ECONOMICS FOCUS 18 THE REGIONAL DEVELOPMENT OF DISTRICTS

THE REGIONAL DEVELOPMENT OF DISTRICTS

doc. Ing. Edita Farkašová, PhD.

We want to point to the problems of the develop- neering, clothing, wood working and food processing ment of regions, their solution, deficiencies in this industries represent the basis of productive industry area and reserves still not used in their development, in the districts. Industrial production is centralized in using the example of two regions with comparable the district towns. Such a spatial situation was crea- conditions. ted during the period of directed urbanization and In harmony with the project VEGA 1/9182/02 „Eco- planned industrialization of the territory of . nomic, Ecological and Social Problems of the East Small and medium-sized wood processing busi- Slovak Region“ being carried out by a group of rese- nesses situated in villages began to develop more archers at the Economics Faculty of the Technical significantly in the districts in recent years. A defici- University in Košice, we selected the neighbouring ency is that the partly processed wooden materials districts of Bardejov and Svidník. are not completed, but taken for further processing outside the analysed districts or abroad. The econo- Socio-Economic Analysis of the Selected mic environment for businesses of various sizes in Districts the industrial area has worsened since 1990. The problems concern mainly the financial liquidity of The districts of Bardejov and Svidník are situated companies and the accessibility of finance from in north-eastern Slovakia, in the northern part of the internal and external sources. Secondary payment Prešov region. The district of Bardejov with an area inability has been a great problem in recent times for of 937 square kilometers and 75,793 inhabitants, the majority of industrial companies in the district. belongs to the second group of Slovak districts in This development of businesses was connected with terms of size. The district of Svidník is one of the the decline of industrial production during the period smaller , with an area of 550 1990 to 2000 in the decisive companies of the square kilometers and 33,443 inhabitants. district, and the associated increased unemploy- The economic potential of the districts is characte- ment. In 2000, the average number of employees rized by two branches – industry and agriculture, recorded in industry was 1,200 in the district of Svid- with tourism as well in the district of Bardejov. The ník and 3,366 in the district of Bardejov. These figu- process of transformation of the economy in market res are more than 40% below the levels of employ- conditions and the restructuring of industry and agri- ment in industry reached before 1990. culture brought various negative effects, which were Mainly firms, which carry out their activity especi- manifested in the two districts. Their peripheral posi- ally in the Czech Republic, are active in construction tion and inaccessibility in the framework of Slovakia in these districts. The districts contain a relatively contributes to the unfavourable economic situation in large number of buildings started, especially by local the districts. This geographical position brings one councils, but without sufficient financial resources for advantage: that of easier penetration into the mar- their completion. It is necessary to emphasize that kets of , and Bielorus. the construction firms in the districts mostly employ The two districts together produce about 1.5% of unqualified applicants for work. Therefore, it is the total gross domestic product of Slovakia. At the necessary to create suitable financial instruments for beginning of 2001, 1,941 organizational entities these firms; that is special grants for construction of were registered in the district of Svidník, including housing or for the reconstruction and modernization 1,386 natural persons and 555 legal persons. On the of buildings, and in this way support increased same date, the district of Bardejov had 3,766 organi- employment in the districts. zational entities, divided into 2,909 natural persons According to the analyses of the Ministry of Agri- and 857 legal persons. According to ownership of from 1998, the districts of Barde- businesses, private companies have the greatest jov and Svidník are placed among the rural areas. share in both districts. According to legal forms of Agriculture has a long tradition in this region, in spite organization, limited liability companies appear most of the fact that the districts are situated in the flysch frequently. zone, where reduced soil fertility and permanent Companies with an orientation to the leather, engi- pasture are typical. The natural and climatic conditi-

