEF-World Bank report draws attention to the policy levers that can promote the sustainability of economic growth in Serbia and the fairness of future public spending on human development. As the welfare of all age groups ultimately depends on the productivity of current and future workers, investments in the human capital of children and youth benefit all generations,” said Aleksandar Vlahović, the President of the Serbian Association of Economists.

The Report puts strong emphasis on children. Since the children and youth of today will ultimately support the elderly of tomorrow, investing in the human capital of children and young adults benefits all generations. This requires the implementation of policies that provide children, independently of origin and background, with good education opportunities, ensure effective and affordable health care, and support vulnerable households with effective social protection programs.