Has the time matured for changes and improvements in social policy reforms? This question has become the subject of many discussions in the institutions of civil society, the business community, and also in Albanian politics.

The majority of debaters think that the answer is Yes. The distribution of goods in society and the support of individuals and groups in need, as well as social policy investments, go to the benefit of society and the guarantee of social order. Meanwhile, social policies cannot fail to consider economic development, the financial possibilities of the state and the moment when they should be applied.

ON SOCIAL POLICY AND ITS PURPOSE

Although social policy is a concept that has had different definitions over time, its purpose is almost the same. Some consider it as a "collective strategy that addresses social problems" (Jansson, B. S., 1984:6), a definition that applies especially to developing countries, which face acute social problems such as poverty, unemployment, immigration, etc.

This approach to the concept of social policies today is increasingly combined with instruments that help individuals/groups find strength and mobilize their positive energies for the fulfillment of social needs. This has also been noticed in the evolution of social programs during these 30 years of transition in Albania. Other social policy thinkers at the London School of Economics define social policy as "an interdisciplinary and applied subject in society's intervention towards social needs".

While those of the Malcolm Wiener Center for Social Policy at Harvard University define social policy as "public policy and practical activity in the areas of health care, services, criminal justice, inequality, education and work". The opinions and definitions are of the most different, where in some of them social policies are expanded to include health policies, immigration, education and some others exclude some of these elements. Regardless of the diversity of opinions, the alignment between these concepts is greater than their diversity and the purpose of social policy converges on the fact and is almost the same: "the protection, guarantee and development of human social rights, as a condition for maintaining social order.

The Albanian state is oriented by the Constitution of the Republic as a legal basis for the drafting and implementation of social policies. A special chapter of it is devoted to social objectives and further the basic social rights of citizens are sanctioned, specifically chapter V, "Social Objectives".

WHY A NEW SOCIAL POLICY NOW?

An analysis of social policy begins with the assessment of unmet social needs, which turn into social problems of society; in parallel with the assessment of economic and financial development of the country. Also, Albania’s social policies are seen in comparison with today's European experience, since we are on the path of the process of full integration in the EU. The construction and implementation of a new social policy at this moment is therefore related to several factors, mainly internal, but also external.

First, the consequences of the four (major) crises of the last 15 years that have also affected our country, the crisis of 2008-2010, the consequences of the earthquake of November 26, 2019, the 2020 and onward coronavirus crisis and the resulting crisis following the Russian aggression against Ukraine.

Secondly, the economic and financial situation and the confrontation with the last two crises.

Thirdly, the analysis of the consequences for the affected strata (vulnerable groups, pensioners, those unable to work, the unemployed, low income employees, business, etc.)

Fourth, the situation of the labor market in the country, its relations with the international labor market and the need to curb immigration,

Fifth, the comparison of the results of social policy in our country (salary, employment, pensions, health care, etc.) with the countries of the region and the objectives of EU integration.

Referring to these factors, the analyzes made, the evaluations of the institutions of our country (Ministry of Finance and Economy, Bank of Albania, Institute of Statistics, IMF, WB, EBRD, etc.), it was concluded that the Albanian economy has performed positively, realized more positive indicators than expectations due to the effect of the crisis. Consumer price inflation came down during the last two months of 2022.

After peaking at 8.3% in October, the inflation rate dropped to 7.4% at the end of the year. The drop in inflation reflected the drop in the prices of oil and some food items, dictated by the similar performance in the international market. While the inflation rates of services and other items remain at high levels, comparable to those of the previous months, but in the meantime internal inflationary pressures still remain high.

Employment rose 4.2%, the unemployment rate fell to a new all-time low of 10.6%, and the average private sector wage rose 12.3% in the third quarter. The positive performance of the labor market creates premises for the sustainability of economic growth in the future, but it also signals a rapid increase in production costs and pressures on consumer prices.

Financial markets have been functioning normally... The situation proves that inflation will gradually decline during 2023 and will return to the target in the first half of 2024. In parallel, the Albanian economy is expected to continue growing, while the main indicators of financial stability are expected to remain in control.

But, taking into account the fact that the crisis continues and it has significantly affected the standard of living of the population, while also deepening the social gap, now is the moment to correct these social disproportions. This objective can be helped by the implementation of a New Social Policy.

First, the reform of the salary system. This, not simply by increasing the salary fund, but by simultaneously targeting several objectives. The minimum wage should be increased (from ALL 34,000 to 40,000-45,000. The concerns that businesses may have about this issue can be resolved by using temporary financial or subsidy instruments for a period. At the same time, the average wage should gradually approach the average level of the countries of the region.

Also, it is time that the pace of salary growth in the public sector should follow the pace of growth in the private sector. And what is more important is not to have equality in the use of the salary fund, increasing all salaries in the public sector equally, but to have a differentiated increase according to the importance of the functions in the administration and in particular the necessary professions, that are considered necessary thanks to the lessons learned from the last two crises and the dizzying developments of the 4.0 revolution, which, as Prime Minister Rama pointed out, are already in the focus of the government.

Second, the deepening of the social security reform. The reform started years ago in this direction, (although it will take time to mark the positive turn in the financial situation of the social security system, to ease the cost of the state budget a little), will have to be accelerated on the one hand by made some upward corrections of pensions in general, of some types of special pensions, and, on the other hand, in the use of some new instruments, to reduce the gap created between the income and expenses of this system.

Third, the deepening of the health insurance reform, in both sectors, but especially in the private sector where this product is minimal. Opening a debate and making this issue a reality, as well as health care reform and greater support for social assistance, unemployment payments, disability pensions, or a better assessment of a variety of health professions' statuses and social, would be elements added to a new social policy.

Fifth, the Education and Sports Sector constitutes an important element of social policy. The initiatives launched for the development of sports in schools (sports classes), the construction of sports fields and facilities, the construction of stadiums, etc., are proof of the turn taken in this direction that must be continued. The time towards a new social policy has begun, it must now be deepened and accelerated.

*Academician, economy expert, former PM and Finance Minister; Panorama, Feb 10, 2023)