republic of slovenia the government of the republic of slovenia andrej horvat, brussels, 6th...

Republic of SloveniaThe Government of the Republic of Slovenia

Andrej Horvat, Brussels, 6th October, 2010

What to do in Crisis?A Place Based Intervention on

Regional Level

Dr. Andrej Horvat

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Contents

Slovenia in EU contextSituation in Pomurje Region……and Place-Based Intervention

What have we learned?


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SLOVENIA IN EU CONTEXTSLOVENIA IN EU CONTEXT


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Republic of SloveniaConstitutional Charter on the Independence and Soverignty of the Republic of Slovenia was proclaimed on 25. June 1991

The Constitution of the Republic of Slovenia was proclaimed on 23. December 1991

Member of EU 1 May 2004

Introduction of the EUR 1 January 2007

GDP per capita (2007) 17.076

Area (km2) 20.273

Population of RS (2008) 2.040.934

Capital Ljubljana

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2007-2013: SLOVENIA IS ONE CONVERGENCE REGION NUTS-2

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WESTERNSLOVENIA

EASTERNSLOVENIA

210 MUNICIPALITIES - NUTS 5

12 DEVELOPMENT REGIONS - NUTS 3

2 COHESION REGIONS - NUTS 2

Regional divisions of Slovenia

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Regional Development AgenciesRegional Development Agencies


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SITUATION IN POMURJE REGIONSITUATION IN POMURJE REGION

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What happened in Pomurje region in 2009?

Unemployed by education level

Source: Marko Močnik, Pomurje Technology Park

New bankrupt companies:

Mura, Pomurka, etc

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What happened in Pomurje region in 2009?

Additional 3457 unemployed

Source: Marko Močnik, Pomurje Technology Park

Structure of unemployed

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Pomurje region – NUTS 3+

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THE PLACE BASED INTERVENTIONTHE PLACE BASED INTERVENTION


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Paradigm SHIFT? Van Run, Pieter (1987); The integral structural plan for the North

of the Netherlands (ISP); Memo Johnson, Thomas G. (2007); Place-Based Economic Policy:

Innovation or Fad?; Agricultural and Resources Economics Review.

Barca, Fabrizio (2009); An Agenda for a Reformed Cohesion Policy, A place-based approach to meeting European Union challenges and expectations; Commissioner for Regional Policy, April 2009.

Romer, Paul (2010); Technologies, Rules, and Progress: The Case for Charter Cities.

Pezzini, Mario (2010); OECD

Own Experience, (1997-2009)…


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THE ACT REGULATING DEVELOPMENT SUPPORT TO THE POMURJE REGION IN THE PERIOD 2010–2015

... immediate and coordinated action of all Government policies, not only of the regional policy...


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Law adopted in the Slovene Parliament in October 2009; in action with 1st January 2010

Start of the “new regional policy in Slovenia”, based on “Place Based Policy”

Analysis of programmes and projects showed following comparative advantages of the Pomurje Region, that may be supported by public means:

- geothermal energy and other renewable energy sources, - sustainable and competitive agriculture, food-processing industry and rural development,- tourism,- logistics.


Law on Pomurje region

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Measures in the Act

1. Programme to foster competitiveness of the Pomurje region in the period 2010–2015

2. employment incentives

3. tax relief applicable to investments

4. Priority treatment of programmes and projects in the Pomurje region competing for funds from national programmes, European cohesion policy and rural development policy.


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Programme to foster competitiveness of the Region (33 M€)

A combination of different instruments is/will be used to mitigate the consequences of the financial and economic crisis and, in a period of six years, directly create 1,000 new jobs.

The programme consists of the following instruments:I. encouraging corporate investments and the creation of new jobs II. encouraging human resources development III. promoting social entrepreneurship IV. promoting the region to attract new domestic and foreign investors V. support in the preparation and implementation of new development projects in the region


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Employment incentives and Tax relief for investments in the Pomurje Region

1. An employer that employs a deprived worker in the Pomurje region for a period of twelve months may claim a reduction of the tax base of 70% of the costs incurred for that worker.

An employer that employs a deprived worker for at least two years shall be reimbursed for social security contributions paid for that period.

2. An employer may, for investments made in the period 2010–2015, claim a reduction of the tax base of 70% of the amount invested in equipment and intangible assets.


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Priority Treatment of programmes and projects related to EU Cohesion Policy

INVESTMENTS IN:

1. establishing an inter-company education centre (IEC) in the approximate amount of EUR 2 million

2. establishing a regional economic centre in the Pomurje region in the approximate amount of EUR 30 million

3. restructuring and increasing the competitiveness of agriculture and forestry, and the food processing industry, and diversification into non-agricultural activities in the Pomurje region in the approximate amount of EUR 40 million

4. drinking water supply infrastructure in the Pomurje region in the approximate amount of EUR 98 million .


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Implementation frameworkImplementation framework

Place Based Intervention of the Government represents following institutions:

1. Inter-ministerial Commission

2. Government Bureau in the Pomurje Region

3. Project Unit of the Government Office for Local Self-Government and Regional Policy

4. Regional Development Agency.

THE BUREAU IN THE REGION; It involves temporary operation of the Government in the Pomurje region The Office is headed by a State Secretary from the Prime Minister’s Cabinet, and the

necessary political mandate is assured for the purpose of concerted action of the state and region in dealing with a number of pending development issues.


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Sector and programme coordination Cases


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WHAT HAVE WE LEARNED?WHAT HAVE WE LEARNED?


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Paradigm shift in regional policies

Source: Mario Pezzini, OECD


Traditional

regional policies New

paradigm

Objectives

Balancing economic performances by temporarily compensating

for disparities

Tapping under-utilised potential to enhance

regional competitiveness

Strategies Sectoral approaches Integrated development

projects

Tools Subsidies and state aids Soft and hard infrastructures

Actors Central government Different levels

of government & …..

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Registered unemployment rate by administrative unit (NUTS 4); Dec 2009


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Average accesibility to Highway in minutes (NUTS 5)


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Economic and social consequences of the economic crisis are especially strong represented in the less developed areas.

A temporary place based intervention of the Government can show immediate results for the businesses.

However, one should be very carefoul when intruducing such an area-based “lex specialis”, mainly due to the budget reasons.

In Slovenia a new Act on Balanced Regional Development will be presented to the Parliament. It contains also a posibility for a “Placed Based Intervention”, based on two criteria:

(1.) border areas with economic problems (2.) areas with high level of unemployment.

What have we learned?


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Potential areas of “place based intervention” in Slovenia

44,7% of territory,20,6% of population,10,4% of employed,

8,6% of value added,6% net profit.


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Dr. Andrej HorvatDr. Andrej HorvatState SecretaryState Secretary

Republic of SloveniaRepublic of Slovenia

Office of the Prime MinisterOffice of the Prime Minister

[email protected]@gov.si


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