OSIJEK-BARANJACOUNTY

REGIONALOPERATING PROGRAM2006-2013 The 2006 to 2013 Regional Operational Program of the and Baranja County

REGIONAL OPERATING PROGRAM 2006 - 2013

OSIJEK-BARANJA COUNTY

The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

IMPORTANT NOTICE

All questions in relation to the contents of the ROP please send to the following address:

Agency for development Europske avenije 11 Tel: 031/200 677 The County web site: www.obz.hr

PROTECTION OF RIGHTS

All the contents of this ROP is exclusively made for the use of the Osijek-Baranja County. Inženjerski biro d.d. has elaborated this Regional Operational Program in compliance with the client Osijek-Baranja County's requirements, only for its specific implementation. All other person using information set out in this Program are doing so to their own responsibility and risk.

This Program has been translated from Croatian to English language. In case of misinterpretation the Croatian version is valid.

The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

C O N T E N T S

Preface...... 1 Introduction ...... 3 I. BASIC ANALYSIS ...... 6 Introduction ...... 7 1. THE COUNTY OVERVIEW ...... 9 1.1. Land and Area...... 9 1.2. Settlements, dwelling and urbanization ...... 9 1.3. Main categories of exploitation of the area...... 10 1.4. Relief...... 11 1.5. Climate...... 11 1.6. Geological, hydrogeological, seizmic and tectonic characteristics...... 12 1.7. Hydrological characteristics...... 12 1.8. Pedological characteristics...... 13 1.9. Protected nature and cultural heritage...... 13 1.10. Landscape values ...... 13 2. NATURAL RESOURCES AND POTENTIALS ...... 15 2.1. Agriculture...... 15 2.2. Forestry...... 15 2.3. Water resources...... 15 2.4. Exploitation of mineral raw material...... 16 2.5. Plant and Animal Communities...... 16 2.6. Traffic position and infrastructure ...... 16 2.6.1. Transport ...... 17 2.6.1.1. Road transport ...... 17 2.6.1.2. Railroad transport ...... 18 2.6.1.3. River transport...... 18 2.6.1.4. Air transport ...... 19 2.6.1.5. Postal transport ...... 20 2.6.1.6. Telecommunication network ...... 20 2.6.1.7. Radio network...... 20 2.6.2. Energy system...... 21 2.6.3. Water supply management system...... 22 2.6.3.1. Waste water drainage ...... 23 2.6.3.2. Water Flows and Waters Regulation ...... 24 2.6.4. Waste management...... 25 3. DEVELOPMENT CONSTRAINTS AND PROSPECTS ...... 26 4. DEMOGRAPHIC REFERENCES...... 28 5. ECONOMIC STRUCTURE ...... 31 6. INVESTMENTS...... 31 7. EMPLOYMENT AND UNEMPLOYMENT ...... 35 8. DEVELOPMENT RETROSPECTIVE...... 37 9. THE COUNTY FOREIGN TRADE EXCHANGE ...... 39 10. BUSINESS EFFICIENCY...... 41 11. EDUCATIONAL STRUCTURE...... 44

i The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

12. OUTLINE OF INDUSTRIES AND INDUSTRIAL BRANCHES IN THE COUNTY ECONOMY...... 45 12.1. Agriculture and food industry...... 45 12.1.1. Structure of agricultural land ...... 45 12.1.2. Livestock production ...... 45 12.1.3. Crop production...... 46 12.2. Processing industry...... 49 12.2.1. Food and drinks production...... 49 12.2.2. Milling and baking industry ...... 50 12.2.3. Sugar industry ...... 50 12.2.4. Oil industry...... 50 12.2.5. Fodder industry...... 50 12.2.6. Textile industry...... 50 12.2.7. Wood and wood processing and paper industry ...... 51 12.2.8. Metal processing and engineering industry ...... 52 12.2.9. Chemical industry ...... 54 12.2.10. Building material industry ...... 54 12.3. Construction...... 55 12.4. Utility infrastructure...... 57 12.5. Small and medium entrepreneurship (SME sector) ...... 61 12.6. Transport...... 62 12.6.1. Road Transport ...... 62 12.6.2. Passenger Road Transport...... 62 12.6.3. City and inner-city suburb transport...... 63 12.6.4. Railroad transport...... 63 12.6.5. River transport ...... 64 12.6.6. Air transport...... 64 12.7. Tourism...... 64 12.8. Trade...... 66 12.9. Financial business - banks ...... 67 13. SOCIAL INFRASTRUCTURE AND BUDGET...... 68 14. LOCAL AND REGIONAL (DISTRICT) SELF-GOVERNMENT...... 70 15. AREAS OF SPECIAL STATE CONCERN ...... 71 16. CROSS-BORDER AND INTERREGIONAL COOPERATION...... 72 17. ENTREPRENEURIAL ZONES AND FREE ZONE OSIJEK ...... 74 18. MINED AREAS...... 78

II. STRATEGY ...... 81 19. SWOT ANALYSIS...... 82 20. STRATEGY...... 84 20.1. Vision...... 84 20.2. Long term development objectives...... 85 20.3. Priorities for interventions ...... 86 20.4. Measures...... 98 20.5. European principles ...... 109

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The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

III. IMPLEMENTATION PLAN...... 110 21. INTRODUCTION...... 111 21.1. From Project Ideas to Projects...... 111 21.1.1. Review of Project Ideas...... 111 21.1.2. Project Selection Criteria...... 111 21.1.3. Project Base and Realization Status ...... 113 21.2. ROP Implementation Institutions and Mechanisms...... 114 21.3. Funds and Financing...... 115 21.4. ROP Monitoring and Evaluation...... 116 21.5. Continuous Programming...... 118 21.6. Steps in ROP Implementation...... 119

APPENDICES...... 120 1. ROP team ...... 121 2. Rules of procedure...... 123 3. Regional partnership committee...... 124 4. List of Project Ideas (Public Invitation of 26 May 2006)...... 130 5. Project ideas and project application for ROP project network ...... 145

Tables ...... 147 Graphs ...... 148 Maps...... 148 Sources ...... 149

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The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Preface

A Word of Introduction by the County Governor

Dear Sir(s),/Madam,

Considering the announcements made by the Bruxelles EU officials, this decade may end in completion of pre-accession negotiations of and its successful joining in the European community as the 28th rightful EU member country. We believe that by 2009 the negotiations and adjustments of all 35 chapters of acquis communautaire will have been completed.

During this period of several years, and complied to the principles of the EU and of private and public partnership (PPP) sector, the Croatian authorities of all levers, regional in particular, shall be restructured to be able to perform a successful cooperation with EU institutions through its internal administrative and absorptive capacities. These adjustments and sustainable strategic development will be significantly supported by participation of county and local structures in tenders announced for the EU pre-accession funds (PHARE, ISPA, SAPARD, etc.) and shall be the base for future participation in allocation of cohesion and structural funds because regional policies have been among the most important means of the EU in encouraging economic and social cohesion covered by more than 30% of the EU annual budget.

Therefore this Regional operational program (ROP), based on positive experience of other Croatian areas and European experts, represents an important partnership and strategic development document of the Osijek and Baranja County clearly defining real priorities of development goals as well as the anticipated annual allocation of funds to achieve these goals and monitor their realization. The ROP also defines that it is the County's intention to realize these goals through financial support of the state funds. However, significant importance is also given to the possibility of receiving support from the EU funds and other international institutions. For this purpose the ROP specifies activities and project proposals to be conducted in order to achieve these goals. All this has been done to train local communities how to successfully implement a project and in the future become true "representatives of development" in their respective areas.

For consultation and supervision purposes as well as for successful implementation of this document and strengthening of cooperation directed to defining and realization of common vision of the future precious to all our citizens, the Osijek and Baranja County has set up a Regional Partnership Committee, whose members are the representatives of private and public sector, and the Program Implementation Unit to ensure technical support. The Partnership Committee encompasses all relevant factors of the common strategic County development, i.e. the units of local self-government, the University of Josip Juraj

1 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Strossmayer in Osijek, the representatives of non-government associations, minority groups and civil initiatives, unions, entrepreneurs and craftsmen, employers and cooperators, to ensure a high-quality debate inside Thematic work groups and project ad hoc committees while considering relevant issues like environment protection, zoning, encouraging employments, rural tourism and respect of social and economic movements.

In the end, on behalf of the Osijek and Baranja County Government and myself I would like to thank everyone who participated in the creation of the ROP. I do hope that our common work has resulted in selecting an integral approach to sustainable development, in noticing and accepting various partner perspectives and in using their entire potentials. In that way we have enabled everyone in our County to participate in reaching the consensus about development priorities of their respective areas, of units of local self-government, of the Osijek and Baranja County and thus of the Republic of Croatia as well.

Krešimir Bubalo The County Governor

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The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Introduction

Regional Development

The importance of institutional capacity for promotion and management of economic and social development at the level of local self-government in Croatia has been increasing. Since the Government policies of the Republic of Croatia are defined based on regional development and following the principles of subsidiarity, the functions of a central state have been gradually decentralized, and the rate of de centralization is to be faster in the future. It should also be pointed out that, based on numerous analyses done both in Europe and in Croatia, economic growth has been slowed down partially due to insufficiencies in regional development. And finally, irregular regional growth has been defined to increase social and area tensions in a society and a country.

EU Structural Funds

The ability to efficiently promote and manage development on the level of local government has been of crucial importance, because Croatia is in the stage of preparation for integration in the EU. When it has become the member country of the EU, all structural funds used in financial support of strategic projects will be available to Croatia in various regions of the country. The EU structural funds are regional-content-oriented and it is therefore very important that the regional government uses these funds efficiently. Apart form that it is important to emphasize that Croatia has access to pre-accession funds through central administration.

Importance of the ROP-a

The tradition of economic and social development planning has been rather long and rich in the Osijek and Baranja County. Therefore the ROP is not a novelty, but with its tangible reasons it gives insight into modern planning followed by the European Union and enriches the general idea and practice of planning and programming.

ROP Goals

Apart from numerous low-value goals there are two fundamental ROP goals:  To construct institutional and technical facilities and capacities within the County to ensure planning and programming in compliance with the EU, and thus use pre- accession and structural funds of the EU effectively and efficiently.  To prepare development strategy and its implementation in order to ensure significant increase of social welfare and level of economic efficiency of entities operating in the area.

It is also worth emphasizing that these two goals have been linked by vertical and horizontal issues and strategic functions.

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Implementation of the ROP

The ROP is realized through projects representing strategic options. Their mutual connection is development and they comprise a wide range of economic activities, from physical infrastructure to supporting companies and activities open to development and growth of the target company. Therefore, the numerous projects deal with economic and general issues like promotion of information technology, goodwill, environment protection and equality of sexes and civil rights. For that reason it is believed that many projects will receive support but shall also increase the competitive advantage of the County related to the EU accession funds once Croatia has become a member of the EU.

Preparation of the ROP

Preparation of the ROP has comprised several activities, including the meetings with individuals and groups of local parties of interest and establishment of Regional Partnership Committee. The Committee and the work group for production of the County ROP has been in charge of ROP production management and composition of the relating document. Problems of resources and development limits which the County has been faced with were investigated and analyzed at several conferences devoted to “Fundamental Analysis”. The conference on strategies and priorities has defined major development priorities and measures linked to the defined development strategy. The conference on projects and odds of projects implementation analyzed the project types and methods which the development strategy, priorities and projects within them can be implemented and financed with. It is rather understanding that the practice of ROP composition has initiated provision of numerous opinions of experts and analytic moves in economy and society, and thus upgraded theory and practice of economic and social programming in the County.

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OSIJEK-BARANJA COUNTY

5 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

I BASIC ANALYSIS

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Introduction

Basic Analysis has been drafted in order to enable the evaluation of current economic and social situation of the Osijek - Baranja County. The document provides an analysis of main economic and social sectors determining the future growth and development of the County, trends and processes which represent the link between the past, present and the future, as well as its advantages and constraints.

Basic Analysis, according to its definition, identifies the main barriers and constraints for the development in the area of material and institutional system, advantages that may be realized by adequate elimination of all obstacles and provides explanations regarding inter - dependency and connections between these factors as well as measurable positive prospects for achieving growth and development. In compliance with the contemporary (holistic) definition, the development is economic progress in the context of social symmetry, from which it ensues that the growth deprived of social content does not represent the real progress but only its illusion. Moreover, as it has already been confirmed by the experience of numerous countries, such growth eventually results in the exhaustion of natural, human and men-created resources and consequently to unsustainable relations both in the nature and the society. Today, the United Nations regularly issue the indexes of social progress which show the conditionality and mutual dependence of numerous factors, starting from those showing economic progress to indexes which include demographic, health, social, educational and ecological standards. In general, the issue we are going to deal with in this document is a sustainable development which, according to basic definition, represents a long-term process.

In the beginning of the development of this analytical approach to the whole subject, the Basic Analysis has established that the obstacles to development in the area of the Osijek - Baranja County are connected to a poor valorization of traffic and geographic position of this area, although it is a natural link not only towards European but also towards Euro-Asian region. In addition to this, the internal connectivity of the entire area of the County is insufficient which results in numerous examples of sub-optimal standards, not only in economic but also in social sphere. The demographic picture of the County indicates the presence of the population regression over relatively long periods. The same situation has been recorded at the state level, however due to the war it is more pronounced in the Osijek - Baranja County area. It is self-understanding that the problem of demographic regression opens the issue of the age structure of population and the activities which become burdened with ever increasing number of inactive aging population, i.e. the decrease of the number of active working population (15-65 years). All these trends reflect in high unemployment rate, with an increase of the number of unemployed with low technological performance (age over 50) but also the youth (first-time employed) who, due to setbacks in modern technology development can not find adequate employment and are forced to leave the County or are employed at working places of lower educational levels.

Basic Analysis has also established deep structural restrictions in the development with long- term consequences, but also those which occurred during the transitional period, that is very recent restrictions. First restrictions are setbacks in the tertiary sector development, registered during the 80ties while the others are linked with the 90ties when the precipitated and systematically wrongly planned de-industrialization and privatization processes have taken place. The consequences of both processes have been severe structural deformations which need to be quickly eliminated by re-industrialization based on new technologies and

7 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County tertiarization directed towards intellectual services development. Also, the findings of Basic Analysis have identified the existence of a significant setback in the development of educational sector and therefore radical changes in this sector are recommended.

Due to the above described structural disproportions and essential shortcoming in the overall development, the exploitation of natural, particularly agricultural and forest resources has been inadequate and scarce - obsolete socialist organizational patterns are abandoned, but the new patterns, adapted to market-oriented business operations and global competition, were not created. It is understandable that the County does not bear sole responsibility for the existing problems with regard deficiencies in its development, this has also to do with the deficiencies at the state level. Also, the solutions are to be found on both sides. Regional Development Strategy of the Republic of Croatia, which is in the process of being drafted, will eliminate numerous shortcomings in the system of management of development policy at the County level.

Basic Analysis has also established significant lack of European standards in plans and programs for development at the County level and, generally, lack of processes of adjustment with these standards. By identifying shortcomings, we are revealing advantages. Thus Basic Analysis identifies development advantages in traffic and geography references whose values will rise significantly with the opening of corridor 5C, which will then, via facti, create new possibilities in the field of geopolitics by bringing together, in a relatively small space, several state associations. Naturally, in this context, the County resources, especially water, land and forests should be valorized in a new way. In addition to this, according to Basic Analysis findings, a greater expansion in the development of tertiary sector, particularly education, will take place, thus creating advantages for knowledge economy and better valorization of a rich tradition and general cultural contents of the County.

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1. THE COUNTY OVERVIEW

1.1. Land and Area

The Osijek - Baranja County is located in the north-east of Croatia in the region of and extends over the area of 4,152 sqare km. The County extends over the area of the River lower flow before its confluence into the . This is predominantly lowlands area, suitable for the development of agriculture. Agriculture is well-developed and its resources extend over 257,646 ha of the total agricultural land area including 113,290 ha of afforested land. The catchment basin of the Danube River had formed Kopa čki rit - the world-famous habitat of various bird types, recognized special zoological reserve and proclaimed Nature Park. The entire County area is intersected with 1,700 km of roads and 269 km of railroads.

The rivers Danube and Drava connect the area with the European Inland Waterway Network. The Drava River is navigable up to the town of and this navigable route has the status of international waterway. The Osijek - Baranja County has two airports, one in the Klisa and business and sport airport located in the vicinity of the town of Čepin. The European traffic route, corridor 5 C connecting the Baltic with the Adriatic Sea traverses the area of the Osijek - Baranja County. Recently, the construction of trans-European highway Budapest - Osijek - Sarajevo - Plo če (5C corridor) has started.

Natural resources (high-quality agricultural land, advantageous traffic and geographical position, demographic potentials, relatively favorable settlements network, level of development of infrastructure systems and autochthon construction inheritage) represent the basis of the County future development.

1.2. Settlements, dwelling and urbanization

According to population census 25% of the total number of the County population is located in towns and municipalities and 75% in municipalities only. In terms of the size, settlements with 200 to 1,000 inhabitants are prevailing, accounting for 52% of the total number of settlements, settlements with 1000 to 2,000 inhabitants account for 15% and those with 100 to 200 inhabitants account for 12% of the total number of settlements. The distribution of settlements according to their size and their main characteristics are the following:  the smallest settlements are located in mountainous area in the south-west of the County,  the majority of settlements with around 300 inhabitants are located in the western part of the County,  settlements with approximately 800 inhabitants are evenly distributed in the County area,  settlements with approximately 1,500 inhabitants are mostly located in the north-eastern, eastern and south-eastern parts of the County,  other settlements with over 2,000 inhabitants are located around the cities, particularly the Osijek city.

The distribution of inhabitants in the area of the County, is characterized by the concentration of inhabitants in settlements located at the main roads. From the Osijek city as the County main center the settlement system is distributed in six main directions, mostly toward the

9 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County cities of Našice, Donji Miholjac, , and (located in the - Srijem County).

Urbanization The complex urbanization process has been marked by the transformation of settlements (from rural to urban settlements), increase of the number of population and its redeployment from natural - rural environment to the city environment. Starting from the evaluation given in the Spatial Planning Strategy of the Republic of Croatia and Spatial Planning Strategy of the Osijek - Baranja County, it can be concluded that the areas with urban characteristics and areas with the established urbanization level are limited to the Osijek city with its adjacent settlements, single settlements in the area of Baranja and the settlements situated on, or close to the Osijek - Donji Miholjac traffic route. Other areas are transitional areas, i.e. those with settlements between urban and rural or the areas with predominantly rural characteristics. Compared to the situation in the Republic of Croatia, urban agglomeration around the Osijek city as macro-regional centre is one of the biggest urban agglomeration in the entire country. Two axles of urbanization can be identified in the County: the Osijek city - Darda - Beli Manastir and the Osijek city - - Beliš će. In the last fifteen years the process of urbanization in the entire area of the Republic of Croatia has been very fast; the growth rate of urban population amounted, on the average, between 12% and 14%, whereas in the area of the Osijek - Baranja County it amounted to only 5.4%. The reason for such discrepancy is the war which particularly affected urban population of the Osijek city and the ensuing emigration processes. It should be noted that in the period from 1880 to 1971 the dynamic of the development of the cities in the Osijek - Baranja County area was second to the dynamics of the development of the cities recorded for the Zagreb region. After the World War II urbanization process gained momentum. In the period from 1953 to 1961 the population polarization process started in the areas with the extremely high rate of population growth recorded within urban centers. In the period from 1961 to 1971 polarization process accelerated and from 1971 to 1981 a certain stagnation of the process was recorded. It may be expected that in the future, the tertiarization of economy and social progress will lead to a more even distribution of both inhabitants and activities in the region.

1.3. Main categories of exploitation of the area

Agricultural land occupies the largest part of the County area, i.e. it accounts for 62% of the entire area. In terms of land exploitation, compared with the same structure at the state level the County area contributes with 7.3%, and in total agricultural land in the Republic of Croatia the County accounts for 8.4%. The number of inhabitants on 100 ha of the County total agricultural land is 138 and 150 at the state level. Obviously, the County area is distinctively agricultural region. In total forest land of the Republic of Croatia, the Osijek - Baranja County contributes with 4.6%. Since the average forest area in the Republic of Croatia amounts to 44% and in the County only 27%, it is obvious that forest area of the Osijek - Baranja County is below the state average. The significant part of the area is covered with rivers: the Danube, 86.06 km in length and the Drava River with 104 km in length. Total built-up area amounts to 9.1% of the total County area and the usability of built-up area amounts to 42.15%. According to the criteria of usability of built-up area, the usability should not exceed 10%, therefore, the County relevant authorities should work on the decrease of the use of built-up areas.

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1.4. Relief

In terms of relief the Osijek - Baranja County belongs to the north-eastern, predominantly lowlands part of the Republic of Croatia. The following geomorphologic forms can be found in this area of typical accumulation plains:  alluvial terraces,  river terraces,  fluvial-wetland plains,  loess terraces,  foothill region.

Alluvial terraces, situated along the flow of the rivers Danube, Drava and Karašica are characterized by high moisture and belong to predominantly alluvial areas. Sand, pre- sediment loess and clay prevail in the composition of the soil whereas gravel can be found in higher depths. Similar morphological forms can also be found on alluvial terraces along the rivers Danube and while in the region of Kopa čki rit, due to a lower level of the entire terrain a marshy area was developed. Higher relief areas above alluvial terraces are terraces of the River Drava flatland. According to geological formation, the older and the younger terrace of the River Drava can be distinguished. The older terrace is characterized by loess sediments in the north, while in the south it is surrounded by alluvial terrace of the River Vuka. The younger terrace is separated from the older one by a steep section and its characteristics are identical to a younger terrace of the Danube River, dating from the Holocene period. Fluvial marshy areas are located separately in the River Karašica cuttings. Terrains that rise above flatland reliefs are loess terraces and plateaux. Two loess terraces can be found in the Baranja area, one situated in the north, along the state border and another around the Kneževo settlement in the area of Bansko brdo. The basis of loess terraces is composed of the sea and river sediments. Foothill region is composed of several elevations in southwestern parts of the County, the eastern spurs of the mountains Dilj and Krndija. The prevailing forms of soil in this area belonging to the oldest mountainous region, are diluvial clay, spurs of marl, sand and limestone.

1.5. Climate

The Osijek - Baranja County has a moderate continental climate marked by frequent and intensive changes of weather. Basic climate characteristics are the following: monthly temperature above 10°C in more than 4 months in a year; medium temperature of the hottest month is below 22°C, and medium temperature of the coldest month is between -3°C and +18°C. Homogeneity of climate conditions is present in the entire area of the County which is, in the first place, the result of unique characteristics of the relief. Average annual quantity of precipitation ranges between 642 mm and 753 mm. Main temperature maximum occurs in June followed by a second peak in November. Main precipitation minimum occurs in mid- autumn, in October and the second minimum at the end of winter period and in the beginning of spring, in February and March. Maximum daily quantity of precipitation waters largely varies. In the period from 1959-1978 maximum daily precipitation of 101.2 mm was recorded in the Osijek city. Precipitation in the form of snow occurs, on the average, 26 days in a year, but, generally, do not last for a longer time. Between 1,800-1,900 sunny hours are recorded, on the average, in the Osijek - Baranja County area. The most common winds in the Osijek - Baranja County area are those from the north-west, west, north and south-eastern direction.

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1.6. Geological, hydrogeological, seizmic and tectonic characteristics

In its most part the County area is made of young sediments overlying old blocks at a higher depths. For this part of the Pannonian plain loess sediments which are found in the areas of Bansko brdo, Jabu čki koš and Erdutsko brdo and also on the ðakovo plateau are particularly significant. Large and mostly swampy plains, the youngest elements in the structure of this area are carved in the young sediments of the rivers. According to regional research of seismic and tectonic relation the most frequent and strongest earthquakes can be expected to occur in the mountain Dilj, situated in the Baranja region, between the settlements Darda and . Until today, the region has experienced earthquakes with a magnitude of 5.0 to 5.7, i.e. intensity in the epicenter of approximately VIII degrees of the MCS scale. In terms of hydrogeology, it is necessary to distinguish between the rocks older than the Tertiary Period, sediment complex formed of the ribbed, undulating tracts of the Tertiary-Quaternary Period and finally, water-bearing strata of flatlands from the Quaternary period. The mountains Papuk, Krndija, Psunj and Požeška Gora are made of rocks older than the Tertiary period. Sediment complex from Tertiary-Quaternary period is pronounced in some foothill regions of Psunj, Dilj and Požeška Gora. Flatland areas along the rivers Sava, Drava and the Danube are covered by alluviums and thick deposits of the Quaternary period.

1.7. Hydrological characteristics

Basic hydrographic characteristic of the County are running waters intersecting the entire area. Water courses of importance for the Republic of Croatia are those of inter-state rivers the Danube, Drava, Karašica, drainage canals Karašica, Borza, Hatvan, Travnik, and water course of the River Vuka up to the ðakovo - Osijek road. The Danube water-course regimen is mostly influenced by its Alpine affluents and, consequently, the water level dynamic is marked by two maximum levels, one in the spring and another in early summer. Water level is being measured on the section of the Danube which passes through the County area. Also, the construction of two more water level gauging stations on the Danube River has been foreseen. Another river important for the County is the Drava River, whose course is marked by the pronounced morphological changes and gravel sediments from the Quaternary period which enable the formation of important reserves of underground waters. The water-course regimen of the Drava River is pluvial - glacial, i.e. it is characterized by small amounts of water during the wintertime and large amounts during the spring and early summer. The Danube affluents of importance for the entire County are the rivers Bosut, Karašica, which springs in and joins the Danube near the Batina, settlement and the Vuka River. The Vuka River mainly collects waters from the eastern spurs of the mountain Dilj and from the northern side of ðakovo-Vinkovci loess plateau. The following are the affluents of the Drava River in the area of the County: the Karašica River, discharging into the River Drava through the Gatski channel, the River Vu čica with its mouth near the settlement , the stream Toplica and the main canal Barbara. All these affluents have the low quantity of water and therefore, their impact on the River Drava water-course regimen is not significant.

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1.8. Pedological characteristics

Pedological characteristics of the County area are being monitored in compliance with modified criteria for the evaluation of soil (FAO 1976). Soils marked “P-1“ fall into the category of good arable lands and are located in the north-west and central parts of the Baranja area and southeastwards from the Osijek city. Soils marked “P-2”, fall into the category of the so-called moderately limited soil and are located in the area of Baranjsko brdo, which is the central part of that area, southwards from the Drava River flow in the area of Erdutsko brdo and in the County central parts. Soils marked “P-3” with limited cultivability are mostly located in the western parts of the County and on smaller surfaces southward from the Drava River. Prematurely unsuitable soils marked “N-1” are stretching from the north of the County towards the south-east up to the Danube river. Permanently unsuitable soils marked “N-2” are located in the western part of the County, in the area of the towns of Donji Miholjac and Našice.

1.9. Protected nature and cultural heritage

Pursuant to the Nature Protection Act there are four categories of protection in the Osijek - Baranja County: special reserve, protected landscape, monument of park architecture and monument of nature. Currently, the protected areas of nature heritage cover around 2% of the total County surface, with the biggest and the most important area being the Nature Park Kopa čki rit. Located in the floodplain areas of the rivers Danube and Drava, covered with willow, aspen and oak woods and dappled with bars, pods, shallow lakes and marshes the Nature Park is also a habitat of various animal species for which reason a special zoo logic reserve is formed within its borders. Thus, the entire area of the Nature Park Kopa čki rit enjoys two categories of protection: as nature park and as special zoological reserve. A part of the area stretching north-west from the town of Erdut falls in the category of protected landscape and twelve parks are protected monuments of park architecture, the most known being the parks in Našice, Valpovo, Osijek and Donji Miholjac).

The entire area of the Osijek - Baranja County is rich with cultural goods which reveal the continuity of life from the young Stone Age until today. There are altogether 303 immovable cultural goods in the area of the County registered in the registry of cultural goods, 812 recorded while 449 objects have been preventively placed under protection. Of a particular importance are pre-historical sites of Gradac near Sarvaš, Hermanov Vinograd in Osijek, Gradac and Sredno in Batina, Gradac in Zmajevac, the mountain Dilj, Bogojevci near and the cemetery Bijelo Brdo, all dating from the early medieval period are. Tvr ña, a magnificent fortress in the Osijek city is proposed for the inclusion on the world cultural heritage list.

1.10. Landscape values

Landscape component is an important part of the nature and environment as it represents a link between the man and its activities in the nature, that is, it is an essential cultural but even more economic component of one area. The Osijek - Baranja County landscape is divided into two landscape units:

13 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

 Flatland area in the northern Croatia,  Pannonian mountain chains.

The largest part of the County is categorized as a flatlands landscape in which agricultural landscape dominates with its huge oak woods and floodplains surrounded by forests edges and fluvial swamps. In the very south-west of the County is the landscape unit of Pannonian mountain chains, composed of insulated, wooden mountain massifs with no dominant peaks and the variety of forest types and preserved spring valley. All the above described landscape values and richness should be better valued in the concept of sustainable development and pronounced specific spatial characteristics.

14 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

2. NATURAL RESOURCES AND POTENTIALS

2.1. Agriculture

Agricultural land in the Osijek - Baranja County accounts for 8.4% of the total agricultural land of the Republic of Croatia and 12% of the total arable land. Agricultural land covers 64% and arable land 58% of the total area of the County. The structure of agricultural land area is the following: plough-fields 86.6%, orchards 1.1%, vineyards 1.1%, meadows 2.2% and pastures and fish ponds 9.0%. The large part of agricultural land area is contaminated with mines (more under Chapter on mine-clearance). Due to the fact that land is not measured and records in cadastral and land register are non adjusted, the process of regulation of agricultural resources is very difficult.

2.2. Forestry

Forest area in the Osijek - Baranja County accounts for 4.6% of the total forest area of the Republic of Croatia. The County total forested area amounts to 113,290 ha, however, only 93,645 ha is accessible for work while 19,655 ha is not accessible. The problem of mine- contaminated forest areas is still not fully resolved (more under Chapter on Mine-clearance). According to the age structure, middle-aged forests cover 44% of the total area whereas the coverage of the so-called mature forests, suitable for cutting, amounts to only 2%, which is considered as largely insufficient. Oak, the most valued type of wood covers the area of 8,186.74 ha of the total forest area. What needs to be mentioned here is that some objects of the protected nature in the area of the County are overgrown with forest and they represent an important ecological and economic resource in a broader sense. The forest area Golubovac represents a separate unit, as it has been designated as leisure and recreation park. The same applies to the forest area Zokovica in ðakovo as well as to some other parks and forests. Hunting represents a significant segment in the area of the County, thus, the County numbers 105 hunting association in 6 hunting main offices and 3,308 of hunters.

2.3. Water resources

Water resources, particularly the rivers Drava and the Danube represent the basis for numerous economic activities. In the first place, this refers to the sections of these rivers used as water routes. In addition to this, water flows are suitable for the construction of hydro- electric power plants. As an example, built 15 hydro-electric power plants on the Drava River, Slovenia 8, whereas Croatia built only 3 hydro-electric power plants in the upper part of the Drava River. The County has 2,800 ha fish - farms managed by four companies. Great benefits are expected from the County Irrigation Plan which has already established that the existing water quantities are sufficient for irrigation purposes. The current quantity of water has been estimated to amount to 80 million m³ (Drava, the Danube), 6 million m³ (mountains accumulations), 4.5 million m³ (natural and artificial water flows) and 65 million m³ (underground waters) which altogether amounts to approximately 155,500,000 m³ of the total quantity of water.

15 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

2.4. Exploitation of mineral raw material

The exploitation of technical stone, brick clay, geothermal waters, liquid and gaseous carbohydrates, construction sand and cement marl is well - developed in the entire area of the County. The exploitation of stone has been carried out in the area of Krndija, basalt is exploited in the locations of Torine and Stari Gradac and construction stone in the location Jovac. The exploitation of brick clay is carried out in numerous locations. Geothermal waters resources are connected with the petroleum - industry exploration of underground in the locations of Bokši ć, , and ðakova čka Breznica. However, the found geothermal water is being used only in Bizovac. Oil and gas exploitations are being carried out in eight oil fields and one gas field. The exploitation of construction sand is carried out along the Drava River flow. The exploitation of cement marl is carried out in the location Vranovi ći which belongs to the Našice cement factory.

2.5. Plant and Animal Communities

Forest areas, river flows and larger moist areas provide habitats for animal communities and various types of plant. In the Baranja area many oak forests decayed to be replaced by bigger common oak and alder complexes while the moistest parts of the area are covered with willows. Main vegetation of the Kopa čko lake area is composed of blister sedge, calamus and rush. A steppe-type vegetation, oak, bitter oak and hornbeam prevail in the Drava River plain. Drava River terraces, due to long-lasting actions of river’s hydraulic forces were transformed in an open agrarian landscapes. In the under woods along the rivers Karašica and Vu čica the most represented are common oak, ash-tree, alder, elm, asp, lime-tree, yoke elm and sallow. Various bio-types in the area of the County determined the development of fauna with rabbit, fox, wild pig, dear and doe being the most represented species of mammals in this area.

In the area of Nature Park Kopa čki rit the most important is ornithofauna with over 285 of recorded birds’ species. The Park is also the birds’ important winter resort, particularly for gooses, grey lag goose, wild ducks, herons, terns linked with water, swampy buntings, mustached titmouse, predatory birds and woodpeckers. Fish nursery in the Danube river with 44 recorded fish types is the biggest natural fish nursery in the Central Europe. Nature Park Kopa čki Rit is also the habitat of many almost eradicated animal species such as otter, plain stoat and mustached bat.

According to the tree types the largest area is covered with oak forest, i.e. 8,186.74 ha, follows the other foliaceous trees with thicker leafs covering over 7,395.1 ha of the area.

2.6. Traffic position and infrastructure

In terms of traffic and geography the position of the Osijek - Baranja County is extremely favorable; from international waterways routes of the two important rivers (Drava and Danube), road connections extending from Central Europe towards Eastern Europe, and also the possibility of opening new corridors between the northern and southern Europe; railroad traffic which corresponds with the historical route from the East to the West (Orient Express) and finally accessibility of air traffic whose progress will clearly depend on economic and social development of the entire County area. In addition to the above said, the flatland

16 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County geographic configuration of the area provides for significant advantages, along with moderate climate, with no extreme oscillations.

In terms of its geopolitical position, in relation to neighboring countries this is the border area but it is also the European intersection of the East and the West. The strengthening of a peaceful development in the regions of Central and South Eastern Europe and the Balkans as well as integration of these regions into European Union will only add to geopolitical advantages of the entire area. Basic Analysis has established that these two factors of importance for advancing economic development and growth of the area have not yet been used which leaves room for the new valorization of their relevance in the future period.

2.6.1. Transport

Transport infrastructure is a key element of the development of economy and social and cultural values. In the process of valorization, infrastructure enables the use of natural resources, identification of economic capacities and population, affects the development of settlements, urbanization and the quality of the environment and stimulates the development of less developed and non-developed regions. Three traffic corridors in the area of the County are most important for development of economy: Drava - basin corridor stretching along the Drava River to which the County is connected both by road and railroad; the Danube - basin corridor connecting the north and the south of the European continent; and the Sava River - basin corridor, contiguous with southern part of the County. Except for the physical traffic routes, an important part of telecommunication routes traverse the County, both on transitory and international level, and they must not be neglected in the comprehensive illustration of the County.

2.6.1.1. Road transport

Road network is infrastructural ground of road transport. Pursuant to Public Roads Act („Official Gazette“, No. 180/04) of the Republic of Croatia the road network is structured as the network of public roads used, under general and transparent conditions, by the majority of participants in the transport, and other roads (non-classified roads) which include the roads used exclusively by private persons and the roads which serve for, and are used by, a certain economic sector such as: forest roads, agricultural roads, water resources management roads, military roads and private roads. The management of non-classified roads is under jurisdiction of private persons or bodies of economic sector, respectively.

Pursuant to the Act and Decisions on Classification of Public Roads, the roads are classified as follows:  State roads,  County roads,  Local roads.

The management of the state roads is carried out by Croatian Roads, Ltd. (Hrvatske ceste d.o.o.) and the county's and local roads are managed by the Osijek - Baranja County Roads Authority.

Notwithstanding the Public Roads Act, but in accordance with general accessibility criterion, „non-classified“ roads, managed by local self-government units function in the road network under the same conditions as public roads.

17 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Road transport system in the area of the Osijek - Baranja County is organized in such way that the state and county roads network connects all central settlements, as well as economic and other subjects of interest for the State and the County, whereas other subjects are connected by means of local and non-classified roads.

According to the determined classification, the category of state roads in the Osijek - Baranja County, refer to the following main roads: Slatina-Našice-Osijek-Ilok (road D2) and the state border Beli Manastir-Osijek-ðakovo (D7); collection roads (Slatina-Donji Miholjac- Josipovac D34, Požega--ðakovo (D38), ðakovo-Vinkovci-Tovarnik (D46) and the state border Donji Miholjac-Našice- (D53).

The second categories are forest roads, agricultural roads, water resources management roads, military roads and private roads. All these roads mainly serve for carrying out economic activities or various other activities in the area.

It is easily noticeable that 24% of the total county and local roads are without road-way surface constructed in a modern fashion. Compared with the overall situation in the Republic of Croatia with, on average, only 21% of roads of these two categories with no modern road- way surface, the situation in the County is more difficult. In addition to this, many of these roads are not interconnected and a large number are in a very bad condition. In total, there is 1,190.73 km of roads, of which 642.79 km are county roads and 547.94 km local roads. The total of 28.47 km of roads is not paved with tarmac, of which 30.47 km of county roads and 256.65 km of local roads.

2.6.1.2. Railroad transport

There are several categories of railroad lines in the territory of the Republic of Croatia: mainline railroads, mainline secondary railroads, I. class railroads and II. class railroads. In the Osijek - Baranja County rail network is composed of 8 railroads; 1) Dalj-Varaždin, Dalj- Osijek, Osijek - Varaždin; 2) Osijek - Beli Manastir- state border; 3) Osijek - , Osijek - Viškovci, Viškovci - Vrpolje; 4) Bizovac - Beliš će; 5) Osijek - Dravska obala; 6) Vinkovci - Osijek; 7) Vinkovci - Erdut; 8) Našice - Nova Kapela. In terms of structure and equipment railroads in the area of the County are technologically obsolete and relatively poorly maintained. In the program of railroad infrastructure development of the Republic of Croatia large interventions in the future are foreseen, which would, of course, require appropriate investments in this region.

