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От Рисина Конференции / АКт

Developments of estonian regional policy

1. Proceeding from the analysis and from the Estonian Regional Development Strategy for 2005–2015, the situation in Estonia and the potential of Estonia in the EU can be evaluated, pointing out both the peculiarities/underdevelopments and potential competitive edges.

This paper/overview is based on the Estonian Regional Development Strategy and on the author’s evaluations.

Estonia differs from other regions of the EU with a similar size by a number of characteristic features:

- due to its geographic position, Estonia is located far from the European core regions and has relatively poor transport connections with the latter;

- Estonia has a sparse settlement structure in comparison with other European regions (ca ¼ of the number of inhabitants per square kilometre compared to the average level in the EU);

- Estonia is the Member State with the most rapidly decreasing population and labour resources;

- the differences in regional development within Estonia are considerable in comparison with other regions of similar size;

- the Estonian economy has a lower volume and is relatively less developed in comparison with other EU regions (GDP per inhabitant was ca 60% of the average of the EU-27 in 2009);

- the employment rate is relatively low in Estonia (the economic crisis has even reduced it);

- Estonia is currently characterised by deepening underdevelopment in the field of innovation (total expenditure on research and development activities is ca 1/3 of the average level of the EU; the number of patent applications per inhabitant is less than 1/10 of the average);

- the underdevelopment of the Estonian skilled labour resources is relatively considerable in comparison with the EU regions with faster development rates (the number of employees participating in ongoing vocational training is approximately a half of the average level in the EU);

- educated labour (above all with higher education) is currently a relative competitive edge for Estonia but will probably disappear in the long term.

Other competitive edges (lacking in many other regions) which probably remain for Estonia in the near future are the following:

- extensive untouched natural environment;

- favourable macroeconomic environment for business activities;

- proximity of large opening markets, which offers additional business opportunities.

Free movement of goods, services, individuals and capital in the common economic space of the EU will have an impact on the developments, incl. regional development, in Estonia also in the future, favouring most of all the development of growth areas here rather than areas with a sparse settlement structure (i.e. above all the rural areas characteristic of Estonia, which are located further from growth areas) which are away from the main movement paths of the capital and individuals. It is necessary to alleviate this contradiction with regional balancing.

2. Knowledge-based society has an important role in ensuring economic and social development. Striving towards knowledge-based society creates dual opportunities in the Estonian regional development:

- on the one hand, the open economy which is becoming more integrated increasingly favours the development of large centres, i.e. economic areas (the Estonian cities Tallinn, Tartu, Pärnu, etc.);

- on the other hand, the networking economy provides broader opportunities for economic specialisation of regions and use of different local specific development advantages.

Among Estonian cities, both Tallinn and Tartu have the potential for becoming urban areas which have functions of pan-European importance. Such a development process would also stimulate the development of the hinterlands of the cities which are closely connected to the cooperation network between cities. The polycentric model of the network of cities is an effort to balance the regional development of the EU – to decelerate the excessive demographic and economic concentration to the European core regions. The same principle should be taken into account also within Estonia.

3. Expansion (both in terms of quality and quantity) of regional production activities (as an important factor of economic development) assumes the use of qualified labour. Besides the training of people, also the systematic further training and retraining on the national and regional level and maximum employment of people have an important role here. Two trends can be forecast in Estonia concerning labour-intensive production activities:

- increasing relocation of enterprises from Tallinn to its immediate surroundings and other Estonian regions;

- increasing pressure for the relocation of production activities out of Estonia, i.e. to areas with cheaper labour and other more favourable production inputs which have contributed to the relative competitive edge of Estonia.

It can be observed that counterbalancing the latter trend, increasingly more companies are preferring production activities which give more added value. Also increasingly more business networks are developing in Estonia where companies depend on each other in their economic activities. In addition to the above-mentioned processes we can also reasonably assume that in connection with the accession to the EU common market, the companies of the Nordic countries and other EU Member States will be more interested in making investments in Estonia, including in its different regions.

The following development trends of different branches and sectors of national economy outside growth centres can be mentioned:

- culture and tourism economy and different niche products of rural economy are examples of such areas in which several smaller rural businesses have already proved successful. Rural areas will depend on single successful small businesses, i.e. niche economy, also in the future. Investments in the provision of services with a higher added value can be seen in the tourism sector. Also development of networking among businesses can be observed in rural entrepreneurship;

- competitiveness of agriculture has improved in connection with the accession to the EU common agricultural policy, therefore agricultural land use and production activities are gathering pace. An increase in employment in the agricultural sector (which is still rather high in Estonia in comparison with the rest of Europe) cannot be forecast for the next few years. The jobs created and maintained by now will become increasingly sustainable due to the implementation of the EU common agricultural and rural development policy and the respective support measures. This trend is surely supported by the increasing orientation to the support of environment-friendly production activities in the framework of rural development policy; these are also somewhat more labour-intensive. Similar to the rest of Europe, there will be preconditions in the future for the increase in the number of rural entrepreneurs who have also a secondary occupation besides the main activity.

