Central and Eastern Europe (CEE) has come a long way in the three decades since the fall of communism and the 10 years since the height of the financial crisis. The region has emerged with a strong degree of both political and economic success, and the gap has narrowed between people’s expectations of the quality of their lives and levels of prosperity.
But the region is at a crossroads. The rate of convergence with Western Europe is slowing and, while wages have increased steadily, they are struggling to keep pace with the rising cost of living. There are challenges that require action if people in CEE are to fulfil their potential and find pathways to prosperity.
This is the third in a series of reports developed in partnership with Erste Group, analysing the nature of prosperity across CEE. It looks at the challenges in-depth and examines the opportunities over the next decades for people to fulfil their potential across the region, through improvements both to the education and health systems and the wider factors that are driving living standards.
A true understanding of prosperity and wellbeing requires an examination of people’s lived experiences. This includes how incomes translate into families being able to make ends meet, quality of work and access to high quality and affordable housing. Our analysis shows that:
- Living conditions in CEE have improved significantly over the past 30 years, but not uniformly.
- In-work poverty is on the rise, despite an increase in employment and wages.
- The rise in the cost of living in the region is impacting on satisfaction with living standards.
- Polarisation of the labour market is increasing middle-class vulnerability.
A high-quality education system from pre-primary all the way up to the tertiary level develops the skills and knowledge to help individuals and societies fulfil their potential. Businesses need access to a talented and skilled workforce to innovate and grow. Our analysis shows that:
- CEE countries have a strong tradition in technical education.
- The last 30 years has seen a significant increase in demand for tertiary education.
- The quality of tertiary education has not kept pace with the expansion in places.
- Demand for skilled workers in the region is outstripping supply.
Good mental and physical health outcomes are central to ensuring individual and national prosperity. In turn, outcomes are, at least in part, reliant on the extent of access to and the quality of healthcare systems. Our analysis shows that:
- Health outcomes in CEE have improved since the end of communism.
- Healthcare performance is mixed and satisfaction with care has not improved.
- Increased reliance on payment from patients is reducing access across the region.
- Increasing investment in health is a priority for the public.
- Structures within healthcare services also need reform.
- Improvements have already begun in many health systems.