Railroads in the area of the County include 269 km of rail tracks and 31 railroad stations. In compliance with the program for arrangements of level-crossings the following solutions have been proposed for the following railroads: MP 13A the Osijek city-Beli Manastir-state border; MP 13B the Osijek city--Vrpolje; I 100 Dalj-Varaždin; II 207 Našice-Nova Kapela; OG -Nova Luka the Osijek city; MP 14 Vinkovci-Erdut-state border.

2.6.1.3. River transport

The Osijek - Baranja County encompasses 104 km of the Drava River waterway which is section of 86.06 km long is contiguous with the Danube River. There are altogether 190 km of waterways in the County of which 96 km is included in continental routes. No ports or wharfs

18 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County exist on the flow of the River Danube through the County area. The Port „Transit“ is included in the Danube River international waterways system, and, in a certain way, it can be considered as a continental port. The Port „Transit“ is situated in two locations on the River Drava right bank. The former location spreads over the surface of 7,3 ha whereas the new location occupies the surface of 400 ha. It is necessary to underline that, prior to the aggression on the Republic of Croatia, the Port „Transit“, was the second port in Croatia in terms of the quantity of reloaded goods, after the Port of . The Port „Transit“ sustained significant destruction during the war, for which reason it has been blocked for years. The consequences of the blockade resulted in the aggravated possibility of the Drava waterway, caused by a long-term poor maintenance and which negatively impacts the operating of the Port „Transit“. With regard the maintenance of vessels, an important part in the transport chain, the County inherited very bad situation. In the former ex- the Republic of Croatia was not allowed to build one shipyard in its territory for the needs of river shipbuilding, instead, the vessels were transported to the Republic of for the repair. Today, there is „dry slipway“ in the town of , but for the County shippers this is not very helpful, for the transport of ships up to the town of Sisak is not possible by the river flows. The possibilities opening to the port of Osijek, but also restrictions standing on the way, require strategic answers and the means necessary for launching the development. In addition to the above mentioned, the building of passenger ports in Batina, Aljmaš and the Osijek city is planned.

2.6.1.4. Air transport

Although there are no significant European air corridors in the area of the Osijek - Baranja County, the region has been included in the Croatian airports network. Since the airport Klisa was under occupation for a long time, an alternative sport - recreational airport near the town of Čepin was built. Thus, the County today has two airports for public air transport, both built in the vicinity of the Osijek city:  The Airport Osijek - Čepin,  The Airport Osijek - Klisa.

Both airports require further modernization and state-of-the-art equipments in order for the area to be able to make full use of its transport and geographic advantages. In the recent period the airport Osijek - Klisa recorded an increase in transport of goods, from approximately 400 tones to 3,100 tones. This fact obviously confirms that the airport perspective lays in the transport of goods and that this sector of air transport needs to be given priority.

Airport Osijek - Klisa is designed for the acceptance of general purpose aircrafts and for occasional transport (taxi services) in a domestic transport, thus the most frequent users are aero-clubs, agriculture aviation and smaller sport and business airplanes.

Table 1 Traffic in the Airport Osijek from 2002 to 2005 2002 2003 2004 2005 Passenger transport 3,132 3,354 3,030 2,343 Airport traffic 673 720 708 695 Source: Airport Osijek, processed by the Croatian Chamber of Economy, County Chamber Osijek

19 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

2.6.1.5. Postal transport

The Central Post of the Osijek city has altogether 80 postal offices. The delivery of packages is organized as follows: five times per week delivery for 92% of citizens, three times per week delivery for 3% of citizens, and up to three times a week delivery for 5% of citizens. These data represent also an average in the Republic of Croatia.

In addition to the above cited post offices, there are also of other postal network such as „City express“ and DHL actively operating in the County.

2.6.1.6. Telecommunication network

Fixed telecommunication network of the County includes several types of network with various purposes and which are an integral part of bigger networks, organized at national and global level.

The longest life span has a traditional telephone network (PSTN - Public Switched Telephone Network; in everyday's practice, also known as POTS - Plain Old Telephone Service). Its capacities are the biggest and its services cover all the towns, municipalities and settlements in the County area. The service of voice transmission is available to every resident and it is a legal obligation of T-Com, the largest telecommunication carrier and provider in the Republic of Croatia (formerly HT-Hrvatske Telekomunikacije d.d., Croatian Telecommunication).

The PSTN network in the area of the County is organized in two hierarchy levels: magistral level and access level.

Access level is composed of access nodes (, Gornji grad, Donji grad, Beli Manastir and ðakovo), with its distributed parts, RSSs (Remote Subscriber Stage) situated in smaller settlements and smaller cities' districts, and pertaining access (cable) network around RSSs mainly built with cables with symmetric brass units serving as the transmission medium.

Magistral level of the County network is composed of two magistral commutation nodes (for channel commutation) located in the cities of Osijek and ðakovo (dual homeing) with the pertaining network of connecting and magistral lines built in the last century, mostly based on the transmission of digital signals on optical media.

The deregulation of telecommunication market carried out in 2005, along with operators of significant market strength, new operators emerged in the area of fixed telephone network (currently H1 and Optima) as a competition in providing broad spectrum of telecommunication services. At the level of the Republic of Croatia a monthly telecommunication traffic amounts to approximately 30,000,000 (thirty thousands million Euro).

2.6.1.7. Radio network

Radio networks are a segment of telecommunication networks which uses one segment of frequency spectrum as a transmission medium. Organizationally, they are divided to the networks for end-users access to the nodes and telecommunication network services (fixed

20 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County and mobile access networks) and radio networks for the transmission of information contents (telecommunication traffic, TV signals, etc.).

A separate segment make transmitter and networks which, for the diffusion of radio and television programs to the users, use medium-wave and UKV (UHF, VHF) radio spectrum area with amplitude and signals frequency modulation. Ground network of the transmitter for radio and TV content distribution in a digital form and with enhanced technical quality is in the process of the construction and it has started with experimental work.

In the ten recent years an explosive development has occurred in the so-called mobile telecommunication networks (NMT, GSM) which, for access to end-users, use the range of 900 MHz and 1,8 GHz, whereas until recently these networks were used for the transmission of a voice and short textual messages. There are several mobile telephony concessionaires active in the area of the County, of which two with its signal cover the entire territory and a large number of basic station and users (VipNet, CRONET).

In order to increase the range of possibility (speed of transmission) and introduction of new services (IM - Instant messaging, i.e. receiving and sending of Internet messages by mobile phone) further development of the 3G or UMTS networks has been planned. The introduction of the so-called HSDPA (High Speed Downlink Packet Access) i.e. fast access to Internet by mobile phone has also been foreseen for the near future. Mobile operators are soon introducing the speed of 1.8 Mbit per second, which will significantly surpass the speed of access to Internet by means of DSL technology, already present in the area.

2.6.2. Energy system

In the area of the County crude oil is drilled from eight oil fields: Bizovac-Štekovica, Štekovica-Beni čanci, Obod-Beni čanci, Ku čanci/Kapelna-Beni čanci, and Crnac-Beni čanci. The drilled oil from this area is mainly processed in the Sisak oil refinery. Parallel oil pipeline ðeletovci-Ruš čica is positioned on the JANAF pipeline route. Both pipelines of 11 km in length run across the area of the County.

Magistral gas pipelines network in the County is currently organized in two main directions and the whole County area is divided in 17 distribution sectors formed around the stations for measuring and regulation.

Electro-energy infrastructure includes the production, transmission and distribution. Currently, the production of electric energy is being carried out only in the Osijek city. The entire production is directed in the unique electro-energy system from which necessary quantity is being drawn. In addition to this, electric energy is produced in the industrial energy plant within the frame of agro-industrial conglomerate Beliš će, but it is meant exclusively for the purposes of conglomerate. Transmission of electric energy is based on transmission systems of 400 kW 220 kW and 110 kW. At the 400 kW voltage transmission is performed by one transformer station TS Ernestinovo and three 400 kW power-transmission lines. At 220 kW voltage transmissions is performed by one transformer station and two power-transmission lines. At the 110 kW voltage transmission systems is made of the above- ground power-transmission lines and transformer station. It needs to be indicated that the biggest part of 110 kW of network was completely destroyed in the war.

21 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Central heating system has been built only in the Osijek city, whereas in other towns the needs are met by block boiler-rooms or each bigger consumer has its own heating system. Heating sources refer primarily to heating plant of the Osijek city which assures heating supply in the peak periods and serves as a reserve source of thermal energy. Another thermal energy source is the Osijek city thermo-electric power plant. Thermo-electric power plant - heating plant Osijek uses three types of fuel: mazouth, extra light heating oil and natural gas. Boilers are fueled with mazouth and natural gas, while extra light heating oil and natural gas are used for running of gas turbines.

Alternative energy sources are mainly in experimental stage. Hydro-potential is used for small hydro-electric power plants as well as traditional fuel sources such as wood, wood waste, fuel wood, etc. It is interesting to mention that fuel wood and wood waste in the structure of total expenditure of economy and households account for only 6-8%. Although bio waste and bio mass are used as fuel in the area of the County, the volume of the use of these energy sources are not known even closely, i.e. there are no statistic data available. Thermal and thermo- mineral waters have been found on the sites of ðakovo, Breznica, Bizovac, Madarinac and Ernestinovo. The use of sun energy is sporadic and the use of wind has not yet been recorded.

2.6.3. Water supply management system

The Osijek - Baranja County water supply system is organized in seven water supply areas which although they cover the entire area of the County do not match its territorial distribution. Water supply areas are the following: water supply area of the Osijek city, Našice, ðakovo, Valpovo, Beliš će, Donji Miholjac and Baranja. The management structure is based on companies providing utility services which are increasingly going through the process of transformation into capital firms with a concession profile. Except numerous firms managing water supply there is also a number of waterworks managed by utility companies in the ownership of municipalities. The most important water supply systems have the following characteristics:  water supply area Osijek which supplies the Osijek city and its suburbs has approximately 400 km of compression pipelines and approximately 27,000 water connections. Within the frame of this water supply system the coverage is 92%. Big consumers which do not require sanitary quality of water have their own system of industrial water.  water supply area Našice includes the town of Našice and parts of municipalities Donja Moti čina, Podgora č and ður ñenovac. The system is based on the using of underground waters. The total length of water supply network is 140 km. Except the central water pumping site Velimirovac, there is also water pumping site Toplice, located in the mountainous area, with a drilled well. There is one more water pumping site, Seona, for which hydrological research needs to be carried out.  water supply area Donji Miholjac covers the town of Donji Miholjac. This water pumping site was built back in 1981 in the same time when water network was built. Currently, the water network numbers 1,600 connections for households and 100 companies. Works on the improvement of industrial water on the water pumping site Donji Miholjac are currently in process.  water supply area Valpovo ensures the supply of households, industrial water, water for processing and industrial water. Water pumping site Jar čevac is designed as a compression-based supply system where, by means of the pumps, the purified underground water is being pressured into transport and distribution network. Supply and distribution network extends in the total length of 58 km.

22 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

 water supply area ðakovo includes several separate water supply systems and smaller waterworks. The most important is the system of the town of ðakovo with the settlements ðakova čka Satnica, ðakova čki Selci, Piškorevci, Budrovci, Novi Perkovci and Pisak. The water supply system consists of scooping up of underground water on the three water pumping sites: Trslana, in the southern part of ðakovo, Pašin Bunar and the basin, located in the settlement but without the ensured sanitary protection zones.  water supply area Beliš će is based on the scooping up of water from the Drava River. The system ensures drinkable water for the needs of Beliš će industry as well as water supply systems of Valpovo and Beliš ća. Water abstracted from the River Drava is characterized by significant oscillation in quality.  water supply area Baranja is based on water pumping sites Livada, Mece and Prosine, as well as on the new water pumping sites Topolje, Nove Livade, Silme ñe and Zlatna Greda, and the system itself encompasses the following settlements: Beli Manastir, Branjin Vrh, Šumarine, Še ćerana and Karanac.

The characteristic of underground waters, used in the majority of water supply areas in the Osijek - Baranja County for the supply of water is an increased concentration of organic substances and metals such as iron, manganese and especially arsenic which even with the current water processing method does not fall up to the level of 10 g/l, which is the maximum allowed value as per the Rulebook on Sanitary Quality of Drinking Water. Based on that, it can be concluded that almost half of the population of the Osijek - Baranja County is drinking sanitary unsafe water, considering the concentration of arsenic.

2.6.3.1. Waste water drainage

In the period of intensive construction of water supply systems consideration has not been given to the construction of adequate drainage system. And non-existence of an adequately constructed drainage system in the area of the entire County represented a threat to both population and flora and fauna in this region. The same situation was with the households’ drainage systems as well as systems for industrial companies and huge agricultural conglomerates. Today, numerous waste waters drainage systems are operating in the area of the County, of which the most important ones are the following: waste water drainage of the Osijek city and drainage systems of the settlements Josipovac, Višnjevac, Podravlje and which consists of approximately 255 km of constructed sewage network. However, waste water is also being discharged into the Drava River near the town of Nemetin, without purification, by means of the so-called “rains floods”. In the Osijek city the north main sewer built in 1912, is 6,633 m long and is still in function. In addition to this one, there is the still functioning connecting north main sewer, 3,218 m long, industrial main sewer, 930 m long and the south main sewer, approximately 9,500 m long. The draining facility built near the town of Nemetin connects the newly built collecting network with the recipient, the Drava River. The construction of suburban’s Višnjevac and Josipovac as well as that of the Osijek city south main sewer has been designed to ensure the drainage quality for the next fifty years. Over 90% of population is connected to the drainage system as well as the industry of the narrower city area. However, it needs to be emphasized that waste waters of Še ćerana still represent one of the most salient problems of drainage. According to estimates, annual quantity of waste water of the Osijek city amounts to 11,119,667 m³. In compliance with development plan for waste water drainage, the systems are partially arranged, but it has also been planned the arrangement of catchments basins of Brijest and Čepin and catchments basin

23 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County of the southern Baranja. Unfortunately, for the settlements of Nemetin, Sarvaš and Klisa the project documentation is still non-existing.

In the area of the town of Našice 17,000 m of secondary network and 7,800 m of main sewer together with facilities for decantation have been built. Waste water is collected by sewage network and is conveyed up to the northern and southern main sewers (collectors). Altogether 3,300 of households are connected to the network.

The drainage system of the town of ðakovo encompasses the area of approximately 740 ha, and the total length of sewage network is 70 km.

Drainage system of Donji Miholjac is mainly constructed as a mixed system, since precipitation water is also connected to the system. Altogether 6 km of the main sewage (collector) and 14 km of sewage network have been built. Mechanical part of waste water purification facility has been constructed (1st phase).

The County of ður ñenovac has a mixed system of 12 km in length, of which 1,500 m accounts for collecting sewage system.

In the Valpovo area there is a unique sewage network in the settlements of Valpovo, Beliš će and Bistrinci. In the centre of Valpovo and Beliš ća the system is mixed whereas in the other parts a separate system which includes the evacuation of water is built. The total length of sewage network is 58 km. The central purification facility is located within the frame of the factory „Beliš će“d.d.

The town of Beli Manastir and the settlement Še ćerana have the waste water purification system, with the main sewage of 1,550 m length and canal network of approximately 10,000 m. In the municipality of Darda 800 m of sewage system with a temporary outlet into depressions has been constructed.

2.6.3.2. Water Flows and Waters Regulation

The regulation system for water flows and waters of the Osijek - Baranja County is divided in four catchments areas (basins): the area of Karašica-Vu čica, the area of Vuka, the area of Baranja and the area of Bi ñ-Bosut, which in its smaller part encroaches the area of the County. The main rivers, the Drava and the Danube are separately regulated.

With the view of the protection of coastal zone, the process of the regulation of the Drava River has begun already in 19th century. Since a part of the Drava River passes through the border sector the regulation has been carried out jointly with Hungary.

The regulation on the Danube River through the Republic of Croatia also started in the 19th century. The regulation was successfully implemented with the simultaneous construction of defense dikes in the area of the County. From that time on, activities related to regulation are being constantly extended, for example, new dikes were constructed along the rivers Drava and the Danube following catastrophic floods in 1965 and 1972.

24 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

2.6.4. Waste management

Two groups are to be distinguished today in the classification of waste: first refers to municipal waste which includes household waste, waste from cleaning of public surfaces and the waste of similar type produced in economy, institutions and services. Second group, the so-called industrial waste is generated by production processes and services, and, according to some of its attributes it is different from the first group. Waste collection in the Osijek - Baranja County is carried out in 136 settlements, i.e. in 51% of all settlements. There are approximately 300,000 inhabitants in the settlements with organized waste collection (90% of the County population). Waste is deposited on a number of landfills, but it needs to be emphasized that there is also a great number of non-sanitary landfills, the so - called “wild “ dumpsites, which aggravates the waste - related problems. Unfortunately, the majority of landfills has no inspection certificate.

The category of the so-called hazardous waste is not regulated in a satisfactory manner, as only two companies have the authorization for waste collection, however, temporary storage and processing can be performed by only one of them, and that only for one category of hazardous waste. Hazardous waste represents one of the main problems which are not solved also at the state level, and as such, it creates serious danger for health of people and animals as well as for the environment. There is also inert waste which does not cause grave consequences for ecology, but has adverse effects on landscapes and, in general, represents obstacle for the smooth functioning of the entire area. There are altogether 14 landfills where municipal firms deposit waste and they are located in all larger settlements where specialized firms for the collection, distribution, destruction and storage of waste are operating. Inert waste represents problem also in the most developed countries and economies, and its solution continues to presents technological and financial challenge.

25 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

3. DEVELOPMENT CONSTRAINTS AND PROSPECTS

Development factors are determined by temporal and spatial components. Our time is the time of tertiarization which strongly emphasizes intellectual potential: thus, we increasingly speak of a knowledge economy. However, this type of economy as any other also shows constraints and advantages within the framework of a given matrix.

Constraining factors in the Osijek - Baranja County are the following:  Demographic picture of the County marked by a growing elderly population as well as by an unfavorable spatial distribution of population. The population concentration and gravitation towards larger cities and settlements is visible, i.e. the de-population of large rural areas.  Trends and development of economic structure are today also constraining factors. Namely, uncontrolled tertiarization can be seen, which is, in addition, developing classic service sectors at the expense of intellectual ones.  Among constraining factors are also consequences of war devastation, mined areas and facilities (for example: 3,800 ha in the Kopa čki Rit Nature park is mined) and inaccessibility of areas on the left bank of the Danube.  As in the case of population, economic capacities are also unevenly distributed and mostly concentrated in urban areas and larger settlements. The fact that these capacities are located in suburban of towns and settlements attaches special importance to such distribution of capacities in the area. Locations of economic zones are being dealt with through new urban plans.  It is necessary to carry out geodetic-cadastral land surveys, and there is lack of coordination of data between cadastral offices and land ownership records.  Another constraining factor on the territory of the County is also an unsatisfactory educational structure that needs to be changed through new programs and substantially different educational approach.

In spite of the above mentioned constraining factors, there are also factors offering development advantages, such as:  Natural resources - land, forest and water resources. Especially important are agricultural areas, water capacities and traffic and geographic position.  The County area, i.e. its economic potentials are especially net exports oriented, which in current Croatian economic circumstances and under existing conditions, as well as in the competitiveness criteria system opens numerous developmental advantages for the County economy. Despite earlier mentioned difficulties and constraints, the economy has managed to become integrated into the global economic space which speaks in favor of almost natural level of competitiveness, but also warns that competitiveness needs to be further improved through new structural solutions and strategically conceived visions.  Traffic and geographic position with its intercontinental routes and fully covered infrastructure (roads, railroads, rivers, and air routes) has clear advantages which will be even more emphasized by the development of new communication routes (5C corridor) and the construction of a new and modernized traffic infrastructure.  Although the educational structure has earlier been mentioned as a constraining factor, in future, within the framework of a new organizational conception, it will create numerous development advantages. These advantages are strategically contained in

26 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

new organizational educational schemes, but also in a broader extent of population to be covered by education. It is also possible to add to the above-mentioned a low fiscal capacity of the local self- government units, which is expected to be resolved by the decentralization of the system. The financial power of local self-government units on the territory of the Osijek - Baranja County is at a very low level. Analyses of local self-government units’ reports on financial operations provide data about income per capita. Thus, in 2004, the average income per capita in the County (including all budgets of local self-government units and the County budget) amounted to 2,151.66 HRK. Only two local self-government units were above the County average and generated higher income per capita: the City of Osijek (2,690.72 HRK) and the Municipality (2,347.31 HRK). In other 40 local self-government units, income per capita ranged from 277.52 to 1,777.34 HRK. It has to be noted that in 24 out of those 40 units, income per capita amounted to less than 800.00 HRK.

27 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

4. DEMOGRAPHIC REFERENCES

Demographic picture of the County demonstrates that it is the third biggest county in the Republic of Croatia (with 330,506 inhabitants). But it is also a county with a very uneven spatial distribution of population: 35% of the population lives in the administrative area of the City of Osijek, 28% in other towns, i.e. local self-government units, whereas 37% of the population lives in other settlements. The County is also among the areas of the Republic of Croatia that have been most affected by war devastation (7.3% of the population still lives abroad). The County area has been affected by depopulation processes, just as the Republic of Croatia as a whole. However, in this area, the number of household members has reached the figure of 2.9 members, which means that demographic processes are marked by regression, coupled with the deterioration of population age and vitality structure, which is illustrated by the following data and findings.

Table 2 Population age structure Age groups 2001 2005 Number Percentage % Number Percentage % 0-4 18,276 5.5 14,249 4.3 5-9 19,438 5.9 19,853 6.1 10-14 21,005 6.4 20,450 6.2 15-19 22,936 6.9 21,591 6.6 20-24 22,319 6.8 22,297 6.8 25-29 20,918 6.3 21,802 6.6 30-34 22,304 6.7 21,753 6.6 35-39 24,946 7.5 23,175 7.1 40-44 25,553 7.7 24,681 7.5 45-49 24,903 7.5 25,103 7.7 50-54 21,150 6.4 23,462 7.2 55-59 17,237 5.2 19,589 6.0 60-64 19,271 5.8 17,834 5.4 65 and older 50,250 15.4 52,260 15.9 Source: Croatian Chamber of Economy, Sector for economic strategy, December 2005

28 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Graph 1 Population age structure

Population age structure

18

16

14

12 % 10 2005 2001 8

6

4

2

0

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65 and more

Age groups

Above-presented data demonstrate that over the past five years the number of inhabitants in the County has decreased. Nevertheless, indicative changes also take place in the population age structure, which in the long-term may have strikingly negative implications. Thus, over the long term, demographically the most vital population group (0-14 years) has been decreasing faster than average, which is a direct consequence of a decreasing rate of natural population growth caused by a faster growth of mortality rate in relation to birth-rate. There are obviously no immigration processes on the County territory; rather, as earlier noted, there are marked emigration processes. At the same time, population groups of lower vitality characteristics have been increasing in the total population structure: the 55-64 years group - by 2.5% and the 65-and-older group - by 3.1%. At the same time, the number of inhabitants of the 15-29 years-age group has decreased by 1%, and the 30-54 years-age group by 0.7%, which only confirms the earlier stated remark about negative demographic implications that might also significantly affect the economic activity and growth. The consequences accompanying all these changes, can also be seen as a marked growth of the population inactive part (65 years and older); this population group has increased over the past five years from 15.2% to 16.8% of the total population. And finally, the consequences of demographic retention have also been confirmed in the age group of population of working age (15-65 years) whose share in the total population has increased from 15.2 in 2001 to 16.8 in 2005. However, this increase has not resulted from the growth of age group of labor force contingent, but from a slight drop of this demographic aggregate in relation to a decrease in total population aggregate. But, when the described controversies of analytical nature are placed into the context of labor supply and society expenses, it can be concluded - from the point of view of the County needs (financing of retired persons is an obligation of the State) that certain future difficulties should be expected in terms of labor supply, especially in the field of new technologies and modern organizational challenges, since the existing unemployed population cannot respond to those challenges. The intensity of demographic changes in the County is more pronounced than in other parts of the State, i.e. in comparison

29 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County with the state average; however, processes taking place on both levels are identical. It is a matter of transition cases which have led to a break in basic system references and in connection with this, to the transition from the socialist, partial market economy model to full market economy model. This process is followed by property privatization which, in the circumstances of belated tertiarization, had numerous negative consequences, particularly observable in the slowing down of economic activity rate and precipitated unemployment growth. Due to specific living and working conditions aggravated by the war, the Osijek - Baranja County, logically, had a substantially weaker position in comparison with the state average.

30 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

5. ECONOMIC STRUCTURE

Gross domestic product (GDP) as a synthetic indicator of the County realized economic potential and the number of employed and unemployed inhabitants of the County are resource indicators determining the position of the County within the state.

Table 3 GDP, employee, unemployment in the County GDP Employed Unemployed Year 2004 5.4 6.3 10.4 Source: Information on economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

Graph 2 Economic situation in the Osijek-Baranja County

Economic situation in the Osijek-baranja County

5,40

10,40 GDP Employed Unemployed

6,30

Economic potentials of the County visibly lag behind demographic potentials (7.8% of the population of Croatia); the number of the employed is also lower in relation to the number of inhabitants, and the unemployment is markedly higher in relation to the number of inhabitants. The social efficiency of the County is unarguably lower in relation to the Republic average.

GDP per capita and employee identifies more precisely the County development potential in relation to the State.

Table 4 GDP per capita and employee Per capita Per employee Year 2004 75.0 85.5 Source: Information on economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

The County’s lagging behind in relation to the State average is pronounced - it is bigger when measured per capita than per employee because of a more unfavorable demographic position and lower degree of employment in relation to the state average. Economic structure with depicts the manner of earning in a certain sector and the compatibility of earning with technological and organizational trends, was the following at the starting point:

31 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

GDP Total 100.00 Agriculture, hunting and forestry 1.4 Fishing 0.1 Mining and quarrying 0.2 Processing industry 39.0 Electric power and gas supply 1.3 Construction 12.5 Wholesale and retail trade 27.8 Hotels and restaurants 0.3 Transport, storage, communications 4.6 Financial mediation 2.2 Real estate and renting 6.4 Education 0.2 Health care and welfare 1.0 Other social activities 3.0 Source: Information on the economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

It can be noticed that the processing industry is still prevailing in the total economic structure of the County, which is surprising in the Croatian circumstances. Namely, de-industrialization that affected Croatia and resulted in huge macroeconomic restrictions (internal and external debts, unemployment, insolvency) has affected the County to a lesser degree, which, consequently, opens economic prospects, but also imposes obligations, especially those of organizational and technological nature. Seeing a slow process of de-industrialization as the County future advantage, from the point of view of Croatian circumstances, this process, nevertheless, failed to bring advantage to the County; due to the policy of neglecting production activities carried out in Croatia for the past dozen years, it was, in fact, a drawback, which above-mentioned referential data unquestionably confirm, as well as data on efficiency. In relation to the economic structure as whole in which industry prevails, processes of structural changes are being affirmed as a path to increasingly strong development of tertiary sector, i.e. tertiarization. However, the process of tertiarization has not been carried out on modern bases, since service activities of classic type expanded, i.e. the activities involving a small share of modern technology (trade, transportation and storage), and intellectual services have failed to develop, especially education, tourist services and services related to social activities. Such a structural lack of harmony (lagging behind of the tertiary sector development with regard to intellectual services) jeopardizes re- industrialization based on new technological models. Namely, in the modern restructuring process the number of employees in primary activities, and production in particular, is constantly being reduced by increasing the income results, which makes possible a high national income per employee and per capita, and at the same time offers space for the financing of tertiary sector development which absorbs the surplus of employees and the newly employed.

32 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

6. INVESTMENTS

After 2000, investment activities in the Republic of Croatia have substantially changed; thus, the investment rate into new long-term assets annually increases (average value): 2001/2002 - 22.5%, 2002/2003 – 34.8%. 2003/2004 – 2.7%. The achieved dynamic visibly oscillates as a result of investment in capital investment projects which were completed in 2003 (highways). At the same time, the Osijek - Baranja County investment rate was 11% in 2002/2001 and 22.9% in 2003/2002. Unarguably, the dynamic of investment in new long-term assets in the County was markedly lower in relation to the State average, since the State capital project were not located on its territory. Of course, if the mentioned capital projects are excluded from the investment mass, the investment picture would substantially change; however, the conclusion remains that investments on the territory of the County on average realize low growth - the year of 2003/2001 with the rate of 5.9% in currents prices, which - through deflation of index - results in a real rate amounting to just 16%. Investments rate indicators (investments share in GDP) for the Republic of Croatia on average amount to 20% in 2001, 22.3% in 2002 and 28.4% in 2003; the same data for the County demonstrate values under 15%.

Table 5 Structure of investments (realized investments) in long-term assets by basic economic activities (2003) Current prices (millions / HRK) New Used Environment Total assets assets protection Total 1,455 1,175 279 22 Agriculture, hunting, forestry 145 80 65 1 Fishing 0.1 0.1 - 0.2 Mining and quarrying 3 1 2 - Processing industry 417 378 39 0.8 Construction 134 121 12 1 Trade 335 233 102 0.2 Hotels and restaurants 30 22 8 - Transportation, storage, communications 84 73 10 0.1 Financial mediation 13 13 0,1 - Real estate business 65 43 22 - Public administration 127 114 13 13 Education 22 22 - - Health care and welfare 23 23 0.1 - Other 57 53 6 2 Source: Information of economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

31 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Graph 3 Structure of investing in long-term assets by basic economic activities

Structure of investing in long - term assets by basic economic activities

Health and welfare

Public administ.

Financial mediation New assets Used assets Hotels and r est aurants Environment

Construction protection

Mining and quarrying

Agribusiness, hunting & forestry

0 50 100 150 200 250 300 350 400 450 Value/ millions/HRK

Investments structure fully corresponds to the County economic structure which supports the conclusion that investments are predominantly financed from the County’s own sources. It is also evident that some investments are predominantly focused on classic services fields, whereas investments in education and other intellectual services fail to take place.

32 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

7. EMPLOYMENT AND UNEMPLOYMENT

It has already been said that economic and social matrix of the Osijek - Baranja County is marked by a lower employment rate than the state average and at the same time a higher unemployment rate in comparison with the state average. The breakdown of employees by economic activities and the change of employment rate in the period from 2000 to 2004 lead to some conclusions.

Table 6 Employed by economic activities Employed Difference GDP 2000 2004 2004-2000 TOTAL 100.00 100.00 100.00 - Primary sector x 1.7 7.3 5.6 -1.7 Secondary sector xx 51.8 44.6 45.9 +1.3 Tertiary sector xxx 46.5 48.1 48.5 +0.4 By: a) economic services 19.5 23.8 25.2 +1.4 b) public & other intellect. services 27.7 24.2 22.8 -1.4 x) agribusiness, hunting, forestry, fishing industry xx) mining industry and quarrying, processing industry, electric power supply, construction xxx) a) wholesale and retail trade, hotels and restaurants, transportation, storage and communications, financial mediation, real estate and renting b) education, health care, welfare, other social activities Source: Information on the economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

Graph 4 Employed by economic activities

Employed by economic activities

50

40 30 2000 % of employed 2004 20

10

0 Primary sector x Secondary sector xx Tertiary sector xxx

A brief retrospective of movements of the employed in certain economic activities confirms that the development being realized in this County is in line with all the references marking its economic structure. It is evident that the number of employees in the primary sector is dropping, which reflects technological changes in contemporary circumstances; however, it is also evident that the number of employees in the secondary sector is increasing, which, in a way, points to the fact that the degree of modern development is still not significantly marked, especially in the field of industrial structure. The same remark applies to the tertiary sector, marked by a certain employment growth; however, an employment disproportion between the sector of classic services and the sector of intellectual services is present and still pronounced in the tertiary sector as a trend. Classic services sector is evidently significantly increasing

35 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County while intellectual services sector is proportionally decreasing, which is a true development anachronism. Depicted trends, naturally, need to be changed, which is, in our opinion, one of the most important tasks of the strategy of economic and social development in the future. As regards employment over the past few years, i.e. if we measure its dynamic, then it can be concluded that the average unemployment rate, which is nevertheless on the increase (0.8 – 1.0) is still under the state average rate (1.3). The consequence is, viewed in the framework of the state, sub-optimal employment, and the unemployment rate (the number of unemployed individuals as percentage of active population) is 26.2% as opposed to the state average of 17.4% (June 2005). In short, the dynamic of economic growth just enables employment of the population that comes of working age, but fails to solve the existing unemployment volume. In mid-2005, unemployment reached the figure of 31,084 unemployed persons. The biggest percentage in the number of unemployed refers to persons older than 50 (20.7%), and the smallest to persons from 15 - 19 years of age (6%). As regards the structure of unemployed according to education, there is a predominant number of persons who have completed secondary education, i.e. who completed three-year secondary education for various professions or who completed vocational schools for skilled or highly skilled workers; there are 12,805 of them or 41.2% of the total number of unemployed; follows the group of persons who completed primary education -7,728 persons, those who completed secondary schools lasting 4 or more years or humanistic secondary schools (grammar schools) -7,331 persons; follows the group of persons with completed faculty education and non-faculty colleges -903 persons and the group of 1,503 persons with the first degree university education. Other unemployed, i.e. 1,814 persons have no education or have failed to complete primary school education.

This brief overview demonstrates that a significant number of unemployed by presented categories are persons older than 50, which clearly leads to a conclusion that it is a labor force contingent who most likely will no longer be included in the work process, i.e. population which might already be listed among inactive population. This creates development restrictions, and confirms the above-mentioned suggestion that future economic development has to be based on very different technological grounds.

36 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

8. DEVELOPMENT RETROSPECTIVE

The Osijek - Baranja County development can be divided into three sub-periods extending over some thirty years. The first period lasted until 1990, i.e. during the existence of Yugoslavia; the second period from 1990 to 2000, i.e. the period of aggression and liberation war linked with the formation of sovereign Croatian state, and the third period has lasted from 2000 until today which is a period still marked by reconstruction, but also by more serious moves of the economic policy towards the expected future development.

The first period was marked by a trend of certain growth with the following values in relation to Croatia:

Table 7 Development retrospective Economy Agriculture Industry and Tertiary sector Total construction Croatia 3.7 1.6 4.0 4.4 the County 3.8 2.4 4.7 4.1 Source: Information about economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

Somewhat faster growth of the County economy is evident in comparison with the Croatian average, i.e. a markedly dynamic growth of the production sector of the County economy as well as lagging behind in the growth of the tertiary sector, which is still evident today. That period, within the framework of the socialist system, was, in fact, marked by a fast growth of the production sector, i.e. industrialization. The former state was, at its beginning, a markedly underdeveloped country with predominantly rural population and rural production, as well as life-style. Although the industrialization process was carried out in a socialist manner, it achieved visible developmental results and reaped benefit. Namely, numerous rural inhabitants with low productivity or almost no productivity at all moved to towns and thus increased their productivity, which resulted in overall social benefit. However, after the eighties, when the change of economic structure globally began to be strongly marked by the process of tertiarization, in the socialist system countries, including the former State, industrialization proceeded on low technological foundations with the service sector markedly lagging behind. Potential forms of high unemployment were created as early as that time, which were, understandably, concealed due to absence of developmental solutions. In 1990, Croatia entered the period of gaining independence and establishing its sovereignty; however aggression against Croatia and the period of almost five-year occupation followed, which, blocked development processes that globally gained momentum. Those five years resulted in very grave consequences for the development of the Republic of Croatia; it is assessed that war damages amounted to about 40 billion Euro, which was about 2.5% GDP. Some regions of the State were especially affected by those consequences, as this County, since the Baranja area was occupied for almost five years, and the entire County was directly affected by war devastation.

The period from 1995 to 1997 was the time of full reintegration of Croatian territories and establishment of Croatian sovereignty on the territory of the entire State; however, that process could not create foundations for a faster and more appropriate economic growth and development in the County. It is assessed that such foundations were created in 2000 and the period after 2000 can be characterized as an interval of a more serious economic and social development. In this period, the County has still not managed to achieve results on the level

37 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County of the State average, but it has managed to achieve progress and start approaching the State average, which means that the process of economic revitalization has, in a way, been launched.

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9. THE COUNTY FOREIGN TRADE EXCHANGE

Foreign trade exchange of the County consists mainly of the exchange of goods, while other forms of exchange are scarce. As it has already been said, the Republic of Croatia is today marked as the country of serious deficit in goods, which is not an optimistic prospect for further development. Compared to the Republic of Croatia the Osijek - Baranja County is, in this regard, far ahead, which is shown in the Table below.

Table 8 The County and Croatian foreign trade exchange - share in GDP Rates 2000 - 2003 the County Croatia Export 15 12 Import 12 16 Coverage of import with export 133 44 Source: Information about economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March, 2005

Evidently, while the coverage of import with export in the Republic of Croatia is markedly negative, in the County it is markedly positive. The effects of balance of goods with abroad in the conditions of constantly appreciated domestic currency bring, on one side significant losses to the County economy, but on the other, they speak about highly competitive level of the County economy on foreign markets, thus pointing to its good perspectives. Undeniably, global market high competitiveness speak in favor of the County prospects for a faster development in the future, since its economy meets all necessary requirements. Also, by a faster growth the County will be able to reduce development gap it has compared to the state average but also compared to other big counties in the state. We can ascertain that the following seven activities of the entire economy may guarantee the success in foreign trade exchange:  cloth and accessories, except knitted items,  the production of food and beverages,  the production of wood-pulp and paper,  the production of machines and devices,  wood and wooden products processing, except furniture,  the production of metal products, except machines and equipment, and  the production of furniture.

According to regional orientation, the largest part of the County's goods exchange (almost 80%) is effectuated with the European Union countries and with the countries of Ex- Yugoslavia and Ex- Soviet Union countries.

