EU Membership and Transition into Market Economies Have Helped CEE Achieve Social Progress

Social Progress Index
Emerging Europe / Global ranking

20 Slovenia (84.27)
22 Czech Republic (82.80)
23 Estonia (82.62)
30 Poland (79.76)
31 Slovakia (78.96)
33 Croatia (77.68)
34 Lithuania (76.94)
35 Hungary (76.88)
36 Latvia (76.19)
42 Romania (72.23)
43 Bulgaria (72.14)
47 Serbia (71.55)
52 Albania (69.78)
54 Georgia (69.17)
55 Montenegro (68.17)
57 Macedonia (67.88)
63 Ukraine (66.43)
66 Belarus (66.18)
67 Armenia (66.05)
69 Bosnia and Herzegovina (65.84)
73 Moldova (64.73)
77 Azerbaijan (63.75)

Social Progress Categorisation
SPI rank 01 - 12: very high
SPI rank 13 - 38: high
SPI rank 39 - 62: upper middle
SPI rank 63 - 95: lower middle
SPI rank 96 - 126: low
SPI rank 127 - 133: very low
source: Deloitte

Countries of Central and Eastern Europe, which joined the European Union between 2004 and 2013, have seen rising standards of living and are ranked amongst some of the most socially advanced countries worldwide, according to the Social Progress Index (SPI).

“Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia demonstrate a consistent performance in terms of social progress – all the countries have social progress levels in line with their GDP and they fall into either the ‘high’ or ‘upper middle’ categorisation of social progress,” Rafał Rudzki of Deloitte Sustainability Consulting Services Central Europe tells Emerging Europe.

Regional strengths and weaknesses

“The index indicates that EU membership and Eastern European countries’ evolution into market economies had boosted their social progress. Slovenia is the best performing among the group, especially on ‘opportunity’ where other former Soviet countries lag. It boasts higher ‘freedom’ over ‘life choices’ and higher ‘tolerance for immigrants’ than its neighbouring countries. The country achieved a social progress score almost as high as the United States (at 84.3 out of 100) even though its economic output is just over half that of the United States,” says Michael Green, Executive Director of the Social Progress Imperative, which published the ranking in a partnership with Deloitte, Skoll Foundation and Avina.

As far as ‘basic human needs’ are concerned, the Czech Republic was ranked third globally, together with Japan and right behind Denmark and Switzerland.

Prage, Czech Republic -
Prage, Czech Republic (source: Bigstock)

“Central European countries perform significantly better than their GDP peers in providing ‘access to information and communications’ to their citizens. Four out of these eleven countries register it as a significant strength on their scorecards with none registering is as a weakness. However, the countries do not perform as well as their economic neighbours in the provision of ‘health and wellness’. Five out of eleven register it as a significant weakness with none registering is as a strength. This is due to underperformance in air quality, levels of obesity, the suicide rate and the number of premature deaths from non-communicable diseases,” says Deloitte’s Rafał Rudzki.

Bulgaria and Romania, ranking lowest in the Social Progress Index amongst EU member states, along with Serbia, Albania, Macedonia, Montenegro and Georgia represent upper middle social progress while Moldova, Bosnia and Herzegovina, Ukraine, Belarus, Armenia and Azerbaijan  — lower middle social progress.

In 2014, the GDP per capita in the eleven countries of Central and Eastern Europe, which are part of the European Union, ranged from $15,930 in Bulgaria to $27,924 in Slovenia.

“We live in a world where GDP is the benchmark of success in a global economy. Our politicians boast when the GDP goes up. Trillions of dollars of capital move around the world based on which countries are going up and which countries are going down, all measured in GDP.  Our societies have become engines to create more GDP,” Mr Green argues.**

Incomplete picture

Alexander Plekhanov, Associate Director and Deputy Director for Research, in the Office of the Chief Economist, at the European Bank of Reconstruction and Development (EBRD) explains that while GDP captures volumes of production and consumption per capita it does not capture other aspects that may be important to one’s quality of life – such as the quality of the environment and leisure time.

“GDP captures the value of goods and services, at a cost. If a service is free, for example Google searches or Google maps, this is not reflected in the GDP, although, arguably, it has a high value to society and individuals and boosts productivity. On the other hand, a bridge to nowhere with limited or no value is recorded as cost and may have a high contribution to GDP. Perhaps, most importantly, headline numbers for GDP growth or GDP per capita growth do not necessarily reflect the experiences of representative individuals, since GDP does not take into account the distribution of income. For instance, early analysis, in the EBRD Transition Report 2016-17 which comes out in November 2016, suggests that in many countries in emerging Europe the headline growth numbers corresponded to the experience of someone in the second decile of income distribution,” Mr Plekhanov tells Emerging Europe.