However, the current economic crisis will surely have its effect but high-quality living environment, active cooperation between businesses and the public sector, and contacts within the community will be increasingly more important development factors of regions in the future. Consequently, we will have to reach a situation in Estonia where we would have no regions without development perspectives.

4. There is a lot of unused development potential in the different regions of Estonia for the full development of their uniqueness. It is important to have a vision (also a specific development plan) in each region on the further development of the local economy, and ideas and resources for achieving it. It will be very difficult to change the situation and succeed without that. Visions of the future have to be based on the specific conditions, peculiarities and possibilities of each area. It is very important for problematic regions to be able to consider the long-term perspective and adjust current development strategies, if appropriate.

According to the Estonian Regional Development Strategy, the regional development of Estonia is oriented to and should reach the following situation by 2015:

- the development of the counties will be balanced. Tartu as the second centre of national importance (after the capital Tallinn), county centres and the largest cities of Northeast Estonia (where the many former and future industrial enterprises are located), will have developed a counterbalance to the attraction of Tallinn as places of living and work. Regional differences in the living standards and quality of life will no longer cause (unlike in the earlier years) unidirectional concentration of the population to the capital region. The increasing competitiveness of the capital region will be based on qualitative rather than quantitative changes (instead of the growth of the population and number of jobs – development of economy based on research and development activities, and development of entrepreneurship which generates higher added value, increase in labour resources with more sophisticated knowledge and skills);

- successful development of regions will be based on the skilful and innovative use of local preconditions. This will be ensured by centres which have innovation potential and keep up the sustainable competitiveness of the regional economy, also by interactive development activities which involve different interest groups and institutions. Equal opportunities will have been arranged for the satisfaction of the basic needs (getting a job and education and self-fulfilment) of all members of the society regardless of their place of living;

- the jobs, services and populations in the counties will have concentrated more than now to county centres and other larger towns of counties. The centres with a favourable living or business environment around Tallinn and other larger cities will be developing fast and forming a network of functional growth areas;

- rural areas will have become viable. The decrease of the rural population will have stopped, the existing resource potential will be both efficiently and extensively used in the conditions of the sparse settlement structure. The increasing mobility of the population and the economic development based on the local preconditions for development will have connected centres to their hinterlands. Commuting, part time and distant work will enable people to combine living in a rural area with a job in an urban centre. Basic services will have become more available in sparsely populated areas. The settlement structure, including in border areas and on small islands, will be sufficient for the preservation of the cultural and natural heritage and fulfilment of several state functions;

- county centres and other larger urban centres will be interconnected and connected with their hinterlands by an evenly developed infrastructure network and frequent and reliable public transport. The well-interconnected centres will function as a joint cooperation network in international competition and this will enhance the competitiveness of Estonia. Regional institutions will actively participate in international cooperation and in the division of tasks among the regions of neighbouring countries.

Consequently, according to the Regional Development Strategy, the Estonian regional policy will be directed to the support of the development of all regions (counties, rural municipalities, cities, towns, villages) to ensure that all Estonian regions are attractive places of living and work. This will be extremely necessary but also largely problematic, considering the development of the Estonian nation state (preservation of the Estonian ethnic identity, culture and language, bringing the occurrence of possible ethnic conflicts and the resulting social conflicts to the minimum).

5. The general goal of the regional policy of the state until 2015 is to ensure sustainable development of all regions based on the internal development preconditions and peculiarities of the regions and on the quantitative development of the competitiveness of the capital region and other urban areas. A concurrent goal in the interests of achieving the integrated and balanced regional development of Estonia is the deceleration of the concentration of the population and economic activities to the capital area.

The objectives of the Estonian regional policy are the following:

- securing better satisfaction of the basic needs of the population in all areas of Estonia.

- improvement of the mobility of the population;

- ensuring a higher quality of the living environment and a higher level of well-being;

- improvement and unification of choices related to jobs, education, different services and self-fulfilment.