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Table 9 The County ten most important partner countries in 2004 - as per total value of exchange are: Ser. COUNTRY EXPORT IMPORT TOTAL BALANCE No. 000 USD % 000 USD % 000 USD % 000 USD 1. Italy 231,066 51.6 42,737 12.8 273,803 35.0 188,329 2. Germany 33,538 7.5 73,130 21.8 106,668 13.6 -39,592 3. Bosnia Herzegovina 45,957 10.3 13,987 4.2 59,944 7.7 31,971 4. Slovenia 33,303 7.4 26,502 7.9 59,804 7.6 6,801 5. Hungary 13,925 3.1 28,466 8.5 42,391 5.4 -14,541 6. Austria 8,792 2.0 22,214 6.6 31,006 4.0 -13,422 7. Serbia Montenegro 11,510 2.6 11,951 3.6 23,461 3.0 -441 8. Czech republic 4,378 1.0 14,871 4.4 19,249 2.5 -10,429 9. Russia 10,643 2.4 7,474 2.2 18,117 2.3 3,169 10. France 5,573 1.2 6,565 2.0 12,138 1.6 -991 Other countries 49,099 11.0 86,942 26.0 136,041 17.4 -37,842 Total 447,784 100.0 334.839 100.0 782,622 100.0 113,012 Source: Information about economic situation in the Osijek-Baranja County, Croatian Chamber of Economy, March, 2005

Overview of the County ten most important partner countries corroborates the remark about the high competitiveness of the County economy on the global markets, since, as it has already been stated, 80% of goods exchange has been effectuated with the member countries of the European Union, i.e. with the most competitive countries of the modern world. Other exchange relates to the countries of South-Eastern and particularly Eastern Europe which, according to general assessment, in the following twenty years, might achieve the fastest development of economy.

40 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

10. BUSINESS EFFICIENCY

Business efficiency is a complex economic concept which links the resourceful, personnel and strategic growth references and the development of economy. Changes in business efficiency are the result of, for the most part, structural changes of economy itself, market valorization of its potentials, production, activities and strategic options and broad organizational concepts. For this reason, the efficiency is the best available criterion which, at a given moment in the selected timeframe interprets the position of one economy in the best possible way.

Table 10 Main financial results of business activities in 2003 (in bill. State Administration Office) Index 2003/2002 Total revenues 19,822 106.5 Total expenditure 20,204 108.2 Gain after taxation 691 124.2 Loss after taxation 1,171 166.2 Financial results -480 323.3 Source: Information about economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March, 2005

Financial results show big losses of the system as well as an inclination towards their worsening.

Table 11 Financial stability, liquidity, indebt ness and business activities successfulness The County Croatia Self-financing level (%) 35.0 49.1 Long-term assets coverage with long-term resources (%) 109.0 106.8 Current liquidity coefficient 9.6 7.1 Short-term assets turnover coefficient 2.1 2.2 Short-term outstanding receivables collection time 100.5 90.8 Total assets turnover coefficient 0.92 0.71 Source: Information about economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March, 2005

There is no doubt that the use of assets is not rational and, as the assets turnover coefficient is below 1, this is obviously the problem of the entire State.

Table 12 Financial results of business activities of entrepreneurs in the Osijek - Baranja County in 2004 in relation to 2003 and the comparison with the results at the State level in mil. HRK Osijek - Baranja County Share of Croatia Republic of ELEMENTS 2003 2004 index 2004 Croatia (2004) in % Number of entrepreneurs 3,146 3,126 99.3 69,098 4.5 Number of employed persons 43,693 43,213 98.9 814,096 5.3 Total revenues 19,822 19,699 99.3 482,680 4.1 Total expenditure 20,204 19,771 97.8 469,956 4.2 Income tax 99 82 82.8 3,792 2.2 Profit after taxation 6,914 716 103.6 22,562 3.2 Loss after taxation 1,171 871 74.4 13,630 6.4 Consolidated financial results -480 -155 32.3 8,932 - Average monthly net salary (in State 2,779 2,850 102.5 3,585 73.9 Administration Office) Source: Croatian Chamber of Economy of the Osijek - Baranja County, August 2005

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The data shown indicate negative trends in revenue and expenditure of the County economy, however, it can be seen that revenues have been decreasing at the lower rate compared to expenditures. These results indicate that the County economy has been experiencing a certain degree of recession, but, in spite of that it managed to improve its positive results. In observing the share of particular indexes realized in the County and comparing them with the average of the Republic of Croatia, a smaller percentage in total revenue and income can be identified which leads to the conclusion that the efficiency of the County economy is lower than that of the Republic of Croatia - total revenue and income (4.1% and 2.2%), expenditure and loss (4.2% and 6.4%).

42 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Table 13 Overview of individual financial results of the Osijek-Baranja County economy in 2004 by industry (in mil.HRK) Number Average number of Net salary TOTAL REVENUE PROFIT LOSS BALANCE of employees in State

entrepre share Administrat Amount Share in % Amount share % Amount Amount Number share % neurs % ion Office Agriculture, hunting and forestry 235 1,870 9.5 51 7.1 287 32.9 -236 5,294 12.3 2,755 Fishing 5 9 0.0 0 0.0 7 0.8 -7 105 0.2 1,618 Mining 4 26 0.1 0 0.1 2 0.0 -2 121 0.3 2,974 Manufacturing (Processing industry) 410 6,292 31.9 354 49.5 164 18.9 190 15,251 35.3 2,967 Electric energy, gas and water supply 11 320 1.6 3 0.4 0 0.1 3 538 1.2 3,506 Construction 307 1,930 9.7 56 7.8 12 1.4 44 6,051 14.0 2,751 Trade 1,321 7,393 37.5 151 21.1 168 19.3 -17 8,928 20.7 2,611 Catering industry 106 137 0.7 3 0.4 26 2.9 -23 1,038 2.4 2,100 Transport, storage and connections 137 538 2.7 8 1.1 7 0.8 1 1,716 4.0 3,291 Financial services 30 41 0.2 2 0.2 52 5.9 -50 130 0.3 2,919 Real estate, renting and business activities 439 610 3.1 81 11.4 137 15.7 -56 2,237 5.2 3,251 Education 37 13 0.1 0 0.1 0 0.0 0 109 0.3 2,339 Health care and social welfare services 11 48 0.2 1 0.2 5 0.1 -4 184 0.4 4,399 Other community, social and personal 73 489 2.5 5 0.8 4 0.1 1 1,511 3.5 2,924 services TOTAL: 3,126 19,716 100 715 100 871 100 -156 43,213 100 2,850 Source: Information about economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March, 2005

In 410 companies from the manufacturing industry sector 31.9% of the County total revenue or HRK 6.3 million has been realized. In 2004 this industry recorded positive results in its business activities since total income increased for HRK 90 million compared to a loss. The realized income accounts for 37.9% of the County total realized income, whereas loss accounts for 18.9% of the total realized loss. This industry employs the largest portion of employees; thus, of the total number of employed in the County, 35.3% or 15,251 of employees are employed in the manufacturing industry. Average net salary amounting to HRK 2,967 is bigger than the County average net salary.

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11. EDUCATIONAL STRUCTURE

In the time of globalization educational structure significantly, if not decisively, influences growth and development of economy, since according to some regression analyses the impact of education absorbs directly 5-6% of the value of GDP growth, which means that the investments in education (2, 0-2, and 5%) increase its value for almost three times per unit of realized growth.

Table 14 The County educational structure according to years of education Completed education Republic of The County % Croatia% TOTAL 100 100 No schooling 2.8 3.4 Incomplete primary school 15.7 17.4 Elementary school 22.00 25.5 Secondary school 47.0 44.1 Two year college, I. faculty degree 4.0 2.8 Faculties 7.3 5.9 Master Degree 0.3 0.2 Doctorate 0.2 0.1 Unknown 0.7 0.6 Source: Strategy of the development of the Osijek - Baranja County, , Faculty of Economy, May 2005

With regard high school and faculty education lagging behind of the County as against the Republic of Croatia is very pronounced. The share of population with lower levels of education is also noticeable in the total educational structure. As this has also been confirmed through adequate structural values in economy, this data can also serve as a warning about the needs for investing in education at the County level.

44 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

12. OUTLINE OF INDUSTRIES AND INDUSTRIAL BRANCHES IN THE COUNTY ECONOMY

12.1. Agriculture and food industry

Market liberalization, globalization and integration processes which affect the global economy without exception can be clearly seen in agriculture and food industry, i.e. in agro- industrial sector as a whole. It is basically a process of strengthening the division of labor on the global level where the comparative advantages of certain areas and world regions come to the forefront in their entirety, i.e. in relation to their complete resources - including pedological, climatic and traditional values - as well as the advantages in the area of technology, knowledge and working resources. Croatia has begun the process of trade liberalization in 2000 when it joined the WTO, and the process proceeded with the conclusion of the free exchange agreements with 30 European countries. Those multilateral and bilateral agreements regulate the reduction of border restrictions and cooperation among countries within the framework of global agrarian policy. Along with positive effects, especially the sales terms on global markets, the process of liberalization and globalization also brought along numerous difficulties and restrictions above all related to an adjustment interval, which had different connotations in different areas of the Republic of Croatia. Since the County area is almost the most important agricultural area in the State, in relation to the production of crops, livestock breeding and river fishing and hunting, it is clear that above described processes created numerous challenges for the County’s strategists, politics and social structure.

12.1.1. Structure of agricultural land

Table 15 Structure of agricultural land Type of agricultural land Hectare % Arable land and gardens 231,273 90.0 Orchards 3,171 1.2 Vineyards 2,707 1.0 Meadows 5,257 2.0 Pasture land 15,238 5.8 TOTAL 257,646 100 Source: Information about the economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

12.1.2. Livestock production

Crop resources in the area of the County are naturally and traditionally an appropriate basis for the development of livestock production:

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Table 16 Number of livestock at the beginning of 2004 Type of livestock Legal subjects Family farms Heads/total Cattle/Total 19,541 27,405 46,946 Heifers and heifers with young 748 2,639 3,387 Cows 4,893 11,409 16,302 Pigs/Total 117,320 164,364 281,684 Sows 10,561 23,908 34,489 Gilts 3,894 6,501 10,395 Boars 212 1,069 1,281 Piglets up to 20 kg 45,357 69,501 114,858 Pigs/from 20 to 50 kg 12,176 38,578 50,574 Pigs of more than 50 kg 45,120 24,807 69,927 Sheep 3,801 62,611 66,412 Horses 214 695 909 Poultry 237,590 557,240 794,830 Source: Information on the economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

However, livestock production suffered a certain crisis for several years – an overall crisis since it is a question of market crisis, capacities crisis, financial crisis, but also a lack of economic conception at the State level which can be described as a strategic crisis. For this reason, the problems of livestock production are manifested through an insufficient use of existing capacities, slow restoration of the livestock number and reconstruction of property damaged during the Homeland War, unsettled market relations, small size of family farms on one side, whereas on the other side food imports uncontrollably grow and reach quite alarming values. In addition to the above said, the year 2003, which was an extremely dry year, resulted in certain medium-term disturbances in the prices of meat due to an increase of the price of fodder in that year.

12.1.3. Crop production

Crop production in the County is realized on the area of 231,273 ha of arable land. It has already been mentioned that the drought in 2003 affected livestock breeding, and extremely cold and rainy autumn of 2004 caused a crisis in the cereal crop production cycle. The rainy spring, in addition to slowing down the crop growth and development, also led to floods, i.e. the retention of precipitation on agricultural land. For all these reasons the results of the agricultural production in 2004 and 2005, when the crop production is concerned, were lower.

Table 17 Harvest areas under early crops in 2004 and 2005 – for business entities Type of crops Business entities 2004 Business entities 2005 Wheat 17,131 14,075 Seed wheat 5,297 4,424 Barley 6,260 3,922 Rye 0 50 Oats 579 148 Other cereal crops 960 145 Oil seed rape 1,722 2,100 Source: Information on the economic situation in the Osijek - Baranja County, Croatian Chamber of Economy, March 2005

It can be added to the above-mentioned that private family farms sowed about 28,000 ha of wheat, and agricultural companies and cooperatives about 14,075 ha of mercantile wheat and

46 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

4,424 ha of seed production. In 2005, due to the described circumstances, the average wheat crop yield was lower than expected and ranged from 4.0 t/ha in family farms, i.e. 5.3 t/ha in agricultural companies. The Osijek - Baranja County has already realized, using resources from its own budget the following projects, or their realization is under way:

1. Financing of soil analysis on occasion of planting long-standing fields:  An agreement was signed with the Agricultural Faculty in Osijek and the Soil Institute. This project included the analysis of about 500 samples, which means about 500 ha.  In 2004, funds amounting to 350,000 HRK were ensured, and in 2005, the amount of. 350,000 HRK. 2. Co-financing of artificial insemination:  the County bought off 8,000 doses of bull semen of elite category and about 5,500 doses of boar semen, and within the same project, it finances two seminars on artificial insemination in pig breeding;  education on artificial insemination in pig breeding;  a trilateral agreement has been signed among the County, Center for Cattle Breeding Advancement and veterinary stations in the area of the County;  in 2004, resources amounting to 600,000 HRK were provided and in 2005, resources also amounting to 600,000 HRK. 3. Drafting of the Irrigation Plan for the area of the Osijek - Baranja County:  an agreement was signed on the drafting of Irrigation Plan for the area of the Osijek - Baranja County between the County and “Hidroing d.o.o.”, a planning and engineering company from Osijek on 18 October 2004 (1,319,430 HRK);  the Agreement on consulting services and reviewing of the Irrigation Plan for the area of the Osijek - Baranja County was signed between the County and the Civil Engineering Faculty of the Zagreb University, (156,992 HRK);  in 2004, resources amounting to 276,422 HRK were provided, and in 2005, resources amounting to 1,200,000 HRK. 4. Co-financing of capital investments in irrigation projects in the area of the County:  the possibility of obtaining investment subsidy amounting to 20,000 HRK, 30,000 HRK or 50,000 HRK;  a tender notice was published;  in 2004, resources amounting to 500,000 HRK were provided, and in 2005, resources amounting to 500,000 HRK. 5. Putting in order a canal network:  the possibility of obtaining resources for co-financing (municipalities and towns) to the amount of 1:1;  a tender notice was published;  agreements were signed with 17 local self-government units and contracts concluded on works in the area of those units;  in 2005, resources amounting to 2,000,000 HRK were provided. 6. Co-financing of counseling and certifying ecological producers and manufacturers:  an agreement has been concluded with Biop,  a larger number of ecological producers are located in Baranja (production of raspberries, vegetables, sheep etc.);  in 2004, resources amounting to 200,000 HRK were provided and in 2005, the amount of 200,000 HRK is expected.

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7. Co-financing of capital investments in crop production and other development projects in agriculture:  the possibility of obtaining investment subsidy amounting to 10,000 HRK or 30,000 HRK;  a tender notice was published;  in 2004, resources amounting to 500,000 HRK were provided, and in 2005, the resources amounting to 500,000 HRK. 8. Co-financing of capital investments in the project for preserving and improving the quality of milk in the area of the County:  the possibility of obtaining investment subsidy amounting to 15,000 HRK;  a tender notice was published;  in 2004, resources amounting to 100,000 HRK were provided, and in 2005, resources amounting to 240,000 HRK. 9. Co-financing of costs of organizing hygienic and health protection and supply of mineral and vitamin supplements:  the possibility of obtaining investment subsidy amounting to 10,000 HRK;  a tender notice was published;  in 2004, resources amounting to 100,000 HRK were provided, and in 2005, resources amounting to 200,000 HRK. 10. Co-financing of the cost of project documentation necessary for obtaining construction permit for production and processing facilities and facilities for storing agricultural produce in the area of the County:  the possibility of obtaining investment subsidy amounting to 15,000 HRK;  a tender notice was published;  in 2005, resources amounting to 200,000 HRK were provided. 11. Co-financing of cadastre surveys with the aim of putting together a cadastre of real estate in the area of the County:  an agreement was signed between the County, the State Geodetic Administration and local self-government units involved in this project;  in 2004, resources amounting to 3,000,000 HRK were provided, and in 2005, resources amounting to 2,000,000 HRK. 12. Co-financing of the project entitled “Control of Soil Fertility in Family Farms” with the aim of improving agricultural production:  an Agreement was signed between the County, the Soil Institute, the Agricultural Faculty in Osijek and 23 units of local self-government;  the Project value is about 900,000 HRK; the County provided 50% of resources, municipalities and towns 40%, and final beneficiaries (family farms, craftsmen and cooperatives) 1% ;  in 2004, resources amounting to 450,000 HRK were provided, and in 2005, resources amounting to 500,000 HRK. 13. Protection of autochthonous products:  the County government approved 50,000 HRK for the drafting of the study and implementation of the project “Kulen“ [paprika flavored sausage], and 50,000 HRK for the project “Šljivovica” and 70,000 HRK for the “Slavonian Bee” project;  the County signed an Agreement on drafting the study on the project implementation with the Association “Domestic Slavonian Kulen – Kulin“, Bee –Farming Association “Slavonian Bee“ and the Association of “Domestic Šljivovica Producers – Slavonka“;  in 2004, resources amounting to 220,000 HRK were provided, and in 2005, resources amounting to 200,000 HRK.

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14. Financing of scientific research projects proposed by scientific institutions in the area of the County, aimed at improving agriculture:  the County signed an agreement with the Agricultural Faculty in Osijek, the Faculty of Economy in Osijek, the Faculty of Food Science and Technology in Osijek and the Osijek Agricultural Institute;  in 2004, resources amounting to 460,000 HRK were provided, and in 2005, resources amounting to 700,000 HRK. 15. Exercising the right to subsidy for crops insurance against possible damages for agricultural producers in the area of the County:  the possibility of obtaining subsidy to the highest amount of 10,000 HRK;  a tender notice was published,  in 2004, resources amounting to 5,000,000 HRK, and in 2005, resources amounting to 500,000 HRK. 16. Co-financing of the cost of registration of facilities for processing, manufacturing and storing of products of animal origin in family farms in the area of the County:  the possibility of obtaining subsidy to the highest amount of 10,000 HRK;  a tender notice was published;  in 2004, resources amounting to 50,000 HRK were provided, and in 2005, resources amounting to 100,000 HRK. 17. Procurement of CDA apparatuses (10 pieces):  the County Government approved the purchase of 10 CDA apparatuses to the amount of 150,000 HRK;  the County will conclude an agreement on co-financing the purchase with 10 local self-government units, according to which the County and local self-government units will provide 50% of resources, i.e. 150,000 HRK (each of the 10 units of local self- government will provide 15,000 HRK);  in 2004, resources amounting to 150,000 HRK were provided, an in 2005, resources amounting to 150,000 HRK.

12.2. Processing industry

12.2.1. Food and drinks production

The County, with its rich natural potentials, has traditionally been the source of raw material for the food industry. In comparison with the Republic of Croatia as a whole, the 257,646 ha of the agricultural land area in the County yield: 25% of wheat production, 33.5% of sugar beet, 56% of sunflower, 45% of soy, 18% of maize, 3.6% of livestock (bovines), 11.1% of pigs, 3.5% of horses, 5.7% of sheep and 4.5% of poultry. However, the natural potential wealth providing raw material is not followed by an appropriate development of the processing industry, which certainly reduces unit-based income effects of the County economy, in terms of natural land area potentials as well as in terms of employment and population. In 2004, the number of food and drinks producers in the County amounted to 76 registered companies with 4,464 employees. However, in relation to 2003, 8 companies closed down and the number of employees was reduced by 580. These circumstances warn that the natural agro-industrial potentials have been disproportionately developing, though it is evident that a final conclusion would need a more detailed analysis.

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12.2.2. Milling and baking industry

Seven big mills are operating in the area of the County of the capacity of 720 t per 4 hours and annual capacity of 200,500 t of processed wheat products. Since these mills were intended for a much bigger market, i.e. the market of the former State, just 50% of their capacity is today being exploited. In addition, comparative analyses show that the milling and baking industry is burdened with a high price of domestic wheat on one side, but also with exports of the milling and baking industry products at considerably lower prices from neighboring countries. In response to a kind of development-system crisis about which we are talking, private entrepreneurship capacities of small production dimensions have increasingly begun to appear, but they still cannot substantially substitute the entire supply.

12.2.3. Sugar industry

IPK Sugar Factory Osijek is the biggest sugar factory in Croatia. Its sugar production capacity amounts to 65,000 t, molasses production capacity amounts 27,500 t and dry beet noodles production capacity amounts also to 27,500 t.

12.2.4. Oil industry

Čepin Oil Factory is the most important oil production factory in the Republic of Croatia. Over the past three years Euro 33.5 millions were invested in its capacities; the factory has the daily processing capacity of 500 t per 24 hours (presses) and the annual processing capacity of 150,000 t of oil crops - sunflower, soy and oil seed rape. There is a big interest in the production and sowing of sunflower, i.e. for the expansion of oil production from this raw material; however, the competition of neighboring countries is very pronounced, especially in terms of production of sunflower unleavened bread, but also of refined oil, margarine and mayonnaise.

12.2.5. Fodder industry

Fodder industry is covered by nine factories and a mixer with a total annual production capacity of 270,000 t. It should be emphasized that the market liberalization made possible the export of fodder to Europe and the markets of the former Yugoslavia; however, effects of these advantages are still not substantially felt. At the same time, the consumers' purchasing power has decreased and cheap exports of meat and cattle appeared which, of course, indicates that there is a need for synchronized development policy that so far obviously did not exist.

12.2.6. Textile industry

Textile industry in the County has a long tradition; however, it is presently facing serious restrictions on the domestic market as well as on foreign markets. It is a question of a known global competition problem which is being increasingly imposed by the Far East countries, which in turn affects not only our country, but Europe as a whole. The fundamental orientation of textile industry has so far been based on loan business, i.e. on business contracted in advance and known buyers. However, these forms of textile production are today faced with so far unknown restriction. The most important production branches in the County are clothing production, linen production, and production of household textile

50 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County products, production of socks and other clothes and production of geotextile products. The total industrial production of the County is marked by growth of both production and exports.

Table 18 Chain indexes of the production volume of the textile industry, processing industry, the County economy and the Republic of Croatia's economy Index 2004/2001 The Republic of Croatia 107.0 The County 137.1 Processing industry 142.8 Textile production 439.4 Clothing production 128.1 Source: Statistics Department of the Economy Service of the State Administration Office in the Osijek - Baranja County

Within the framework of economic growth of the Republic of Croatia, as industry in the area of the County, textile industry development has been marked, in view of the fact that this industry has had an average growth almost 4 times bigger than the state average, over 3.5 times bigger growth than the County average and about 3 times bigger growth than the processing industry in the County. In short, this industry has expanded in both republic and county proportions. This growth was realized primarily thanks to textile exports, which in just one year, 2004, in relation to 2003, increased by 43%. It should be emphasized, however, that at the same time, textile industry failed to realize positive balance of payments, i.e. its foreign trade balance remained negative, in the total trade volume as well as in trade dynamics. Thus, textile industry exports increased by 48 million dollars, imports by 231 million dollars; however, total imports were 3 times bigger than exports. In addition to all presented restrictions and advantages, textile industry is also marked by illiquidity problem, insolvency, lack of professional staff, competition of grey market and high labor costs. Of course, it is necessary make a strategic turnaround, by decreasing labor costs in particular, but also by investing into new technology, marketing and creation of our own brands.

12.2.7. Wood and wood processing and paper industry

There are significant capacities in the area of the County for the production of wood pulp, paper and paper products, wood sawn, construction woodwork, wooden packaging, kitchen and other furniture and other wood products. In total structure of the County industry production these industrial branches account for one fifth of the production value. In addition to this, they are an important contributor to the overall production at the state level. Starting from 1999 until 2004 the growth of these industrial branches significantly increased.

Table 19 Chain indexes of industrial production physical volume Index 2004/1999 The County 124 Manufacturing industry 142 Wood processing and wooden products 108 Wood pulp and paper production 155 Production of furniture 43 Source: Department for statistics of the Economy service of the State Administration Office in the Osijek - Baranja County

Evidently, the growth has been particularly expansive in the production of wood pulp and paper. According to the growth indicators the production volume marked an increase in the

51 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County observed period for over 50%. However, in wood processing industry, and particularly in furniture production the results were not as good. Indisputably, the level of wood raw finalization in the production of furniture as one of the final phases in wood-processing complex has significantly dropped. The most important share in the County export is the production of wood pulp, paper and cardboard, which accounted for 15.4%, which in 2004 recorded an increase in export of 17.6%. The other branches of this industry in 2004 also recorded significant results in export, as example processed wood and wooden products export increased for 47.2% and the export of furniture for 48.2%. These data show that there is high demand for these products on external markets, which leads to the conclusion that this industry requires reconstruction and improvement in marketing and organization.

Table 20 Export and import in the County by industries 2003 and 2004 Structure Structure Export Import Industry 2004 Index 2004 Index Saldo 2003 2004 % 2003 2004 % Manufacturing 384,400 418,115 93.4 108.8 154,725 160,270 47.9 103.6 257,845 industry Wood 10,146 14,934 3.3 147.2 5,220 3,927 1.2 75.2 11,007 processing and production Paper and 58,597 68,884 15.4 117.6 30,034 32,175 9.6 107.1 36,709 cardboard production Production of 5,849 8,668 1.9 148.2 3,001 3,796 1.1 126.5 4,872 furniture TOTAL 419,187 447,785 100.00 106.8 307,119 334,836 100.00 109.0 112,949 Source: Central Bureau of Statistics of the Republic of Croatia, processed by Croatian Chamber of Economy, Osijek

It is necessary to point out that in this production segment huge devastation had occurred in the whole County during war and occupation which resulted in significant losses and the liquidation of some important producers, such as DIK ður ñenovac and Mobilia. High competition on the global market of producers from Eastern countries, often with dumping of prices and significantly lower labor costs makes the competition even stronger. For this reason it is crucial to make a strategy for the development of wood industry at the state level, and that particularly by linking raw material and manufacturing production phase, since in today's conditions an important volume of wood mass is exported. Of course, there are also some systemic reasons which add to the difficult position of wood products manufacturers, and particularly exchange rate. For years the Croatian Kuna has been significantly appreciated and there are no instruments which could substitute the incurred losses.

12.2.8. Metal processing and engineering industry

In the period of industrialization metal processing industry has been significantly represented in the entire area of the County. However, in the last ten years the industry lost its position, due to objective reasons such as difficulties in restructuring, war destruction and the loss of the market. Today, metal processing industry accounts for only 3% of the total industrial production in the County.

In 2004, the County numbered 48 companies active in metal processing industry one big, three medium and 44 small companies. The collapse of the companies from this industrial branch, their inferiority in terms of technology was substituted by smaller, more flexible

52 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County companies marked by significant entrepreneurial motivation and state-of-the-art technological output. Today, this sector of craft and small entrepreneurship holds respectable position, which can be seen from the data on employment shown in the Table below:

Table 21 Employed in craft sector and in business entities 2003 2004 Republic of Croatia Employed in the craft sector 233,695 224,675 Employed in business entities 1,076,619 1,095,643 The County Employed in the craft sector 12,236 13,085 Employed in business entities 66,209 71,583 Production of metal 143 121 Production of metal products, other 863 853 than machines and equipment % Employed in metal production sector 0.18 0.14 of total number of the employed in the County % Employed in the production of metal 1.10 1.01 products Source: State Administration Office in the Osijek - Baranja County, Statistics Department of the Economy Service, processed by the Croatian Chamber of Economy, Osijek

In the County's total export in 2004, the industry of metal and metal products production accounted for a 4.1%, and 3.4% in import. Thus, in the exchange with abroad a positive balance in the amount of 6.9 million USD has been realized.

Table 22 Export and import by industry in 2003 and 2004 In 000 USD (current exchange) Structure Structure Export Import Industry 2004 Index 2004 Index Balance 2003 2004 % 2003 2004 % Metal 732 745 0.2 101.8 373 503 0.2 134.7 242 production Production 14,692 17,412 3.9 118.5 11,622 10,744 3.2 92.4 6,667 of metal products TOTAL 419,188 447,785 100.0 106.8 307,119 334,836 100.0 109.0 112,949 Source: Central Bureau of Statistics, processed by the Croatian Chamber of Economy, Osijek

It can be established that the entire metal processing industry suffers from certain problems in relation to restructuring, however, its perspective for development is not that bad. Current situation and major problems in the field of metal processing can be summarized as follows:  Non-existence of strategy for development of metal industry at the state level. Metal industry and mechanical engineering are one of the most important promoters of overall development, which is not sufficiently acknowledged at the state level. Individual solutions, such as providing guarantees or individual writing off of debts to the state can not be called „the strategy of development“.  Complex situation in the industry, particularly in export activities, due to tax levied and particularly destimulative investment politics, due to high interests and financial recession of impoverished metal industry. A slight increase of the total revenue and income of metal industry and mechanical engineering is encouraging. However, this rise in revenue is minimal and not sufficient for making any serious improvement of the situation in the entire sector.

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 After several years of recession, in 2004 an encouraging rise of industrial production index for almost 30% has been recorded, as well as increase of export and a positive foreign trade balance.  Low technological level, investments below depreciation levels, non-existence of new, recognizable products, which would be interesting for international and domestic market. What is required, as a competitive advantage, is inexpensive labor force, and that, in general leads to the weakening of the sector’s strength and a struggle for survival, and in such conditions, there is no room for investment in technological equipping and education of work force.  Metal processing and mechanical engineering has potentially good chances to employ small economy capacities, although entering in new markets and in big systems abroad is very difficult and is linked with the possession of sophisticated technology, knowledge and tradition, as well as certificates ISO-9000.

12.2.9. Chemical industry

In the chemical industry sector altogether eight companies in the area of the County are being active, one falling into category of big companies and six small. This industry realized 8% of total revenue of the County economy, 6% of total income and even 10% of total investment. The development of the industry is very expansive, thus in total export of the County in 2004 chemical industry participated with 5.9%, and its share in export was 9.2%. This resulted in a negative foreign trade balance in the amount of 4.5 billion USD. Due to highly competitive global market the industry is, evidently, oriented towards import. Since this problem is present in the entire country, it can not be overcome at the County level. The number of employed in this industry in the County is decreasing in the last few years, which may be attributed, in part, to the consequences of technological development, but this is partially the result of the falling behind of salaries not only in this industry, but in the entire area. Namely, in 2004 salaries in chemical industry in the area of the County were 35% lower as against average salary in the Republic of Croatia.

Table 23 Production of selected products in 2003 Product Unit measure 2003 Industrial monocarbon acids t 101 Acyclic monocarbon saturated acids t 79 Wood coal t 3,449 Other paints and lacquers, diluents t 12 Detergents and other laundry projects t 45,169 Pastes, powders and other cleaning products t 392 Powders of cosmetic use kg 487 Decorative cosmetics and skin care products kg 8,627 Shampoos, hair sprays kg 753,488 Mouth and dental hygiene products kg 380,829 Shaving products and deodorants kg 30,838 Processing material t 56 Source: The County in numbers, December, 2004, Croatian Chamber of Economy, County Chamber, Osijek

12.2.10. Building material industry

Owing to the tradition of the production from Austro-Hungarian monarchy to the former Yugoslavian states but also due to rich natural resources of clay in the area of the County the industry of building material has a long tradition particularly in the production of brick and

54 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County roofing-tiles. Except the above said, cement production is rather strong and there are a number of smaller producers of glass, concrete and plaster products, and products made of natural and artificial stone. There are 21 companies active in the production sector (2 big, one medium and 18 small) and total value of the production in 2004 amounted to HRK 699 million. In the total industrial production of the County this industry the share is 6%. In 2004 the industry of building material accounted for 11% of total revenue of the County economy, 13% of investments and even 31% of the County total income. The industry share in total export of the County was 3.1%, and 4.6% in total import. However, in analyzing export and import data the effects should be measured at the County level, and this is particularly important for this industry, because it is obvious that balance relations differ significantly from those in foreign trade. Number of employed is 980, and, what is very specific, average monthly salary in 2004 compared with the state average is 10% higher. In addition to the above mentioned the industry of craft and small entrepreneurship is also very active and achieves visible effects at the state level.

Table 24 Employed in the sector of craft and by business entities according to NCA* in 2002 2003 2004 Republic of Croatia Employed in the craft sector 233,695 224,675 Employed in business entities 1,076,619 1,095,643 The County Employed in the craft sector 12,236 13,085 Employed in business entities 66,209 71,583 Production of metal 143 121 Production of other non-metal 1,004 983 mineral products % Employed in the production of other 1.28 1.16 non-metal mineral products of total number of employed in the County Source: Statistics Department of the Economy Service of the State Administration Office in the Osijek - Baranja County, Osijek * National Classification of Activities

Table 25 Production of selected products in 2003 Product Unit 2003 Ceramic construction brick and bloques m³ 520,464 Roof tiles 1000 pcs 21,606 Portland cement t 705,279 Lime t 505 Blocks, panels, brick and similar products made of concrete t 27,561 Prefabricated construction elements t 5,644 Prepared fresh concrete for use t 99,565 Plaster t 39,667 Production of cement and artificial stone t 31 Hot asphalt/tarmac mass t 74,131 Source: The County in numbers, 2004; Statistics Department of the Economy Service of the State Administration Office in the Osijek - Baranja County, Osijek

12.3. Construction

Construction industry of the County in the last few years has marked an increase of activities which corresponds to trends in the entire country. Namely, the Republic of Croatia in the last few years completed the repair of objects destroyed in the war, while in the same time some

55 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County capital infrastructure objects have been built. All this contributed to the raise of construction industry to a higher level, both in terms of technology and income and has also increased the number of the employed, which is one of crucial components of the development of this industry. In 2004 the County numbered 307 entrepreneurs involved in construction business, of which 277 small, 23 medium and 7 big entrepreneurs. In 2004 construction industry realized an income of HRK 55 million, which represents 7% of the total income at the County level. Total investment in 2004 amounted to HRK 200, i.e. 12.3% of total investment in the County. In only one year construction industry shares in total economy rose from 8.83% to 9.71% by growth rate. Of overall economy this shows further strengthening of this industry in the structure of economy. In the structure of value of construction works, according to the type of construction, transport infrastructure objects share is 21.3%, which is significantly lower than the state average of 51%, but with the construction of corridor 5C these ratios will definitively change in the near future. Investments in utility and energy infrastructure continue to grow and their dynamics is above state average which represents certain advantage, particularly in relation to the expected construction activities in the area. Number of employed in this industry is approximately 5,288 or 6.3% of total number of employed in the County.

Table 26 Employment in craft sector and by business entities 2003 2004 the Republic of Employed in the craft sector 233,695 224,675 Croatia Employed in business entities 1,076,619 1,095,643 the County Employed in the craft sector 12,236 13,085 Employed in business entities 66,209 71,583 Construction 5,306 5,288 % Number of employed in 6.76 6.25 construction of total number of employed in the County Source: Statistics Department of the Economy Service of the State Administration Office in the Osijek - Baranja County, Osijek

Problems of construction industry can be summarized as follows:  Severe market struggle intensified by foreign competition assisted with strong investment banks, which causes lowering or prices below any normal condition for conducting business. In addition to this, the policy of lowest price as the main criterion for the selection of contractor on public offerings;  Frequent changes of the Construction Act with the aim to ease administrative obstacles in the construction process and non-defined criterions for licensing companies with technical and technological preconditions and quality requirements for carrying out a particular task ;  Lack of educated personnel, engineers and highly-skilled workers, education of manpower, poor interest for skilled work;  Non-incentive VAT rate and VAT payment immediately upon issuing invoice, while the state pays the performed work with a delay of even 180 days;  High costs of banks guarantees the contractors need for applying on tenders (expensive bill of exchange, public notaries, etc. contracting firm often provides loan for the investors);  Unsustainable 40 - hours working week in the construction industry; it is necessary to stimulate working staff and enable to those who wish to work, legally regulated contracts for increase of work hours (Labor Act);

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 Own weaknesses of the company - generally low level of technical and technological equipment and knowledge;  Non-existing state plans for investments for at least one year ahead so that the contractors are able to make preparations. Too long legal procedure in connection to tenders, appeal period and contract signing makes already short deadlines for completion of work even shorter.

12.4. Utility infrastructure

Utility economy is, according to definition a controversial category, since in this economic activity private and public interest are interlaced, together with interest of public services. In the last 20 years in market-oriented countries privatization of this sector has been carried out and this process has an impact on our economic structure and social conditions. Utility services include: drinking water supply, drainage and waste water purification, passenger transport in public traffic, maintenance of cleanness, disposal of municipal waste, maintenance of public surfaces, maintenance of non-classified roads, retail markets, maintenance of cemeteries and crematories, carrying out cemetery activities, chimney- sweeping activities and public lighting.

Utility standard is more and more emphasized in the European Union as a category of priority. The European Union particularly insists on the criterions of equipping of the cities and settlements with utility infrastructure. This particularly refers to collection and purification of waste water, collection and management of waste and air protection. Almost everywhere in Croatia, and also in the County projects of municipal waste management is becoming the priority issue. The Osijek - Baranja County and the Vukovar-Srijem County are currently in the process of the realization of regional system of waste management. In the area of the County big projects of the construction of capital economy infrastructure are being carried out:

 Building of gas network in Baranja According to the Study „Supply of the Osijek - Baranja County area with natural gas“ municipal users, industry and agriculture have used substitutional energy in the amount equivalent to 62.5 million m³ of natural gas. Since the area of Baranja has almost none of its own energy resources, the said amount of energy in the form of lignite, brown coal, matzoth and heating oil was transported mainly by roads from distant areas and other countries. By introducing natural gas in Baranja transport routes of Posava and Podrava basins would be relieved of a burden of transporting approximately 60,000 ton per year of various energy sources and total level of energy industry activities of Croatia (there is no energy consumption for transport of energy), CO2 emission would be reduced and healthier food produced.

 Drainage system in the municipality of Čepin Čepin has built its own water supply system with the main pump in the centre of the town, with water processing in which way the perspective of faster and more quality economy development is assured. However, with water supply system put in place, the consumption of water suddenly increased, but neither quality nor control of drainage has been ensured. By building of water supply system, intensive housing construction works and increase of population standard significantly increased the consumption of water and the existing collecting proved to be unsatisfactory solution. Project includes main sewage (collector) in the catchment basin of Čepin, of total length of 10,638.52 m and two pumping stations.