Dr. Arup Banerji, Regional Director for the European Union countries for the World Bank Group, says there should not be any inherent trade-off between economic well-being, or GDP growth, and social well-being, as long as everyone has the opportunity to avail themselves of opportunities to improve their welfare, as they see it, to the highest extent possible.

“The question is: does every section of the population have the opportunity to avail themselves of this? Are they limited, instead, by the level of their education, by their access to credit or their location? This is the core question for our societies and policy-makers to address,” Dr. Banerji says in an interview with Emerging Europe.

High on the agenda

The Social Progress Index has three main categories: ‘basic human needs,’ ‘foundations of well-being’ and ‘opportunity’ and twelve subcategories, such as access to information, communications and basic knowledge, personal rights, tolerance, advanced education etc., and comprises 53 indicators. The Index shows how specific countries address issues, which are becoming increasingly important for governments in Central and Eastern Europe.

Scenic summer outdoor aerial view of corporate busiWarsaw, Poland
Warsaw, Poland (source: Bigstock)

“Obviously, the GDP is not necessarily the best way to measure the quality of life or the general welfare of a society. To be precise, it gives us a trend that enables us to guide our efforts better. The policies we are developing must: target severe income inequalities, increase labour participation and improve the quality of infrastructure like roads, education, and healthcare. In Romania’s case, the structural deficiencies — especially those in the labour market as there are still 2.5 million people who are employed in agriculture — are critical,” says Costin Borc, Romanian Vice-Prime Minister and Minister of Economy, Trade and Business Environment.

“We must rethink our active labour market policies and training programs, in order to help Romanian workers be even more competitive. Last but not least, Romanian manufacturing has tremendous potential. That potential can only be fully realised if local companies can manage to integrate into the global supply chain of the foreign companies that are operating in the country,” Mr Borc tells Emerging Europe.

Sustainable social and regional development is one of the pillars of the Morawiecki Plan, which was named after its author, Deputy Prime Minister and Minister of Economic Development of Poland, Mateusz Morawiecki, and which ranked 30th amongst 133 countries globally.

“The social component is of crucial importance if the Plan is to be implemented successfully. The nation’s well-being is not confined to statistical and economic indicators alone and, as the government, we have to make sure that these numbers translate into tangible improvement in the quality of life for Polish people. Therefore, to provide the foundations for sustainable and long-term development, its benefits must be spread across the population more inclusively. This means, for example, better education, higher wages and job quality, improved social cohesion and a better access to infrastructure. Only by broadening the middle-class, in this way, will we be able to build not only a modern country, but a modern nation as well,” Mr Morawiecki tells Emerging Europe.

Zdravko Počivalšek, Slovenian Minister of Economy and Technology says that amid general improvement in the international environment and higher export competitiveness, the reforms and measures for stabilising the macroeconomic situation have contributed to an improvement in the economic situation, which has also improved the material position of individual households in recent years.

“The stabilisation of the macroeconomic situation has led our economy to a relatively high position, with greater opportunities to manage increased export to the global markets, in recent years. The Slovene economy’s export competitiveness is the leading point of our overall economic growth. Consequently, as one thing leads to another, individual consumption has also risen. Regardless of this extremely positive recent progress, Slovenia still needs far-reaching structural changes.

All the above mentioned positive results, and especially the economic growth and raised productivity, allow us to begin all the necessary reforms. Our highest priorities are: tax reform, environmental reform, elimination of administrative obstacles and the management of a more flexible labour market. All of those reforms would ensure our country a stable (sustainable) economic growth and long term competitiveness, in the coming years,” says Minister Počivalšek.

Joint efforts

“Business also has a critical role to play. With increased stakeholder, regulator and consumer pressure, more companies are seeking to integrate social impact into their core business. Providing quality employment or services, typically provided by the state, may enable business to generate synergies that have valuable impacts on the social development of a country,” says Deloitte partner, Irena Pichola.

“We are firmly committed to following our “Brewing a Better World” sustainable development strategy to focus on measuring our direct, indirect and induced impact on the economy, society and the environment. The Social Progress Index sheds some light on matters that are important for the inclusive growth of Polish society and economy. We are also curious about the EU Regional Social Progress Index results which are going to be presented later this autumn. This information may give us additional and valuable insights into what’s vital for the regions in which our breweries operate,” says Magdalena Brzezińska, Senior Corporate Relations Manager at Grupa Żywiec, one of the largest beer producers in Poland.

