Residents of rural, economically less-developed regions tend to face higher barriers to finding a job than people living in more developed, urban areas, even within the same country.
They may also find it harder to access good quality education and other services, such as healthcare or clean drinking water, which further reduces their chances of competing successfully in the labour market.
Indeed, EBRD research has identified an individual’s place of birth as one of the most important drivers of wealth inequality and a key determinant of life-time economic opportunities.
Regional inclusion gaps exist in many countries where the EBRD invests,as outlined in the Transition Report 2013 and the Transition Report 2016. They are particularly pronounced in south-eastern Europe, in relation to labour market opportunities and the quality of local institutions, and in the Caucasus and some parts of Central Asia, in relation to access to services – particularly as regards access to water and IT infrastructure.
A similar picture emerges for labour markets, with Azerbaijan, the Kyrgyz Republic, Russia, the Slovak Republic, Tajikistan and Turkey displaying the largest regional disparities in terms of employment opportunities taking account of informality and the extent of underemployment.
For most of these countries, school-to-work transition is weak and vocational education and training do not provide adequate skills, which is one of the main barriers to regional development. Turkey has the highest regional variation in unemployment rates of all countries covered by Eurostat.
In all of these countries, populations in less developed regions tend to have fewer economic opportunities than their counterparts in urban and more developed regions and therefore share unequally in the benefits of transition. The EBRD makes investments that help to create verifiable improvements to the economic opportunities of regional populations.
Examples of the EBRD’s regional inclusion projects include investments that improve access to services such as:
IT connectivity resulting in verifiably enhance economic opportunities (such as employment, skills or access to vital services),
quality water supply resulting in improved economic opportunities for men and women in underserved regions, through a reducing in the occurrence of water-related diseases, time lost due to sickness, caring for the ill or securing water supplies or through improved production levels of rural, small-income farmers, who are at present constrained by unreliable water services, insecurity of suppliers and unequitable distribution.
Other projects include credit lines that target small and medium businesses in less economically-developed parts of its countries of investment. Rural farmers in remote areas often face hurdles in accessing finance, so credit lines such as these – coupled with business and financial training – allow them to invest in and grow their businesses. In this context, the EBRD has recently established regional MSME credit lines coupled with advisory services support to target regions most affected by the refugee crisis in Turkey and Jordan.
The EBRD has moved to the next stage of its refugee response plan that aims to strengthen the economies of Jordan and Turkey as they deal with the influx of millions of people displaced by the conflict in Syria.
In support of refugee-hosting countries the EBRD is building on its private sector-led economic inclusion to also enhance access to work-based learning opportunities and skills verification mechanisms in the most affected regions, especially as part of global effort - such as the Jordan Compact.
The EBRD has launched new research activities in relation to its refugee inclusion activities, in Jordan and in Turkey, to enhance the knowledge on the impact of refugee influx on host communities, identify measures to address hard and soft barriers to integrate refugees in the labour market, and to monitor and evaluate the impact to learn and apply lessons.
As part of its efforts, the EBRD has furthermore agreed to a new €375 million framework – the Municipal Resilience Refugee Response Framework – with a goal to fast-track infrastructure investments in municipalities in Jordan and Turkey that have been most severely affected by the refugee crisis.
The first project approved under this framework was a €5 million loan to improve public transport in Gaziantep, a city on the Syrian border, which is home to one million Turkish people and over 350,000 refugees.