57 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

 Drainage model with preliminary design of sewage system of the Osijek city In the process of drafting, it has been foreseen that the project will be realized in four project's phases:  Current situation  Reconstruction of the existing status and development plan  Building up of the water quality model  Management phase Main indicators linked with the operating of utility services sector are the following:

Table 27 Public water supply system in 2004 2004 Quantities of water, in thousands m³ 22,148 Main supply pipe length, in km 178 Distribution network length, km 1,483 Number of water connections 69,062 Source: Statistics Department of the Economy Services of the State Administration Office in the Osijek - Baranja County, processed by the County Chamber of Commerce, Osijek

Table 28 Public sewage system in 2004 2004 Waste water total, in thousands m³ 15,276 Purified waste water, in thousands m³ 1,754 Non-purified waste water, in thousands m³ 13,522 Total length of closed sewage network, in km 508 Main sewage length, in km 66 Number of sewage connections 34,373 Source: Statistics Department of the Economy Services of the State Administration Office in the Osijek - Baranja County, the County Chamber, Osijek

Table 29 Public lighting and low voltage electric energy delivered to end-users in 2004 Electric energy delivered to end-users connected to Installed public lighting devices low voltage, MWh City Total Modern Public Other Strengt Streng Total Households Number Num. lighting end-users hW thW Beli Manastir 607 98 598 96 20 17,325 457 3,149 Beliš će 762 220 561 167 11 9,661 397 1,896 Donji Miholjac 367 55 283 ... 12 7,400 342 4,836 ðakovo 1 405 1 360 40 25,571 1,180 14,071 Našice 1 244 1 214 15 7,908 856 6,937 the Osijek city 10 1,705 9 1,440 214 140,115 7,806 66,524 Valpovo 766 150 619 127 17 9,707 406 7,441 Source: Central Bureau of Statistics, processed by Croatian Chamber of Economy, the County Chamber Osijek

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Table 30 Streets, roadways surface and squares in 2004 Street Roadway surface, thousands m² Squares Of which Of which Total Other Numbe City Length Surface Average surface, in Other No. Total Modern types r of km m² width, m thousands Modern types of pavem. of squares m² pavem. pavem. Beli 72 431) 9351) 221) 2181) 2181) - 1 101) 101) - Manastir Beliš će 55 27 327 12 146 145 1 1 5 5 - Donji 56 30 531 20 179 151 28 1 7 7 - Miholjac ðakovo 119 61 915 15 220 200 20 3 31 20 11 Našice 88 28 340 - 142 107 35 2 15 15 - the Osijek 449 392 7,840 20 2,352 2,116 235 14 121) 121) - city Valpovo 54 321) 6431) 201) 1661) 1621) 41) 1 91) 81) - 1) Estimated data Source: Central Bureau of Statistics, processed by Croatian Chamber of Economy, Osijek

Table 31 Public parking places in 2004 Public parking places Marked space for Marked space at Covered parking Uncovered parking Public parking places parking at covered uncovered parking places places City parking places places Surface, Surface, Surface, Surface, in Surface, in Nu Num. thousands Num. thousands Num. in thous. thousands Num. thousands m. m² m² m² m² m² Beli - - - - 5801) 81) - - - - Manastir Beliš će 802 19 - - 802 19 - - 802 19 Donji 8 2 - - 8 2 - - 182 2 Miholjac ðakovo 15 8 - - 15 8 - - 683 6 Našice - - - - 2 4 - - 2 4 Osijek 2,500 31 - - 12,500 156 - - 560 7 Valpovo - - 1 1 - - 90 1 708 12 Source: Central Bureau of Statistics, processed by Croatian Chamber of Economy, Osijek

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Table 32 Cemeteries in 2004 Cemeteries Cemeteries Mortuaries with water Cemeteries with sewage system supply Surface m² Number of Wells City liers in Connected Connected crematories Under Chapels with public with septic No Under Under Burial lot Churches graveyard sewage tank, open Public park avenues devices devices Wells Wells

places Pumps network canal, river waterworks waterworks With cooling Number of liers Without cooling Beli Manastir 2 8,607 25,149 3,751 3,458 2 - 4 - - - 2 - - 1 1 Beliš će 1 3,287 12,052 6,574 3,758 - 1 2 - - 1 1 - - 1 - Donji 2 2,675 15,945 2,150 2,174 - 1 2 - 1 2 2 - - 1 1 Miholjac ðakovo 1 47,219 17,781 4,781 4,800 1 - 3 - - 1 1 - - 1 - Našice 1 - 28,907 7,227 2,200 - 1 3 - - - 1 - - 1 - Osijek 12 241,270 156,612 63,090 32,781 1 9 23 - - 5 9 - - 3 2 Valpovo 1 24,000 19,000 1,700 4,000 - 1 2 - - 1 1 - 1 - 1 Source: Central Bureau of Statistics, processed by Croatian Chamber of Economy, Osijek

Table 33 Public green surfaces in 2004 Public children Parks Grass surfaces Botanic gardens ZOO gardens Parks-Forests Line of Trees playgrounds Surface, City Surface, in Surface Surface, in Surface, in Surface, in Surface in Num. thousands Num. thousands Num. thousands Num. thousands Num. thousands Num. thousand Num. thousands m² m² m² m² m² s m² m² Beli Manastir 19 89 - 83 ------8 12 6 16 Beliš će 4 43 59 186 ------8 8 7 29 Donji Miholjac 3 152 - 14 - - - - - 134 - - 2 14 ðakovo 9 118 22 40 ------8 13 10 5 Našice 2 342 6 45 - - 1 3 1 520 3 3 1 2 Osijek 19 283 - 1,950 - - 1 101 - - 42 85 65 35 Valpovo 1 200 23 110 - - - - 1 50 3 4 6 15 Source: Central Bureau of Statistics, processed by Croatian Chamber of Economy, Osijek

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12.5. Small and medium entrepreneurship (SME sector)

The position of the so-called middle economy is being increasingly assessed as an advantage in the more developed countries. Common opinion is that this sector of economy is much more flexible for the market challenges and that due to this, it represents a sort of guarantee in the period of crisis and in the conditions of fast technological and marketing performances.

Table 34 Movement and number of active entrepreneurs by size 1997 1998 1999 2000 2001 2002 2003 2004 Big 35 43 36 35 33 41 51 56 Medium 137 118 141 140 148 137 137 140 Small 3,011 2,944 2,868 2,843 2,724 2,717 2,958 2,930 Total 1,183 3,105 3,045 3,018 2,905 2,895 3,146 3,126 Source: Financial Agency (FINA), The County Chamber of Economy, Osijek

In the Ministry of Economy, Labor and Entrepreneurship program the following objectives of the development of small economy have been set forth: increase of efficiency, quality and competitiveness, increase of export and adjustment to global market, research, development and implementation of new technologies, increase of employment, cooperation and incentive measures for environment-friendly production, i.e. which does not have adverse effect on the environment. Pursuant to the program the following measures and activities have been foreseen:  Loans under more favorable conditions,  Providing grants for the raise of employment,  Organization of entrepreneurship centers, entrepreneurship incubators and small economy zones,  Encouraging the development of female entrepreneurship and entrepreneurship of young,  Co financing the development of new technologies and innovations in the development of craft and cooperatives,  Providing support for the participation at the international fairs in country and abroad,  Providing professional assistance and consulting services,  Education of entrepreneurs, etc.

Among the main problems of SME sector is insufficient education of entrepreneurs (in terms of knowledge and skills) for high quality management of the sectorial activities, as well as for the activities in the field of marketing, finance, informatics technology, foreign languages, etc. The problem represents the lack of different guarantee funds, particularly at local level, and also good programs for development and long procedures for obtaining a loan. Investing in the capacities for the production activities, and in new technology and enhancement of quality of products and services are scarce and insufficient.

Within the frame of the program for SME sector, the Ministry of Economy issued a number of measures for stimulating development of SME sector, from better conditions for obtaining loans to the improved conditions of doing business and registration of a company. In line with that, the Osijek - Baranja County Committee adopted, on March 8, 2005 the Rulebook on the support for capital investments in the craft area. This refers particularly to the support for production industry, and the amount of support is limited to 25% of the total investment

61 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County value. In addition to this, the conditions for the users of these grants are well-defined and strategically targeted.

12.6. Transport

Owing to favorable geographic and traffic position of the County, the area has outstanding development advantages. However, due to underdeveloped transport infrastructure, particularly in the area of the County, no significant economic effects from the transport activities in the area were recorded in the past period. Traffic infrastructure includes 1,614 km of roads of which 470 km of state roads, 620 km of county roads and 520 km of local roads. Railroad transport has not yet recovered to the pre-war level, railroad infrastructure sustained serious destruction and the modernization of railroad infrastructure is rather slow. Thus, the rail route Osijek - Vinkovci is not yet in function. Owing to rapid growth of traffic on inland water routes the Port Transit of the Osijek city recorded in the last year an increase of traffic of over 30%. Average number of the employed in transport, storage and communications sectors is 1,716 persons, which accounts for 4% of the total number of employed in the County.

12.6.1. Road Transport

According to the last data (2004) 98,219 motor vehicles have been registered in the County which is 6% of total number of registered vehicles in the Republic of Croatia. This shows that this sector of the County, in relation to the potentials of the entire economy is relatively good represented within the state.

Table 35 Registered motor vehicles in the County The County Republic of Croatia Passenger cars 75,462 1,293,461 Buses 314 4,833 Freight vehicles1) 6,927 138,290 Other vehicles2) 10,641 114,126 1) Trailers are included 2) Combined vehicles, working machines, working vehicles and tractors are included Source: Central Bureau of Statistics, processed by the County Chamber of Economy, Osijek

Transport by roads is the most represented form of freight transport in the County. It can be noticed that the County motor pool is improving every year; the number of ecologically safer and technically acceptable vehicles is increasing, while the number of old and technologically obsolete vehicles is in the same time decreasing. The County numbers 165 carriers and total of 675 of licensed vehicles, which accounts for 7% of the total licensed vehicles in the Republic of Croatia. With the enlargement of the European Union carriers from neighboring countries are allowed easier and simpler access to market, which, of course, will aggravate the position and competitiveness of our carriers. Also, the big problem represents the distribution of critical permits for international transport (CEMT permits).

12.6.2. Passenger Road Transport

The County has 314 registered buses, which accounts for 6.5% of the total number of registered buses in the Republic of Croatia.

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Table 36 Overview of transported passengers and realized passengers kilometers in the County 2004 Passengers transported in public transport, in thousands 1,621 Inland transport 1,594 Passengers kilometers, in thousands 329,237 Of which in inland transport 321,433 Source: Statistics Department of the Economy Services of the State Administration Office in the Osijek - Baranja County, the County Chamber, Osijek

The problematic of road passengers' traffic particularly that of systematic market-related nature is still undefined and strategically undeveloped. This deficiency, along with the price of fuel which have recently become an issue of concern, causes serious restrictions in this economy sector activities.

12.6.3. City and inner-city suburb transport

Table 37 Overview of passengers transport in the city's public transport Passenger transport in 2003 2004 thousands Total 8,896 9,252 Buses 5,690 6,189 3,206 3,063 Source: Information about the economy in the Osijek - Baranja County area, Croatian Chamber of Economy, March, 2005

The growth of passenger transport in the two years observed is evident which contributes to better economic results in this sector. However, since every year the number of passenger cars is rapidly increasing, public transport sustains serious limitations, particularly with regard parking places, public traffic infrastructure and therefore, losses which ensue from these problems. For this reason, significant reconstructions of infrastructure of public transport have been planned, including solutions for parking and traffic services in private sector.

12.6.4. Railroad transport

There are altogether 31 railroad stations and 269 km of railroad tracks in the area of the County.

Table 38 Railroad routes in the County measured by the number of passengers 2002 2003 Departed passengers, in 714 725 thousands Goods transport, in thousands Loading 435 310 Unloading 688 620 Source: Statistics Department of the Economy Services of the State Administration Office in the Osijek - Baranja County, the County Chamber, Osijek

While the growth of passengers transport is visible the sector of transport of goods has dropped. This decrease is attributed to obsolete technology, and improvements and changes foreseen in the program of railroad modernization are expected to reverse this negative trend. This is, of course, the problem of the State, but the County also suffers the consequences, both economic and social.

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12.6.5. River transport

River routes of the Republic of Croatia are part of the European traffic system. Thus, within the frame of the County the Drava River has a status of international waterway, in the section of 23 km from the mouth of the river up to the Osijek city. These obligations (international) but also the needs of domestic economy require the modernization of waterways and wharfs, for which investment significant funds are needed. In the last two years traffic in ports has greatly increased and that points to good prospects of this activity.

Table 39 Physical volume of operations of Port Transit of the Osijek city 2003 2004 index 04/03 Reloading in River traffic (in thousand tons) 291 367 126 Total freight manipulation (in thousand tons) 1,024 950 93 Source: Port Transit of the Osijek city, Croatian Chamber of Economy, Osijek

The main users of the Osijek Port Transit services are domestic economic subjects however, geo-political links, particularly those with Hungary and gradually point to the relevance of the port for much larger area. By including of the port into NEXE group, concrete factory will be built in the complex of the port which will significantly increase the volume of traffic in the port. Entry to the port has been restored and terminal for access of bulk load and the construction of the port basin has started.

12.6.6. Air transport

The was put into operation long after the war, in 2001. The airport is constructed and equipped for commercial airplanes and the complete infrastructure has been restored. During 2003 the second phase of the airport repair was undertaken.

Table 40 Airport passenger’s transport 2003 2004 Total airplanes traffic 432 584 Domestic routes 210 291 Traffic with abroad 222 293 Total passengers traffic 3,302 3,027 Domestic routes 2,674 1,821 Traffic with abroad 628 1,206 Source: Airport of the Osijek city, processed by Croatian Chamber of Economy, the County Chamber Osijek

The Osijek airport is in function 24 hours, which enabled opening of cargo traffic. In 2004 total of 356 tons of goods has been manipulated.

12.7. Tourism

Neglecting the development of continental for the benefit of coastal tourism which has been an ongoing trend or some thirty years is the reason for the slow development of tourism in the Osijek - Baranja County. However, tourism today develops new destinations which particularly lay on natural resources, favorable climate and ecological conditions, historical diversity and cultural richness. All these advantages open the possibility for the County to develop various types of tourism: ecological and cultural tourism, health and recreational

64 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County tourism, excursion, hunting and fishing tourism, and recently also transit and business tourism.

Nature Park Kopa čki rit together with the Danube basin and lower flow of the Drava River represents the County biggest nature resource with Kopa čki Rit as the most protected natural catchment area of the Danube river in the entire Central Europe. Exquisite biological, habitats and landscape variety and constant changes under the influence of flooded waters are the basic tourist attractions of this area. In addition to this, the County broader area ( ðakovo, Valpovo, Donji Miholjac, Našice) provides rich cultural and gastronomic offer. Development projects of Public Institution Nature Park Kopa čki rit are based on sustainable use of natural resources and on the development of ecological aspects of tourism (observing of birds, education programs, etc.) which will ensure the preservation of natural richness for future generations. The complex of the Tikveš castle located within the Nature Parc Kopa čki rit represent the centre of such developmental direction, with its plans for opening the European centre for the environment with exclusive gastronomic, accommodation and cultural offer. Linear connectivity of natural eco-systems along the rivers Drava and the Danube enable the development of parallel tourist connections with neighboring countries (primarily with Hungary) and also with more distant Western-European markets.

In 2004 in the County had 106 entrepreneurs registered in the hotel and restaurant activities of which 103 small and 3 medium firms. Average number of employed in the tourism industry in 2004 was approximately 1000 persons. Today, the County has approximately 1500-1600 available beds, mostly in towns. Other accommodation capacities comprise those linked with health and recreational tourism in the town of Bizovac and the capacities in private accommodation in smaller towns of the Baranja region.

By far the biggest nature resource of the County and also tourist attraction of the County is Nature Park Kopa čki rit as the best preserved natural catchment basin of the Danube River in the entire Central Europe. Development projects are being drafted on that basis, i.e. the starting point being the stimulation of eco-tourism as such type of tourism is adequate for protecting natural environment of this area. The castle Tikveš located within the Nature Parc Kopa čki has been foreseen as the central place where all disciplines of eco- tourism, such as protection, research, monitoring of the nature and environment and education could develop, along with various cultural-artistic contents. Another important polyvalent content in the area of the County is Bizovac, i.e. the Bizova čke thermal waters, oriented toward the development of recreational and health tourism. In 2004 the County recorded over 100,000 visits/nights, of which 2/3 are domestic and 1/3 foreign tourists, with the latter showing a mild, but gradual growing trend. However, an average number of tourists nights in the County amounts to only 1.8 which indicates that it is necessary to develop a more diversified tourist offfers. Starting from this conclusion, and with the aim to promote continental tourism it is necessary:  to define objectives and principles of the development of the County tourism in compliance with the potentials and trends on tourist markets,  to define the County tourist products and make the proposal for the development of each one of them,  to define individual tourist offers of particular destinations in one unique tourist offer,  to define a unique marketing access and promotion of the County area which should make an integral part of the tourist promotion of the Republic of Croatia,  to create preconditions for drafting of Master plan for the development of the County tourism as an integral part of the Strategy of the development of tourism of the Republic of Croatia.

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12.8. Trade

Tertiarization which in the Republic of Croatia was late for ten years and privatization based on the concept of artificial restructuring of economy together have had a negative consequence for the development matrix of the economy of the entire country. What occurred was fast development of standard type of import - based services and inappropriate reduction of production capacities which were mainly based on domestic resources. As many other country’s regions the Osijek - Baranja County was also struck twice with negative outcome of belated tertiarization and wrongly conceptualized privatization; on one side, the volume of natural resources use was sharply reduced, while, on the other, services sector, particularly in trade industry, rapidly grew.

Table 41 Number of entrepreneurs in the Republic of Croatia and in the County Serial Number of Industry/Area Number entrepreneurs 1. Economy of the Republic of Croatia 69,098 2. Trade in the Republic of Croatia 27,196 3. Economy of the Osijek - Baranja County 3,126 4. Trade of the Osijek - Baranja County 1,321 5. % of share of entrepreneurs in trade in the economy of Republic of 39.36% Croatia 6. % of share of entrepreneurs in trade in the Osijek - Baranja County 4.86% in the economy of Republic of Croatia 7. % of share of entrepreneurs in trade in the Osijek - Baranja County 42.26% in the economy of the Osijek - Baranja County Source: FINA

Evidently, the area of the County has a larger share of entrepreneurs in trade sector compared with the average at the state level, thus, we may conclude that in this area trade is somewhat more developed than it is in entire Republic of Croatia.

Table 42 Number of employed in distributive trade Description Number of shop/services Number of employed Republic of Croatia 24,389 170,076 The County 1,852 10,541 % of share in the Republic of 7,59 6.19 Croatia

In 2003 the distributive trade sector numbered 1,852 shops and 10,541 of employees, which accounted for 6.2% of the number of employed in this sector at the state level. However, in 2003 a drop in the number of employed for 807 occurred, while in the same increase in turnover was recorded which leads to the conclusion that the recorded growth was due to the improvement of trade efficiency. In the same time, serious concerns with regard social and general working conditions in this sector have arised. The so-called ranking list of 400 biggest companies in the Republic of Croatia include 7 trade companies from the County area, which confirms the earlier conclusion about the vigorous trade activities in the area. In the last two to three years the County, just as the entire country has experienced an enormous expansion of big trade chains and shopping centers. On one hand, this phenomenon increased the competition and enhanced market offer, and on the other it resulted in the unemployment of small family markets and many were forced to close. For this reason, it is necessary to draft a strategy for development of trade at the state level and regulate the following issues:

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 Conditions for performing trade on domestic and international market,  Protective measures for import and export,  Restrictions for carrying out trade activities,  Working hours in trade industry,  Unfair market competition, and  Surveillance and management measures.

12.9. Financial business - banks

As the entire financial system in the country has undergone substantial changes so had the financial sector in the County area, and particularly banks sector. Many banks and their subsidiaries were closed and in the same time many new were opened. Gradska banka is still undergoing bankruptcy procedure. The following banks exist in the area of the County: Slavonska banka d.d. member of HYPO Group, in the majority ownership of HAAB, with its branch offices and agencies; 14 banks represented by their branch offices, agencies, business and commercial and consulting centers; these are: Banka Kovanica d.d. Varaždin, Banka Sonic d.d. Zagreb, Croatia banka d.d. Zagreb, Erste & Steiermarkische Banka d.d. Zagreb, HVB Splitska banka d.d. Split, Križeva čka banka d.d. Križevci, Partner banka d.d. Zagreb, Podravska banka d.d. , Primus banka d.d. Zagreb, Privredna banka Zagreb d.d. Zagreb, Raiffeisenbank Austria d.d. Zagreb, Slatinska banka d.d. Slatina, Volksbank d.d. Zagreb and Zagreba čka banka d.d. Zagreb. Each branch office of these banks has its own subsidiary and each subsidiary its outlets in all major towns. Evidently, the entire County area is well-covered with the bank system network.

In addition to the banks there are 12 savings banks and loan association with six own subsidiaries and four housing saving banks are included in the banking system.

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13. SOCIAL INFRASTRUCTURE AND BUDGET

The County has a very well developed network of the institutions in the sector of education, science, culture, health, social welfare and information. Scientific sector in the area of the County is represented primarily by the University of J. J. Strossmayer in the Osijek city with 10 faculties – Faculty of Economy, Faculty of Law, Faculty of Medicine, Faculty of Agriculture, Faculty of Food Technology, Faculty of Electrotechnics, Faculty of Civil Engineering, Faculty of , Faculty of Theology, Faculty of Pedagogy, and Academy of Arts, and four University departments of mathematics, biology, physics and chemistry. The County, the University and the Osijek city are co-founders of Technology and Development Centre d.o.o. Osijek. In addition to this in Osijek the Institute for Scientific and Arts Work of the Croatian Academy for Science and Arts (HAZU).

In the sector of education and social care for children there are 22 pre-school institutions, 70 elementary schools, 108 regional schools, 30 secondary schools and 5 pupils dormitories of which two are independent institutions while 3 dormitories make part of secondary schools. Art institutions of the County include the Croatian National Theater, with the status of national theatre, Gallery of Visual Arts in the Osijek city and the Agency for the restoration of the Osijek fortress Tvr ña, and in cultural sector 4 theaters, of which 2 are professional are active in the County. The County has 122 libraries, 13 museums and galleries and gallery institutions, i.e. domestic collections, of which the most known are those in the cities of Osijek, ðakovo, Našice and Valpovo and the State Archive in the Osijek city.

Health sector of the County includes the Osijek city Clinical Hospital, which also serves as a regional hospital, health institutions established by the County – Medical center of the Osijek city, Medical center ðakovo, Medical center Valpovo, Medical center Donji Miholjac, Medical center Našice and Medical center Beli Manastir, Pharmacy of the Osijek city, Pharmacy ðakovo, Pharmacy Beli Manastir, General County’s hospital Našice, Public Health Institution of the Osijek - Baranja County, of the Osijek - Baranja County Emergency Medical Aid and Polyclinic for the rehabilitation of hearing and speech „SUVAG“ in the Osijek city. There are also a number of private health institutions, private surgeries and pharmacy units.

Social welfare activities in the area of the County are carried out by social welfare centers of the Osijek city, ðakovo, Valpovo, Donji Miholjac, Našice and Beli Manastir, as well as by social welfare institutions established by the County; these are: homes for the retired and home for disabled persons in Osijek, ðakovo and Beli Manastir; private centers for the elderly and disabled persons in Donji Miholjac, Beliš će, Osijek, and in Beli Manastir, psychiatry centers for adult patients in Osijek and in ðakova čka Breznica, children’s home „Klasje“ in Osijek, children village „Ladimirevci“, Center for education of children and youth in Osijek and family homes in Zel čin and Darda, foster families and one legal entity providing social welfare services for maximum twenty individuals, along with other activities.

Social welfare activities are also performed by the Center for professional rehabilitation in the Osijek city of which the Shelter for family aggression victims and Center for Homeland War victims form part.

Information industry includes: TV stations, Television of Slavonija and Baranja and HTV studio of the Osijek city; radio stations: Slavonski radio, Gradski radio, Radio plus, Radio Baranja, and radio stations in D. Miholjac, ðakovo, Našice and Valpovo and radio station

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Croatian Radio Osijek. Main newspapers are the daily Glas Slavonije, informative newspapers Osje čki dom, magazines of literature, Književna revija Matice Hrvatske, Pravni vjesnik (Legal Newsletter) of the Faculty of Law, Konji čki vjesnik (newspaper for horse riders), etc.

The Osijek -Baranja County budget is planned for the three-year period, in compliance with the state budget. In 2006 the planned amount was HRK 238.4 million, for the year 2007 HRK 256.3 million and for 2008 HRK 275.5 million. These amounts indicate the average annual growth rate of 4.3%. The budget is adjusted to economy, with the anticipated savings for the benefit of economy, since the rate of growth of economy has been set to approximately 6% per year. In the budget plan revenues with taxation account for 73.22%, followed by a rather high figures representing various grants and which account for 6.34% while revenues from non-financial assets account for 7.06%. Within the frame of our budget system this local system is evidently short in revenues, which should change in a few years, owing to the development of local self-government and process of decentralization of the system. Total expenditure from the budget for items related to primary education account for 41%, for secondary education and pupils dormitories 26%, for health services 21%, 6%, for centers for elderly and disabled persons and 6% for social welfare. The budget structure provides for very narrow maneuvering space for expenditures. However, in spite of that, for the next three years savings have been planned for material expenditures, e.g. expenditure for the employed will be only 10.35% of total expenditure, expenses for material and energy 9.71%, and expenses for services 19.91%. Significant expenditures are planned for subsidies, i.e. 7.63%, for assistance within the state 11.63% and 9.30% for other undefined expenditure. In the following period the expenditure growth for capital investment has been planned to account for 22.25% of total expenditure. Since expenditure for financial assets and payment of loans account for only 1.16% of total expenditure, the County will have enough room for additional financing through the issuance of securities and bonds.

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14. LOCAL AND REGIONAL (DISTRICT) SELF- GOVERNMENT

Osijek - Baranja County was established in 1993 by the administrative-territorial regulation act which established the new administrative units of the Republic of Croatia. The County is, by its legal status, local self-government unit governed by the County Assembly, the Committee, the County Prefect and administrative bodies of the County. The County includes 264 settlements located in 42 local self-government units, of which 7 have the status of the town (B. Manastir, Beliš će, D. Miholjac, ðakovo, Našice, the Osijek city and Valpovo), 35 status of municipalities (Antunovac, Bilje, Bizovac, Čeminac, Čepin, Darda, D. Moti čina, Draž, Drenje, ður ñenovac, Erdut, Ernestinovo, Feri čanci, , , Kneževi Vinogradi, Koška, Levanjska Varoš, Magadenovac, Marjanci, , , , Podgora č, , , Satnica ðakova čka, , Strizivojna, Šodolovci, Trnava, , Viškovci, , Vuka). The County is also the founder and a member of the Croatian Institute of Local Self-Government. Following elements have an impact on the situation in local and regional (district) self-government:  problem of financial sources (decentralization problem),  systemic restrictions: problem of the management of development for issues requiring regional approach (regional development without regions),  low capacity of small local self-government units (financial, organizational, human resources) requires providing assistance,  capacity for planning and developmental function: the County founded the Agency for Development and Službu za International projects and European Integration Service as administrative bodies,  in the County development visions are drafted with issuing of a number of strategically development documents (Strategy of development of the County, Spatial planning of the Osijek - Baranja County, Irrigation Plan, Environmental Protection Program, Recovery of soil polluted by waste and non-sanitary landfills, etc.).

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15. AREAS OF SPECIAL STATE CONCERN

Areas of special state concern are defined on the basis of combined criteria and are classified into three value groups:  First group includes areas of the cities and counties situated along the state border, which were occupied during Homeland War and whose city or municipal center respective distance from the state border does not exceed 15 km of air line and which do not have more than 5,000 citizens (census of 1991). In addition to this, municipalities and cities of the entire Croatian are also included in this group.  Second group includes the area of the cities, counties and settlements occupied during the Homeland War, but which, according to the degree of destruction and some other criteria can not be included in the first group.  Third group are those settlements which have been formed according to the European Union criteria, i.e. which, according to these, fall behind in terms of development. The following criteria are applied: 1. economic development measured on the basis of income, employment rate, activity as per resident and some other criteria; 2. criteria of structural difficulties which include the level of restructuring of economy, and is measured by the structure and number of employed and unemployed, development of industry, urban criteria, etc.; 3. demographic criteria which measure population density, mobility, vital indexes, educational structure and similar indexes; 4. criteria with a specific characteristic and which refer to the areas undergoing difficulties due to the changes of border line or are area contaminated with mines.

The areas of cities and municipalities in the Osijek - Baranja County designated as areas of special state concern are included in the first group. These are: Antunovac, Beli Manastir, Bilje, Draž, Erdut, Ernestinovo, Jagodnjak, Kneževi Vinogradi, Petlovac, Popovac, Čeminac and Darda and Osijek city's suburbs Klisa, Nemetin, Sarvaš and . In the third group municipalities Levanjska Varoš, Podgora č, Podravska Moslavina, Punitovci, Satnica ðakova čka and Semeljci are included. On the basis of criteria of structural difficulties the County Vladislavci is also included.

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16. CROSS-BORDER AND INTERREGIONAL COOPERATION

Valuation and definition of border zones in the Republic of Croatia, have not been precisely laid out in the document „Strategy of Regional Development of the Republic of Croatia (Proposal)“. On the 37th page of this document, under Item 33 (Program for cross-border and regional cooperation) objectives and activities are established aimed at promoting cross- border cooperation with the European Union and with countries which remain candidates for entering the EU within the next ten years. The document mentions the need for improving the management of cross-border and regional cooperation and to integrate such programs in the County’s strategy, to draft ROP for cross-border cooperation and to establish and develop programs of cooperation. From the position of strategy of the County's ROP it ensues that it precedes ROP on cross-border and inter-county cooperation, therefore, further in this document we are emphasizing the areas and contents which such document should contain. In connection to this, the Osijek - Baranja County has already started to invest efforts in the development of interregional, cross-border and transnational cooperation, issues in charge of the Agency for Development of the Osijek - Baranja County, Office for International Projects and European Integration of the Osijek - Baranja County, and other administrative bodies of the County, depending on the need.

Firstly, ROP should set forth general characteristics of of the Osijek city - Baranja County border area in relation to the areas of bordering counties or areas of other countries (Hungary, Serbia and Montenegro). As the EU pre-accession initiatives in assessing eligibility for granting funds for certain project take into account political realities in a broader area, the Osijek - Baranja County, in drafting its international project proposals, while it continues to successfully cooperate with the EU member countries (e.g. Austria, France, Italy and Germany) becomes more oriented to countries potential candidates for the EU membership (e.g. Bosnia and Herzegovina). To this effect, geographic characteristics, borders and area along the border, historical overview and valuation of these relation, traditional cross-border connectivity as well as border areas attributes in a larger sense should be included in the ROP. In addition to this, economic considerations, description of activities, compatibility of economic interests and potentials, infrastructural advantages and restrictions, environment protection and human resources are to be included, too. In that sense, the need for the development of small and medium enterprise, technological and business centers and the development of market and local institutions should be emphasized. And finally, starting from the strategy for development which is determined for these areas, it is of paramount importance to define instruments for the support of development of entrepreneurship, local self-government and interstate arrangements and instruments. As a conclusion, it can be established that the border areas development can be defined only after the County Regional Operating Programme (ROP) has been adopted.

Inter-regional cooperation represents the expansion of strategic decisions on inter-regional areas, that is the inclusion in strategic concepts of natural resources, capacities, manpower and other potentials. In the Strategy of Regional Development (draft paper) an increase of efficiency of inter-regional development programs has been foreseen, but also the creation of instruments and institutions for the management of the development. It has been particularly emphasized that this cooperation refers to the areas experiencing development constraints and on border and inter-regional cooperation. It is self-understanding that such cooperation

72 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County includes inter-regional scientific, strategical and institutional foundations, which has not been sufficiently emphasized so far.

The Osijek - Baranja County develops its inter-regional cooperation within the frame of international relations, on the basis of long-term contacts with the European integration guidelines. In this context, the following needs to be emphasized:

 the Osijek city-Baranja County participates in the European Union integration processes through the Euro- Regional cooperation „Danube-Drava-Sava“, of which it is one of the co-founder, and 28 November 1998 in Pecsz, Hungary, the County signed the Statute of Euro- Regional cooperation „Danube-Drava-Sava“. Main active factors in this cooperation, regional Chambers of Economy, on 8 September 2005 held a conference on the prospective for the development of the Baranja County and the Osijek - Baranja County, on which the issues about cooperation within the frame of Euro - Regional cooperation „Danube-Drava-Sava“ dominated. Conference was also attended by the representatives of canton, Bosnia and Herzegovina. Euro- regional cooperation „Danube-Drava-Sava“ continues its activities, and the Republic of Croatia has taken over the presidency from Hungary in the new period.  Within the frame of Euro-region, the Osijek - Baranja County particularly develops bilateral cooperation with the County of Baranja in Hungary, mainly in the preparation and implementation of (25) projects which apply for the EU funds, but also in the development of other areas (Cooperation agreements was signed in 1995 and in 2005 Cooperation agreement in the area of the protection and rescuing from natural disasters and catastrophes, etc.);  the County also develops inter-regional cooperation with other international associations (Working associations of the Dunav basin regions, where it assumed together with the Vukovar – Srijem County the leading role of the Republic of Croatia since 2004 and European Regions Assembly since 2005) as well as on the basis of bilateral agreements (with the autonomous province in Italy, Furlania- Iulia).

Within the frame of the Republic of Croatia the Osijek - Baranja County develops bilateral cooperation with other counties, and multilateral within the frame of the Croatian Association of Counties, whose foundation it initiated and prepared in 2003.

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17. ENTREPRENEURIAL ZONES AND FREE ZONE OSIJEK

Entrepreneurial zones represent a new form of infrastructural content which has been developing fast in twenty recent yeas within the frame of the European Union. The state creates conditions, by providing starting funds for economic activities defining in advance the content of the activities and their organizational forms. Namely, in entrepreneurial zones, according to the definition, small and medium entrepreneurship is being developed, which by all analytical data makes to most vital segment of economy in global business conditions. Over 60% of innovations in business, and even some of the most relevant innovations emerged from the SME sector activities, while big conglomerates adopt on most occasions, these solutions and develop them as a broad market brands.

The Osijek - Baranja County undertook significant efforts in order to create modern business zones.

The biggest entrepreneurial zone in the Osijek - Baranja County is the one in Osijek. Free zone extends over the area of over 600,000 m², with an average parcel of approximately 2,500 m². The activities which are being carried out in the Free Zone Osijek include: warehouses and services, business operations and trade. Over a 100 of entrepreneurs are operating in the Free Zone, employing over 1,630 of workers. Free Zone is fully equipped with the necessary utility infrastructure.

Due to the fully occupied existing zone the building of the new zones has been planned as follows:

 Economic zone South is situated opposite to the existing warehouses and services zone, between Sv. Leopold Bogdan Mandi ć Street, southern beltway and „S“ roads and it occupies the area of approximately 155 ha. The request for the transfer of ownership over the land from the Republic of Croatia to the Osijek city for the land surface of up to approximately 74.7 ha is in the process. Planned use of the area: economic (production, business and catering-tourist services), business purpose (offices, services and trade), fairs and sport and recreational purpose and surfaces for infrastructural systems.  Economic zone West is situated between Kopaoni čka and Vilajska Street, westward towards the Risnja čka Street, up to the new intra-zone roads, parallel with the direction of two-tracked railroad Corridor VC ðakovo- Osijek-Beli Manastir and extends over the area of approximately 1.81 ha. Planned use of the area: economic (production, offices, craft, services) surfaces for infrastructural systems.  Economic zone Tenja is situated at the entry into settlement near the main road the Osijek city - Tenja and extends over the area of approximately 5.62 ha. The request for transfer of ownership over the land from the Republic of Croatia to the Osijek city for the land surface up to approximately 5.62 ha is in the process. Planned use of the area: economic (production, craft), business purpose (offices, services, trade), catering- tourist (catering, accommodation) and surfaces for infrastructural systems.  Warehouse and services zone are situated in the south-east of the St. Leopold Bogdan Mandi ć Street and the roads for Ankin Dvor, between III. Row of the existing warehouse and services zone, canal Šeper and railroad track Osijek – ðakovo and extends over the surface of approximately 6.77 ha. Planned use of the area: economic

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(industry, craft), business purposes (services, trade, offices) and surfaces for infrastructural systems.  Industrial zone Nemetin extends over the area of around 101 ha. The Zone is situated in the eastern part of the Osijek city, surrounded by the Osijek – Vukovar road from the west and railroad line Osijek city – Dalj from the north and in the south-east with the Osijek city beltway towards Sarvaš. The request for transfer of the ownership over the land from the Republic of Croatia to the Osijek city for the land surface of up to approximately 101 ha is in the process. Planned use of the area: economic (industry, production, services) and surfaces for infrastructural systems.  Free Zone Osijek – strategic objective of the Osijek city is the entry into ownership structure of Free Zone Osijek d.o.o. With 25% + 1 share, and ensuring the necessary land for potential investors. Situated as a fifth independent unit eastward from MIO Standard in the area between Vukovarska and Vinogradska Street the Free Zone Osijek extends over the surface of 37.4 ha. The request for the transfer of ownership over the land from the Republic of Croatia to the Osijek city for the land surface of 37.4 ha is in the process. Planned use of the area: economic (industry), business (trade, service activities) and surfaces for infrastructural systems.

The business zone Beli Manastir includes the space of 602,000 m², with the average size of a parcel amounting to 2,600 m³. Currently 23 entrepreneurs employing 220 workers are doing business in the zone.

The Beliš će Zone includes 65,000 m³. with the average size of a parcel of 1,250 m, and with approximately 50 employed.

The zone Donji Miholjac includes two zones Janjevci and Lanik, both situated along the state highway, contiguous with Hungary. The Zone Janjevci includes the space of 325,000 m square, with the average size of a parcel of 4,000 m square. The Zone currently hosts 13 active entrepreneurs, employing 220 people. The Zone Lanik includes the space of approximately 60,000 m square, the average size of a parcel is approximately 2,000 m square, and currently approximately 30 people are employed in the Zone. The industrial Zone ðakovo extends over 640,000 m square, with 20 entrepreneurs doing business in the zone with 540 people employed.

The entrepreneurial Zone Našice extends over 659,000 m square, and currently has 220 employees.

A small enterprise Zone Valpovo includes 67,000 m square, the average size of a parcel is 1,650 m square, and 196 persons are currently employed.

The business Zone Valpovo includes 51,678 m square with the average size of a parcel of 4,600 m square. The Zone is undergoing the process of investment and currently employs only a small number of persons.