BIATEC, Volume XI, 3/2003 ECONOMICS FOCUS THE REGIONAL DEVELOPMENT OF DISTRICTS 19 ons are unfavourable for the development of highly because of insufficient work, decline of industrial intensive agricultural production. An orientation to production and sales in the most important works of primary agricultural production continues. Plant pro- the districts, a significant decline of agricultural pro- duction is oriented mainly towards the cultivation of duction in cooperatives and state properties, caused fodder, grain and technical crops, cultivation of root- by their break up and transformation into small sha- crops has significantly declined. Animal production reholding forms. concerns mainly cattle and sheep. In 2000, the average monthly salary in the district The new economic conditions also influenced agri- of Svidník was SKK 8,216, in the district of Bardejov culture in the districts. In spite of decline, it is still one SKK 7,539, in the Prešov region SKK 10,351 and in of the main productive activities. Especially measu- the whole of Slovakia SKK 11,430. res in the grant policy of the state, rising costs, the credit burden from the past, failure to observe pay- Possibilities for development of the districts ment discipline, disturbance of supplier-consumer relations and the low ability of agricultural cooperati- Strong points: ves to adapt to the demands of the market have • High quality socio-demographic potential – the high influenced the state of agriculture. One of the pro- percentage share of inhabitants of productive age blems in the development of the region is the great together with improved education enable the stabi- number of agricultural businesses, which are small lization of employment, and do not have enough of their own financial • A qualified work force – in the areas of industry resources, which are and will be a condition for dra- (leather and engineering), agriculture and con- wing money from the SAPARD programme. In con- struction enables the rapid and effective introducti- nection with the development of agriculture, it is on of new technologies and the resulting increase necessary to devote attention to processing capaci- of productive and competitive abilities, ties, which are inadequate and need to be increased. • The existing productive base creates conditions for The agricultural and forestry potential in the analy- the rapid modernization or restructuring of produc- sed districts is not only used for agricultural and fore- tion, stry production, but also for tourist purposes. The low • The ability of economic entities to enter supra-regi- level of damage to the environment and small farms onal forms of cooperation – the practical experien- create ideal conditions for the development of rural ce of some entities in the districts enables entry to tourism. The protected territories are suitable for various cooperative relationships, nature trails. Spa and health recreation is no less • The advantageous geographical position of the interesting, especially in the district of Bardejov. The districts for penetration into the markets of Poland, geographical position of the districts enables the Ukraine and Belarus – the existence of road fronti- development of near-frontier and international tou- er crossings creates possibilities for cross-frontier rism. A socio-economic analysis of a region also cooperation and conditions for a transit region, requires an analysis of human resources, which gat- • High quality environment – a low level of damage to hers together a series of problems. Especially the the environment, medicinal mineral waters create labour market will interest us. conditions for the development of tourism, especi- From the point of view of long-term unemployment, ally spa-recreational tourism, the districts have a leading place in Slovakia. At the • A high quality cultural heritage – important historic beginning of 2000, the level of unemployment in Slo- monuments, traditions and folklore create good vakia reached 19.2%. The Prešov region had an conditions for sight-seeing tourism, unemployment rate of 26%, the highest level among • A high quality socio-cultural environment – traditio- the eight . The district of Svidník nal culture activities, character of inter-personal had unemployment of 31.2%, while relations and low level of threat of social pathology had 29.38%. The level of unemployment at the create conditions for the development of tourism, beginning of 2001, was 17.9% in Slovakia, 22.1% in as well as for the establishment of branches of vari- the Prešov region, 24.6% in the district of Svidník ous institutions. and 24.68% in the district of Bardejov. Unemploy- Weak points: ment in the districts was caused mainly by privatiza- • Mono-structural orientation of the productive base tion of the state owned shops, services, catering and – during the restructuring of production, employ- tourist enterprises, the unfavourable financial situati- ment declined rapidly and the flexible creation of on and deepening economic problems in the private new job opportunities in other areas of production sector, the break up of construction companies was not enabled,

BIATEC, Volume XI, 3/2003 ECONOMICS FOCUS 20 THE REGIONAL DEVELOPMENT OF DISTRICTS

• Industrial production is centralized in the central stagnation of the territory and increased threat of towns of the districts – the villages have very little social pathology. business activity and this leads to social stagna- tion, Conclusion • Insufficient infrastructure in the districts – lack of conditions for their development, the territory is not The strategy should lead to a region with evenly interesting for investors, which leads to its stagna- developed industrial production and services, supp- tion, lemented by advantageous agricultural production • A high level of unemployment – associated with and rural development, high quality tourism and social stagnation and decline of the population by a standard level of technical and social infrastruc- migration, ture. • Low absorption ability of small and medium-sized One of the obstacles to achievement of these aims businesses in the area of employment – the area is a lack of financial resources. The districts need to does not provide conditions for the creation of a lar- create a system of coordination and information level ger number of new jobs, raising or stabilizing the about the use of financial resources from state and level of employment, foreign funds, especially those of the EU, contribu- • A high percentage of migration to jobs outside the ting to the implementation of programmes for tech- districts – leading to social stagnation of the terri- nological and innovation development, the support of tory, small and medium-sized businesses and the deve- • Decline of the population in the villages of the lopment of agriculture. Clearly, if the aim is to gain district – leading to social decline of the territory, financial support, all these efforts must end with the • Social problems in the villages with a high propor- preparation of high quality business projects, and the tion of Romany population are leading to social analysed districts should use all the reserves here.

BIATEC, Volume XI, 3/2003