Budapest Hungary
Budapest, Hungary (source: Bigstock)

As Mr Green explains, the GDP measurement was invented in the 1930s to address the challenges of economic growth of the 20th century. “In the 21st century we face new challenges: ageing, obesity, climate change etc. To face those challenges we need new tools and measurements; new ways of valuing progress.”**

The statement is also true for Central and Eastern European economies, which have developed economically and socially over the last decades, especially since they joined the European Union. Now they need to define their strategy for achieving even more progress and to ensure that it is in line with the Global Goals launched by the United Nations in September 2015.

*Countries from the Deloitte CE region included in the SPI report: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovak Republic, Slovenia
**Source: Michael Green: What the Social Progress Index can reveal about your country.

RELATED ARTICLES

EconMin: Bulgaria — Number One Outsourcing Destination And an Island of Stability in Europe

Belarus’ Economy Is Slowly Recovering From Past Declines

Estcoin: Estonia’s Own Digital Currency?

1 euro coin money (EUR) currency of European Union Estonia over blue background

Derek Chollet: There Is a Resurgence of Supporters of the Transatlantic Relationship

white house

Business Standards Are High in SEE But Vary Widely

Aerial view of The Cathedral of the Assumption in Varna

Digital Business Space Gives All Businesses an Office in Sarajevo

Sarajevo Bosnia and Herzegovina - August 24 2015. View from Vraca Memorial Park with building of Avaz Twist Tower

Albania’s Economy Booms Despite Political Infighting

Panorama view to the city Tirana Albania

Poland’s Q2 2017 Growth Is Stronger Than Expected

WARSAW, POLAND - MAY 07, 2016: Building Palace of Culture and Science among the modern buildings of the city

Putin Urges Belarus to End Oil Transit Through Lithuania

Athens Greece - May 27 2016: Russian President Vladimir Putin delivers

IMF Increases Growth Forecast With Emerging Europe Prominent

Dambovita river and center of Bucharest at sunset time Romania.

Romanian Economy Grows Fast in 2017

Brasov cityscape panoramic and aerial view over medieval architecture of Brasov town, in Transylvania Romania

Chickens Blamed for Romanian Budget Deficit

Two white chickens or hens inside a chicken coop or hen house seen through chicken wire.

Poles Still Keen on German Jobs

Brandenburg Gate in Berlin in Germany. The Brandenburg Gate is a triumphal arch a city gate in the center of Berlin. It is one of the most known sites in Berlin.

Despite Public Anxieties, Migration is Playing a Key Role in ECA Growth

Bratislava city aerial panoramic view. Bratislava is the capital of Slovakia.

More EU Help for Belarus SMEs

GRODNO BELARUS - DECEMBER 13 2013: Seamstress in textile factory sewing with a industrial sewing machine .

Ukraine Is Offering Europe Unique Combat and Technological Experience

World Bank’s Doing Business Report 2016 Resume For Emerging Europe

Chris Lowney — What Jesuit Spirituality Can Teach Us About Global Leadership

Fitch And the World Bank: Economic Growth To Remain Solid Within CEE In 2016

Trans Adriatic Pipeline Will Fuel Albanian Growth

Xanthi. Greece - July 30 2017: aerial view of construction of gas pipeline Trans Adriatic Pipeline - TAP in north Greece. The pipeline starts from the Caspian sea and reaches the coast of southern Italy

Jadranka Joksimović: Serbia Takes Its Candidacy of the EU Seriously

bigstock-Joint-Press-Conference-Of-Serb-155400338.jpg

Baltics Seek Lockstep With High Tech States

Euro money: Macro view of euro coin and bill. Suitable for financial, monetary, euro or European Union concepts and ideas

Poland Stays Cool on Euro Adoption

Euro cash and Zloty on one photo.

Growth Continues for State-Owned Azerbaijan Airlines

Azerbaijan Baku - September 16 2015: View of the Heydar Aliyev International Airport sign in Baku Azerbaijan. The airport is the home of Azerbaijan Airlines the national flag carrier.