In the Osijek - Baranja County the following zones are also important: Bizovac, Cret Viljevski, Črnkovci, ður ñenovac, Petrijevci, Semeljci and Koška.

For the development and stimulation of entrepreneurship the Osijek - Baranja County ensured the funds from the budget and established the manner of the use of these funds. Incentive measures include education, information, consulting for the system of development, program

75 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County of spatial possibilities and the program of providing financial support. The County has also brought the Incentive Program for small entrepreneurship and tourism in rural area. Incentive funds are used on the basis of evaluation of projects and for printing the guidelines for small and medium entrepreneurship with pertaining catalogues.

Free Zone Osijek city d.o.o. is established in 1997 by altogether six founders (Osijek - Baranja County, Saponia, Tranzit, Airport Osijek, Slavonska banka and Niveta) which were granted a concession for 25 years. Concession was granted for four separate locations, as follows:  Port Tranzit  Airport  Nemetin  Vukovarska avenue.

Free Zone Osijek Ltd. Extends over the total surface of 240,000 m². Two locations (Port Tranzit and Benetton) are in function, whereas the other two are not yet in the use.

The following five users – producers were active, as at 31 December, 2005 in Free Zone Osijek:  Benetton Croatia d.o.o. - 215 employed – textile industry  Osijek city konfekcija d.o.o. (ready-to-wear clothes) - 250 employed - cooperate of Benetton  Konfekcija Antonazzo d.o.o. - 250 employed - cooperate Benetton  Ascommerce d.o.o. - 80 employed – food industry  Trbomin d.o.o. - 5 employed – chemical industry.

Besides these five active users, there are around thirty users who also actively use the Free Zone Osijek Ltd. storage services for their goods.

Free Zone Osijek Ltd. has a very good position with regard its geographic surroundings and the vicinity of Hungary, Serbia and Montenegro and Bosnia and Herzegovina. Traffic and utility infrastructure are well organized. There is a good connection through the beltway with the highway Zagreb-Lipovac and with the corridor 5c, in the near vicinity, which is a link between Budapest and Adriatic Sea. International airport is at the 5 km distance and part of the Zone is positioned in the port of the Drava River. Railroad connection with all parts of the country and abroad is assured by means of a railway track within the Free Zone.

Free Zone has the complete utility infrastructure (electric energy, water, gas, sewage system, vehicle weight, telephones). Some of the users of the Free Zone Osijek are also the beneficiaries of incentive measures and support provided by the Republic of Croatia. As legal entity Free Zone Osijek Ltd. currently employs 13 people.

The following are priorities for the construction of free zones:

The construction of the existing entrepreneurial zones established by spatial plans or their extension:  The construction of entrepreneurial zone in Beli Manastir;  The construction of entrepreneurial zone in Beliš će;  The construction of entrepreneurial zone in ðakovo;  The construction of entrepreneurial zone in Donji Miholjac;

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 The construction of entrepreneurial zone in Našice;  The construction of business zones in Osijek city;  The construction of entrepreneurial zone in Valpovo;  The finishing of construction of business zone in Bizovac;  The finishing of construction of business zone in ður ñenovac;  The finishing of construction of entrepreneurial zone in Feri čanci;  The finishing of construction of entrepreneurial zone in Koška;  The construction of entrepreneurial zone in Levanjska Varoš;  The construction of entrepreneurial zone in Magadenovac;  The finishing of construction of entrepreneurial zone in Petrijevci;  The finishing of construction and extension of the existing entrepreneurial zone in Semeljci;  The finishing of construction entrepreneurial zone in Viljevo.

The construction of new entrepreneurial zones to be established by spatial plans:  entrepreneurial zone Antunovac;  entrepreneurial zone Bilje;  entrepreneurial zone Bizovac;  entrepreneurial zone Čeminac;  entrepreneurial zone Čepin;  entrepreneurial zone Darda;  entrepreneurial zone Donja Moti čina;  entrepreneurial zone Draž;  entrepreneurial zone Erdut;  entrepreneurial zone Ernestinovo;  entrepreneurial zone Kneževi Vinogradi;  entrepreneurial zone ;  entrepreneurial zone Petlovac;  entrepreneurial zone Podgora č;  entrepreneurial zone Popovac (Kneževo);  entrepreneurial zone Satnica ðakova čka;  entrepreneurial zone Strizivojna;  entrepreneurial zone Viškovci;  Entrepreneurial zone Vuka.

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18. MINED AREAS

18.1. In terms of a number of mine-explosive devices and unexploded devices the area of the Republic of Croatia is one of the ten most contaminated national areas. Current estimates point to the fact that 1,174 km square meter in the Republic of Croatia are still under mine suspected surfaces and, according to data available, there are approximately 500,000 mines and unexploded ordnance (UXO).

Table 43 Size of Mine Suspected Areas (MSP) and distribution by counties MSP and the No. The County The County MSP Surface County in relation (%) Surface to the surface of the State (%) 1. Osje čko-baranjska 4,152,000,000 203,953,721 17.4 4.9 2. Li čko-senjska 5,350,500,000 200,764,385 17.1 3.8 3. Sisa čko-moslava čka 4,463,000,000 182,175,854 15.5 4.1 4. Karlova čka 3,622,000,000 118,811,126 10.1 3.3 5. Vukovarsko-srijemska 1,860,760,000 107,270,524 9.1 5.8 6. Brodsko-posavska 2,034,000,000 100,330,487 8.5 4.9 7. Zadarska 3,642,000,000 84,169,397 7.2 2.3 8. Šibensko-kninska 2,994,000,00 60,803,609 5.2 2.0 9. Viroviti čko-podravska 2,023,000,000 43,374,248 3.7 2.1 10. Splitsko-dalmatinska 4,572,000,000 28,042,308 2.4 0.6 11. Požeško-slavonska 1,821,000,000 26,118,266 2.2 1.4 12. Dubrova čko-neretvanska 1,728,490,000 18,229,774 1.6 1.0 Total 38,316,750,000 1,174,043,699 100.0 3.1 Source: Agency for development of the Osijek - Baranja County in cooperation with HCR, branch office Osijek November, 2005

18.2. Planning of mine clearing is an interactive procedure of the Croatian Mine Action Center and the users of areas and objects. Planning of mine clearing projects directs all activities on particular areas and objects. The County mine clearing plan includes all demands of the cities in the County area and other demands of community for deminig in cooperation with CMC. And finally, the County plan contains the procedure of the adoption of annual plan. Since mine clearing is extremely slow and demanding task which requires significant financial assets, priority areas for demining are determined, according to type of soil and function of the area (family yards, infrastructural objects, land on which economic objects and factories are built, agricultural land, national parks, protected areas, natural and cultural in heritage, meadows and pastures, forests and other surfaces). Within its activity the Croatian Mines Action Center includes also demining procedures with methods, main actors and financing of mine clearing procedure.

18.3. Problems of mined areas in the Osijek - Baranja County are very serious, as it has already been said. Of total 4,149 km square area of the Osijek - Baranja County, the area suspected for mine presence amounts to 209.4 km i.e. around 5% of the whole territory. Until today in the area of the County 232 persons were victims of mines, of which 45 died and 120 with heavy head injuries. Overview of mine cleared area in the Osijek - Baranja County by years and funds invested is given here below:

Table 44 Overview of mine cleared area in the Osijek - Baranja County by years Year Mine cleared area Isklju čena/reducirana Total (m²) Surface (m²)

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1998 167,154 0 167,154 1999 891,495 2,313,650 3,205,145 2000 1,590,761 657,429 2,248,190 2001 1,641,649 7,036,692 8,678,341 2002 6,913,414 8,734,770 15,648,184 2003 3,887,778 15,674,444 19,562,222 2004 5,779,950 49,988,776 55,768,726 TOTAL 20,872,201 84,405,761 105,277,962 Source: Agency for Development of the Osijek - Baranja County, in cooperation with the Croatian Demining Centre, subsidiary office in the Osijek city, November, 2005

18.4. The status of contamination with mines of agricultural land of the County as at 31 December, 2004 is 57.4 km² which, compared to the total suspected area accounts for 27.4%.

Table 45 Status of mine contamination of agricultural land of the County City - the County Suspect areas of agricultural land (according to survey of September, 2004) Antunovac 9,881,344.50 Beli Manastir 184,093.00 Beliš će 0 Bilje 2,529,181.00 Darda 7,874,450.80 Donji Miholjac 0 Draž 6,571,077.40 Erdut 19,087.80 Ernestinovo 2,157,691.85 Jagodnjak 0 Osijek 13,574,407.05 Petlovac 4,242,971.40 Petrijevci 0 Popovac 910,356.00 Semeljci 0 Šodolovci 8,389,521.60 Valpovo 0 Vladislavci 1,113,562.95 Vuka 0 TOTAL: 57,447,745.35 Source: Agency for Development of the Osijek - Baranja County in cooperation with the Croatian Demining Centre, subsidiary office in the Osijek city, November, 2005

In view of ROP the problem of mined areas has potentially negative implications with regard life safety and everyday's work of population, functioning of economic activities in the area, use of resources and finally, on perspectives of the County development as a whole. In addition to this, there are high costs which mine clearing process cause which evidently causes additional financial needs and sources of funds. Request for acceleration of overall demining process (2010 as a target date) is more and more emphasized, yet, to this, we should add demands for covering costs of demining compared to all other expenses for development. Demining is a precondition for every activity, particularly economic, which means that the costs of demining should be recorded as external costs, separate from the costs for individual development projects. In other words, the costs of mine clearing should be qualified as the costs of external economy, and in compliance with that, economically projecting and qualify as expenditure.

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II STRATEGY

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19. SWOT ANALYSIS

The SWOT analysis has been taken from the following document: Development Strategy of the Osijek – Baranja County, University J. J. Strossmayer, Osijek, Faculty of Economy, May 2005. The SWOT analysis is a starting point for drafting the Regional Operative Program (ROP). Made in accordance with the EU methodology, this analysis is a synthesis of all the findings of the Basic Analysis, defining restrictions and opportunities for the future County development to the County. In accordance with this, starting from the verbal procedure (its method), the analysis systematically presents obstacles and opportunities, as well as directions and methods for solving developmental problems in the future.

Strengths  Possibility for education (University J. J. Strossmayer, well – developed secondary education),  Favorable position of the County (traffic, geographic location at the European East – West crossroads and at the North – South route which is becoming increasingly important),  Rich natural resources, agricultural arable land, abundant water supplies, minerals, raw materials, forest wealth,  Existing capacities for agricultural production,  Production of food, starting from resources, market, technological and modern organizational concepts,  Possibilities for further development of continental tourism,  Industrial and craftsmanship tradition,  Osijek Klisa airport,  Potentials for further development of river traffic,  Industrial labor force.

Weaknesses  Long - term unemployment, significant imbalance of economic structure and inability to transfer labor force among sectors,  Lack of consistent and balanced development strategy,  Massive war destructions, extensive war damages which have not been consolidated yet, mined areas,  Aging population and depopulation of the area,  Insufficient coordination between educational institutions and the regional development needs,  A smaller number of highly educated inhabitants than Croatian average,  Lagging behind average development indexes for Croatia, - Lower index of utilization of intellectual capital, - Insufficient entrepreneurial activity, - Lower GDP per capita, - Higher unemployment rate/higher percentage of inactive population, - Insufficient investment,  Inadequate disposal of waste waters and waste,  Low level of finalized agricultural raw products,  Lack of strategy for the exploitation of agricultural resources,  Privatization of agricultural land has not yet been completed,  Insufficient purification of underground waters with the aim to make it drinkable,

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 Small, disorganized and uncompetitive economy  High percentage of industries of low technological level,  Inadequate ties of small and medium- sized businesses with larger business systems,  Inadequate ties of large retail chains with local production,  Insufficiently used capacities of the Osijek Klisa airport which would enable local economy to break into new foreign markets,  Road and rail traffic insufficiently developed and outdated,  Low financial power of local government, outflow of significant financial assets from the County,  Institutions of local government inadequately prepared for entrepreneurial activities,  Insufficient growth of industrial production,  Farmland inadequately used (mostly small plots owned by each individual),  The good quality production of finished products which prevailed before the Homeland war disappeared to be again replaced by primary production (especially in wood- processing industry),  Bankruptcy procedures (the end of the process not defined),  Acquisition of material goods by citizens mainly based on loans (massive indebtedness of citizens, dissatisfaction with the present financial condition).

Opportunities  Entry into the EU, gaining access to the EU funds (SAPARD),  Trends - political: decentralization, democratization, - economic: knowledge-based economy, - social: globalization, - technological: green technology, ecology, informatization, - tourism: sports, rural tourism, agro-tourism, health- tourism,  Corridor 5c,  Development of business and industrial zones,  Transformation of the University in accordance with the Bologna Declaration,  Natural advantages, clean, well- preserved and healthy environment,  Possibility of trans-border cooperation,  Further growth of trade with foreign countries,  Return to production of finished products (furniture, final flour products, canning corn, finalization of all products using natural resources),  Further development of the University,  Production of energy from renewable resources (communal waste),  Taking advantage of possibilities to invest in areas of special state concern,  Depolitization of life.

Threats  Enormous indebtedness of economy in general as well as of individual citizens,  Outflow of young, educated labor force to other counties or countries,  Global competition, mass food production,  Centralization of financial power in Zagreb,  Politization instead of professionalism,  Corruption and failure to implement the rule of law,  National tax policy and high contributions and taxes on salaries, centralization of pension system,  Conflicting development options,

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 Corrective factors of economic system - such as political circumstances or natural disasters,  Illegal work, failure to pay workers,  Total lack of control over import, regardless of open market,  Adjustment to the EU legislation,  Insufficient investment in economy (inadequate exploitation of trade which presently accounts for 27.8% of GDP and is increasing),  Insolvency of the system.

20. STRATEGY

20.1. Vision

In the methodology of Regional Operative Program (ROP), vision is the part of the concept referring to the past and current situation (Basic Analysis and SWOT analysis).

Therefore, vision represents the expectations based on the assessment of current position and development of relations between material and spiritual world of the future. Characteristics of the future, defined as a third millennium, we are just entering include numerous advantages but also limitations, the unknown and the risks. Processes which strongly influence changes in the environment are: globalization, development of knowledge, human capital, technological development and linking processes, that is networking.

In accordance with it, it is possible to define the vision of the Osijek - Baranja County as an option consisting of the following contents:

The vision of the Osijek - Baranja County is to realize extremely high growth rate of development in the period until 2013, in order to create balance within the narrow and wider geopolitical environment. Economic growth would be fully based on revitalization and modernization of ecologically acceptable agricultural and industrial sector, as well as structurally aligned service sector with the emphasis on developing intellectual services. Such a growth is the prerequisite for a balanced social and economic development, which in turn guarantees integration of traditional, historic and culturological contents.

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20.2. Long term development objectives

The vision, i.e. its implementation, is based on selection of strategic goals which on the one hand represent its instrumental mechanism and on the other a certain platform for operative bodies of ROP (Partnership Commitee, the County working group, the Main County team) required for expert and social verification of selected direction of development.

Objectives:

I. Based on the principle of sustainable growth, the development of economy is especially aimed at agriculture, industry, tourism, service sector and rural area along with development and improvement of communications in the whole County as well as communications and traffic connections with a narrow and wider environment.

II. Realizing human potentials in accordance with the challenges of globalization, mainly through education and employment, to be carried out in accordance with the needs of the County and the community in general.

III. Development based on material welfare and social justice, with a balanced development of social and communal infrastructure.

Objectives have been developed through choice matrix:  Focus on agriculture and food production,  Focus on development of entrepreneurship and institutions supporting entrepreneurial efforts,  Development of traffic infrastructure: roads, railroads, river, air and combined traffic,  Development of communal and social infrastructure,  Development of educational infrastructure,  Development based on direct foreign investment,  Development based on tourism industry,  Development of ecologically acceptable high-technology industry,  Development based on the principle of sustainable development and environmental protection,  Focus on construction business,  Revitalization of traditional industries in accordance with ecological standards,  Focus on banking and  Focus on trade and commerce.

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20.3. Priorities for interventions

Objectives of strategic priority are contained in the concept of defining direction for achieving development objectives. This is the reason why these have to be connected in a transparent way and must reflect the ensuing benefits for the community on one hand, and on the other, define the avenues for the holders of interests and motives that drive them.

Objective:

I. Based on the principle of sustainable growth, the development of economy, with an emphasize on agriculture, industry, tourism, service sector and rural area along with development and improvement of communications both within the County and with narrow and wider environment.

Priorities:

1.1. Creating conditions for development of economic structure based on information technology and up-to-date technologies, knowledge economy and new organizational and civilization concepts.

1.2. Creating the conditions for revitalization of agriculture and production, paying special importance to encouraging faster development of manufacturing compared to service sector, development of small and medium - sized entrepreneurship. Within service sector the priority is to develop intellectual, rather than classic service sector, with emphasis on tourism which should integrate natural advantages of the preserved environment, historic, traditional and cultural contents and development of rural area through above- mentioned contents.

1.3. Creating the conditions for faster development of transport connectivity including roads, railroads, rivers, air and combined transport.

1.4. Creating the conditions for global competitive investments in the County.

Objective:

II. Creation and development of human potentials in accordance with the globalization challenges, mainly through education and employment, based on the requirements and needs of the County economy and community in general.

Priorities:

2.1. Based on global criteria systems, imperative goal is development of human resources. Therefore the priority is to reduce long-term unemployment, which includes the following priorities:

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 Coordination and harmonization of educational system with the requirements and needs of the market,  Increasing the percentage of university graduates, supporting the talented and prospective in order to create preconditions for their staying in the region and participation in all the projects which are significant for the development of the County and the whole region,  Employment and self-employment incentives,  Preparing employees for future activities with special emphasis on employment possibilities, flexibility based on life-long learning, thereby encouraging their creativity and independence,  Stimulation and motivation,  Profit-sharing,  Promotion at work,  Creating high - quality working conditions.

Objective:

III. Development of society and local community based on material welfare and social justice, along with a balanced development of social, utility and community infrastructure.

Priorities:

3.1. Encouraging entrepreneurship development. 3.2. Communal infrastructure. 3.3. Waste management. 3.4. Tourist offer, which integrates economic and specific landscape advantages of the environment as well as historic, traditional and cultural contents. 3.5. Public services. 3.6. Mine-clearance. 3.7. Creation and promotion of civil society.

The purposefulness of priorities can be clearly demonstrated by narrower objectives linked with global objectives and their priorities. In this way generic forces of the system are created, which enable the modern development, which is not possible without them, in spite of the rich resources of industrial and post-industrial society (natural resources, communications and traffic advantages etc.). These objectives must clearly indicate the reasons for intervention, since spontaneous actions do not guarantee their implementation; beneficiaries of intervention who clearly define local social interests; implementation bodies which take responsibility for their realization.

I. Based on the principles of sustainable development, development of economy with special attention being paid to agriculture, industry, tourism, service sector, rural area, along with the further development of communications in the whole County and with a narrow and wider environment.

1.1. Creating the conditions for development of economic structure based on information technology and new technologies, knowledge economy and new organizational and civilization concepts.

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Objectives:

 Setting up and identifying the holders of development ranging from educational to economic and social institutions,  Individual and multidisciplinary strategies within the framework of suitable institutional structures,  Operative methods of strategic decisions implementation and their agents.

Reasons for intervention:

The concept of knowledge society based on information and telecommunications technologies as well as new organizational concepts is an extremely expensive and delicate program which requires the programmed cohesion of the assets, systems and agents responsible for its implementation.

Beneficiaries:

 Economic and social infrastructure,  Educational, health and social institutions,  Political organizations and civil society institutions.

Implementation bodies:

 The County and government institutions,  Geopolitical organizations and associations,  Entrepreneurs and trade unions,  Civil society associations.

1.2. Creating the conditions for the revitalization of agriculture and production, with an emphasis on faster development of production rather than service sector, development of small and medium - sized entrepreneurship. Within the scope of service sector the priority is development of intellectual rather than classic services, special importance being paid to important position of tourism which should integrate natural competitive advantages of preserved environment and historic, traditional and cultural contents which would also facilitate development of rural area.

Purpose:

Revitalization of production sector with special emphasis on agricultural production and processing agricultural products, which is the prerequisite for dinamizing the economic growth and employment rate and consequently the growth of income, improving standard of living and creating conditions for pleasant life in the County. In addition to it, there is a clearly defined need to regulate the market, especially agricultural products market, which should in turn balance supply and demand. Establish organizational forms and institutions and further develop the instrument for stimulating entrepreneurship. Creation of tourist offer, which would define the County as a recognizable tourist destination which prides itself on

88 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County clean environment, historical, traditional and cultural contents, all of which should additionally contribute to development of rural areas.

Objectives:

 Selection of highly competitive and attractive products which will present additional support to the export orientation of the regional economy,  Adopting new production processes, creating brands and clusters,  Encouraging development of final products, of a higher finalization level,  Creating stronger partnership among the manufacturers of base products, manufacturers and traders (vertical and horizontal linking),  Encouraging manufacturers to join associations and cooperatives (agriculture, small and medium - sized entrepreneurship),  Creating positive entrepreneurial environment and motivating manufacturers to adopt more entrepreneurial spirit,  Implementation of the program for managing land resources (agriculture),  Tourist offer should be based on well - preserved natural and cultural historic values and preserved environment,  Offering original and authentic tourist products which link the contemporary and the traditional,  Widening the scope of existing tourist offer, encouraging development of agro tourism, wine-roads and other tourist facilities suitable for rural areas.

Reasons for intervention:

The County economic structure has been affected by inefficient privatization, war destruction, mines - contaminated land and long-term period of occupation. For this reasons and in order to eliminate the accumulated disadvantages the County should focus its activities on a targeted development; develop entrepreneurial climate through education and institutional support; link together the inland tourism offer with the “seaside” tourism; encourage further development of continental tourism which has traditionally been lagging behind tourism in the Adriatic region for more than half a century, along with better advertising of inland, continental tourist destinations.

Beneficiaries:

 Economy based on small and medium-sized entrepreneurship,  Farming, rural economy, associations and cooperatives,  Investors and holders of new ideas/initiatives,  Entrepreneurs in the tourism sector,  Entrepreneurs in catering business (hotels, motels, restaurants, coffee-bars, agro tourism),  Craftsmen, tradesmen and small entrepreneurs,  Tourist associations and agencies,  Regional (district) and local government.

Implementation bodies:

 The County administration, agencies and entrepreneurship and development sectors,  Government institutes and agencies,

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 Business associations,  Commodity exchange d.o.o. Osijek, as infrastructure support in agriculture,  Croatian Chamber of Economy, Croatian Chamber of Crafts and Trades, tourism and catering business organizations.  Tourist associations and agencies,  The County, towns and municipalities.

Remark:

Within the framework of this objective, it is possible to single out small and medium - sized entrepreneurship and agriculture as priorities, which is of course closely related to the choice of programs. In other words, should the programs be based on infrastructure (manufacturing, communal infrastructure, educational infrastructure, etc.) the wider approach might not be appropriate. Instead, selection of narrow, targeted objectives is imposed.

1.3. Creating the conditions for faster and more efficient traffic communications in road, railroads, rivers, air and combined transport.

Purpose:

Development of all kinds of traffic infrastructure as well as improving all types of communications within the region will create conditions for faster flow of people, goods and capital. Therefore investment in transport facilities should be the moving force facilitating development and growth. Better transport accessibility of the County will in turn enable further development of continental tourism.

Objectives:

 Making the County easily accessible including all types of transport,  Increasing the County growth rate by employing construction workers and encouraging manufacturing closely connected with traffic infrastructure,  Increasing investment in traffic infrastructure,  Providing better traffic connections with other parts of the Republic of Croatia and neighboring countries, as well as improving traffic communications within the County,  Becoming part of international traffic corridors,  Increasing employment rate.

Reasons for intervention:

Creating traffic infrastructure for increased flow of people and goods, since traffic isolation directly leads to decreased interest in investment in the County.

Beneficiaries:

 Country, the County, towns and municipalities,  Economy in whole,  Potential investors from Croatia and abroad.

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Implementation bodies:

 Authorized ministries,  Croatian railroads,  Croatian highways,  Croatian roads,  Croatian waters,  The County roads authority,  Port administration Osijek and Vukovar,  Port authority Osijek,  Agency for inland navigable waters,  Domestic and foreign airlines and tour operators,  The County authorities and bodies as well as municipal and town bodies and authorities.

1.4. Creating the conditions for global competitive investments in the County.

Purpose:

Investment as the generator of growth and development should be encouraged by complex mechanisms and instruments whose coordinated approach and organization will result in synergy effect.

Objectives:

 Increasing growth on new income bases,  Increasing employment rate,  Inflow of “fresh” capital.

Reasons for intervention:

Creating material, organizational and financial conditions for investment in the County.

Beneficiaries:

 State, the County, towns and municipalities,  Potential investors from Croatia as well as foreign investors.

Implementation bodies:

 Government ministries and authorities,  The County authorities and bodies, and municipal and town authorities and bodies,  Regional Agency for Development.

II. Creation and development of human potentials in accordance with the globalization challenges, mainly through education and employment, based on the requirements and needs of the County economy and community in general.

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2.1. Starting point being globalization criteria systems, the imperative requirement is development of human resources. Therefore, one of the main objectives is reducing unemployment in the long term, which includes the following priorities:

 Harmonizing educational system with the needs of the market,  Increasing the number of high-educated (university graduates) and encouraging the talented to stay in the region and become involved in all the projects which are important for further development of both the County and the whole region,  Incentives for employment and self - employment,  Training and educating employees with special attention being paid to employment prospects and flexibility of work power based on life-long learning, encouraging their creativity and independence,  Stimulation and motivation,  Profit - sharing,  Promotion at work,  Creating working conditions of better quality.

Explanation:

Education based on multidisciplinary organizational concept (team work), specialized profiled personnel in accordance with requirements of labour market.

Purpose:

Relate and integrate the process of growth of knowledge with the requirements of the economy and labour market and create optimum number of professional, high –level educated personnel in accordance with the needs of each economy segment.

Objectives:

Enable permanent employment on competitive basis, reduce long - term unemployment, keep the high-level educated professionals and encourage further development of science.

Reasons for intervention:

Regulate and harmonize supply and demand for labour on long - term basis, reduce the potential outflow of high - level educated personnel to other parts of the Republic of Croatia and abroad.

Beneficiaries:

 The unemployed and the young,  Employers,  Public administration and institutions.

Implementation bodies:

 educational institutions, especially faculties/ colleges,

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 government institutions, employment agencies,  municipal, city and government bodies and institutions.

III. Development of community based on material welfare and social justice, along with a balanced development of social, utility and communal infrastructure.

3.1. Promoting entrepreneurship development

Purpose:

Establishing local organizational forms and institutions as well as developing appropriate instruments of entrepreneurial incentives.

Objectives:

Supporting the creation of entrepreneurial culture and developing motivation aimed at entrepreneurial efforts.

Reasons for intervention:

Entrepreneurship, unfortunately, has not been well developed in Croatia yet, especially in view of expectations and risk - taking. Therefore, further education and training and a strong institutional support is of utmost importance.

Beneficiaries:

Stakeholders with capital and fresh ideas.

Implementation bodies:

 institutions established in order to support entrepreneurs,  Regional Agency for Development and similar institutions.

3.2. Utility infrastructure

Purpose:

To improve the conditions and standard of living and protect the environment.

Objectives:

 Improving utility infrastructure systems, primarily public water - supply and drainage system,  Improving the protective systems against harmful effects of water,  Increase awareness of the importance of clean environment,  Protecting the preserved environment and natural resources from any kind of pollution.

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Reasons for intervention:

Increasing and balancing the level of development of certain areas, thereby enabling the more balanced distribution of inhabitants and business activities in the areas, which is in turn expected to result in long - term benefits.

Beneficiaries:

Local inhabitants, especially those whose utility infrastructure is presently at low level, and economy in general.

Implementation bodies:

 Companies and institutions involved in utility economy,  Authorized ministries and institutions,  Inhabitants, especially those whose utility infrastructure is low,  Public administration and civil associations.

3.3. Waste management

Purpose:

Preservation of natural environment, waste disposal and waste management in general (recycling).

Objectives:

Creation of systems of waste management and waste disposal.

Reasons for intervention:

Managing waste, not just disposing of it. Protection, preservation and promotion of the environment, natural and landscape values as a basic condition for decent living which would foster additional economic and cultural development.

Beneficiaries: Inhabitants and economy of the County.

Implementation bodies:

 Public institution of Eastern for communal waste disposal,  Public companies engaged in utility economy,  Government, the County, town and municipal bodies and institutions,  Civil associations.

3.4. Tourist offer, which integrates economy, landscape and environmental advantages as well as historical, traditional and cultural contents.

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Purpose:

Creating tourist offer in the County as a clearly recognizable and specific tourist destination famous for its ambiental, historic, traditional and cultural historic values.

Objectives:

 offering original tourist products and services which connect the modern and traditional,  extending the existing offer and developing new forms of tourist offer which would have a positive impact on development of the region and economy in general.

Reasons for intervention:

There is an obvious need for affirmation of tourism in this region (continental tourism) which would alleviate the lagging behind of the continental tourism compared to seaside tourism lasting more than half a century as well as making continental destinations more popular among potential tourists.

Beneficiaries:

 entrepreneurs in tourist industry,  entrepreneurs in catering business (hotels, motels, restaurants, coffee-bars etc.),  craftsment and small entrepreneurs,  tourist associations and agencies,  counties, municipalities and towns.

Implementation bodies:

 municipalities, towns and the County as a whole,  Croatian Chamber of Economy, Croatian Chamber of Crafts and Trades, Croatian Chamber of Agriculture),  organizations in tourism and catering business,  employers' associations.

3.5. Public services

Purpose:

To increase quality and economic efficiency of educational, cultural, healthcare and social welfare institutions as well as administrative institutions and other public services.

Objectives:

 increasing efficiency of administrative services and other public services,  encouraging and fostering development and advancement of preventive medicine and public healthcare system,  increasing the present capacities for pre - school children, especially for the children with special needs,

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 increasing the existing capacities for elementary school and secondary school children, especially gyms and playgrounds for physical education,  building new facilities for the elderly, the infirmed and persons with special needs.

Reasons for intervention:

 lagging behind in building infrastructure and in the development and improvement of public services,  lagging behind in the construction of pre - school facilities, especially those for children with special needs, elementary schools and secondary schools, a special priority being construction of school gyms and facilities for physical education,  lagging behind in the construction of social infrastructure, especially facilities for the elderly, the infirmed and persons with special needs.

Beneficiaries:

Inhabitants of the County, public services on all levels directly, and economy and social superstructure indirectly.

Implementation bodies:

Municipalities, town authorities, counties, government ministries and institutions, civil society associations, religious institutions, physical and legal entities.

3.6. Mine-clearance

Purpose:

Secure completely safe living and working conditions within the whole County, thereby securing a balanced economic and social development in general.

Objectives:

 to speed up the demining process until the whole area has been completely demined,  to raise awareness of harmfulness and threats of mines,  to prepare and take advantage of the demined areas.

Reasons for intervention:

 this area is priority, i.e. most urgent interventions in relation to the post - war reconstruction are required,  failure to realize and implement economic and infrastructure projects,  slow pace, difficulty and costly process of demining, which calls for large - scale intervention of the whole community,  extreme danger for the inhabitants.

Beneficiaries:

Inhabitants and economy of the County and the whole country.

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Implementation bodies:

 The Government of the Republic of Croatia,  The Croatian Center for Demining, with all its local organizations and bodies,  The County,  Local government units,  Public companies.

3.7. Creation and promotion of civil society

Purpose:

Development and advancement of civil society will have a significant impact on increased standard of living and better quality of life in general.

Objectives:

 encouraging interest groups, cultural and other forms of associations, with special emphasis on youth associations and especially associations for specially endangered groups (the handicapped, the impaired, victims of domestic violence, various support groups etc.)

Reasons for intervention:

 Developed and advanced civil society is the basis for community welfare, based on equal rights and equal opportunities for all the citizens regardless of gender, religious, national and other affiliation.

Beneficiaries:

Inhabitants of the County, regional (district) and local authorities and associations.

Implementation bodies:

Regional (district) and local governments, civil associations.

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20.4. Measures

The methodology of Regional Operative Program is based on the rigid hierarchy of objectives and priorities. These objectives and priorities together with measures to be undertaken create a matrix of economic – social synthesis related to the development of an individual area and the eligibility and selection of the projects are based on them,. Therefore any project is required to be in accordance and harmonized with the requirements of objectives, priorities and measures, which is basic prerequisite for their successful application. The project is first of all assessed based on its harmonization with general objectives of ROP as well as on the basis of multiplicative impact of the project on objectives, priorities and measures. To sum up, the project which represents a synthesis of wide range of objectives, priorities and measures from the standpoint of ROP will be considered as more attractive and appropriate. To this effect, the measures have to provide clear answers to the following questions:  What measures are necessary and what is intended to be realized by those measures,  Address the measure is aimed at,  The area of its maximum possible effectiveness,  Its measurable results,  Its impact on the whole,  Financial means for its implementation,  Attributing responsibility for its implementation.

I. Based on the principles of sustainable development, the development of economy with special emphasis on agriculture, industry, tourism, service sector and rural area, along with development and improvement of traffic communications both in the entire County and with the narrow and wider surroundings.

1.1. Creating the conditions for the development of economic structure based on information technology and modern technologies, knowledge driven economy and new organizational and civilizational concepts.

Measures:

1.1.1. Globalization criteria have to be applied on all levels of economy and community in general, since their timely implementation results in advantages and benefits.

1.1.2. Increasing the level of knowledge is one of the basic prerequisites for the application of contemporary technologies and organizational and civilization concepts based on it, which in turn represents the instrument for affirmation of knowledge and giving preference to specialized knowledge and expertise rather than loyalty.

1.1.3. Importance of human factor as the basic element in development calls for reforms of educational system, recruitment system, selection and promotion of personnel and establishing appropriate organizational systems.

1.1.4. Increasing competitiveness is an imperative for development and growth, therefore it is necessary to create and implement systems of monitoring and measuring as well as

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planning adequate incentive measures. These systems and measures must be market based and coordinated by appropriate institutions.

1.1.5. Modern globalized society converges toward the process of increased networking. This is the reason why all the horizontal and vertical ties creating organizational forms such as clusters, districts, generic development points, etc., should be strengthened in economic vertical sphere and why these should be linked and coordinated through public sector and associations on horizontal level in all the County as well as inter- regionally, both in the country and abroad.

1.1.6. Within the framework of globalization imperatives, Croatian Chamber of Economy in Osijek should endeavor to systematically follow and monitor foreign markets, especially EU markets. In addition to this, University J.J. Strossmayer should, in cooperation with Croatian Chamber of Economy, entrepreneurial centres and embassies of specific countries, organize permanent seminars on entrepreneurship.

1.1.7. The County should organize continuous monitoring and evaluation of personnel and employment opportunities, in cooperation with the University which is now operating within the framework of Bologna Declaration.

1.1.8. Croatian Chamber of Economy should, together with the University, monitor and supervise the level of informatization of economy, educational and public institutions and develop appropriate scientific and operative programs.

1.1.9. Public administration, economy and economic associations and bodies should adopt principles of sustainable use of the County resources.

1.2. Creating the conditions for revitalization of agricultural and production structure, with special attention paid to faster growth and development of production sector rather than service sector, encouraging and assisting the development of small and medium - sized entrepreneurship. Within the service sector more attention should be paid to development of intellectual, rather than classic services, thereby bearing in mind the exceptional development position of tourism, which should integrate the advantages of well - preserved natural environment as well as historical, traditional and cultural contents, all of which should in turn contribute to further development of rural area through all the above-mentioned contents.

Measures:

1.2.1. Introducing new products and production processes and exploration and scientific research of available resources.

1.2.2. Creating new entrepreneurial and free zones and increasing capacities of Development units in the County.

1.2.3. Specialist education and training of personnel, especially managerial and marketing personnel in order to enable creation of new products and brands and penetrate new markets.

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1.2.4. Creating favourable conditions for promotion of all potentials within the County, clearly defining the conditions for investors and for the establishment of new companies.

1.2.5. Creating the conditions for regulating the agricultural products market by establishing Commodity market - Robna burza d.o.o. Osijek.

1.2.6. Inter - regional economic cooperation.

1.2.7. Creating the conditions for the development of farming:  program for managing agricultural land,  incentives for development of family farms,  establishing farming cooperatives, associations and clusters,  creating brands,  coordinating and linking manufacturers and consumers,  establishing cold - storage plant Osijek (ULO hladnja če d.o.o. Osijek) will result in providing the necessary capacities for agricultural production,  building irrigation systems will enable and facilitate further development of intensive agriculture,  building the systems for protection against hailstorms and floods,  creating the plan for development of rural regions of the County.

1.3. Creating conditions for faster development of traffic communications within the County, including roads, railroads, rivers, air traffic and combined traffic.

Measures:

1.3.1. Constructing traffic corridors which will be part of international traffic corridors (corridor Vc).

1.3.2. Reconstruction of the existing railroad system as well as level - crossings in order to secure better, faster and safer traffic conditions.

1.3.3. Construction of passenger harbors on the river Drava and Danube (Osijek, Aljmaš and Batina), increasing cargo traffic through Osijek port and improving navigability of the Drava river.

1.3.4. Incorporating Osijek Airport into the network for transport of domestic passengers organized by domestic airline, as well as including it into international network and increasing cargo transport.

1.4. Creating the conditions for global competitive investments in the area of the County.

Measures:

1.4.1. Permanent promotion of the County potentials and creating competitive conditions and favourable climate for investment in the County.

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1.4.2. Inter - regional, vertical and horizontal cooperation and consensus regarding investment in the County economy.

1.4.3. Establishing Regional Development Agency.

II. Coordination and creation of human resources in accordance with the challenges of globalization and the needs of the County economy and community in general, through education, training and employment.

2.1. Starting point being globalization criteria systems, the imperative requirement is further development of human resources. With this respect it is of utmost importance to reduce unemployment in the long term, bearing in mind the following priorities:

 Coordination and harmonization of education system with the market needs,  Increasing the percentage of persons with university education and encouraging the talented and prospective employees by creating the prerequisites for their staying in the County and their inclusion in all the projects which are important for further development of the County and the entire region,  Providing incentives for employment and self - employment,  Educating and training personnel with special emphasis on recruitment and flexibility of labour force based on life - long learning, promoting creativity and independent action,  Stimulation and motivation,  Opportunity for profit - sharing,  Opportunity for promotion at work,  Creating better working conditions.

