Romania has experienced a slow and difficult growth towards stable market economy since the fall of communist regime. Romania had ranked second highest in the EU in regard to relative poverty rate, after Lithuania. Romania had in 2010 a risk of poverty rate of 17.2% (Eurostat, EU-SILC data). Inequalities appeared between younger generations, who saw their access to housing severely limited and older generations, who benefited from a generous communist welfare package (Berger-Schmitt, 2002). Romania faces the challenge of thousands of children orphaned during the communist regime. Habitat for Humanity hereby referred to as HFH has endeavored to provide poor and homeless families with homes. I have been privileged to work with HFH in the town of Beius; Romania, as well as another organization in Geneva, called ‘Serve the City Geneva’. The HFH focuses on dynamics of contemporary inequalities and building homes to the homeless while Serve the City Geneva looks at political issues of poverty through other supporting NGOs and also offer financial aid.
One commonality between the two is both deals with eradicating poverty. I will focus my analysis on the two cities in two different countries which are both under the European Union. I will focus on how politics and government policies have shaped and still continue to play a major role in the two towns in relation to eradicating poverty and homelessness. It is imperative to note that poverty affects all categories of society and is closely tied to education, level of employment, quality of employment and salary level.
Focusing on Beius there is clear inability to cover current needs when analyzing the risk of poverty for its general population. The social policy implemented in Romania has done little to change things, and the risk of poverty after social transfers was around 22.5%. The tenure status practiced in Beius and to a greater extent, Romania is heavily influenced by the communist heritage and the privatization of the housing stock in the early ’90s. Homeownership is overwhelmingly widespread in Romania and the highest in the EU. Most of the houses are owned outright, while mortgage or loans are not significant in the total tenure status (Eurostat, EUSILC data).Beius town has a very low share of owners with mortgage or loans as compared to Geneva. The proportion of tenants is also low as renting is not an institution yet in Romania.
Lack of experience and inadequate education have been the major cause of unemployment in the two cities.The town of Beius receives a share of the nationally allocated education budget of 4.2% of GDP, representing the second lowest share allocated to education in the EU (Ministry of Education, 2010). There is yet no consistent comprehensive approach or any move to integrate education and employment policies in Romania in comparison to Switzerland. The education reforms in Romania have been under various reforms that have heavily depended upon the governments of the day and political moments of the time.
One gets to feel the level of estrangement from Political life in Beius through the town’s low level of trust in political institutions and by their preference for institutions that are highly personalized and visible like local authorities to the detriment of more abstract and less tangible institutions. Tavits and Letki (2009) demonstrated that the classic relationship between left/right orientation and public spending does not hold in post-Communist countries.
I believe that this applies to the Romanian context as well and more so in Beius. Here, the actions of various political parties have been influenced by the opportunities they had when in power, responding to pressing problems of the moment and to the interest of their political clientele, and much less by long-term strategy and ideological stances. A very large majority consider that there are huge disparities between incomes and that the fairness of redistribution should be ensured by the government.
The level of post-neonatal mortality is 6 times higher in Beius than in the Geneva, which show the precarious sanitary and healthcare conditions and services, as well as the lack of qualified personnel (Joint Inclusion Memorandum, Romania, 2005); Poor families cannot afford co-payment of medical services, costs of medication as well as the costs related to transportation to health care facilities, especially secondary and tertiary (Institute for Research on Quality of Life, Stanculescu, et al., 2004).
Switzerland which enjoys the privilege of being amongst wealthy nations of Europe is not spared either in the housing crisis. In Beius the crisis can be blamed on many historical and unfavorable social factors and to a large extent unemployment and low level of education. However, when you go to Geneva the city has a high level of education and employment but still suffers housing crisis. The past ten years have seen an explosion of real estate prices with an increase in multinational companies. This influx has surpassed housing constructions creating a group of educated and employed but homeless population. Geneva authorities approved an urban master plan in 2009 that placed a strict ratio – one new job equals one new home built. However, the implementation of such a policy has faced its criticism with new companies clarifying the policy would force them to venture into real estates. One such company Procter & Gamble which had been interested in moving new offices in Praille-Acacias-Vernets district faced the challenge of having to provide housing to its 300 employees.