- sustainable competitiveness of different regions. The objective is directed to the acceleration of economic development in all regions and improvement of its sustainability. Achievement of this objective will require:

- shortening of distances in time and space;

- enhanced use of the specific development preconditions and opportunities of regions;

- closer cooperation between different institutions and regions in the direction of the development of the region and shaping of the development conditions;

- stronger linking of Estonian regions with cross-border regions and the rest of Europe. The objective is directed to the alleviation of the negative effects arising from the small size of Estonia. Achievement of this objective will require:

- improvement of the communications of Estonia with the rest of Europe;

- deeper cross-border cooperation between regions.

6. The general orientation of the Estonian regional policy is determined by the following principles:

- reaching the goal of the national regional policy will only be possible as a result of cooperation between the national government, the county level and local governments.

- support to development projects of regions should proceed from the principles of sustainability (creation of a continued self-sufficiency and capacity for development) and innovativeness (development of the learning capacity and preference of innovative ideas and activities). Development projects supported through the national government have to ensue from and/or be coordinated with local and regional development strategies;

- effective interconnection of different sectoral policies of the state with efforts to direct regional development should be strengthened. Regional aspects should be taken into account in keeping with the achievement of the primary objectives of sectoral policies. The role of national regional policy together with spatial planning consists in linking sectoral policies, supplementing them and coordinating their regional impact. Among the sectoral policies which have a more extensive regional impact, above all the development of transportation and communication networks and management of public transport systems, provision of financial support and support services to businesses, development of the network of educational and research institutions, provision of labour market services and development of human resources, planning of protected areas, and local and regional administration have a central role.

7. Planning and implementation of measures of regional policy has to take into account the interdependence of centres and hinterlands and the weighty role of centres in further regional development. Regional policy should be oriented to the creation of conditions for more extensive employment and the involvement of the private sector in regional development activities.

Regional peculiarities and also the potential socio-economic impact and effects of different measures on the cultural and natural environment should be taken into account for the achievement of objectives of regional policy. Problems related to the population, economic activities and infrastructure of different regions, importance of their problems, and their development perspectives vary with the order of magnitude of different growth areas and with different rural areas. Different rural and urban areas have their specific and distinct role in the development of the whole country.

Support of the general economic development of Estonia, stopping the concentration trends observed in regional development and adjustment to them requires planning of specific measures of regional policy for the development of both growth areas and the regions outside them:

- it is necessary to launch integrated development activities in all growth areas to cover both spatial planning and the planning of infrastructure, solution and prevention of environmental and social problems, promotion of housing development and of competitive economy. The development activities which should be strengthened are above all making use of the innovative potential of growth areas by stimulating the cooperation between different institutions, and generation of the specific preconditions, skills and knowledge of the region;

- in the capital region Tallinn and in Tartu as a growth area it is primarily necessary to improve international competitiveness (promotion of international cooperation, research and development activities, innovativeness, etc.) and ensure its sustainability and to prevent the aggravation of problems accompanied with the concentration of the population and economic activities (e.g. shortage of technical and social infrastructure, environmental problems);

- in the growth areas of other county centres it is primarily necessary to improve the quality of the living environment (provide broader opportunities for education, medical services and self-fulfilment), create a favourable business environment for the emergence of new enterprises and jobs (development of the respective infrastructure and stimulation of business networks) and linking the places of work and living more efficiently for the inhabitants of the hinterland (flexible combination of the work and family life and increasing the spatial mobility of labour);

- in regions located outside growth areas, particularly in geographically isolated areas (e.g. islands) it is urgently necessary to provide opportunities for the creation of additional jobs in order to prevent the above-mentioned demographic processes and social marginalisation (incl. increasing the enterprising spirit of people, tourism promotion, supporting the development of existing businesses, promotion of niche businesses, development of opportunities for distant work, creation of jobs which require more basic skills), for the improvement of social involvement (stimulation of civil initiative, strengthening of the community, improvement of the sense of social security and more active involvement of the community and nongovernmental organisations in the development activities of the region) and improvement of the availability and quality of public services provided for the satisfaction of the basic needs of the population (incl. development of communications);

- for the achievement of the long-term competitiveness of all regions it is necessary to create favourable conditions by the central government for an enhanced use of the specific preconditions and opportunities for the development of each region (incl. for the marketing and image-building of the region), for the mutual and international communication of regions, development of human resources, improvement of institutional capacity and raising the efficiency of local development activities.

However, the economic crisis will have its impact on regional development. The goals and objectives set will probably be reached somewhat later than planned in the strategy. On the other hand, the economic crisis gives an additional impulse for economic development, which may also push things on for the achievement of a better regional balance.

Шаталова Е.В.