Measures:

2.1.1. Education based on new, up-to-date knowledge and new concepts:  Strengthening and promoting knowledge and expertise based on development objectives and the requirements of labour market,  Strengthening and promoting social and other “soft” skills through regular education.

2.1.2. Education in accordance with the requirements of labour market:  Harmonize enrolment policies in secondary schools and faculties with the needs of labour market,  Ensure availability of education, retraining and vocational training for the unemployed and others in order to enable them to return to labour market as soon as possible and to avoid long-term unemployment,  Increase competitiveness of employees through additional training and education, retraining and specialization, which will facilitate the development of the companies in which they are employed and, in case they are made redundant, speed-up their re- employment,  Affirm and encourage acquiring new knowledge and skills through life - long learning, which will contribute to the flexibility of labour force and their employment on permanent basis,  Retraining, additional education and training of already employed and others,  Acquiring new knowledge and skills.

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2.1.3. Assistance in establishing and promoting entrepreneurship:  Strengthening the capacities for promotion and further entrepreneurship development,  Encouraging and affirming entrepreneurship of the young through regular education, especially through vocational schools  Ensuring that favourable loans are available.

2.1.4. Providing grants for the employment.

2.1.5. Creating incentives for the employment of young, highly educated people.

2.1.6. Creating necessary preconditions which would enable young scientists to stay in the region.

III. Development of community based on material welfare and social justice, and a balanced development of social, utility and communal and infrastructure.

3.1. Incentives for entrepreneurship development

Measures:

3.1.1. Strengthening the capacities of the County development units.

3.1.2. Strengthening the institutions providing support to entrepreneurs.

3.1.3. Creating the positive entrepreneurial atmosphere and conditions.

3.1.4. Encouraging construction of business zones.

3.1.5. Encouraging education and training of entrepreneurs.

3.1.6. Creating the conditions to ensure availability of favourable loans.

3.2. Utility infrastructure

Measures:

3.2.1. Improving the water supply and drainage systems, building the facilities for waste waters purification and improving the protective systems against harmful effects of waters.

3.2.2. Improving the energy production and production systems and making gas available to majority of consumers.

3.2.3. Encouraging the consumers to switch to alternative sources of energy.

3.3. Waste management

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Measures:

3.1.1. Construction of Regional centre for waste management for Eastern Slavonia.

3.1.2. Recovery of the existing and construction of new landfills and disposal of all kinds of waste.

3.1.3. Developing an integral and unique system of waste disposal and waste management in general.

3.4. Creating a tourist offer, which will integrate economic, landscape and environmental advantages as well as cultural, traditional and cultural contents.

Measures:

3.4.1. Emphasis on tourist offer based on natural resources (Natural Park Kopa čki rit, geothermal waters, ecological tourism and others).

3.4.2. Revitalization of old crafts in order to promote and improve tourist offer.

3.4.3. Protection of historic and cultural heritage.

3.4.4. Integration of various tourist offers in order to encourage development of various types of tourism.

3.4.5. Promotion and advertising of continental tourism and inter-regional cooperation to contribute to better and more diversified tourist offer (including both seaside and continental tourism).

3.5. Public services

Measures:

3.5.1. Building, renovating and equipping educational institutions, cultural institutions, healthcare and social welfare institutions, administrative and other public services.

3.5.2. Providing assistance in promotion of activities of sport associations and clubs, cultural institutions and associations as well as other civil associations.

3.5.3. Technical and organizational promotion of services of the County, municipal and town administrations as well as public administration of the County.

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3.6. Mine-clearance

Measures:

3.6.1. Planning the process of mine - clearance of the whole County area, within the scope of integral government demining program.

3.6.2. Clearly defining the methods, responsibilities and sources of finance.

3.6.3. Mine-clearance is not only a safety issue, but also an issue of high priority regarding natural environment (contamination of the area with mines).

3.7. Creation and promotion of civil society

Measures:

3.7.1. Development of civil society.

3.7.2. Encouraging various interest groups and civil sector to take part in decision-making processes.

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Table 46 Intensity of influences of priority areas for intervention and measures required to achieve those objectives OBJECTIVES I. Based on the principle of II. Providing human resources in III. Development of society based on material sustainable growth, development accordance with globalization welfare and social justice, along with a balanced of economy based on agriculture, challenges, through education and development of social, utility and communal industry, tourism, service sector employment, in line with the needs infrastructure. and rural area, along with and requirements of the County development of traffic economy and community in communications within the general. County and with other parts of PRIORITIES AND MEASURES the region and the country. 1.1. Creating conditions for development of economic structure based on information technology and new technologies, knowledge economy and new organization and civilization concepts 1.1.1. Globalization criteria must be applied on all levels of economy and society, since +++ ++ + their timely implementation contributes to enormous advantages 1.1.2. Knowledge growth is the basic prerequisite for absorption and application of modern technologies and organizational and civilization concepts based on them, ++ +++ + which represent instruments for affirmation of knowledge and contributes to giving preference to knowledge rather than loyalty 1.1.3. Importance of human factor as the basic element of development calls for reforms of entire education system, employment system, selection and promotion + +++ ++ of personnel along with appropriate organization systems 1.1.4. Increasing competitiveness is an imperative for achieving development. It is vital to develop systems for monitoring, measuring and promoting that phenomenon. +++ + ++ These must be market-based and coordinated by institutions. 1.1.5. Modern globalized society converges towards the process of increasing networking. This is the reason for strengthening horizontal and vertical ties, based on organizational forms such as: clusters, districts, generic development +++ + ++ points and similar in economic vertical sphere and incorporating into public sector and community associations on horizontal level within the County, inter- regionally, in the country and abroad 1.1.6. As globalization process is gathering pace, Croatian Chamber of Economy in Osijek should organize systematic monitoring of foreign markets, especially EU markets. Together with University J.J. Strossmayer, Croatian Chamber of +++ + ++ Economy, entrepreneurship centres and embassies, permanent seminars on entrepreneurship should be organized 1.1.7. The County should organize continuous monitoring and evaluation of personnel and opportunities for employment, in accordance with the position of the ++ +++ + University with regard to application of Bologna Declaration principles 1.1.8. Croatian Chamber of Economy should, together with the University, monitor the level of informatization of economy, educational and public institutions and ++ +++ + develop scientific and operative programs in this respect 1.1.9. Public administration, economy and business associations should adopt the ++ + +++ principles of sustainable and rational usage and exploitation of the County area 1.2. Creating the conditions for revitalization of agricultural and production structure, with emphasis on faster development of production sector compared to service sector, development of sm all and medium - sized

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entrepreneurship. Within service sector priority is development of intellectual rather than classic services, with important position of tourist offer which should integrate competitive advantages of well - preserved environment and historic, traditional and cultural contents, along with further development of rural areas through all the above - mentioned contents 1.2.1. Introducing new products and manufacturing processes and research of raw +++ + ++ material resources 1.2.2. Creating new entrepreneurial and free zones, and strengthening the capacities of +++ + ++ development units in the County 1.2.3. Specialist education of personnel, especially managers and marketing specialists, to enable them to work on creation of new products and brands and penetrate new ++ +++ + markets 1.2.4. Creating conditions for promotion of all potentials in the County, improving +++ + ++ conditions for investing and establishing new businesses 1.2.5. Creating conditions for regulating agricultural products market by establishing +++ + ++ Commodity market - Robna burza d.o.o. Osijek 1.2.6. Inter-regional economic cooperation +++ + ++ 1.2.7. Creating conditions for developing and facilitating farming +++ + ++ 1.3. Creating conditions for faster traffic communications by road, railroad,

rivers, air and combined traffic 1.3.1. Building road corridors as part of international traffic corridors (corridor Vc) +++ + ++ 1.3.2. Reconstruction of existing railroad tracks and level crossings to ensure faster and +++ + ++ safer traffic of better quality 1.3.3. Construction of passenger harbours on the rivers Drava and Danube (Osijek, Aljmaš and Batina), increasing the cargo transport through Osijek port and +++ + ++ improving navigability of the Drava river 1.3.4. Including Osijek Airport in the passenger traffic of domestic airline operator as well as into international air - traffic, along with the increase of cargo air +++ + ++ transport 1.4. Creating conditions for global competitive investment in the County 1.4.1. Continuous promotion of The County potentials and creating competitive +++ + ++ conditions for investment in the County 1.4.2. Inter-regional, vertical and horizontal cooperation regarding investment in the ++ + +++ County economy 1.4.3. Establishing Regional Development Agency +++ + ++ 2.1. According to globalization criteria the development of human resources becomes a priority. In this respect it is essential to reduce long-term unemployment, which includes the following priorities 2.1.1. Education based on new knowledge and new concepts + +++ ++ 2.1.2. Education in line with the labour market needs ++ +++ + 2.1.3. Assistance in setting up and promoting entrepreneurship ++ +++ + 2.1.4. Providing grants for employment + +++ ++ 2.1.5. Incentives to employ young, highly educated people + +++ ++ 2.1.6. Creating conditions for the young scientists to stay in the County + +++ ++ 3.1. Encouraging entrepreneurship development 3.1.1. Strengthening the capacities of development units in the County +++ + ++

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3.1.2. Building up institutions offering support to entrepreneurs +++ + ++ 3.1.3. Creating positive climate for entrepreneurship +++ + ++ 3.1.4. Incentives to build business zones +++ + ++ 3.1.5. Encouraging further education of entrepreneurs ++ +++ + 3.1.6. Creating conditions for granting favorable loans +++ + + 3.2. Communal infrastructure 3.2.1. Improving water supply and drainage systems, building systems for waste waters, purification, improving system for protection against harmful effects of ++ + +++ water 3.2.2. Improving energy production and making gas available to as large as possible ++ + +++ number of potential consumers 3.2.3. Incentives to use alternative sources of energy +++ + ++ 3.3. Waste management 3.3.1. Construction of waste management regional center for Eastern Slavonia ++ + +++ 3.3.2. Recovery of the existing and building new landfills for communal waste ++ + +++ disposal, disposal of all kinds of waste 3.3.3. Creating a unique system for waste disposal and waste management ++ + +++ 3.4. Creating tourist offer which integrates economic, landscape and environmental advantages, as well as historical, traditional and culturological contents 3.4.1. Including tourist offer based on natural resources (Natural Park Kopa čki rit, +++ + ++ geothermal waters, ecological tourism and other) 3.4.2. Reviving old crafts and incorporating them into tourist offer +++ + ++ 3.4.3. Renovation and protection of historical and cultural in heritage +++ + ++ 3.4.4. Integrating various types of tourist offers in order to facilitate development of +++ + ++ various types of tourism 3.4.5. Promotion and advertising of continental tourism and inter-regional cooperation +++ + ++ in the organization of tourist offer (seaside tourism and continental tourism) 3.5. Public services 3.5.1. Construction, renovation and equipping educational, cultural health-care and + ++ +++ welfare institutions as well as administrative and all other kinds of public services 3.5.2. Assistance in promotion and activities of sport associations and clubs, cultural + ++ +++ institutions associations as well as cultural and other civil associations 3.5.3. Technical and organizational promotion of services of the County, municipal and + +++ ++ town administration, as well as state administration offices in the County 3.6. Mine-clearance 3.6.1. Planning the demining process for the whole region, in line with the general +++ + ++ government demining program 3.6.2. Clearly defining the methods, responsibilities and ways and sources of financing +++ + ++ 3.6.3. Mine-clearance considered not only as safety issue, but also as a priority development issue regarding the environment (contamination of the County area with +++ ++ + mines) 3.7. Creation and promotion of civil society 3.7.1. Encouraging development of civil society + ++ +++ 3.7.2. Encouraging interest groups and civil sector to take part in decision making + ++ +++ processes

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KEY: + weak influence ++ strong influence +++ exceptionally strong influence

Results:

I. objective: +++ 30 II. objective: +++ 13 III. objective: +++ 11 ++ 14 ++ 6 ++ 34 + 10 + 35 + 9

COMMENT: Intensity of influence of some of the measures is significantly the strongest when it comes to exceptionally strong influence with regard to objective No. I. Also, with regard to that objective measures of strong influence have a significant impact. The second place in terms of intensity of influence is objective III. where the measures of strong influence dominate. Intensity of influence of measures of exceptionally strong influence is the weakest for objective III. Measuring the intensity points to the overwhelming importance of objective I. with regard to the development of the County economy and society.

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20.5. European principles

As an operative instrument for establishing priorities and achieving objectives, the measures have to prove consistent with regard to these priorities and objectives, which in turn confirms the conceptual validity and efficiency of Regional operative program. However, in accordance with ROP methodology, its conceptual efficiency will be fulfilled only if its principles are in line with and totally harmonized with the horizontal principles of European Union regional policy. These principles are as follows:  Society based on information technology (Information society)  Environment and sustainable development  Equal opportunities  Partnership.

Information society was a notion inaugurated by European Union Council of Ministers in Lisbon in 1999. According to conclusions from Lisbon (the Lisbon Declaration) only a society based on knowledge, research and development will be capable of coping with the challenges of globalization. The objective of the Lisbon declaration is to make European economy the most competitive and most dynamic one in global terms, in accordance with the principle of sustainable development and increased social cohesion The conditions for realization of such a society are as follows: Access to the Internet available to every citizen, household, school or educational institution, Eagerness of entrepreneurs regarding financing and developing new ideas, Acceptance of the society based on social cohesion.

Basic analysis showed that the County economy is lagging behind with regard to numerous aspects and pointed out the need for faster bridging of that gap, especially by absorption of information and communication technologies and development of human resources. All the three strategic development objectives of the County are therefore emphasized as important.

Environment and sustainable development are the objectives which European Union Council of Ministers has been pointing out repeatedly (Maastricht, Amsterdam i Göteborg). It refers to natural and created cultural historic values which have to be preserved for future generations thereby ensuring and facilitating growth and enhanced competitiveness of the economy and standard of living of the inhabitants. Basic analysis explicitly pointed out natural and created values, while the SWOT analysis paved the way for instrumentalization of their priorities.

Equal opportunities is a notion referring to equality of sexes, ethnic groups, care for the sick and the infirm, as well as the other oppressed groups in society (Amsterdam 1988). In development option of Regional operative program, this issue is clearly pointed out, illustrating that those members of society should have advantage compared to other members of society.

Partnership represents another important aspect of our European legacy. This is why in ROP methodology partnership has a central role in methodic convergence, since the decisions are reached by consensus. Therefore the partnership issue has been fully respected in preparation of ROP for Osijek – Baranja The County.

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III IMPLEMENTATION PLAN

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21. INTRODUCTION

This chapter describes project selection criteria, implementation mechanisms, the strategy of financing, and evaluation and monitoring procedures of the ROP projects and programs. The content of this chapter has been focused to several thematic issues:  The project selection criteria described in 21.1.  The institutional structure described in 21.2. This part describes the proposed institutional preparations for the ROP implementation.  The strategy of financing is described in 21.3., defining that the ROP represents an instrument which the County will use in order to present a strategically structured development plan to the actors and sources of financing.  The monitoring and evaluation procedure has been described in paragraph 21.4. It defines and explains that the ROP is a development mechanism whose options, as well as all projects presented in it, are subject to verification in space and time. Conditions may change, which means that pursuant to their change the ROP strategy as well as its implementation and the relating projects shall change too.  Paragraph 21.5 shows projections for the future. It describes how the ROP may in the future develop as an increasingly efficient development instrument. It emphasizes once again that the ROP is a document subject to changes in space and time and can and should be continuously upgraded.  Other steps have been described in 21.6, dealing with the success of the ROP implementation and to it related mechanisms and instruments.

21.1. From Project Ideas to Projects

21.1.1. Review of Project Ideas

The Review of Project Ideas is a list of all project ideas submitted by a certain date to the set office/institution.

The List should contain information on the sector the project relates to, which institution has made the proposal, the project description, place or area it is to be realized, number of results users, amount of funds, stage of project implementation, status of necessary permits for project implementation, etc. all listed in the Project Idea Application Form for the project base.

21.1.2. Project Selection Criteria

The selection of project ideas and projects shall be done based on the ROP reflecting Criteria, that is the criteria resulting from the priorities and measures of every stage of project development.

The project selection criteria for every stage of project development and the results of their implementation are as follows:

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Table 47 Agreed project selection criteria Stage Criteria Results IDENTIFICATION They can appear in any of the project development The result of this selection, i.e. application of the stated This process is the project phases, from the idea to the detailed plan, but shall: criteria, is the REVIEW OF PROJECT IDEAS including selection process  Reflect the ROP strategy, i.e. relate to the issues a list of project ideas stating all general details listed in of the General and SWOT Analysis and result the Project Idea Application Form divided by different from priorities and measures of the ROP. sectors:  Match with other approved plans (i.e. with a. agriculture, existing and approved national/county area plans b. infrastructure, of the local self-government units). c. support to business sector, In addition the project idea shall: d. tourism,  Contribute to upgrading of the County e. NGOs and living conditions. environmental management,  Contribute to maintaining the local infrastructure,  Contribute to construction of local facilities in private and public sector,  Generally adjust to the EU principles (horizontal principles). SETTING UP PRIORITIES These may include project ideas that meet the selected THE LIST OF HIGH-PRIORITY PROJECT IDEAS in Setting up priorities presupposes criteria below: all of the mentioned sectors. If the feasibility study shows defining certain project ideas as a. The Partnership Committee has defined the the first project on the list is not feasible that the priorities. Project as a priority, following one is considered. It is important that the b. It is possible to quickly produce a feasibility project ideas correspond to the available sources of study and implementation plan, there are no financing. significant technical, environmental, financial, social or economic obstacles, c. It can be realized fast, d. Ensured financing - confirmed possibility of co financing the Project expenses, e. Initial evaluation has indicated benefits higher than the costs, f. The contracting authority is capable of managing and maintaining the project.

The additional criteria to be met are as follows: a. The Project is a pre-condition for implementation of other projects, b. The Project potentially attracts other funds in the County, c. The project adds to other projects resulting from the County structures, d. The Project promotes social participation.

MAKING PROJECT All project drawings shall meet the criteria stating that LIST OD PRIORITY PROJECTS per stated sectors, DRAWINGS they must have: followed by the responsible actors preparing a. A goal, a priority and a measure resulting in a documentation for the priority projects and identifying co proposal, financing funds. After that the projects are submitted for b. Short description of the current situation, tenders of the donors. c. Short description of a solution proposal including possibilities, target users, additional projects and operational liabilities, d. Current status of preparation, e. All key issues related to environment and purchase of land, f. Compliance with the physical planning.

All high priority project shall also include: a. Cost estimate with +/-25% accuracy, b. Preliminary evaluation of users, c. Identified organization and co-financing funds, d. Implementation plan including time schedule and liabilities.

The schematic presentation of the above stated is as follows:

Map 1 From the Project Proposal to Implementation

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According with According with priorities of national ROP Strategy resources and donors

Project ideas

Implementing projects Criteria Criteria Criteria Project Ideas

Implementing and Ready!

supported by County Ranged and with

and Partnership financial resources

The project selection process indicates that the project will not be realized unless justified, and complied with the County Development Strategy, national programs and priorities of the donors.

21.1.3. Project Base and Realization Status

Project ideas and projects identified in this way represent the PROJECT BASE. It is the initial stage of the project cycle management process. The base should be divided into four project groups characterized by their respective levels of preparation:  Group 1 for projects ready to be implemented,  Group 2 is a list of projects that require a feasibility estimation, including a detailed plan and cost-benefit analysis. This means a pre-feasibility study has already been made for them,  Group 3 for projects that require a pre-feasibility study,  Group 4 is a list of project ideas to be developed into projects.

Project ideas represent the first concrete steps in realization of the County development Strategy implementation process and are the base for realization of its goals. They should be collected by public invitations, which will enable a large number of citizens to participate in making proposals and ensure many good ideas.

Projects systematically structured in this way comprise the PROJECT REALIZATION STATUS. Their status shows that there are always those whose realization is ongoing, those being prepared for implementation, those which the pre-feasibility study is being made for and the others that still require drawings. The goal of such classification of projects is that there are always as many relevant projects being implemented as possible.

Graphical presentation of project ideas and projects after several years may show their realization as follows:

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Map 2 Distribution of Project Ideas per Status

Distribution of project ideas by status

Total Implementation 500 Feasibility study 400 Pre -feasibility study 300

200

100

0 Year 1 Year 2 Year 3 Year 4

21.2. ROP Implementation Institutions and Mechanisms

The ROP being a comprehensive and integral development and operative instrument naturally has to be complied with all levels of development. Therefore, it must connect economic and social structures efficiently but also analytically from the level of project works, through local self-government to state community as a whole. The organogram below outlines the stated scheme: Map 3 Participants in the Regional Operational Program Implementation

Ministary of Sea, Tourism, Transport and Development, Regional Development Committee

ROP MANAGER Appointed by COUNTY GOVERNOR INTEREST

GROUPS COUNTY Selection of Opinions and (Actors of representatives Regional ASSEMBLY AND suggestions GOVERNMENT social Partnership development) Committee odbor

Technical support Projects

PROJECT USERS AND Project PROPOSERS

It is understandable that the County Assembly and its Government are placed in the centre of selection and implementation of the ROP. However, the this is not enough for the ROP operation. It is necessary to define the executors of the ROP and we therefore suggest that a ROP implementation unit be set within the County as an operative mechanism for the

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Assembly and Government conclusions and suggestions. The unit has been named the Project Implementation Unit.

Project Implementation Unit

The Project Implementation Unit considers the principles of transparency, partnerships, concentration and subsidiarity which the ROP preparation was based as well. Therefore the Project Implementation Unit should be organized as a separate body staffed with sufficient number of qualified experts and office workers in the County. Its fundamental duty is to pass certain management and coordination procedures to establish mechanisms which should function in compliance with Croatian laws and regulation and regulations of the EU.

Regional Partnership Committee of the Osijek and Baranja County

The Partnership reflects the entire economic, civil and public sector and its members are representatives of the County organizations and as such represent the interested parties and actors in the County development. The Partnership Committee has a counseling function and suggests or rejects, i.e. verifies proposals made within the ROP. However, it should be mentioned that its decisions are not executive.

Civil and Private Sector

NGOs (civil sector) have a significant influence on the progress of the ROP and influx of funds for its realization because they enhance transparency of the ROP goals and enable insight into its vision and strategic definitions. Besides, the presence of NGOs in the Partnership is important to ensure the necessary dialogue between economy, civil associations and government organizations. The private sector, on the other hand, drives growth and development, creates prosperity and new jobs. However, the sector cannot realize this function unless it receives support from the public sector and approval from NGOs. Therefore, in cooperation with the public sector, the private and the civil sector may be considered major partners in the ROP implementation.

Table 48 Organizational Responsibilities Related to the ROP Organization Review of current status Proposed activities within the ROP Time span – necessary resources implementation County Assembly and Government Accepts the ROP draft and final version, Final version should be accepted in responsible for its total implementation June 2006. Project Implementation Unit To be established as soon as Coordination of the ROP and submitting To be defined later possible reports to the County Assembly, communication with partnership and individual shares. Regional Development County Project Idea Providing support in preparation of the Provide additional funds for the Agency Project complied with the related ROP guidelines and limitations. Regional Partnership Established and functioning Central counseling body coordinating the Financial regulation of the Committee implementation of the ROP Committee expenses Private sector Invests according to motivation and Provide as many opportunities as possible For the purposes of communication financial assets to make comments and give suggestions it would be useful to set up a definite organizational structure NGOs The civil sector is still under The ideas of this sector should be There are numerous organizational intensive development and its integrated as much as possible in and financial problems to be solved prosperity should be supported comparison to those of the civil and public sector. Competent ministries Manage the entire process through Coordinate relationships between ideas It is necessary to define institutional basic guidelines and regulatory and funds based on the ROP and other mechanisms of individual sectors ad support sources and monitor the entire work. provide financial support

21.3. Funds and Financing

The emphasis should be made on the fact that the priority projects are considered those projects that direct development as defined by the development strategy. This should be

115 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County understood and implemented to confirm the liability of the ROP and to realize its economic and social function. The Ministry of Sea, Tourism, Transport and Development has established a common mechanism for acquiring funds, which coordinates the majority of foreign donors. They include the European Commission, the European Investment bank, the World Bank, the European Bank for Reconstruction and Development and other resources whose basic strategy is intended to regional development within the EU and of the candidate countries. However, apart from the priorities stated in the ROP it is necessary to take into consideration the objective circumstances offered to material and financial resources. And finally, the donor capital should also be taken into consideration. Projects proposed to donors for financing should be attractive to them and it is therefore of great importance to indicate the decisive importance of the stated project implementation unit. The unit should submit its projects to donors in a transparent and correct way.

21.4. ROP Monitoring and Evaluation

The ROP monitoring and evaluation mechanisms should enable its unobstructed, correct and transparent implementation. These mechanisms are important for the ROP creation procedure to provide a certain educational platform for the practice of development programming and planning. Therefore the following should be made available:  access to performance data, showing the contribution of the ROP to the County development, considering its goals and priorities as well as the period which it is being realized in,  related to the entire ROP, i.e. the program and individual projects, goals should be set up together with the stages during which thy should be realized,  in order to manage the collected date, analyses and opinions of the experts, it is necessary to develop certain framework for their evaluation and feedback.

Data and Goals

The fundamental analysis has shown initial data and results with which it is possible to measure the ROP progress. It defined the scope, the character, the level of social development with all existing limitations. Its results have been fully confirmed as a relevant base for the ROP vision and strategy.

Evaluation Framework

The diagram below helps in understanding the measuring procedure and its importance for determining the project success. For that purpose the resources used in implementation of the program and the project should be defined as well as their wide influence on the lives of individuals, general earning circumstances and business entities.

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Map 4 Evaluation Framework

The most important evaluation framework may be developed through the Logical Framework. This framework represents an important tool for monitoring the program and its prosperity as it connects the goals, activities and results and provides useable parametres.

Table 49 Logical Framework Matrix for the Osijek and Baranja County Intervention Logic Objectively verifiable parametres of Sources of information Assumptions achievement Overall objective: economic  increase of the GDP State administration and county Continuation of the EU accession and social development of the  increase of employment and economic and social statistics policy Osijek and Baranja County decrease of unemployment rate  economic development as the  more companies and farms making main goal of the Republic of profit and increasing employment Croatia  decrease of the inequality coefficient  regional policy as a priority (GINI)  participants in the ROP follow its vision Specific (ROP) Objective:  decrease unemployment to 10%  unemployment data received National and county statistical stated in the development share of the working population from the Employment Bureau resources strategy  GDP growth rate of the County  data from business zones and  increase the level of education parks  identify and regularly monitor all  skills and business research marginal groups  monitoring of marginal groups,  public utility and business studies and evaluations infrastructure should be  project reports and ROP audits continuously upgraded Expected results:  the programs have a satisfactory  application data and Management of strategic 1. Upgraded institutional impact and deliver the promised research on the programming complied to the EU capacity for economic support entrepreneurs’ and standards available throughout the development  the plan has been adjusted with users’ opinions. entire process 2. Support programs are being partners. Public institutions have  ROP monitoring  The ROP remains the general developed, are accessible but been adjusted according to their mechanisms activity within the County should be detailed volume and term  data, research, studies, development planning 3. The Plan for attracting  performance is measured by the opinions of experts  Enabled coordination at local, investments to the County is product quality, quantities sold,  comparison of initial regional and national level operational realized gains status and situation  local development actors 4. Stimulation instruments  the County has been recognized as a analysis remain devoted to the principle with high added value have business location inside Croatia of partnership been developed  clearing of mines and the level of 5. Agriculture is being new technologies increased while developed as the driving the number of pollutants decreased sector of the economy 6. The economic structure has been complied with the consumers’ needs

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7. Public utility infrastructure has been improved 8. Environment protection measures have been increased 9. Educational services of the institution have been adequately facilitated regarding staff and adapted to the needs of the business sector 10. Health and social care have been improved and the quality of life increased, based on the principles of equality and public safety Activities: Assessment of necessary investments: Costs:  the management capacity  coordination and  total investment assessment in the  assessment of absorption available at the Ministry level cooperation with partner County area in the period until 2013 capacity during the ROP is sufficient for actions of such institutions is estimated to the amount of 1.6 production has been assessed scope  cross-competence billion EUR to 250 million EUR  the management capacity cooperation  projects included in the ROP amount available is sufficient for a free  implementation of a to 0.8 billion EUR and timely implementation strategic scheme  implementation of few larger projects

Monitoring and evaluation of projects may be very complex because projects have input and output source values. These source values are not easy to define and are not unique. Therefore there are suggestions on the EU level relating to this complex verification. They may be presented as follows:

Interest Group Area of Interest Main Areas of Performance/Monitoring and Assessment Parametres  economic development  standards and parametres  reducing poverty  output parametres with emphasis being put  cooperative administration on quantitative measures Government of the Republic of Croatia  implementation results  results  county but also inter-county level of  institutional performance of administration cooperation at all levels, inter-institutional cooperation and partnership  implementation results  commonly used standard parametres  improved coordination within administration  input parametres including financial, human  use of available funds and other resources  better traffic connections and links of the  output parametres focused on quantitative County Administration area and the wider region measures  initiating new programs  institutional performance of the  opening of new jobs administration at all levels, inter- institutional cooperation and partnership  implementation results  standards and parametres  improved coordination within administration  input parametres Local Administration  use of available funds  output parametres  increased focusing of attention onto non- material aspects and qualitative questions  productivity and better access to markets Parametres of policy and public investment  decreased crime results focusing on:  reduced administrative barriers  simplification of legal regulations Non-government and non-profit organizations  availability of credits  crime and strategically located areas of  reduction of transaction costs economic potential  results and initiative of the public sector to provide opportunities  reducing poverty  parametres of results related to poverty and Donors  horizontal themes of equality of sexes, economic growth computer facilitation, infectious diseases  parametres of performance

21.5. Continuous Programming

The ROP is a dynamic document that will develop in time and thus require adjustments or changes during its development but also improvements resulting in better understanding of problems and key issues. This is why the ROP, as a framework but also a determining strategic document must respect changes caused by programming development and realized through the development program. This considering we suggest the following schedule of reviews and ROP assessments:

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 An annual control to be conducted at passing of the county budget. For this purpose the performance of each program should be analyzed separately including the program schedule per each activity and stages of realization of interests. In that way the Assembly shall fully control the project implementation and intervene if appropriate.  A three-year evaluation is a procedure where every three years the results of the ROP are defined and analyzed. All participants in the ROP have an important role at this level of verification, particularly the Partnership Committee which coordinates the relationships between the public, civil and non-government sector and establishes contacts with the representatives of the European Commission.

Updating of the ROP shall contribute to its actuality and provide continuity in monitoring and implementation of the ROP. Besides, upgrading enriches the database and creates a wider network of partners in creation and implementation of the ROP, but also of its relationship with external environment.

21.6. Steps in ROP Implementation

The first steps to be taken in the implementation of the ROP are those relating to the Program being accepted by the County Assembly. Following is the establishment of a ROP implementation unit whose role has already been explained and whose foundation should not be delayed. And finally, the subsequent procedures comprise creation of a project base which should ensure the continuity of programming set by the ROP. To conclude, the ROP represents a mechanism of continuous monitoring, programming and evaluation of the County economic and social development.

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APPENDICES

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1. ROP team

Main County Team 1. Krešimir Bubalo, County Prefect 2. , Deputy County Prefect 3. Dinko Buri ć, Deputy County Prefect 4. Mile Horvat, Deputy County Prefect 5. Marko Bagari ć, a member of County Government

County Workgroup 1. Sandra Filipovi ć - Development Agency (Assistant to the Head) 2. Martin Marolin - Development Agency (Head) 3. Željko Kralji čak - Economic and Agribusiness Affairs Administrative Department (Head) 4. Oliver Grigi ć - Institute for Spatial Organization (Head) 5. Davor Brun čić, M.Sc. - Secretariat (Secretary) 6. Romana Mihaljevi ć - Common Affairs Service (Head) 7. Snježana Raguž - Public Finance Service (Service Director) 8. Ksenija Zbožil - Social Affairs Administrative Department (Head) 9. Višnja Novoseli ć - Administrative Department for Administrative and Legal Affairs (Head) 10. Katica Čosi ć - Administrative Department for Administrative and Legal Affairs (Assistant to the Head) 11. Željka Jurkovi ć - Institute for Spatial Organization (Assistant to the Head) 12. Tihomir Živi ć, Ph.D. - Secretariat (consultant for the matters of inter-county and international cooperation) 13. Mirela Sudari ć - Social Affairs Administrative Department (financial expert assistant) 14. Silva Wendling - Economic and Agribusiness Affairs Administrative Department (Assistant to the Head) 15. Saša Forgi ć - Secretariat (Department Head - consultant) 16. An ñelko Lišnji ć, M.Sc. - County Government member 17. Nedeljko Bosanac, Ph.D - County Government member

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Regional Partnership Committee:

WORK GROUP GROUP REPRESENTATIVES REPRESENTATIVE DEPUTIES 1. Industrial economy (companies, WERKOS d.o.o. - Mirta Veki ć NEXE GRUPA d.o.o. - Ivica ðeri crafts, chambers, local development CROATIAN CHAMBER OF CROATIAN CHAMBER OF agencies) ECONOMY, OSIJEK COUNTY CRAFTS, The Osijek and Baranja CHAMBER - Katarina Pekanov County Chamber of Crafts - Blaženka Bogdan BIOS-PODUZETNI ČKI MIHOLJA ČKI PODUZETNI ČKI INKUBATOR CENTAR d.o.o.(ENTREPRENEURSHIP d.o.o.(ENTREPRENEURSHIP INCUBATOR) - Igor Medi ć CENTRE) - Valent Posun 2. Rural economy (agricultural INSTITUTE OF AGRICULTURE - CROATIAN INSTITUTE FOR cooperatives - zadruge, other Josip Kova čevi ć AGRICULTURAL COUNSELLING - organizations) Draženka Gutzmirtl BIOPA - Davor Samota INSTITUTE FOR SEED AND SEEDLINGS - Stanislav Volenik AC ALMUS - Stjepan Puši ć AC MATIJEVI Ć - Andreja Perkovi ć 3. Social infrastructure (sectors of INSTITUTE FOR PUBLIC HEALTH COUNTY GENERAL HOSPITAL IN education, health, police, social care) - Karlo Kožul NAŠICE - Vesna Čačinovi ć-Mati ć Mihajlo Biglbauer FACULTY OF CIVIL ENGINEERING IN OSIJEK- Sanja Lon čar-Vickovi ć TECHNICAL SCHOOL OF VLADIMIR NAZOR PRIMARY MECHANICAL ENGINEERING IN SCHOOL IN ðAKOVO - Josip Rener OSIJEK - Ivan Kuleš 4. Physical infrastructure NATURAL PARK „KOPA ČKI RIT“, UNIKOM d.o.o. - Krunoslava (representatives of public utility PUBLIC INSTITUTION - Biserka Kova čevi ć sector and institutions competent for Vištica environment protection) INSTITUTE FOR PUBLIC HEALTH VODOOPSKRBA d.o.o. DARDA - IN OSIJEK - Vera Santo Boris Ivan čić STATE ADMINISTRATION HRVATSKE VODE, WATER OFFICE IN THE OSIJEK AND MANAGEMENT OSIJEK - Silvio BARANJA COUNTY - Jasna Gorupi ć Brezak 5. Civil society (representatives of CROATIAN EMPLOYERS' CROATIAN EMPLOYERS' NGOs, union, volunteers, etc.) ASSOCIATION IN OSIJEK - Bernar ASSOCIATION IN OSIJEK - Milka Jakeli ć Kosanovi ć ASSOCIATION OF INDEPENTENT INDEPENDENT TRADE UNION OF TRADE UNIONS OF CROATIA IN CROATIA - Marko Brekalo OSIJEK - Ante Krajna ALBERT E - Milan Ivanovi ć NANSEN DIALOG CENTAR - Nikolina Svalina 6. Public sector (representatives of CROATIAN EMPLOYMENT CITY OF BELI MANASTIR - Sonja local, county and central government BUREAU, BRANCH OSIJEK - Veseli and Employment Bureau) Kristina Aleri ć MUNICIPALITY OF MUNICIPALITY OF DARDA - Ante ERNESTINOVO - Matija Greif Vukoje MUNICIPALITY OF BILJE - Žarko INSTITUTE OF COMPUTER Zeli ć SCIENCES IN OSIJEK - Dražen Tomi ć

ROP consultants: 1. M. Sc. Mladen Mlinarevi ć 2. D. Sc. Branimir Lokin 3. D. sc. Marijan Živkovi ć 4. Katarina Mlinarevi ć dipl.oec.

Ministry of the Sea, Tourism, Transport and Development: 1. Emina Štefi čić 2. Ines Franov

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2. Rules of procedure

Meetings of RPC

Meetings of Regional Partnership Committee (RPC) shall be held at the call of the President (Deputy) of RPO, in cooperation with Main County Team. Invitations shall be circulated to the members of RPO in writing with proposal of the agenda and other written or electronic materials at least 5 days before the meeting is held.

Minutes

Minutes shall be taken at each meeting by a person appointed by the County, and signed by the President of RPO and keeper of the minutes. The first item on the agenda of each meeting shall be the adoption of the minutes from previous meeting, and the signed minutes will be circulated to members together with invitations.

Quorum

RPC is considered to have quorum if there is a majority of members present. Decisions within RPO are reached primarily by consensus, and should that prove to be impossible, by a majority vote, except in cases of change in the Rules of Procedure (Article 10 of the Rules of Procedure).

RPC Responsibilities

In case that a nominated representative of certain institution is not able to attend the meeting of the Committee, he shall be replaced by his deputy. If the nominated representative fails to attend the meeting on three consecutive occasions without a valid reason, his deputy shall become a member of the RPC, and the previously nominated representative shall act as his deputy. The county will appoint a person responsible for keeping record of attendance at the meetings, and it shall be signed by the President of RPC.

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3. Regional partnership committee

Introduction

It is expected that Croatia will become a member of the EU in the next few years. Accession to the EU will be preceded by preparatory period during which the Croatian government is supposed to adjust its internal organization and strengthen the capacities required for successful inclusion in the EU policies, as well as for a successful cooperation with the EU institutions.