During an interview conducted on 20 July 2016, Remy Pagani, the former mayor of Geneva stated that It was illogical for transnational to set up in Geneva and make tax savings without making an effort to become involved in the community and ensure that the employees they bring can be housed. Many companies did not agree with him though saying “It’s not the lack of investors but the availability of land which is one of Geneva’s construction problems. It’s down to the politicians to resolve it and not the multinationals.” Many middle-class citizens have also blamed the problem on lengthy administrative procedures and appeals rather than finance. Many protests, however, have been made to decry the low vacancy rate which to the residents has been beneficial to property developers while hurting the ordinary citizens. They have criticized the system they refer to as ‘Organized penury and abusive rents’ that has made an average or low wage-earners no longer have the opportunity to find accommodation. If the situation is as tough for the average earners then one can imagine how much worse it is then for those living in abject poverty. But although homelessness may not seem like a problem in the country, it definitely exists. I have visited nuclear bunkers that are converted to cater for the homeless population by Geneva authorities between the months of November and April. This, however, is a temporary escape from Winter after which the homeless return to the streets.
Figures from the Swiss federal statistics office showed that 7.7 percent of the nation of eight million people lived below the poverty line which is 2,200 francs ($2,466) per month for a single person and 4,050 francs for a couple with two children.
In Geneva, a lack of awareness about poverty combined with a high cost of living compounds the struggles felt by impoverished residents. The unskilled laborers and people with low level of education are at the highest risk of living below the poverty line. The Swiss Conference for Social Statistics sets poverty line thresholds based upon the inability to afford the goods and social services necessary to a healthy and socially integrated life. One solution to tackling the poverty issue was via a referendum conducted in June 2016 on universal basic pay. The proposal sought a guaranteed monthly income of 2,500 Swiss francs (£1,755; $2,555) for adults and also SFr625 for each child. The referendum got no support among Swiss Politicians and ended up being rejected by 77% of voters. The critics had argued that it would lead to a disconnect between work done and money earned. The referendum failed in a vote but I believe it represented an innovation and willingness in seeking solutions to poverty with Switzerland being the first country to have considered a solution of this kind. The wait for government policies can be a long political process that is why NGOs like ‘Serve the City Geneva’ has played a critical role in ensuring the poor still have dignity and means to have shelter and daily meals. In the Alpine country where getting poverty statistics is difficult, I believe that the NGOs have done not enough but much in eradicating poverty.
There is political disconnect exhibited among the poor in both cities of Beius and Geneva. In Beius granting trust to institutions appears to be dependent on how people feel having more or less control on them, and how they perceive the outcomes of these institutions as more or less direct/tangible. A professor at the University for Social Work and Health in Lausanne, Jean-Pierre Tabin, said that there were many people who would not ask for social support, even though they were entitled to it. He blamed such mistrust and laxity on bureaucracy, a lack of familiarity with the system, complexity or simply just a fear of being discriminated against or stigmatized. He argued that these people needed to be included in the formation of social welfare policy.
In conclusion, Romanian authorities should design a policy mix and adopt a synergic approach for combating poverty and social exclusion. A study by Voinea and Mihaescu (2009) found that flat tax system introduced in 2005 with the goal of increasing the tax base had some mixed effects, it increased employment but it did not contribute to lowering inequality. The flat tax system was also hindered by a very high social security contribution. Therefore such a mix of policies should include and coordinate: equity in development policies, education policy, employment and social inclusion policy. Switzerland and in specific Geneva has done a lot in empowering people living in poverty in fulfillment of the UN goals (United Nations Development Programme, 2006). This they have done through macroeconomic policies integrating employment growth and poverty reduction goals. They have improved skills training and encourage the growth of small and medium enterprises. Both towns have had several changes in their social policies. The failure of the flat tax system in Romania and rejection of the referendum on Universal basic income in Switzerland serve as great lessons. They have provided a platform for discussing the meaning of basic income in Geneva and inequality in Beius. Assessing poverty in both Geneva and Beius demonstrates the importance of not allowing a minority impoverished population to go overlooked. HFH and ‘Serve the city Geneva’ in collaboration with other NGOs, therefore, play a critical role in ensuring innovative and consistent efforts to address poverty and homelessness in both cities.
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