Development Region Centre: creation process and prospects. Economic analysis by Info-Prim Neo

According to the law on regional development, the Development Region Centre (DRC) consists of 13 districts: Anenii-Noi, Calarasi, Criuleni, Dubasari, Hancesti, Ialoveni, Nisporeni, Orhei, Rezina, Straseni, Soldanesti, Telenesti, and Ungheni. The DRC is located in the central part of the country and borders Romania in the west, the Development Region Transnistria in the east, the Development Region South in the south and the Development Region North in the north. The DRC is the largest and most populated region of the country. It occupies 34.9% of the territory and is home to 30% of the Moldovan population. The share of the DRC’s industrial output is 15.3%, smaller that the share of the industrial production of the Development Region North, but larger than that of the Development Region South. The Strategic Planning Group of the DRC was set up in mid-February with the support of the Ministry of Local Public Administration and the EU Project “Support to the Regional Development Implementing Bodies”. The Group is designed to ensure the participative framework for formulating the Regional Development Strategy (2007 -2013), which will be later taken over by the Centre Regional Development Agency and approved by the Regional Development Council. The main actors in the region participate in the Group’s activities: representatives of the local public administration, of the private sector and civil society. [Distinct features of the DRC] [The DRC has a strategic geographic position for further development, because it is near the municipality of Chisinau], where it can benefit from different services that are not developed in the settlements of the region. At the same time, it can become a source for supplying the urban population of the capital with agricultural products. Also, Chisinau is a favourable environment providing the population of the region’s districts with employment and access to education. [The DRC is a crossing between other regions,] owing to its favourable geographic position, fact that can stimulate the development of sectors such as hotel services, trade, trans-shipment points, transport and communications etc. [The specific features of the DRC as regards the human resources reside in the high rate of people able to work (76.7%).] The DRC has sufficient labour force and a high percentage of able to work population. Most of the people work in agriculture and this affects the population’s standard of living because this sector brings the smallest income to the population at present. Labour force is needed to develop the services in different sectors (trade, industry, tourism etc.), but the people expect favourable conditions. The DRC has human resources, but these need professional training or re-qualification. The region offers possibilities of professional formation as there are 14 vocational schools and six colleges preparing teachers, doctors, specialists in agro-industry and constructions, specialists needed on the present labour market. The region’s population can take different professional training and re-qualification courses in the specialised institutions of the municipality of Chisinau. Yet, the municipality of Chisinau can attract skilled human resources as it offers better working and living conditions, better salaries than the rest of the region. To avoid this danger, the DRC can use the resources is has and the opportunities of creating working and living conditions for its residents comparable with those in Chisinau municipality. This can constitute an important stimulus for making the migrant citizens return to the motherland. [The phenomenon of migration] has negative consequences on the development of the DRC, because the young population and the skilled workers are the first to migrate. The consequences of migration are evident particularly in the countryside, where the health and education institutions confront a shortage of personnel. As in the rest of the country, the natural growth rate of the population in the DRC is negative and this will determine the ageing of the population. Compared with the other regions, the DRC has the lowest urbanisation rate – 17%. The favourable weather conditions, the aquatic resources that can be used for irrigation, the big areas of farmland and the fertility of the soil are the strong points that favour [the development of agriculture in the DRC.] The agricultural production per inhabitant is 148% compared with the average per country. Since the rural population of the region accounts for 83%, the modernisation and development of services in agriculture can ensure a high agricultural productivity and the agricultural products can be sold on the markets in Chisinau municipality or can be used as raw material by the processing plants of the region. The business environment in the rural zones can be developed by creating industrial services. [The DRC is characterized by a poorly developed industry.] The industrial production rate per capita is 33% compared with the average per country and the investments in fixed capital make up 72%. The industrial enterprises are not developed because there is no functional industrial infrastructure, a strategy for promoting the local products on third markets; the products’ quality is not uniform and not permanently improved. The natural resources in the DRC (clay, sand, limestone) and the existent industrial infrastructure favour the development of the construction materials industry. This sector of the industry is developed in the region, but its production capacities do not satisfy the market demands, so the extension of the industrial services and their diversification can be a strategic development direction for the DRC. [The DRC has the largest tourism potential in the country.] But not all the potential is realised at present. The richest forest fund, the different protected areas and scientific reservations of the region can be used as resources to develop tourism and leisure. The historical-cultural monuments of national importance (Orheiul Vechi, Saharna, Tapova, Japca, Donici etc.) can be used to initiate and develop the tourism services because the DRC has an underdeveloped respective infrastructure. The national monasteries, the handicraft, winemaking and winegrowing traditions represent a pole for attracting both national and foreign tourists. [The share of the homes equipped with aqueduct] in the DRC is 34% compared with the national average of 37.5%, and with natural gas networks 44.7% as