One of the most important phases in negotiations between the Croatian government and the European Union is the issue of policy toward regions. Presently, regional policy accounts for more than 30 percent of the total EU budget, since it is considered to be the main instrument for promotion and advancement of successful economic and social cohesion on the EU territory.

Designing the programs based on which funds will be drawn from the Structural Funds (including the regional policy funds) and their implementation requires an efficient and smooth administrative organization which should include collaboration of various institutions of public and private sector. In order to secure a successful allocation of funds from the Structural Funds, it is of utmost importance that Croatia from the very beginning strengthens its capacity for their usage, in other words, to make efforts toward strengthening so-called absorption capacity. This, in turn, calls for the establishment of comprehensive and efficient administrative systems and procedures on all levels as well as collaboration of socio - economic institutions within the country, with the objective of identifying and harmonizing priorities and preparing development projects of high quality.

Such a collaboration of all the participants in development is implemented through Partnership, which aims at inclusion of all socio - economic partners into the process of designing and developing strategic development documents, such as the regional (county) operative programs (ROP) and the monitoring process in order to secure their successful implementation.

The Osijek-Baranja County has already started working on the Regional Operative Program (hereinafter referred to as “ROP”), which is being drafted by the Section for European Integration with the assistance of other administrative departments in the County, and in collaboration with the local interest groups and other agents. This collaboration process will continue in the implementation stage as well.

In order to draft a program document which will be compatible with the documents in the EU member countries, ROP requires clearly defined priorities of development objectives and a carefully planned annual allocation of funds required for the achievement of these objectives. Therefore it is vital to consult the Partnership both in the process of drafting the document as well as in its implementation. Partnership should help identify the real priorities, objectives which are planned to be achieved with financial support of foreign government funds (source of financing), the European Union and other international donators. Moreover, it should also help plan the activities (in the form of projects) which will be undertaken to secure the successful completion of identified objectives.

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This document is a proposal for the organization and activities of the Partnership Committee of the Osijek-Baranja County. The proposal of the Rulebook consists of the following chapters:

Chapter 1 General provisions, Chapter 2 Composition of RCP-a, Chapter 3 Main tasks/mission of RCP-a, Chapter 4 RPC and TWG Work Organization in the implementation stage of Regional Operative Program, Chapter 5 Final provisions.

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RULEBOOK OF REGIONAL PARTNERSHIP COMMITTEE

Chapter I – General provisions

Article 1 – Establishing the Regional Partnership Committee

Article 1 Establishing

( 1 ) The Regional Partnership Committee (RPC) is established in accordance with the principles and standards of the European Union, with the objective of drafting and implementing the Regional Operative Program (hereinafter: “ROP”) in accordance with the principles and standards of the European Union (hereinafter: EU), its task/mission being as follows:

(1.1.) To bring together private and public sector from the County, strengthen their cooperation in order to outline and promote the common vision of the future of the County. (1.2.) To participate in drafting of ROP as a consultative body. (1.3.) To participate in implementation of ROP as a consultative and supervisory body.

( 2 ) In the ROP drafting stage, the competent authorities of the County shall establish the RPC as an integral body. The Main County Team and the County Working Group (which are responsible for drafting the ROP on the operative level) shall consult the RPC throughout all the stages of drafting the ROP: basic analysis, development strategy, defining the priorities, measures and the budget.

( 3 ) In the implementation stage of Regional Operative Program, RPC shall act through plenary conferences, in addition to occasional formation of Thematic working groups (Article 4, Item 1). For the purpose of implementing ROP of the County through Main County Team, which coordinates the activities of RPC, a Program Implementation Unit shall be established (PIU) in order to provide technical support to both the County and Regional Partnership Committees.

( 4 ) Members of RPC shall be elected from the area of the County.

( 5 ) Members of RPC shall not receive any financial compensation for their work.

( 6 ) Meetings of RPC shall be public.

Article 2 – Role of Regional Partnership Committee

The Regional Partnership Committee (hereinafter: “RPC”) shall have an advisory role. Its recommendations should be taken into account during all the ROP activities/projects co- financed by the European Union (or other international donators/sponsors within the framework of ROP). Drafting, auditing or any other updating of ROP should be carried out following the consultations with RPC.

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Chapter II – Composition of Regional Partnership Committee

Article 3 Composition of Regional Partnership Committee

( 1 ) RPC shall be based on the principle of equality. Nobody is the owner of Partnership and no organization shall be dominant in it. Members of the Partnership shall be considered equal in terms of participation; they shall have equal influence on decision-making processes and generally speaking, shall be on equal footing in the Partnership.

(2) In accordance with the above - mentioned principle, the Regional Partnership Committee shall consist of 36 members from six interest groups: industrial economy, rural economy, social infrastructure, physical infrastructure, civil society and public sector. Every member is entitled to one vote. The members of Regional Partnership Committee have been nominated and elected by interest groups, and they represent the following institutions:

INDUSTRIAL ECONOMY: Mirta Veki ć, Katarina Pekanov and Igor Medi ć – members and Ivica ðeri, Blaženka Bogdan, Valent Poslon – deputy members.

RURAL ECONOMY: D.Sc. Josip Kova čevi ć, D.Sc. Davor Šamota and Stjepan Puši ć - members, and M.Sc. Draženka Gutzmirtl, M.Sc. Stanislav Volenik and Andreja Perkovi ć – deputy members.

SOCIAL INFRASTRUCTURE: Karlo Kožul, D.Sc. Mihajlo Biglbauer and M.Sc. Ivan Kuleš - members, and M.Sc. Vesna Čačinovi ć-Mati ć, Sanja Lon čar- Vickovi ć and Josip Rener – deputy members.

PHYSICAL INFRASTRUCTURE: Biserka Vištica, Vera Santo and Jasna Gorupi ć - members, and Krunoslava Kova čevi ć, Boris Ivan čić and Silvio Brezak – deputy members.

CIVIL SOCIETY: Bernard Jakeli ć, Ante Krajina and Milan Ivanovi ć - members, Milka Kosanovi ć, Marko Brekalo and Nikolina Svalina – deputy members.

PUBLIC SECTOR: Kristina Aleri ć, Matija Greif and Žarko Zeli ć - members, and Sonja Veseli, Ante Vukoje and Draženo Tomi ć – deputy members.

( 3 ) The president of RPC and his deputy shall be elected by the RPC members, and confirmed by the competent authority of the County. The president (and deputy president) shall be elected by consensus, and should that fail, by voting.

( 4 ) The structure of institutions/organizations represented in RPC can be changed. Every change, however, must be made in accordance with the provisions of paragraph V of this Rulebook.

( 5 ) The County, Main County Team and the County Working Group shall provide technical support to Regional Partnership Committee during the development of ROP. Program Implementation Unit shall act as Secretariat of the Committee and provide technical support.

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Article 4 Implementation stage of ROP - Formation and structure of Thematic Working Groups (TWGs)

( 1 ) In the initial stage of ROP implementation, should RPC decide to form Thematic Working Groups (in accordance with needs), each Thematic Working Group should involve all the partners in dealing with issues discussed at the meetings. RPC shall provide a list of participants who expressed willingness to be involved in activities of each Thematic Working Group, which shall appoint the president. Should Thematic Working Groups require professional assistance in their attempts to solve certain problems, Thematic Working Groups may decide to involve one of the renowned experts on certain issues into their activities.

( 2 ) In accordance with the provisions of Article 8 of this Rulebook, the operation of the Secretariat of Thematic Working Groups shall be provided by the Program Implementation Unit.

Chapter III – Main tasks of Regional Partnership Committee

Article 5 Responsibilities of RPC in ROP drafting phase (programming) and implementation

( 1 ) Responsibilities of RCP in the drafting phase are as follows:

a) Adopts the draft program documents prepared by the Main County Team, the County Working Group and engaged consultants in all phases of designing ROP: basic analysis, development strategy, establishing priorities, measures and the budget; b) Provides the County Prefect with a list of defined priorities which should be selected and objectives to be achieved in order to implement (or amend) ROP; c) Suggests the measures the County Prefect should take regarding ROP; d) Justifies and presents arguments for its proposals.

( 2 ) Responsibilities of RCP in the implementation stage are as follows:

a) Suggests to the County prefect projects that should be financed and so-called grant schemes to be implemented; b) Supervises the implementation of the financed program (all the projects and grant schemes).

All the official proposals of Partnership Committee should be accompanied with arguments and submitted in writing.

Article 6 Responsibilities of Thematic Working Groups (TWGs) in implementation stage

In the implementation stage, Thematic Working Groups have the following responsibilities: a) Analyze, in line with the agreed selection criteria, the projects and grant schemes and suggest to RPC which of these should be financed and implemented; b) If and when necessary, assist RCP in monitoring the implementation stage of the financed projects.

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Article 7 Responsibilities of the President of Regional Partnership Committee

a) In collaboration with the Main County Team, and later, with the Program Implementation U prepares the agenda and convenes the meetings. b) Presides over the meetings, promoting consensus in decision-making process. c) Signs the documents prepared by RCP and verifies the minutes of previous meetings.

Article 8 Responsibilities of the RPC Technical Secretariat or Program Implementation Unit in the ROP implementation stage

a) Prepares and circulates the documents and materials necessary for convening the meetings of RCP and Thematic Working Groups; b) Participates in meetings of RPC and Thematic Working Groups; c) Organizes and distributes the proposals and comments of members of RCP and Thematic Working Groups; d) Prepares minutes of the meetings; e) Circulates minutes of the meetings to all members for verification.

Chapter IV – Organization of work of Regional Partnership Committee in ROP implementation phase

Article 9

All the detailed operative activities regarding the activities of RCP and Thematic Working Groups - such as the frequency of holding meetings, majority vote, quorum, absence and other - shall be defined by members of RCP and Program Implementation Unit at one of the first meetings convened. Acting as Technical Secretariat, the Program Implementation Unit shall be in charge of preparing and circulating invitations, preparing agenda and minutes of the meetings.

Chapter V – Final provisions

Article 10 Adopting and amending the Rulebook

(1) The rulebook shall be passed by 2/3 majority vote of all RPC members. The number of voters shall equal the number of institutions and organizations which appointed their representative to RPC. (2) Amendments to this Rulebook shall be adopted by a qualified majority vote (2/3 of all members with voting rights). The number of voters shall equal the number of institutions and organizations which had their representatives in the RPC on the day amendments were proposed.

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4. List of Project Ideas (Public Invitation of 26 May 2006) 1. AGRICULTURE No. Institution Program Activity Area of implementation Beneficiaries Total Budget Required Feasib. Cost Location Building Stage 1 from the study Benefit Permit Permit started ROP 1 2 3 4 5 6 7 8 9 10 11 12 13 1. Faculty of Agriculture in Osijek Suitability of soil conditioning in the Osijek research County Manufacturers in the 330,00 165,00 no no - - no and Baranja County County 2. Faculty of Agriculture in Osijek Allotment of the Osijek and Baranja research County Manufacturers in the 245,000 208,000 no no - - no County areas intended for permanent crops County adapted to suitability of soil 3. The Osijek and Baranja County The Slavonia apple brand agriculture County European market and ------Administrative Department of the County Economy Agriculture and Economy 4. Construction of several melioration systems according to the Plan of melioration system in the County 5. GIS as allotment precondition for the agricultural production in the County 6. Cadastral-Geodesic survey of agricultural land in order to achieve a better agricultural land maintenance 7. County’s Rural Development Plan 8. Hail defence with an airplane generator as a precondition for agricultural development in the County 9. The first Croatian cluster of ecological Development of production based on agriculture County European market and 3,150,000 630,00 no no - - no production healthy cereal crops the County Economy 10. Faculty of Agriculture – Department Increasing the quality of wine in the Osijek research County family farms - 757,500 ------for Chemistry and Biochemistry and Baranja County wineries 11. Faculty of Agriculture in Osijek Monitoring the quality of honey in the research County family farms 757,500 ------Osijek and Baranja County 12. Faculty of Agriculture in Osijek Monitoring the quality of meat and meat research County Manufacturers of the ------products County area 13. Faculty of Agriculture in Osijek Enriching poultry products with PVFA N-3 research County manufacturers of the ------on family farms County area 14. Municipality of Bilje Initiative for the development of family agriculture Bilje manufacturers 400,000 ------farms 15. Municipality of Bilje Establishment of a farming cooperative agriculture Bilje manufacturers 50,000 ------16. Municipality of Marijanci Measures for land management in the Donji agriculture Municipality of Viljevo, agriculturists 452,000,000 316,000,000 - - - - yes Miholjac area Magadenovac, P. Moslavina, Donji Miholjac and Marijanci 17. Municipality of Draž Initiative for family farms development agriculture Municipality of Draž family farms 2,020,000 202,000 - - - - - 18. Municipality of Satnica ðakova čka Land survey agriculture Satnica ðakova čka and owners of real estate 7,500,000 ------Gašinci 19. Cooperative of agriculture „Naše selo“ Milk cooperative for production of meal agriculture Municipality of cooperative member 3,100,000 1,550,000 - - - - - Jagodnjak 20. Municipality of Semeljci Cadastral survey of state agriculture land agriculture Municipality of Semeljci family farms 6,000,000 840,000 - - - - - 21. Municipality of Kneževi Vinogradi Bin capacity expansion agriculture Kneževi Vinogradi family farms 3,530,000 706,000 - - - - - 22. Organization for Enterprise ður ñenovac – place for hunting, fishing and agriculture Municipality of population 6,450,000 645,000 - - - - - development-municipality of the recovery of fish pond ður ñenovac ður ñenovac „Uzlet“ 23. Organization for enterprise Cluster of farmers agriculture Municipality of agriculturists 5,450,000 545,000 - - - - yes development-Municipality of ður ñenovac ður ñenovac „Uzlet“ 24. Entrepreneurship centre Miholjac Development of water scales on the river agriculture Near the river Karašica agriculturists ------yes Korašica in order to regionalize exploitation

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of waters in the Donji Miholjac area

25. Entrepreneurship centre Miholjac Development of pig farms in order to agriculture Municipality of P. agriculturists 75,750,000 26,512,500 - - - - yes finalize field crops Moslavina, Viljevo, city of Donji Miholjac, Magadenovac and Marijanci 26. Entrepreneurship centre Miholjac Development of food capacities in order to agriculture City of Donji Miholjac, agriculturists ------yes change the structure and finalization of municipality of filed crops Magadenovac, Marijanci and Viljevo 27. City of Donji Miholjac Drava – the river that connects two shores agriculture, industry Local safe------governments 28. Municipality of Magadenovac Project of agriculture land irrigation by agriculture, Municipality of population 750,000 450,000 - - - - yes artesian wells drilled for INA needs. infrastructure Magadenovac, Viljevo and Marijanci 29. Municipality of Magadenovac The usage of geothermal water as an agriculture, Municipality of population ------alternative energy source infrastructure Magadenovac, Viljevo and Marijanci TOTAL: 568,240,000 348,453,500

2. INFRASTRUCTURE No. Institution Program Activity Area of implementation Beneficiaries Total Budget Required Feasib. Cost Location Building Stage 1 from the study Benefit Permit Permit started ROP 1 2 3 4 5 6 7 8 9 10 11 12 13 1. City of Osijek Demining of suspicious areas and mine Environment and Nemetin, Podravlje, population and 52,000,000 50,200,800 yes no - - yes fields in the area of the City of Osijek and safety Tvr ñavica, Sarvaš and economy other areas in Osijek-Baranja County Tenja 2. Municipality of Bilje De-mining of the Bilje area infrastructure Bilje population 11,000,000 ------3. Osijek and Baranja County Extension of southern pavement of the infrastructure Southern suburb of population 150,000,000 90,000,000 - - yes no - Osijek southern by-pass Osijek 4. Kombel Beliš će d.o.o. public utility Construction of the Beliš će drainage system infrastructure Wider area of Beliš će population of the 669,900,000 401,940,000 - - no yes - company Valpovo and Beliš će areas 5. Institute for Area planning of the Waste management Project economy-public County population of entire 376,000,000 56,000 no no yes no no Osijek and Baranja County utility County 6. Vodovod Osijek d.o.o. public utility Wastewater filtration system of the City of infrastructure City of Osijek Population of Osijek, 247,500,000 148,500,000 no no yes no no company Osijek Čepin, Livana and Ov čara 7. City of Osijek Wastewater filtration system of the City of infrastructure Area of Nemetin along population and 150,000,000 90,000,000 yes no no no no Osijek the river Drava economy 8. City of Osijek Construction of “Osijek” - wastewater infrastructure Osijek, Čepin, Livana, population 290,000,000 14,500,000 yes no yes yes no filtration system and recovery of the public Antunovac, and a part of drainage system northern collector of the Southern Baranja City of Osijek 9. Baranjski vodovod Beli Manastir Construction of the wider Beli Manastir infrastructure Northern Baranja population of 62,617,500 37,570,500 - - no yes - d.o.o. komunalno poduze će water supply system Northern Baranja 10. „Park“ d.o.o. Donji Miholjac - Utility Construction of the Donji Miholjac water infrastructure Wider area of Donji population of Donji 56,118,975 33,670,800 - - no yes - services Department supply system Miholjac Miholjac and its wider area 11. „Park“ d.o.o. Donji Miholjac - Utility Construction of dividing grid of drinking infrastructure Donji Miholjac, population 40,000,000 12,000,000 yes - yes yes yes services Department water supply of Donji Miholjac area Magadenovac, Viljevo, Marijanci and P. Moslavina 12. City of Osijek Construction of the Water supply system of infrastructure Osijek, Čepin, population 34,000,000 17,000,000 yes no yes yes no the City of Osijek Municipalities: Vladislavci, Vuke, Areas: Divoš, Ernestinovo, Laslovo, Dalj, Erdut and Aljmaš

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13. „Park“ d.o.o. Donji Miholjac - Utility Construction of water supply system infrastructure Donji Miholjac, population 22,500,000 7,875,000 yes yes - yes yes services Department „Slavonska “ Magadenovac, Viljevo, Marijanci and P. Moslavina 14. Kombel d.o.o. Beliš će, public utility Construction of the wider Beliš će and the infrastructure Beliš ćeand Marijanci population of Beliš će, 19,305,000 11,583,000 - - no yes - company Marijanci Municipality water supply areas of: Tiborjanci, system Veliškovci, Gat, Črnkovci and the municipality of Marijanci 15. Naši čki vodovod d.o.o. public utility Construction of the wider Našice water infrastructure City of Našice, population of Našice 15,130,500 9,078,300 - - no yes - company supply system Municipalities: Podgora č and the municipality and ður ñenovac of Podgora č and ður ñenovac 16. ðakova čki vodovod d.o.o., public Construction of the ðakovo water supply infrastructure Wider area of ðakovo population of wider 13,345,200 8,071,200 - - - - - utility company system and municipalities of ðakovo area Drenje, Trnava, Viškovci, Gorjani and Satnica ðakova čka 17. Rad ður ñenovac d.o.o., public utility Construction of the ður ñenovac infrastructure Municipality of population of the 12,622,500 7,573,500 - - yes no - company Municipality water supply system ður ñenovac municipality of ður ñenovac 18. Čvorkovac - Dalj d.o.o. public utility Construction of the Dalj-Erdut water supply infrastructure Municipality of Erdut population of the 9,736,800 5,842,080 - - no yes - company system and the area Sarvaš municipality of Erdut 19. Municipality of Podgora č Regional water supply system of Slavonska infrastructure Markovac Naši čki, population and 8,535,000 5,974,450 no no yes no no Podravina - central pipeline, Markovac Vukojevci, Stipanovci, institutions Naši čki - Razborište and water pipeline Podgora č, Razorište network Podgora č-Razvodište 20. Vodoopskrba Darda d.o.o. public Construction of the Darda Municipality infrastructure Municipality of Darda population of the 6,187,500 3,712,500 - - no yes - utility company water supply system municipality of Darda 21. Municipality of Vladoslavci Construction of drinking water central infrastructure Pavlin Dvor, Hrastin, population 6,169,092 1,542,273 - - yes - - pipeline Ernestinovo - Pavlin Court- Vladislavci and Dopsin Hrastin-Vladislavci-Dopsin 22. Municipality of Popovac Water supply of south Baranja – central infrastructure Popovac, Kneževo, population 3,237,900 1,618,950 - - yes - yes pipeline Popovac – Kneževo - Branjina Branjina 23. Municipality of Petlovac Lu č water network infrastructure Lu č population 2,660,000 1,330,000 yes - yes yes yes 24. Municipality of Popovac Branjina water network infrastructure Branjina population 2,600,000 1,300,000 - - yes - yes 25. Municipality of Popovac Kneževo water network infrastructure Kneževo population 2,600,000 1,300,000 - - yes - yes 26. Municipality of Erdut and Dalj Construction of drinking water central infrastructure Bijelo Brdo population legal 2,600,000 260,000 no no - - - pipeline - Sarvaš-Bijelo Brdo entities 27. Municipality of Marijanci Construction of drainage and water supply infrastructure Municipality of population 52,000,000 - - - - yes yes system Marijanci and City of Beliš će 28. Municipality of Kneževi Vinogradi Waterwell „Prosine“ infrastructure Kneževi Vinogradi population 9,015,000 - - - yes yes yes 29. Municipality of Kneževi Vinogradi Local water system Zmajevac infrastructure Zmajevac population 4,500,000 - - - - yes yes 30. Municipality of Jagodnjak Local water network infrastructure Jagodnjak population 2,100,000 - yes yes yes yes yes 31. Municipalty of ður ñenovac Construction of a water pipeline infrastructure Kr čevina, Beljevina, population 4,175,000 - - - yes yes - connection ður ñenovac-Kr čevina- Bokši ć Beljevina-Bokši ć 32. Municipality of ður ñenovac Construction of a water pipeline infrastructure Bokši ć and Bokši ć Lug population and 4,075,000 ------connection Bokši ć-Bokši ć Lug economic objects in Bokši ć Lug 33. Municipality of ður ñenovac Water supply network of the Beljevina infrastructure Beljevina population and 3,650,000 ------cimmunity economic objects in Kloko čevci 34. Municipalty of ður ñenovac Construction of a water pipeline infrastructure Teodorovac population and 1,575,000 ------connection Sušine-Teodorovac – location economic objects in of waste disposal Bokši ć Lug 35. Municipality of ður ñenovac Construction of a water pipeline infrastructure Kloko čevci population and 3,040,000 - - - yes - - connection Šatinovci-Kloko čevci economic objects 36. Municipality of ður ñenovac Water supply network of the Kloko čevci infrastructure Kloko čevci population and 2,030,000 ------community economic objects in

132 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Kloko čevci 37. City of ðakovo ðakovo-Budrovci water network infrastructure City of ðakovo, population 1,866,000 ------Budrovci 38. Municipality of ður ñenovac Bokši ć Lug water network infrastructure Bokši ć Lug population and 1,530,000 ------economic objects 39. Municipality of Bilje Zlatna Greda water network infrastructure Bilje population 1,500,000 ------40. Municipality of ður ñenovac Construction of a water central pipeline infrastructure Bokši ć and Štapinovci population and 1,030,000 ------connection Bokši ć-Štapinovci economic objects in Bokši ć Lug 41. City of ðakovo Construction of draw well on water well infrastructure City of ðakovo, water population 1,000,000 ------Trslana well Trslana 42. Municipality of Bilje Tikveš water network infrastructure Bilje population 960,000 ------43. Municipality of ður ñenovac Water supply network of the area of Lipine infrastructure Lipine population and 770,000 ------economic objects in Lipine 44. City of ðakovo Construction of alternative draw well in infrastructure City of ðakovo, Široko population 600,000 ------Široko polje Polje 45. Municipality of Bilje Water supply network of the area of Kozjak infrastructure Bilje population 350,000 - - - yes no - 46. Municipality of Bilje Distributive water supply network of Lug infrastructure Bilje population 300,000 - - - yes yes - 47. Municipality of Bilje Water supply network of the Konkloš area infrastructure Bilje population 300,000 - - - yes yes - 48. City of ðakovo Restructuring of chlorine station of Trslana infrastructure City of ðakovo, water population 250,000 ------well Trslana 49. Municipality of Jagodnjak Local water network infrastructure , Novi Molman population ------and Majške Me ñe 50. Municipality of Viljevo Construction of drinking water central infrastructure Municipality of Viljevo population 35,400,000 - - - yes yes - pipeline D. Miholjac – Moslavina – Gezinci, Main supply pipeline Viljevo- Cret-Kapelna, water network of Municipality of Viljevo 51. Dvorac Valpovo d.o.o. public utility Construction of the Valpovo drainage infrastructure Valpovo Area population 110,715,000 66,429,000 - - yes yes - company system 52. Municipality of Bizovac Construction of wastewater system of infrastructure Municipality of Bizovac population 101,000,000 20,200,000 - - yes - - Municipalities of Bizovac and Petrijevci, i and Petrijevci, city of and settlement Ladimirevci of City of Valpovo Valpova 53. Dvorac d.o.o. for public utility Wastewater drainage system of Dvorac infrastructure Ladimirci, Petrijevci, population and 98,000,000 29,400,000 no no yes yes no services d.o.o. wastewater for the areas of the Satnica, Samatovci, Cret, economy municipalities of Petrijevci, Bizovac, Bizovac, Novaki, suburban area of Ladimirovci including the Brodanci and wastewater filtration system Habijanovci 54. Naši čki vodovod Našice d.o.o. public Construction of the Našice drainage system infrastructure Našice and neighbouring population 86,212,500 51,727,500 - - no yes - utility company municipalities 55. Municipality of Erdut and Dalj Construction of sewage network of the infrastructure Erdut population and legal 82,500,000 41,250,000 no no - - - municipality of Erdut entities 56. ðakova čki vodovod ðakovo d.o.o. Construction of the ðakovo drainage infrastructure ðakovo Area population 51,051,000 30,630,600 - - yes yes - public utility company system 57. Komunalno Bilje d.o.o. Construction of the South Baranja drainage infrastructure Baranja population 46,777,500 28,066,500 - - yes yes - system 58. Dvorac d.o.o. for public utility Drainage and filtration of the Dvorac d.o.o. infrastructure Topoline, Normanci, population and 42,200,000 12,690,000 no no no yes no services wastewater for the municipality of Koška Koška, Suboti čki Lug, economy including the wastewater filtration system Branimirova, Andrijevac, Ordanja, Ledenik, Niza and Naši ćka Brezovica 59. Baranjski vodovod Beli Manastir Construction of the Beli Manastir drainage infrastructure Beli Manastir population 27,076,500 16,245,900 - - yes yes - d.o.o. public utility company system 60. Municipality of Popovac Construction of sewage network of the infrastructure Municipality of Popovac population 21,500,000 10,750,000 - - - - - Popovac Municipality 61. Municipality of Kneževi Vinogradi Sanitary sewer system and plant for infrastructure Kneževi Vinogradi population 21,300,000 3,195,000 - - - - - purification of wastewaters 2500ES 62. Rad, ður ñenovac d.o.o. public utility Construction of the ður ñenovac drainage infrastructure Našice and neighbouring population 20,212,500 12,127,500 - - no no - company system municipalities 63. Dvorac d.o.o. for public utility Drainage and filtration of the Dvorac d.o.o. infrastructure Marijan čaci, Ivanovci, population and 17,504,000 5,251,200 no no no no no activities wastewater for the areas of Marijan čac, Zel čin, Harkanovci economy

133 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

activities wastewater for the areas of Marijan čac, Zel čin, Harkanovci economy Ivanovci, Zel čin and Harkanovci including the wastewater filtration system 64. City of Donji Miholjac Construction of biological purification infrastructure Donji Miholjac population 16,000,000 9,600,000 yes yes yes yes yes system of wastewaters 65. Municipality of Podgora č Sanitary and consumer sewage network of infrastructure Podgora č population and 4,819,000 3,373,300 no no yes no no Podgora č institutions 66. Municipality of Satnica ðakova čka Construction of drainage system infrastructure Satnica ðakova čka and population 4,650,000 930,000 - - yes - - Gašinci 67. City of Donji Miholjac Construction of collector system infrastructure Donji Miholjac population 1,237,500 618,750 - - - - - 68. City of Donji Miholjac Construction of autonomous purification of infrastructure Donji Miholjac population 225,000 112,500 - - - - - wastewaters system 69. Osijek and Baranja County Construction of melioration drainage infrastructure - Osijek and Baranja Manufacturers in 250,000,000 ------system in the County area economy County agriculture 70. Municipality of Semeljci Wastewater system infrastructure Municipality of Semeljci population 64,000,000 ------71. Municipality of ður ñenovac Construction of wastewater filtration infrastructure ður ñenovac population, 31,500,000 ------system of Teodorovac agricultural and industry object 72. Municipality of Ernestinovo Construction of the Municipality of infrastructure Ernestinovo, Divoš, population 23,652,000 - yes yes yes - yes Ernestinovo drainage system Laslovo 73. City of ðakovo Collector network recovery infrastructure City of ðakovo population 17,500,000 ------74. Municipality of Bilje Drainage system of Southern Baranja and infrastructure Bilje population 17,200,000 - - - - yes - main canals in Bilje 75. Municipality of ður ñenovac Collector Pribiševci-ður ñenovac-Sušine infrastructure Pribiševci, ður ñenovac population and 15,200,000 ------and Sušine economy 76. City of ðakovo Construction of sewage network Kuševac- infrastructure City of ðakovo, population 15,000,000 ------Ivanovci suburban villages Kuševac i Ivanovci 77. City of Beliš će Construction of 1st phase of drainage and infrastructure Gat population 13,000,000 - - - yes - - filtration systems of Tiborjanaci, Veliškovci, Gat – wastewater filtration system 78. City of Beliš će Drafting of project documentation for 2nd infrastructure Veliškovci and population 13,000,000 - - - yes - - and 3 rd phase of drainage and filtration Tiborjanci systems of Tiborjanaci, Veliškovci, Gat – main collector of Veliškovci i Tiborjanco with collector network 79. Municipality of Bilje Wastewater drainage system of Southern infrastructure Bilje population 12,000,000 - - - yes yes - Baranja and Darda-Bilje sewage collector 80. Municipality of Bilje Vardarac and Lug drainage system infrastructure Bilje population 11,000,000 ------81. City of ðakovo Collector 3 - ðakovo infrastructure City of ðakovo population 8,000,000 ------82. City of ðakovo Collector for Industrial zone – Jug infrastructure City of ðakovo population 6,000,000 ------83. Municipality of Bilje Rainwater drainage project infrastructure Bilje population 5,000,000 ------84. Municipality of Bilje Sewage collector of the areas of Kopa čevo infrastructure Bilje population 4,856,000 - - - - yes - and Kopa čevo-Bilje connecting pipeline with pumping stations "Kopa čevo I" and "Kopa čevo II" 85. Municipality of ður ñenovac Collector Kolodvor street - Sušine infrastructure ður ñenovac population and 4,090,000 ------economic objects 86. Municipality of Bilje Creation of detailed network of infrastructure Bilje economy and 4,050,000 - no no - - - amelioration and drainage canals cooperatives 87. Municipality of ður ñenovac Collector - Kolodvor street, ður ñenovac infrastructure ður ñenovac population and 2,600,000 - - - yes yes - economic objects 88. Municipality of ður ñenovac Collector Nazorova Street - ður ñenovac infrastructure ður ñenovac population and 1,530,000 ------economic objects 89. Municipality of Bilje Recovery of canal culverts for Class 3 and infrastructure Bilje family farms 960,000 - no no - - - 4 canals 90. City of Beliš će Construction of secondary sewage network infrastructure Vinogradci population 700,000 - - - - - yes of the municipality of Kitišanci 91. City of ðakovo Wastewater filtration system infrastructure City of ðakovo population 700,000 ------92. City of Beliš će Construction of secondary sewage network infrastructure Kitišanci population 300,000 - - - yes yes yes of the Kitišanci municipality

134 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

93. Municipality of Levanjska Varoš Construction of municipal infrastructure infrastructure Majar, Ovčara, Milinac, population ------Pau čje, Ratkov dol, Slobodna Vlast, Levanjska Varoš and Musi ć 94. Municipality of Strizivojna Drainage and filtration of wastewater infrastructure Municipality of population ------Strizivojna 95. City of Donji Miholjac Melioration of agricultural land by grasping infrastructure Near the river Drava, population ------yes from river watercourse of rivers Drava, Karašica and Vu čica and Karašica and Vu čica water way Drava- Karašica 96. Municipality of Viljevo Drainage of Municipality of Viljevo – with infrastructure Municipality of Viljevo population 7,650,000 ------construction of separators for wastewater filtration 97. Regional self-government unit and UP airport – Improvement of Osijek infrastructure Osijek Airport Population and ------Osijek Ariport Ltd. Airport operationalisation economy 98. Osijek and Baranja County Replacement of the railway corridor Vc infrastructure Construction areas of population and ------from the Cities of Osijek and ðakovo Osijek and ðakovo economy

99. Municipality of Bilje Gas supply Sources of energy Bilje population, economy 44,000,000 - no no - - - 100. Municipality of Bilje Disinsection of mosquitoes infrastructure Bilje population 600,000 ------101. Municipality of ður ñenovac Transit station for utility garbage infrastructure ður ñenovac population and 30,500,000 ------economic objects 102. Municipality of Satnica ðakova čka Gas supply in the area of Municipality infrastructure Satnica ðakova čka and population ------Gašinci 103. Osijek port authority Terminal for trans-shipment of bulk cargo infrastructure and Osijek Dock worker and 116,259,000 93,072,000 yes - - yes yes transport economy subjects

104. City of Donji Miholjac Construction of bypass of the City infrastructure Donji Miholjac population 27,000,000 ------105. Entrepreneurship centre Miholjac Implementation of new financing models infrastructure Donji Miholjac area population 250,000 ------for the development of municipal infrastructure 106. City of Osijek Waste management – comprehensive infrastructure Osijek, Čepin, population 380,000,000 190,000,000 yes no yes yes no system of waste treatment of the City of Municipalities: Osijek Vladislavci, Vuke, Areas: Divoš, Ernestinovo, Laslovo, 107. City of Osijek Composting, systematic waste treatment of infrastructure Osijek, Čepin, population 11,700,00 5,850,000 yes no yes yes no the City of Osijek Municipalities: Vladislavci, Vuke, Areas: Divoš, Ernestinovo, Laslovo, 108. City of Beliš će Recovery of utility and industrial – waste infrastructure Grad Beliš će Population of citiy of 32,000,000 - - - yes - yes dump „Staro Valpovo“ of Beliš će Beliš ća and Valpovo, and Municipalities of Bizovac, Petrijevci i Koška 109. Municipality of Erdut Waste disposal in the area of Municipality infrastructure and Municipality of Erdut population 2,200,000 1,100,000 - - - - - of Erdut environment 110. City of ðakovo Construction and recovery of waste dump infrastructure City of ðakovo population 9,500,000 ------111. Municipality of Satnica ðakova čka Recovery of existing waste dumps infrastructure Satnica ðakovačka and population 450,000 225,000 - - - - - Gašinci 112. Municipality of Semeljci Construction of waste dump infrastructure and Semeljci population 2,200,000 880,000 - - - - - ecology 113. „Park“ d.o.o. Donji Miholjac - Utilitiy Waste management infrastructure and Donji Miholjac population 38,200,000 15,280,000 - - - - yes services Department ecology 114. City of Osijek Training in waste treatment infrastructure Osijek population 450,000 225,000 - - yes no - 115. Municipality of Viljevo Recovery of existing dumps and illegal infrastructure Municipality of Viljevo population 3,825,000 ------landfills –collecting and waste disposal in the areas of Municipality of Viljevo 116. Municipality of Draž Recovery of illegal landfills in the area of infrastructure and Draž, Botina, Podolje, population 165,000 16,500 - - - - - Municipality of Draž and construction of environment Gajic, Topolje, dump for animal waste Duboševica

135 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

117. City of ðakovo Asphalt over the access road to the Vitika infrastructure City of ðakovo population 650,000 ------waste dump 118. City of ðakovo Construction and setting of 50 eco islands infrastructure City of ðakovo population 425,000 ------119. City of ðakovo Construction of recycle yard infrastructure City of ðakovo population 1,500,000 ------120. Municipality of Darda Recovery of waste dump infrastructure Municipality of Darda population 4,000,000 - yes - - - - 121. Municipality of Jagodnjak Recovery of waste dump infrastructure Jagodnjak, Bolman, population 350,000 - - - - - yes and Majške Me ñe 122. Municipality of Bilje Bicycle path network infrastructure Bilje population 21,000,000 - no no - - - 123. Municipality of Bilje Construction of roads in rural areas infrastructure Bilje population, economy 4,400,000 - no no - - - 124. Municipality of Bilje Public illumination along the Osijek-Bilje infrastructure Bilje population 1,500,000 - - - yes - - bicycle path 125. Municipality of Bilje Reconstruction of the Ružina street infrastructure Bilje population 1,100,000 - - - yes yes - 126. Municipality of Bilje Unclassified road in the Konkloš area infrastructure Bilje population 325,000 - - - yes yes - 127. Municipality of Viljevo Modernization of local and regional roads infrastructure Municipality of Viljevo population ------in the areas of Donji Miholjac 128. City of ðakovo Reconstruction– the ban J. Jela čić and infrastructure City of ðakovo population 8,500,000 ------Pavi ćeva streets 129. City of ðakovo Construction of Strossmayer square infrastructure City of ðakovo population and tourists 3,500,000 ------130. Municipality of Jagodnjak Construction of unclassified roads infrastructure Jagodnjak population 12,194,250 - - - yes yes yes 131. Municipality of Kneževi Vinogradi Construction of a County road Kotlina - infrastructure Municipality of Kneževi population 820,000 - - - yes - - Podolje Vinogradi and Draž 132. Municipality of Levanjska Varoš Reconstruction of local and County roads infrastructure Breznica ðakova čka, population ------Slobodna Vlast, Majar, Pau čje, Musi ć, Levanjska Varoš 133. Municipality of Bilje The Ritska street in Kopa čevo infrastructure Bilje population 300,000 - - - yes yes - 134. Municipality of Bilje The Ritska street in Luga infrastructure Bilje population 280,000 - - - yes yes - 135. Municipality of Bilje The Ribarska street in Kopa čevu infrastructure Bilje population 620,000 - - - yes yes - 136. Municipality of Bilje Unclassified roads in the area of the infrastructure Bilje population 2,250,000 ------Municipality of Bilje 137. Municipality of Bilje Public illumination Kopa čevo infrastructure Bilje population 1,200,000 - - - yes yes - 138. Municipality of Bilje Public illumination Lug infrastructure Bilje population 2,000,000, - - - yes yes - 139. Municipality of Bilje Public illumination of Vardarac infrastructure Bilje population 800,000 - - - yes yes - 140. City of ðakovo Construction of a roundabout (rotary) in the infrastructure City of ðakovo population 7,500,000 ------city of ðakovo 141. City of ðakovo Construction of speed bumps in school area infrastructure City of ðakovo population 320,000 ------142. City of ðakovo Construction of parking place for grave- infrastructure City of ðakovo population 500,000 ------yard 143. City of ðakovo Crossroads of the streets Lj. Gaja and B. infrastructure City of ðakovo population 1,000,000 ------Mandi ća 144. City of ðakovo Public illumination in the Dragutina infrastructure City of ðakovo population 500,000 ------Domjani ća street 145. Municipality of Jagodnjak Recovery of public illumination infrastructure Jagodnjak, Bolman, population 302,000 - - - yes yes yes Novi Bolman and Majške Me ñe 146. Municipality of Kneževi Vinogradi Modernization of street - illumination and infrastructure Municipality of Kneževi population 5,200,000 - - - yes yes yes low voltage system Vinogradi 147. Municipality of Bilje Fire Station infrastructure Bilje population 3,240,000 - no no - - - 148. Municipality of Bilje Sports Centre Ivica Ranogajac Beli infrastructure Bilje population 2,500,000 - - - yes no - 149. Municipality of Bilje Child care centre infrastructure Bilje population 3,240,000 - - - yes no - 150. Municipality of Bilje Memorial to Croatian soldiers infrastructure Bilje population 1,740,000 - - - yes - - 151. Municipality of Strizivojna Construction of warehouse and Fire station infrastructure Municipality of population ------Strizivojna 152. City of ðakovo Indoor swimming pool infrastructure City of ðakovo population 14,000,000 ------153. City of ðakovo GNŠ hall – environmental design infrastructure City of ðakovo population 5,500,000 ------154. City of ðakovo Sports and recreation centre Jošava infrastructure City of ðakovo population 6,200,000 ------155. City of ðakovo Construction of playgrounds infrastructure City of ðakovo population 550,000 ------156. City of ðakovo Reconstruction of buildings façade infrastructure City of ðakovo population 12,600,000 ------157. City of ðakovo Expending the residential and business infrastructure City of ðakovo population 4,500,000 ------zones 158. City of ðakovo Construction of mortuary in the suburban infrastructure City of ðakovo and population 5,870,000 ------

