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Kosovo Human Development Report 2010 - UNDP Kosovo - United ...

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FIGURe<br />

2.1<br />

Households<br />

report also identifies that poverty and<br />

vulnerability levels would be much<br />

higher without the safety net provided<br />

through migration and remittances.<br />

Poverty in <strong>Kosovo</strong> remains largely a rural<br />

phenomenon 41 disproportionately<br />

affecting large families, female headed<br />

households, people with disabilities,<br />

unemployed persons, precarious job<br />

holders (mainly ‘per diem’ workers) and<br />

self-employed agricultural households.<br />

The peculiarities of <strong>Kosovo</strong>’s economic<br />

context – rising GDP but stagnant<br />

poverty and unemployment rates<br />

- point to exclusion as a factor undermining<br />

inclusive economic growth.<br />

Since economic exclusion is necessarily<br />

more complex than economic deprivation<br />

(poverty), this chapter seeks to understand<br />

the mechanisms that underlie<br />

and perpetuate it – before looking to<br />

solutions.<br />

2.2<br />

Mechanisms and<br />

drivers of economic<br />

and labour market<br />

exclusion<br />

Identifying social exclusion mechanisms<br />

in transitional countries is always<br />

Two mainstream economic processes: factor and goods and services markets<br />

36 | KOSOVO HUMAN DEVELOPMENT REPORT <strong>2010</strong><br />

Goods and service<br />

markets (bread, clothing,<br />

transportation etc.)<br />

Consumption Purchases<br />

Factor markets (labour,<br />

land etc.)<br />

Wage, rent, profits etc.<br />

a challenging exercise. The data on<br />

economic exclusion are often distorted<br />

by such factors as the underground<br />

economy, un-reported remittances,<br />

and poorly developed statistical and<br />

social protection systems. To identify<br />

socially excluded groups in the economic<br />

area, the analysis seeks to map<br />

groups excluded from two essential<br />

and mainstream economic processes,<br />

namely:<br />

1. all factor markets/ factors of production<br />

such as labour, land, capital;<br />

and<br />

2. the ability to purchase necessary<br />

goods and services.<br />

The most severe form of exclusion is<br />

exclusion from all factor markets: i.e., an<br />

excluded individual or household cannot<br />

participate in any normal production<br />

proceses, and does not earn any<br />

income through profit, wages, rent or<br />

interest. Exclusion from all factor markets<br />

usually (but not always) leads to<br />

the second form of exclusion – inability<br />

to purchase necessary goods and<br />

services. This form of exclusion is essentially<br />

synonymous with poverty – the<br />

Businesses

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