Economic inclusion

Economic inclusion, the opening up of economic opportunities to under-served social groups, is integral to achieving a transition towards sustainable market economies.

An inclusive market economy ensures that anyone regardless of their gender, place of birth, family background, age or other circumstances, over which they have no control, has full and fair access to labour markets, finance and entrepreneurship and, more generally, economic opportunity. Inclusion is thus an intrinsic element of a sustainable market economy.

Promoting an inclusive market-based system is about efficient (human) resource allocation rather than being a social policy choice.

But there is also a political dimension to inclusion. Beyond its contribution to efficient markets, fair and equitable access to economic opportunity is essential in fostering broad support for market reforms and, ultimately, sustainable market economies.

Economic inclusion is therefore an important transition quality. If people are given a chance to succeed, they are more likely to participate in the workforce, pursue education, or engage in other activities that lead to economic growth. This, in turn, strengthens the transition process.

Through its private sector inclusion model, the EBRD builds inclusion elements directly into its investments across all sectors and regions, creating pathways into jobs and training for young people, women and rural populations whilst addressing challenges businesses face due to skills shortages, lack of workforce diversity or inadequate access to new markets.

Examples of EBRD’s economic inclusion projects include: investments in the manufacturing, retail, and infrastructure sectors that create pathways into jobs and training for young people, women and those in underdeveloped regions whilst addressing challenges businesses face due to skills shortages; credit lines and business advisory for women entrepreneurs; and investments that facilitate access to quality water supply resulting in improved economic opportunities for men and women in underserved regions.

EBRD launched its first Economic Inclusion Strategy (2017 – 2021) in May 2017. The aim of the inclusion strategy is to accelerate the transition of countries towards inclusive market economies by harnessing the power of the private sector to create economic opportunities for all.

In this context, the EBRD will strengthen its project and policy activities to enhance access to economic opportunity for women, youth and regions. It will also carefully and gradually widen its inclusion approach to other groups such as ageing populations, refugees or Roma in line with country priorities. The EBRD will work through its projects and associated policy dialogue to enhance economic inclusion across three key thematic areas:

  • Access to employment and skills.
  • Entrepreneurship and access to finance.
  • Access to services that enhance economic opportunities.

Economic inclusion, the opening up of economic opportunities to under-served social groups, is integral to achieving a transition towards sustainable market economies.

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The Economic Inclusion Strategy draws on the EBRD’s Environmental and Social Policy (ESP) and aligns with its Strategy for the Promotion of Gender Equality (SPGE).

The EBRD’s Refugee Response and Inclusion

Economic inclusion is one of the core three pillars of the EBRD’s refugee crisis response programme: infrastructure development, small and medium-sized enterprise growth, and economic inclusion and gender.

In support of refugee-hosting countries the EBRD is building on its private sector-led economic inclusion to 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.

To foster entrepreneurship opportunities, the EBRD is furthermore supporting financial institutions as they expand services they offer to local businesses, including those owned or managed by refugees or employing refugees. A Gender Focal Point has been appointed to ensure that gender considerations are reflected across all parts of the EBRD’s refugee response programme.

In parallel, the EBRD undertakes research about its refugee inclusion activities, in Jordan and in Turkey, to enhance knowledge of the impact of the influx of refugees 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 in on-going programmes.

In all these endeavors, we work in close partnership with International Labour Organisation, European Training Foundation, UNHCR and relevant international and local agencies.

The EBRD’s just transition initiative

Guided by its Economic Inclusion Strategy and Green Economy Transition approach, the Bank will help its countries of operations to achieve a just transition towards sustainable and inclusive market economies. This will be based on the EBRD’s experience of enhancing economic inclusion through private sector investments and associated policy engagements to achieve structural changes to support workers and communities that are at risk of being left behind due to the transition towards a green economy.

The EBRD will proactively identify investment and policy activities that can accelerate a just transition, with a focus on three priority themes:

  • Green economy transition: The EBRD will work with clients with high-carbon assets in the transition to a low-carbon economy. This includes targeting the reconversion of high-carbon assets, remediation and rehabilitation of land, and a range of other green investments that create access to local employment.
  • Supporting workers: The Bank will promote access to alternative livelihoods for those whose livelihoods are affected by the transition process through reskilling and enhancing entrepreneurship within the context of addressing underlying drivers of inequality.
  • Regional economic development: Emphasising activities that provide access to quality employment, including tailored support for competitive SMEs and larger firms as well as the financing of projects in sustainable infrastructure.

In particular, the Bank will support green investments that can be implemented alongside investments and policy interventions to enhance green skills. It will promote access to alternative employment opportunities through active labour market policies, employment programmes and workforce upskilling, within the context of fostering digitalisation and greening of the local, regional and national economies. The EBRD will also support regional development strategies that can mitigate regional disparities and address underlying drivers of inequality at the regional and national levels by providing equal access to skills and employment; finance and entrepreneurship; and public services that enhance economic opportunities. This will include support with: the development of inclusive regional development strategies, education and skills development policies for future of work, investments in TVET and high education PPPs and private provision; support for women and youth led SMEs and larger firms in labour intensive sectors.

To promote such efforts, we will work in close partnership with local, regional and national governments, private and public sector employers, training providers, employment agencies as well as international donors and organisations, such as the European Commission, World Bank, European Training Foundation, the International Labour Organization and other partners.

Economic Inclusion Research

The EBRD has a rigorous and broad research programme on inclusion issues.

At an operational level, the assessments of economic inclusion gaps continue to provide the analytical backbone of its inclusion approach. Based on the concept of equality of opportunity, the EBRD measures the extent to which economic institutions, markets and education systems extend economic opportunities to individuals regardless of their specific circumstances, such as their gender, age or place of birth. The resulting inclusion gaps reflect international best practice and are centered on the EBRD’s transition mandate.

As per the Economic Inclusion Strategy (2017 – 21) this approach is being expanded to other potential circumstances and associated groups that (i) face disproportionate barriers to economic opportunity, (ii) constitute a substantial political or economic priority in the country, and (iii) where there is a clear business case for the EBRD to foster their economic inclusion through private sector engagement and associated policy dialogue.

The EBRD’s Transition Report 2016 'Transition for all: equal opportunities in an unequal world' furthermore provides a core analysis of inequality and inclusion challenges across the EBRD regions. See the 2013 Transition Report for more details on the theoretical methodology behind the conceptualization of economic inclusion for cross country research.

The EBRD also manages a growing portfolio of project-related inclusion research. Examples include studies in Bosnia and Herzegovina, Mongolia and Morocco that use randomised control trials to detect the impact of access to microcredit on a host of outcomes, such as consumption, savings and entrepreneurship. Economic experiments are being used to analyse supply side barriers for women’s access to finance in Turkey. Other research work investigates the relationship between levels of infrastructure development and inclusion in Central Asia.

Lastly, the EBRD is interested in the relationship between economic opportunity, migration and entrepreneurship. Ongoing research looks at these links, using the Western Balkans as a case study.

Read more about the EBRD's Economic Research and Data.

Contact Barbara Rambousek

Director, Economic Inclusion

Contact the Economic Inclusion team

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