CEE Nation Brands Still Behind Western Counterparts

TALLINN ESTONIA- JUNE 17: View of the modern high rise buildings on border with an old part of the city on June 17 2012 in Tallinn Estonia

CEE Is Key to China’s Belt and Road Initiative

Shanghai skyline Panoramic view of shanghai skyline and huangpu river Shanghai China

Mayor: Armenia And Its Capital Yerevan Offer Safe Investment And Tourism To a Growing World

Automotive and Transport Companies Dominate the CEE Region

Car bodies on the production line inside automobile factory

Prospering Czechia Still Needs a Bigger Workforce

prague emerging europe

Latvia Urged Not to Increase Expenditure As Economy Grows

Riga, Latvia - August, 2010: Panorama view from Riga cathedral on old town of Riga, Latvia

More Brexit Fears As the UK Proves To Be A Needed Member

City of London view from Waterloo Bridge. This view includes: St. Paul`s Cathedral The Gherkin Tower 42 and Blackfriars Bridge.

Macedonia — Stepping Out Of the Shadow Of the Balkans

Economy Minister: Internationalisation Is the Key To the Slovenian Economy

World Bank: Brexit Hides Greater Challenges to the European Union and the CEE Region

Albania’s Construction Sector Supports the Country’s Growth

SARANDA, ALBANIA - MAY 18: View of the city Saranda, most important tourist attraction of the Albanian Riviera on May 18, 2017 in Saranda, Albania.

Effective Policies Have Strengthened the Georgian Economy

TBILISI GEORGIA Jul. 18 2017: Bridge of Peace is a bow-shaped pedestrian bridge a steel and glass construction over the Kura River in downtown Tbilisi capital of Georgia

Meghri Becomes Armenia’s Third FEZ

armenia emerging europe

CEE Boosted by Positive Tourism Trends Across the Region

cruise ship in Kotor Bay Montenegro. Aerial view panorama. Kotor bay Montenegro.

Nadiya Savchenko: I Dream of a Great Ukraine

Panorama of the top part of the Andrew's Descent from Castle Hill in springtime in Kiev Ukraine.

Lithuania Handed Top Marks for Business Services

Beautiful panorama of Vilnius Old Town taken from Gediminas hill; Lithuania

Estonia Proposes Bill of Rights and Responsibilities for Robots

Robotic hand accessing on laptop the virtual world of information. Concept of artificial intelligence and replacement of humans by machines.

Lech Wałęsa: Hard Options Can Force Nations to Get Down to Work

Polish Labour Market Deficits Are Impacting All

Construction site with crane and building. Construction site in western europe - in Poland.

Air Passenger Volumes Reach Record High in the Baltics

airbaltic

Hungary Today: Potential and Challenge

Chain bridge on Danube river in Budapest city. Hungary. Urban landscape panorama with old buildings and domes of opera

Poland’s Business Constitution Must Be Finalised

Front of finance ministry in Warsaw Poland with a fountain framing the entrance. Could be used for images about Euro currency problems

Romania Cuts Income Tax, Introduces Solidarity Tax

CLUJ NAPOKA ROMANIA - OCT 2 2016: People on the central street of Cluj Napoka - the unofficial capital of Transylvania.

Sarajevo Stock Exchange Connected to SEE Link

sarajevo stock exchange

CEE Must Improve Infrastructure and Logistics

Aerial view of Gliwice Sosnica motorway junction. There are international traffic in four directions

Valga and Valka – Where Estonia and Latvia Work Together

Valga valka emerging europe

Doing Business Across Eurasia Could Be Easier

Eurasia emerging europe schneider group

CEE Emigrants Could Boost Their Countries’ Economies

Londoners walking through Millennium Bridge with St.Paul's Cathedral at the background after sunset - London, UK

Belarus Introduces New Business-Friendly Auditing Procedures

MINSK, BELARUS - AUGUST 15, 2016: Aerial view of the southwestern part of the Minsk with Palace of Sport and old and new other buildings. Minsk is the capital and largest city of Belarus.

CEE Tech Growth Continues: Poland and the Czech Republic Lead the Way

technology

Bosnia and Herzegovina: Focussing on Stability and Business Climate

Sarajevo Bosnia and Herzegovina - August 23 2015. View of Miljacka River in Sarajevo city

Estonia Leading CEE Country in WEF Competitiveness Index

pharmaceutical factory woman worker operating production line at pharmacy industry manufacture factory

Moldova Launches New e-Procurement System In Search For Positive Change

Photo team work process, holding contract hand, signs documents. Account managers young crew works with startup project.New idea presentation, analyze marketing reports.Blurred, film effect, horizontal.