against the national average of 34.9%. The sewerage network in the DRC is poorly developed, though it has a larger share than the national average (22.6%). The DRC has a developed network of roads, but their quality is unsatisfactory; 85% of the road infrastructure is in need of repair. In such a way, the inadequately developed infrastructure is an impediment to the development of the industry and small business. [The education institutions in the DRC meet the necessities of the residents, except the preschool institution]. The education establishments face difficulties in being supplied with the necessary teaching aids and equipment. The settlements of the DRC are confronted with a shortage of teachers, especially in rural areas. The vocational education institutions cannot meet the real market demands, as there is no coordination between the nomenclature of specialists and the market demands. The managers and teachers in residential institutions are conservative and sceptical as regards the implementation of alternative services to institutionalisation. [Weak points and advantages] Parascovia Munteanu, consultant of the EU Project “Support to the Regional Development Implementing Bodies”, considers that the examination of the socio-economic development of the DRC, the comparative advantages, strong points and opportunities determine an optimistic strategic orientation of the region. But this analysis should also take account of the weak points, which hinder the development of the DRC. [The problems that can defer regional development] are related to the deficiency of workplaces, the high percentage of population working in agriculture (61%), the unfavourable business environment, the insufficiency of qualified human resources, the deplorable condition of the roads, the poor quality of the technical infrastructure, the poor diversification of the markets, the high level of corruption. These weak points can affect the development of the region and the efforts made by the residents to remove them must be in accordance with the regional development programmes and policies. The regional development also envisages access to the European funds that aim to encourage and diversify the economic activities, to stimulate investments in the private sector, to contribute to lower unemployment rate and to improve the living standards of the population. The mentioned problems will not be solved if the foreign funds are not fully put to good use and the capacities of administering them are not improved. To avoid this risk, representative of the regional organisations that are to be set up have to strengthen the cooperation relations with different support programmes and funds and efficiently use the funds to which they have access. On the basis of the analyses and studies carried out in the DRC, Iurie Costin, also consultant of the EU Project “Support to the Regional Development Implementing Bodies”, formulates [the following comparative advantages] of the region: - Intermediation of the economic transport and commercial flows between the Moldovan and foreign regions; - Rural development that envisages modernidation of agriculture, expansion of rural business, diversification of services in agriculture; - Development of the industry and SMEs, meaning creation of conditions for opening SMEs, industrial development on the basis of the raw material found in the DRC, modernization of the industrial technologies, efficient utilization of the existent infrastructure; - Creation and diversification of tourism and rest services. The tourism potential of the DRC can be used as important source in developing rural, cultural, recreational, fishing tourism; - Utilization of the human resources. The DRC has the highest percentage of population able to work. The labour force is needed to create new services, modernize agriculture and industry require. In such a way, the preparation and re-qualification of the human resource is an objective for the DRC. The regional development policy can be assessed from the angle of how the local and central public authorities use the existent resources, the instruments of the economic and financial policy with a view to stimulating investment, creating new workplaces ad improving the living conditions in the region. [Vision and strategic objectives of the DRC] Basing on these comparative advantages of the region, the Strategic Planning Group of the DRC had worked out [the vision and strategic objectives of the DRC – components of the Regional Development Strategy]. The vision represents the image of the region for the next 25 years, a long-term prospect that will cover the members of the community, the priority development policies and programs. According to the formulated vision, “the Development Region Center will become a prosperous region with a developed, dynamic and diversified economy, with well-paid jobs and an active involvement of the citizens in ensuring the well-being of the communities. The region will use the benefits it gains from being near the municipality of Chisinau, as multifunctional centre of the country, and the favourable geo-strategic position to develop an evident “logistic” function and of facilitating the interregional and international ties. The region will offer a decent living and working environment to the residents and hospitality to the visitors, while the human and cultural values and the care for the environment will constitute the foundation of the social cohesion of the community.” On the bases of this development vision, the Strategic Planning Group set the strategic objectives: - to economically develop and diversify the DRC in line with the dynamism of Chisinau and the market requirements; - to develop the human resources in order to increase the employment rate; - to develop the infrastructure and transport services in order to enable access to the European corridors; - to improve the living conditions by protecting the environment and promoting the quality of the public utilities and services; - to strengthen regional, interregional and international cooperation and partnership. Each strategic objective has specific objectives that can be achieved by a number of measures that take into account the region’s potential. The Regional Development Strategy is still under formulation. Currently, the Strategy’s text is being finalised and there are collected ideas to draw up the Operational Development Plan, which will be based on the strategic objectives and the worked out measures and will constitute the Project Portfolio of the region for the next 3 years.