The Opportunty Cost of deficient national educational and training provisions Notes on CESS Part 1 Return to index Background to this topic Hector McNeill1 Following the 1989 collapse of the Soviet system there was rapid change by former Soviet satellite countries to so-called free market economies. From the very early 1990s this involved a process of privatization of state assets. As a result of the privatization process thousands of people, especially in rural regions, lost their employment without any immediate alternatives for work. The Hungarian economy passed through a fairly severe recession. During 1996-1998, the Agricultural Development Foundation (ADF) noted that the re-orientation of the economy had affected rural Roma more than rural non-Roma who seemed to be re-entering alternative forms of employment. In 1998 it became evident that the sitation of the rural Roma, and it would seem those based in cities, was not good. In some villages the unemployment rate was 100% for Roma. For many Roma the only active1 income was from casual seasonal agricultrual work during the fairly short Hungarian harvest seasons for which they were paid very low wages for long working days. On investigating this further the ADF discovered that much of the lack of employment related to a range of racial discriminatory issues including the refusal by others to sell economic assets, such as land, to Roma as well as giving preference to non-Roma in employment situations. ADF field work also established that the Roma were well-disposed to work and were as intelligent as other people within Hungarian society. On the other hand a constant complaint by non-Roma was that the Roma did not value education, that they were therefore uneducated and as a result had no professional training. This constant "theme" in the experience of ADF field staff did not correlate with the obvious initiative and general levels of intelligence of Roma. In 1999 the ADF became aware that most rural Roma children were segregated into separate schools and at the same time a separate regime known as "Special schools" was expanding rapidly. Leading Roma in many villages explained that Roma children were being placed in these schools and were receiving effectively no education. The Director of the ADF2 wrote to the European Commission raising the issues that segregated educational denial was against European Law and that the extent and impact of such a level of educational denial would have serious negative consequences for the economic performance of all countries concerned. In 1999, the Ombudsman for Minorities in Hungary referred, one of his reports, to the fact that the conditions surrounding central government funding for special schools was not transparent. This seemed to support the repeated statements from Roma in several villages that Special schools were "appearing" in many villages which had never had them before. In 2000 a specialised NGO, ECRE-European Committee on Romani Emancipation took up this issue but faced considerable official resistance. ECRE therefore opted to undertake direct field survey work with the help of Roma volunteers (2001-2003) to discover more about how the Special school system in Hungary operated. Parallel data was collected for the Czech republic and Slovakia. This survey and its resulting reports (2003) contained two important findings: the extent, modus operandi and quantities of funding of a widespread segregated educational denial leveled at rural Romani children the scale of the potential negative economic impacts of this system on the future prospects of national economies This document addresses the second, economic aspect, of these findings. The impact on the economy of low earning capacity is an acute problem since the Roma were, and continue to be, the fastest growth component of the workforce. However, acknowledging the extreme prejudice suffered by the school age children subjected to segregated educational denial, it is also vitally important to quantify the life-long economic impact on those affected in this way. Indeed, the economic aspects of the enforced "under capacitation" of the fastest growing component of the workforce, the Roma, reflects a serious mismanagement of human resources planning on the part of the governments concerned. This mismanagement is proactively undermining the future growth prospects of economies and thereby harming the real income and welfare prospects of whole populations, that is, Roma and non-Roma segments. The System CESS-Cigány Economy Simulation System is an econometric model designed to measure the opportunity costs of deficient educational and training provisions in Hungary. It is also designed to provide a basis for rational planning reviews of the options which make the Cigány Economy a major contributor to economic growth and general welbeing. CESS runs on the SEEL global network and sections can be made accessible to the public using a browser. The project has several phases of development. The first involves the creation of accurate population projections for Roma and non-Roma populations. These are associated with calculations of Gross National Product deficits caused by the earning capacity deficits within the Roma segment. The first simulation series will be created for Hungary for which ECRE has supplied information including data from independent Hungarian sources. The outcomes of simulations will be analysed from the standpoint of the future economic prospects of the country in terms of dependency support through the funding of pensions and social welfare systems, health services, education and vocational training as well as the payment of international debt. In addition, feasible strategies will be proposed together with budgets able to address the economic deficits and gradually recover average per capita real income levels. Naturally this will require a significant changes in human resourcs policy. CESS can provide a useful basis for analysing possible policy options for closing these GNP decifits. Return to index 1 Hector McNeill is the Systems Co-ordinator at the Systems Engineering Economics Lab, Portsea Isle, Hampshire. 2 In early 2000, the ADF was absorbed as a specialised division by SEEL.The word cess is an old English term for tax or fiscal buden