Non-Financial Reporting No Longer a Secondary Consideration in CEE

GE Inaugurates Its New Bucharest Software Centre

Asian Outsource Developer Team Sitting At Desk Working Laptop Computer Mobile Application Software Real Office

Poland Is Set To Become a Large Economic Zone

Aerial view over the building materials processing factory. View from above.

Romanian Cabinet Reshuffled as New Splits Emerge in Ruling Party

BUCHAREST ROMANIA - MAY 25 2014: The Victoria Palace. Victoria Square.

Serbia, Belarus and Ukraine Ranked Lowly by Wharton Business School

Kyiv Ukraine - April 172017: The postal square in Kiev on Podol the Dnipro river. view of the square from the river panorama

Croatian Salaries Are Growing in Line With Other CEE Countries

Dubrovnik Croatia emerging europe

GSA Names Ukraine as UK’s Offshoring Destination of the Year

map of ukraine emerging europe

UK Economic Growth Slows as Brexit Uncertainty Bites

flags of UK and EU combined over icons of London - Brexit concept

Slovenia Sets Green Vehicle Deadline of 2030

ljubljana

Investigations Into the Corrupt Ukrainian Fuel and Energy Sectors

Ukrainian money hryvnia. The national currency. Corruption in Ukraine

Changes Are Making Ukrainian Banking More Aligned with International Standards

Beyond Borders: Immigration Within the EU

refugees immigrants

Škoda too Strong for VW Group

MLADA BOLESLAV CZECH REPUBLIC - MAY 30: Skoda Octavia on conveyor line during Doors Open Day at Skoda Auto a.s. factory. Skoda auto celebrated 120 years since its founding on May 30 2015 in Mlada Boleslav.

Do Your Homework First and Starting Business in Poland is Easier

Romanian Car Maker Dacia Sees Sales Boom

Sables d Olonne France - May 07 2017 : Dacia Tour 2017 is a commercial operation organized by the car builder in order to present its cars throughout France - Close-up on cars

Still Potential for Growth in CEE as Economies Stabilise

Lithuania Gives Innovation a StartUp

MILAN ITALY - MAY 2: People visit Lithuania pavilion at Expo universal exposition on the theme of food on MAY 2 2015 in Milan.

China Agrees to Build Hi Tech Business Park in Serbia

BELGRADE SERBIA - SEPTEMBER 29 2016: View on the city center and the junction of Rivers Sava and Danube in Belgrade Serbia.

High Real Estate Prices at Home Force Czech Investors Abroad

Construction of the Petrin lookout tower in Prague Czech Republic

Lithuania Set to Streamline Competition Legislation

Industrial dock with cranes on the quay

Lviv Is the Pearl and the Soul of Ukraine

PE and VC Investment In CEE Is At an Eight-Year High

venture capital

Warsaw Rising: The Polish Capital’s Skyline Gets Even Taller

varso

Western Ukraine Could Be an Entry Point into the Country

Larisa Manastirli: Where is Bulgaria After Ten Years in the EU?

SEE Link — Sharing SEE Europe’s Hopes for a Brighter Investment Future

Ukraine’s Q2 Growth Climbs

kyiv ukraine emerging europe

Bad Payers Still Causing Problems for Romanian Firms

Close up Romanian currency note, LEI or LEU, Romania

The Reality in Romania Exposes False Perceptions Of The Country

21st century Manufacturing Arrives at Great Stone

Great stone

Ukraine to Restart Privatisation to Realise Profits

Pricatisation electricity ukraine

Global Players Dash for Tempting CEE

dollar pound euro coin on euro background.

After Economic Shocks Armenia Plans for Macroeconomic Stability

yerevan armenia minister of finance

A Risky Evaluation of Croatia’s Economy?

ZAGREB, CROATIA - JULY 17, 2017: Square Ban Josip Jelacic with tourists and trams on a summer day in Zagreb. City of Zagreb is the capital of Croatia.

Poland to Switch from Emerging to Developed Market by September 2018

warsaw stock exchange

Kosovo: A Population of Talented Young Entrepreneurs Waits at Europe’s Door

Georgia’s Growth Continues

Batumi, Adjara, Georgia - May 27, 2016: Batumi, Adjara, Georgia. Gogebashvili Street Road And Marine Station Or Maritime Station Building Batumi On Background

EY: Belarus’ IT Scene Is Thriving

High tech park minsk

Leave a Reply

Your email address will not be published. Required fields are marked *