ISSUE No. 4/1999

Strategy For Economic Stabilization And Development Of Smolyan Region

by Ginka Kapitanova, FLGR Executive Director

On 15 March 1999, the Foundation for Local Government Reform and Vesselin Cherkezov, Regional Governor of Smolyan Region, organized a public debate on the objectives, tasks and mechanisms for the development of a "Strategy for economic stabilization and development of Smolyan Region". The Members of Parliament from Smolyan Region, mayors of Municipalities, representatives of decentralized structures of the central government, non-governmental organizations, local businesses, labour unions, the media, and citizens participated in the debate.

The development of the Strategy is part of the "Partners for Local Development" Project, which is implemented by the Foundation for Local Government Reform, the "S.E.G.A" Foundation and the Dutch organization "NOVIB", and is financed by the EU Phare Democracy Program. The Association of the Rhodope Municipalities (ARM) also made a financial contribution to the project.

A team of experts led by Yordan Hristoskov will prepare the Strategy. The team will work in close collaboration with the municipal management, ARM, NGOs working at municipal and regional level, representatives of the business circles, and all institutions, which are involved in the process of regional development. The possibilities for integration with neighboring municipalities, ARM members, will be considered as well.

The public debate was extremely productive. Everybody present approved the idea of developing such a strategy, and the approaches and mechanisms for its implementation; the proficiency of the team of experts was highly appreciated. Мunicipalities, NGOs and regional institutions pledged their support for the project, and readiness to provide the necessary information. The next public debate will be held in the middle of May.

On March 11th, 1999 the National Assembly passed the Regional Development Act. Thus the development of the Strategy gains an even greater importance. The possibilities to finance its implementation increase.

The main methodological instrument for the development of projects focused on mobilizing local resources, attracting investments, and integrating a number of projects into programs at municipal and inter-municipal level, is strategic planning.

Local self-government bodies are the principal actors in the implementation of the strategy for economic stabilization and development. They shall:

analyze the state of the local economy;

administer economic projects;

provide or organize the provision of services to the population and to the industries;

ensure the financial and infrastructure prerequisites for development;

maintain an appropriate environment and create incentives for business development.

The Regional Governor and the Regional Development Council are expected to play a significant role in the process.

The private (entrepreneurial) sector is a powerful generator of jobs and income, and comprises market-oriented structures and their organizations, namely:

commercial companies, entrepreneurs, foresters and farmers, etc.;

banks;

chambers of commerce and other business organizations (including organizations supporting the business).

The public sector acts both as an incentive and a corrective to the interests of the State and the local administration, and includes:

citizens of the region;

vocational organizations;

educational, cultural and religious organizations;

non-governmental organizations.

The strategy for economic stabilization and development is based on the idea of sustainable development as a global philosophy of the thinking and behavior of the individual and of communities, irrespective of whether they are formal or informal.

The instruments for economic stabilization and development will be identified within the following areas:

Sector-oriented: industry, tourism, forestry and agriculture, services, etc., the main emphasis being on:

job creation by means of strengthening the existing business sector and development of new productions;

diversification of the local economic basis;

strengthening the potential of family farms and promoting its market orientation by improvement of animal breeds, introduction of modern methods of land cultivation and management, and use of appropriate equipment;

creating prerequisites for reducing the number of bankruptcies of small and medium-sized enterprises and maintaining the current employment level.

Business promotion: non-monetary (technical assistance - business consultations and training, inclusion in various business networks, information provision, business incubators and technology parks, etc.), and monetary (guarantee funds, micro-credit schemes, etc.).

Improving the infrastructure (transport, water supply, gas, electricity, communications, municipal services) as an instrument to business promotion and improvement of the living environment;

Employment policy and human resources: pro-active labour market policy, including the implementation of programs for stabilization of existing sources of income and creation of new ones in respect of target groups, such as unemployed, young people, handicapped persons, etc.;

National framework: the projects should be in harmony with the national objectives and priorities; possibilities should be sought for financing the projects within the framework of national programs and funds;

Trans-border co-operation and project orientation within the international setting: all possibilities for implementation of the full project potential within the framework of transborder cooperation should be examined.

The projects to be submitted will be assessed by the following criteria:

the project should meet the priorities of the region (for regional and inter-municipal projects) or of the municipality (for local projects) against the background of the objectives and tasks;

the project's impact on employment and on income generation; its potential to attract investments, to improve the business climate, to advance inter-municipal or inter-regional co-operation;

the project's visible impact on the stabilization and development of municipal (regional) economy from the perspective of the time period and the funds to be spent;

the project's social or political feasibility and its potential to boost local economy;

the project's technical / technological feasibility.

The mission of the project is to guarantee a higher level of employment, higher income and better services through economic stabilization and development.