136 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

area suburban villages 159. City of ðakovo Construction of social centre in the infrastructure City of ðakovo and population 6,000,000 ------suburban areas suburban villages 160. City of ðakovo Reconstructure of utility infrastructure on infrastructure City of ðakovo population 8,500,000 ------graveyard 161. Municipality of Darda Red Cross Chamber - restructuring infrastructure Municipality of Darda population 900,000 630,000 - - - - - 162. Municipality of Darda Primary school - attic infrastructure Municipality of Darda population 12,000,000 9,600,000 - - - - - 163. Municipality of Satnica ðakova čka Construction of Culture centre infrastructure Gašinci population 1,575,000 472,500 - - - - - 164. Municipality of Satnica ðakova čka Reconstruction and equipping of school infrastructure Satnica ðakova čka and population 450,000 ------buildings Gašinci 165. Municipality of Satnica ðakova čka Construction of object for the purpose of infrastructure Satnica ðakova čka population ------general, health and other public services 166. Municipality of Jagodnjak Building reconstruction infrastructure Jagodnjak population - - - - yes yes -

167. Municipality of Jagodnjak Local Government building reconstruction infrastructure Jagodnjak population - - - - yes yes - 168. Municipality of Levanjska Varoš Morgue of city cemeteries infrastructure Municipality of population ------Levanjska Varoš 169. Municipality of Levanjska Varoš Reconstruction of local homes and infrastructure Breznica ðakova čka, population ------buildings Slobodna Vlast, Majar, Pau čje, Musi ć, Levanjska Varoš 170. Municipality of Bilje Children playground infrastructure Bilje population 450,000 - - - yes no - 171. City of Beliš će Construction of building for City of infrastructure City of Beliš će population 3,300,000 ------Beliš će Authorities 172. City of ðakovo Sidewalk in industrial zone infrastructure City of ðakovo population 500,000 ------173. City of ðakovo Sidewalk towards Pisk infrastructure City of ðakovo population 450,000 ------174. City of ðakovo Renovation of City Government building infrastructure City of ðakovo population 5,600,000 ------175. City of ðakovo Construction of 3 public toilets infrastructure City of ðakovo population and tourists 60,000 ------176. Municipality of Bilje Town planning of Bilje infrastructure Bilje population, economy 360,000 - no no - - - 177. Municipality of Bilje Environment protection Intervention Plan infrastructure Bilje population 50,000 ------178. Municipality of Bilje School bus stop infrastructure Bilje population 280,000 - - - yes no - 179. Municipality of Bilje Housing and business structure Bilje infrastructure Bilje population 6,000,000 ------180. City of ðakovo Indoor tennis court infrastructure City of ðakovo population 11,000,000 ------181. City of ðakovo Construction of athletic track infrastructure City of ðakovo population 6,800,000 ------TOTAL: 4,573,700,717 1,622,448,103

3. SUPPORT TO BUSINESS SECTOR No. Institution Program Activity Area of implementation Beneficiaries Total Budget Required Feasib. Cost Location Building Stage 1 from the study Benefit Permit Permit started ROP 1 2 3 4 5 6 7 8 9 10 11 12 13 1. Osijek and Baranja County Construction of business and free zones in economy Osijek and Baranja entrepreneurs 250,000,000 187,500,000 - - - - - the area of Osijek and Baranja County County 2. Osijek and Baranja County Construction of the climate controlled economy Osijek entrepreneurs 19,200,000 - - - yes - - (ULO) cooling chamber in the area of the regional Gross-market d.d. Osijek 3. Osijek and Baranja County Commodity market of manufacturers in economy Osijek Entrepreneurs and 6,200,000 4,960,000 - - - - - agriculture as infrastructural support to the managers development of Croatian economy 4. BIOS Osijek Development of entrepreneurial economy County entrepreneurs 9,000,000 6,750,000 yes - - - - infrastructure through increase of spatial, technological and education al capacity of the BIOS d.o.o. business incubator in Osijek 5. Local Desk FDI – Miholja čki Development of entrepreneurial zones Industry and craft Osje čko-baranjska entrepreneurs 500,000,000 50,000,000 yes - - - yes entrepreneurial centre County 6. City of Osijek Development of business zones in the area economy City of Osijek entrepreneurs 57,800,000 43,350,000 - - - - - of the City of Osijek - Nemetin 7. City of Osijek Development of business zones in the area economy City of Osijek entrepreneurs 56,371,800 39,460,260 - - - - of the City of Osijek - South

137 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

8. City of Osijek Development of business zones in the area economy City of Osijek entrepreneurs 22,542,500 13,525,500 - - - - - of the City of Osijek - Vukovarska - Vinogradarska 9. City of Valpovo Business zone in Valpovo - continuation of industry and services Grad Valpovo entrepreneurs 22,400,000 11,200,000 - - no no - construction 10. Municipality of Erdut Development of entrepreneurial zones industry and Erdut and Bijelo Brdi entrepreneurs and 20,900,000 12,540,000 yes - yes - yes Bijelo Brdo and Erdut economy workers 11. Municipality of Draž Development of entrepreneurial zone industry and Municipality of Draž entrepreneurs 11,550,000 3,465,000 - - - - - economy 12. City of Osijek Development of business zones in the areas economy City of Osijek entrepreneurs 6,671,937 3,669,565 - - yes no - of the City of Osijek – Tenja 13. Municipality of Petlovac Entrepreneurial zones - B.P. Selo i industry, agriculture B.P. Selo and Petlovac small and medium- 3,300,000 1,320,000 - - - - - Petlovac sized enterprises 14. City of Osijek Development of business zones in the area economy City of Osijek entrepreneurs 1,780,000 1,388,400 - - - - - of the City of Osijek – warehouses and services 15. City of Osijek Development of business zones in the area economy City of Osijek entrepreneurs 1,485,000 1,188,000 - - yes no - of the City of Osijek - West 16. Municipality of Kneževi Vinogradi Business - entrepreneurial and recreation economy Kneževi Vinogradi entrepreneurs 930,000 186,000 - - yes yes yes zone 17. Municipality of Semeljci Entrepreneurial zone industry Semeljci companies, agriculture 25,614,508 - - yes yes yes yes cooperation and craftsmen 18. Municipality of ður ñenovac, Industrial zone Pribiševci – „Zone for industry Municipality of Agricultures of the 15,000,000 ------Association Uzlet and Association industry and service“ ður ñenovac Municipality and Slavonija Wireless surrounding 19. Municipality of Darda Business zone for crafts, small and economy, Municipality of Darda small and medium- 15,000,000 ------medium-sized enterprises infrastructure sized enterprises 20. Municipality of ður ñenovac Business zone ður ñenovac industry Municipality of population 10,200,000 ------ður ñenovac 21. Municipality of Bilje Bilje Business Zone – Sage 2 industry Bilje entrepreneurs 8,500,000 ------22. City of ðakovo Industrial zone industry City of ðakovo population and 6,400,000 ------workers 23. Municipality of Bilje Bilje Business Zone - Sage 1 industry Bilje entrepreneurs 6,200,000 - - - yes yes - 24. City of Beliš će Industrial zone II in Beliš će industry City of Beliš će small and medium- 5,350,000 - yes - - - - sized enterprises from local area, and wider area of RH and abroad 25. City of Beliš će Industrial zone III in Beliš će industry and City of Beliš će small and medium- 5,350,000 - yes - - - - economy sized enterprises from local area, and wider area of RH and abroad 26. Municipality of Podgora č Entrepreneurial zone „Podgora č“ economy Podgora č family farms and 5,000,000 yes - - - yes legal entities 27. Miholjac entrepreneurial centre Development of industrial zones industrija i obrt Osje čko-baranjska entrepreneurs 1,000,000 - - - - - yes County 28. Municipality of Strizivojna Development of entrepreneurial zone industry and Municipality of entrepreneurs ------economy Strizivojna 29. Municipality of Satnica ðakova čka Entrepreneurial zone industry, agriculture Satnica ðaova čka family farms and ------legal entities 30. Municipality of Viljevo Organization of industrial zones – making industry and Municipality of Viljevo population 7,575,000 ------preconditions for economic growth of the economy Municipality 31. Osijek and Baranja County Production of a base of County's economy and Osijek and Baranja entrepreneurs and 1,680,500 843,750 - - - - - geothermal potentials and of the subsequent infrastructure County managers pilot project of geothermal drill for industrial purposes 32. Brodarski Institute Zagreb Production of the feasibility study for economy and Osijek entrepreneurs 145,000 ------construction of Eastern Slavonia waste infrastructure management regional centre. 33. Technical School of Mechanical Efficient Energy Consumption and economy County entrepreneurs 2,111,557 1,878,367 yes - - - -

138 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Engineering in Osijek Environment Protection Educational Centre 34. Gord - Dalj Start your own business - improve your economy County and the entrepreneurs 432,825 - yes - - - - business municipality of Erdut 35. Entrepreneurship centre Osijek E-Learning – distant learning for economy Osijek entrepreneurs 350,000 245,000 yes - - - - entrepreneurs 36. Entrepreneurship Centre Osijek Development and growth of your company economy Osijek entrepreneurs 187,500 - yes - - - - 37. University of J.J. Strossmajer in International Centre of Entrepreneurial economy Osijek entrepreneurs 37,875,000 3,787,500 yes - - - - Osijek, Business Graduate School Studies 38. City of Valpovo Construction of a business incubator industry and services entrepreneurs entrepreneurs 3,000,000 1,200,000 - - no yes - 39. Valpova čki poduzetni čki centar d.o.o. Development and growth of the Valpovo economy entrepreneurs entrepreneurs 305,000 183,000 - - - - - (Valpovo entrepreneurship centre) Entrepreneurial Centre 40. "Biopa" Osijek Revival of agriculture in the neighbouring agriculture, Baranja population and 2,099,000 1,259,000 - - - - - municipalities in Croatia and Baranja education, tourism economy (Hungary) based on crossborder and environment cooperation in exchange of new knowledge, sustainable development, environment protection, tradition and culture, production, trade and tourism. 41. Werkos d.o.o. Osijek Production of a study and preliminary economy and Baranja population of the 2,500,000 ------proposal for construction of energy infrastructure County production plant from the biomass 42. Domovina Osijek Clustering of berry-fruit manufacturers economy County entrepreneurs, 1,704,866 ------"Slavonska jagoda" farmers, Croatian soldiers 43. "Slavonka" Association of Establishing of the Slavonka cluster economy Osijek and Baranja entrepreneurs 1,030,000 ------manufacturers of plum products County 44. Brodarski Institute Zagreb Waste management plan for the Osijek and economy and Osijek entrepreneurs 60,000 ------Baranja County infrastructure 45. Brodarski Institute Zagreb Possibilities of introducing bio-diesel fuel economy Osijek entrepreneurs 60,000 ------for the Osijek and Baranja County including the preliminary proposal of decentralized bio-diesel production plant (pilot project) 46. Municipality of ður ñenovac BIO power plant, facility for production of economy, industry Municipality of population, agriculture 30,000,000 13,000,000 - - - - - energy from biomass power MW 3-5 ður ñenovac and nearby and industrial facilities places in the Municipality, HEP, entrepreneurs 47. Municipality of ður ñenovac Entrepreneurial centre of Municipality of industry, educatione, Municipality of entrepreneurs 660,000 - - - yes yes yes ður ñenovac economy ður ñenovac 48. Municipality of Darda Marketplace economy, trade Municipality of Darda merchants, craftsman, 2,700,000 ------buyers (population) 49. KEMO d.o.o. Biodisel – production of waste oil industry ður ñenovac INA and other 15,000,000 - - - - - yes distributors of petrol 50. Miholjac entrepreneurial centre Development of the system of local entrepreneuship Osje čko-baranjska authority of local ------yes development agencies as part of County government and self- development infrastructure government TOTAL: 1,203,221,993 402,899,342

4. TOURISM No. Institution Program Activity Area of Beneficiaries Total Budget Required Feasib. Cost Location Building Stage 1 implementation from the study Benefit Permit Permit started ROP 1 2 3 4 5 6 7 8 9 10 11 12 13 1. Osijek and Baranja County Construction of tourist ports in Aljmaš and tourism Aljmaš and Batina entrepreneurs and 24,750,000 17,325,000 - - - - - Batina tourists 2. Osijek and Baranja County Creation and implementation of landscape tourism Osijek and Baranja population and 795,000 477,000 - - - - - zoning of the Osijek and Baranja County County tourists 3. Osijek and Baranja County Cycling path along the Danube from tourism Osijek and Baranja population and ------Budapest to the Danube delta (development County tourists of cycling tourism in the Danube valley area)

139 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

4. Drava Tim - association Sustainable ecological and traditional tourism and environment Osijek and Baranja population ------tourism of the river Drava protection County 5. "Mladi poduzetnik" (Young Development of the "Mladi poduzetnik" tourism Osijek and Baranja tourists and 607,830 ------Entrepreneur) association in association in Ladmirevci – Regional centre County entrepreneurs Ladimirevci for rural tourism 6. Tourism development strategy in the area ------of the County based on natural resources 7. Revitalisation of traditional trade within ------tourism development 8. Study of connecting marine and continental ------tourism and development possibilities in the County 9. Municipality of Bilje Tourist signalization tourism Bilje population and 60,000 ------tourists 10. Bilje Entrepreneurial Centre Development of regional tourist destination tourism Bilje population and 600,000 ------"Baranja" tourists 11. City of Valpovo Renovation of the Norman-Prandau castle tourism Valpovo tourists and 20,000,000 10,000,000 - - - yes - population 12. Rural tourism association Strengthening of horizontal and vertical tourism Valpovo, Beliš će, entrepreneurs 2,967,865 148,350 - - - - - "Valpovština" connections within the agro tourism chain Petrijevci and Bizovec in the Area of Valpovo region and realization of the "Valpovština" agrotourist association objectives 13. IŽIP – Baranja antiques fan club Project for creation of the agro tourism agro tourism Municipality of Draž population and 1,376,602 137,602 - - - - - chain in the area of the Draž municipality entrepreneurs 14. City of Beliš će Bike-tourist track Donji Miholjac-Beliš će- tourism City of Beliš će and population and 1,937,212 830,000 - - - yes yes (DRAVA BIKE- Donji Miholjac, and tourists TOURS) Municipalities Petlovac and Marijanci 15. City of Beliš će Construction of walk path from bridge tourism City of Beliš će and population and 2,060,000 - - - yes - - Beliš će over river Drava to the monument Municipalities tourists to dead Croatian soldiers Petlovac 16. City of Beliš će Reconstruction of swimming pool in tourism City of Belišće population and 1,000,000 ------Beliš će tourists 17. City of Beliš će Reconstruction and decoration of Trg Ante tourism, infrastructure City of Beliš će population and 5,400,000 - - - yes - - Star čevi ća tourists 18. City of Beliš će Renovation of monument in Beliš će – tourism, infrastructure City of Beliš će population and 16,000,000 - - - yes yes yes Palace Gutmann tourists 19. Municipality of Erdut Renewal of Erdutska tower tourism, infrastructure Erdut population and 2,000,000 1,000,000 - - - - - tourists 20. Municipality of Draž „Tourism of Municipality of Draž “ tourism Municipality of Draž population and 23,700,000 7,100,000 - - - - - tourists 21. City of ðakovo Building of memorial sign on city cemetery Memorial sign City of ðakovo population and 2,500,000 ------tourists 22. Dominus d.o.o., Dominus-Tours Renewal and development of tourism tourism Batina population ------Travel agency supply on Zeleni Island, Batina 23. Gradnja d.o.o. Osijek Building hotel „Panon“ as part of ŠRC tourism Kneževi Vinogradi tourists 37,500,000 ------swimming pools Kneževi Vinogradi 24. Op ćina Levanjska Varoš Spa, baths, retreat and excursion site tourism Breznica ðakova čka population and ------Breznica ðakova čka tourists 25. Op ćina Levanjska Varoš Development of excursion site Bazovac i tourism Slobodan Vlast population and ------Vra čica tourists 26. Turisti čka zajednica Grada Donjeg Castle Mailath in Donji Miholjac and castle tourism Osje čko-baranjska turisti čke zajednice u 825,000,000 660,000,000 - - - - - Miholjca and gardens of Osijek-Baranja County County touroperateri 27. Tourism association for the City of Development of bike tracks as a part of tourism City of Donji population and 1,575,000,012 11,813,000 - - - - yes Donji Miholjac European tourism infrastructure Miholjac, tourists Municipalities Viljevo, P. Moslavina,Marijanci, Popovac, City of Beliš će 28. Tourism association for the City of Fishing tourism as brand of Donji Miholjac tourism Rijeka Drava i population 1,100,000 550,000 - - - - yes

140 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Donji Miholjac Karašica 29. Tourism association for the City of Fishing tourism as brand of Donji Miholjac tourism Hunting ground population ------yes Donji Miholjac „ður ñenica“, other hunting grounds and fishing areas 30. Tourism association for the City of Development of a port for river tourism tourism From the bridge over population 1,125,000 562,500 - - - - yes Donji Miholjac river Drava by Donji Miholjac – port Aljmaš 31. Association „Drava tim“ Sustainable development of ecological and tourism Osje čko-baranjska population ------traditional tourism by the river Drava County TOTAL: 2,545,479,521 709,943,452

5. NGOs AND CONDITIONS OF LIVING No. Institution Program Activity Area of Beneficiaries Total Budget Required Feasib. Cost Location Building Stage 1 implementation from the study Benefit Permit Permit started ROP 1 2 3 4 5 6 7 8 9 10 11 12 13 1. Osijek-Baranja County Equipping the catering-tourism school and education Osijek population 30,000,000 ------construction of 2. Osijek-Baranja County Construction of huge sport hall "City sport Osijek population ------garden" 3. Senior citizens nursing house, ðakovo Construction and equipping of nursing unit health ðakovo population 14,000,000 ------in the Senior citizens nursing house, ðakovo 4. Osijek-Baranja County Annex construction and equipping of education Donji Miholjac population 39,000,000 ------secondary school, Donji Miholjac 5. Osijek-Baranja County Annex construction and equipping of education Osijek population 36,000,000 ------classrooms of Economic and Administration School, Osijek 6. Osijek-Baranja County Annex construction and equipping of education Ivanovci population 4,000,000 ------school in Ivanovac, OS Ladimirevci 7. Osijek-Baranja County Construction of centre for the rehabilitation health Osijek-Baranja population ------of disturbed persons County 8. Osijek-Baranja County Construction and equipping of I high school education Osijek population 50,000,000 ------with gymnasium in Osijek 9. Osijek-Baranja County Access platforms for disabled in the education Osijek-Baranja Population 3,000,000 ------primary and secondary schools of Osijek- County Baranja County 10. Osijek-Baranja County Living without ambrosia health Osijek-Baranja population ------County 11. Osijek-Baranja County Construction of warehouse for theatre decor culture Osijek population ------of CPT in Osijek 12. Visual Art Gallery Attic reconstruction of Visual Art Gallery culture Osijek population ------in Osijek 13. Osijek-Baranja County Construction of concert hall culture Osijek-Baranja population ------County 14. House for senior disturbed persons, Construction and equipping of the House health Osijek population 30,000,000 ------Osijek for senior disturbed persons 15. Osijek-Baranja County Reconstruction, equipping and annex education ður ñenovac Population 12,610,000 ------construction of PS Josipa Jurja Strossmayera, ður ñenovac 16. Osijek-Baranja County Construction of annex and equipping of PS education Čepin Population 14,590,000 ------Miroslav Krleža, Čepin 17. Osijek-Baranja County Annex construction, equipping and education Čepin Population 14,616,000 ------construction PS Vladimira Nazora, Čepin 18. Osijek-Baranja County Annex construction and equipping, and education Beliš će, PŠ Population 6,433,000 ------classrooms construction in PS Ivana Veliškovici i PŠ Kukuljevi ća, Beliš će Vinogradci

141 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

19. Osijek-Baranja County Foundation and construction of hospice health Osijek-Baranja population ------County 20. Osijek-Baranja County Popular health education for Roms health Osijek-Baranja Roms 1,127,500 ------County 21. Osijek-Baranja County Elevators for 60 primary schools education Osijek-Baranja Population 15,000,000 ------County 22. Osijek-Baranja County Construction of new building of II high education Osijek Population 26,100,000 ------school Osijek 23. Osijek-Baranja County Construction and equipping of school education Osijek Population 13,000,000 ------gymnasium and additional facilities of Trade School Osijek 24. Osijek-Baranja County Construction of 11 classrooms and 4 education Osijek population 14,000,000 ------cabinets, construction of elevator in Osijek 25. Osijek-Baranja County Annex construction for 9 classrooms of the education Osijek population 10,000,000 ------School of Technology Ru ñer Boškovi ć, Osijek 26. Osijek-Baranja County Construction and annex construction of education Osijek population 48,720,000 ------Traffic and Technology School Osijek 27. Osijek-Baranja County Construction of indoor and outdoor sport Osijek-Baranja population ------swimming pools and Olympic outdoor County swimming pool 28. Osijek-Baranja County Adaptation and reconstruction of football sport Osijek-Baranja population ------stadiums County 29. Osijek-Baranja County Securing top qualified coach personnel sport Osijek-Baranja population ------County 30. Osijek-Baranja County Annex construction and equipping of PS education Drenje i podru čne Population 9,848,400 ------Drenje škole, PŠ Potnjani i PŠ Slatinik Drenjski 31. Osijek-Baranja County Annex construction and equipping of PS education Podgajci Podravski i Population 18,270,000 ------Hrvatski sokol, Podgajci Podravski PS Črnkovci 32. Osijek-Baranja County Reconstruction, equipping and annex education Donji Miholjac i PŠ Population 2,562,000 ------construction of PS August Harambaši ć, Rakitovica Donji Miholjac 33. Osijek-Baranja County Annex construction and equipping of PS education Dalj Population 6,960,000 ------Dalj 34. Osijek-Baranja County Classrooms, wardrobe and hall construction education Bilje Population 8,700,000 ------of PS Bilje 35. Osijek-Baranja County Croatian House in Osijek – construction culture Osijek population ------and adaptation 36. Osijek-Baranja County Construction of elevators and access culture Osijek-Baranja population ------platforms in cultural institutions County 37. Visual Art Gallery Facade reconstruction of Visual Art Gallery culture Osijek population ------38. Visual Art Gallery, Osijek Work of art restauration, Visual Art Gallery culture Osijek population ------Osijek 39. Osijek-Baranja County Reconstruction and construction of sport Osijek-Baranja population ------facilities on war - devastated area County 40. Osijek-Baranja County Construction of stadium for EC 2012. sport Osijek population ------41. Osijek-Baranja County Construction of sport facilities for the sport Osijek-Baranja population ------University County 42. Osijek-Baranja County Reconstruction and annex construction of sport Osijek-Baranja population ------ski centre Jankovac County 43. Osijek-Baranja County Construction of indoor tennis court sport Osijek-Baranja population ------County 44. Visual Art Gallery, Osijek Construction of Contemporary Art Museum culture Osijek population ------45. Osijek-Baranja County Annex construction and equipping of PS education OŠ Budrovci i PŠ Population 2,610,000 Budrovci ður ñanci 46. Osijek-Baranja County Construction of (indoor track) athletic hall sport Osijek-Baranja population ------County 47. Osijek-Baranja County Construction of trotting track sport Osijek-Baranja population ------County 48. Osijek-Baranja County Construction of diagnostic -rehabilitation sport Osijek -Baranja population ------

142 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

centre County 49. Osijek-Baranja County Construction of water sports centre sport Osijek-Baranja population ------County 50. Osijek-Baranja County Construction of athletic complex (tartan sport Osijek-Baranja population ------track) County 51. Osijek-Baranja County Construction of regional centre for the sport Osijek-Baranja population ------preparation of athletes, children and youth County 52. Osijek-Baranja County Construction of indoor and outdoor skating sport Osijek-Baranja population ------rink and one indoor rink that meets all County standards for top sport events 53. Osijek-Baranja County Construction of carting motorcycling track sport Osijek-Baranja population ------County 54. Osijek-Baranja County Construction of recreational sport centre sport Osijek-Baranja population ------County 55. Osijek-Baranja County Construction of football camps sport Osijek-Baranja population ------County 56. Osijek-Baranja County Construction of indoor bowling court sport Osijek-Baranja population ------County 57. Osijek-Baranja County Adaptation, reconstruction and construction sport Osijek-Baranja population ------of winter and summer holiday facilities County 58. Osijek-Baranja County Purchase of sport equipment sport Osijek-Baranja population ------County 59. Croatian Tamburitza Association - Festival of Croatian Tamburitza music in culture Osijek population and 70,000 ------Osijek Osijek tourists 60. Voluntary centre Osijek Encouraging of voluntarism associations Osijek and Baranja population 304,000 ------County 61. Scouts club "Javor" (“Maple”) Scouts centre Osijek associations Osijek population 5,610,000 ------62. PRONI – social research centre Regional training centre education Osijek and Baranja population ------County 63. Društvo zelenih - Osijek Eco-centre Zlatna Greda - Education and tourism and environment Kopa čki Rit population and 2,300,250 1,610,175 - - - - - ecotourism centre tourism 64. STD "Pajo Kolari ć" Tamburitza Association of Slavonija "Pajo culture County, Država population and 80,000 ------Kolari ć" Osijek Europa tourism 65. Drava Osijek – scouts association Hidden treasure tourism Osijek and Baranja tourists 169,150 165,767 - - - - - County 66. Foundation for rural and urban balance Logistics of strategies and geopolitics of association Osijek and Baranja population 3,375,000 1,350,000 - - - - - of Slavonija, Baranja and Srijem partnership relationships dignity in creation County of the entire ROP and its parts 67. Centre for peace, non-violence and Research and educational centre association Osijek and Baranja population 794,700 ------human rights - Osijek County 68. "Slap" Osijek - association Ethno-brand education association Osijek and Baranja population and 406,700 166,747 - - - - - County tourism 69. Centre for peace, non-violence and Mediation centre - Osijek training Osijek and Baranja population 488,900 ------human rights County 70. Centre for peace, non-violence and Centre for free legal counselling of socially association Osijek and Baranja population 520,100 ------human rights endangered citizens County 71. Milan Ivanovi ć, Ph.D. Establishment of social cohesion and association Osijek and Baranja population 307,500 246,000 - - - - - strengthening of social capital in the area of County the County 72. Milan Ivanovi ć, Ph.D. Regional centre for renewable resources association Osijek and Baranja population and 330,000 247,500 - - - - - County economy 73. Milan Ivanovi ć, Ph.D. Regional institute for development of association Osijek and Baranja population and 660,000 ------renewable energy resource technologies County economy 74. Agency for social changes System of social and cultural centres and association Osijek and Baranja population 8,500 ------clubs County 75. Women's association "Izvor" Care for senior citizens association Osijek population 360,241 ------76. Osijek and Baranja County Installing lifts for the disabled and people public services Osijek population 575,000 287,500 - - - - with lower mobility in the seat of the Osijek and Baranja County. 77. Osijek and Baranja County Proposal of a long-term mosquito control in conditions of life Osijek and Baranja population 45,000,000 6,750,000 - - - - - the area of Osijek and Baranja County County

143 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

78. Osijek and Baranja County Establishment of a permanent monitoring conditions of life Osijek and Baranja population 300,000 180,000 - - - - - system and prevention of allergy causing County plants with special focus on rag-weed in the County area. 79. Osijek and Baranja County Implementation of activities and measures conditions of life Osijek and Baranja population 103,551 25,887 - - - - - for upgrading the areas and surroundings of County locations inhabited by Romes in the Osijek and Baranja County 80. Municipality of ður ñenovac Youth centre education Municipality of population 2,162,802 - yes - yes yes yes ður ñenovac 81. Municipality of ður ñenovac Construction of home for old and disabled social care Municipality of population 2,300,000 - - - yes yes - persons „Omogu ćimo im dostojan život“ ður ñenovac 82. City of Osijek Reconstruction of powder-magazine (left culture powder-room (left M-art, Umak. 3,000,000 - - - - - yes shore) shore) of river Drava Kompa, Exit i NUS barutana 83. Municipality of Jagodnjak Construction of educational-sports hall, sport Jagodnjak population 3,560,000 - - - yes yes yes Elementary school Jagodnak 84. Municipality of Jagodnjak Summer stage, children’s and sports sport, culture, recreation Bolman population 603,000 - - - yes yes yes multifunctional playground 85. Association – Slavonija Wireless Wireless Internet web – Slavonija Wireless education Municipality of population 850,000 - - - - - yes ður ñenovac 86. Agency for social changes System of social-cultural centres and clubs culture, education Osje čko-baranjska population ------County 87. Tourist Association for City of Donji Traditional customs and manifestations of culture Donji Miholjac, Sv. population 400,000 200,000 - - - - yes Miholjac, Center for culture and Šoka čka podravina region as a part of rural ðura ñ, P. Podgajci, information tourism Rakitovica, Marijanci, Šljivoševci, Viljevo 88. City of Donji Miholjac Construction of schools and athletic halls education, sport Donji Miholjac population ------89. Centre for culture and information - Restoration and conservation of cultural culture Donji Miholjac population 825,000,000 660,000,000 - - - - yes City of Donji Miholjac and environmental values TOTAL: 1,330,786,294 671,229,576

144 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

5. Project ideas and project application for ROP project network

1. PROJECT TITLE ______Full title of the project 2. THE PROJECT CONNECTION WITH ROP

______2.1. ROP objective the project is ROP objective number connected with ______

ROP objective full name

2.2. ROP priority the project is connected ______with ROP priority number ______ROP priority full name

______2.3. ROP measures the project is ROP measure number connected with ______ROP measure full name

______Applicants name

______Specify the category of the applicant (administration, public institution/company, association, etc.) 3. PROJECT APPLICANT/

PROPONENT ______

Address

______Phone, e-mail, fax

______Authorized person name and surname, position 4. PROJECT DESCRIPTION

4.1. Project purpose

Describe the project purpose, Why the project has been started?

4.2. Project objectives Describe the outcome of the project; Describe the steps required to achieve the project objectives.

4.3. Project results Describe the benefit for the beneficiaries; Describe the effects of the project on the beneficiaries

______5. FINAL BENEFICIARIES Number of beneficiaries

Describe the beneficiaries, main group beneficiaries

6. LOCATION OF THE PROJECT Location of the project.

______7. SECTOR AND TYPE OF THE Insert the sector, e.g. industry, agriculture, education, environment, etc. PROJECT ______Insert the type of the project: production, infrastructure, knowledge transfer, etc. x project idea x project documentation preparation x project ready for implementation but with insufficient finance sources 8. PHASE OF THE PROPOSED x project ready for implementation with ensured financial assets PROJECT x project in the process of implementation

Select one of the above

9. OPTIONAL START OF THE ______PROJECT IMPLEMENTATION Month, year a) ______10. ESTIMATED TOTAL TIME FOR: Number of month a) project preparation b) ______b) project implementation Number of month a) ______11. TOTAL BUDGET ESTIMATE HRK/EUR a) project preparation, b) ______b) project implementation, HRK/EUR c) total c) ______1 EUR=7,5 HRK HRK/EUR

145 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

______% of own (applicant) funds ______% of other County sources ______% of state budget and state institutions funds ______% of EU program funds ______% of other foreign sources 12. PROJECT FINANCIAL ______% of funds from loans STRUCTURE ______% of private funds ______% other sources (specify)

For the projects under implementation with co-financing attach a certificate. For the project in the phase of preparation state the potential proposals.

13. IS THE PROJECT PROPOSED TO ______ANOTHER EXTERNAL FINANCE Specify the source. RESOURCE ______Specify when

14. OWNERSHIP ISSUES ______State if the ownership issues are solved if the project includes construction. Attach written certificate

______15. LOCATION AND CONSTRUCION Specify if all location/construction permits for the project are provided. Attach written certificate. PERMITS ______If not, state the permits that could be provided within 6 months.

______Specify if all technical documentation (designs, plans, equipment specification) are available for the project.

Attach written certificates. 18. TECHNICAL DOCUMENTATION

______If not, state if technical documentation could be prepared within 6 months.

______19. ANALYSIS FOR THE PROJECT Specify if any of the analysis have been prepared: cost-benefit analysis, environmental impact study, pre- investment study, etc.

20. SUPPORT OF AUTHORISED ______INSTITUTIONS Specify if there is any support of authorized institution, if yes, which institution. Attach written certificate.

21. CONNECTION OF THE PROJECT ______WITH OTHER DEVELOPMENT Specify if the projects is connected with any other development program, sector or regional (e.g. Agriculture PROGRAMS-STRATEGIES development strategy, or Municipal development plan, etc.) and the name of this program.

22. MUTUAL PROJECT OF SEVERAL ______LOCAL SELF-GOVERNMENT UNITS Specify the local self-government units.

23. INTER-COUNTY PROJECTS ______Specify the Counties.

24.CROSS-BORDER PROJECTS ______Specify the foreign regions.

______25. IMPLEMENTATION Name of implementing organization ORGANIZATION AND PARTNERS ______Name of the partner of implementing organization 26. ANY ADDITIONAL DATA OR INFORMATION RELEVANT FOR THE PROJECT

27. PLACE AND DATE ______

28. SIGNATURE AND POSITION OF THE APPLICANT ______Name and surname, position

Project Code ______To be filled in by implementation unit (PIU) of CWG

146 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Tables Table 1 Traffic in the Airport Osijek from 2002 to 2005...... 19 Table 2 Population age structure ...... 28 Table 3 GDP, employee, unemployment in the County...... 31 Table 4 GDP per capita and employee...... 31 Table 5 Structure of investments (realized investments) in long-term assets by basic economic activities (2003)...... 31 Table 6 Employed by economic activities...... 35 Table 7 Development retrospective...... 37 Table 8 The County and Croatian foreign trade exchange...... 39 Table 9 The County ten most important partner countries in 2004 - as per total value of exchange are: ...... 40 Table 10 Main financial results of business activities in 2003 (in bill. State Administration Office) .. 41 Table 11 Financial stability, liquidity, indebt ness and business activities successfulness...... 41 Table 12 Financial results of business activities of entrepreneurs in the Osijek - Baranja County in 2004 in relation to 2003 and the comparison with the results at the State level...... 41 Table 13 Overview of individual financial results of the Osijek-Baranja County economy in 2004 by industry (in mil.HRK) ...... 43 Table 14 The County educational structure according to years of education...... 44 Table 15 Structure of agricultural land...... 45 Table 16 Number of livestock at the beginning of 2004...... 46 Table 17 Harvest areas under early crops in 2004 and 2005 – for business entities ...... 46 Table 18 Chain indexes of the production volume of the textile industry, processing industry, the County economy and the Republic of Croatia's economy...... 51 Table 19 Chain indexes of industrial production physical volume ...... 51 Table 20 Export and import in the County by industries 2003 and 2004...... 52 Table 21 Employed in craft sector and in business entities...... 53 Table 22 Export and import by industry in 2003 and 2004...... 53 Table 23 Production of selected products in 2003 ...... 54 Table 24 Employed in the sector of craft and by business entities according to NCA* in 2002 ...... 55 Table 25 Production of selected products in 2003 ...... 55 Table 26 Employment in craft sector and by business entities...... 56 Table 27 Public water supply system in 2004...... 58 Table 28 Public sewage system in 2004...... 58 Table 29 Public lighting and low voltage electric energy delivered to end-users in 2004...... 58 Table 30 Streets, roadways surface and squares in 2004 ...... 59 Table 31 Public parking places in 2004 ...... 59 Table 32 Cemeteries in 2004...... 60 Table 33 Public green surfaces in 2004...... 60 Table 34 Movement and number of active entrepreneurs by size...... 61 Table 35 Registered motor vehicles in the County...... 62 Table 36 Overview of transported passengers and realized passengers kilometers in the County ...... 63 Table 37 Overview of passengers transport in the city's public transport...... 63 Table 38 Railroad routes in the County measured by the number of passengers...... 63 Table 39 Physical volume of operations of Port Transit of the Osijek city...... 64 Table 40 Airport passenger’s transport ...... 64 Table 41 Number of entrepreneurs in the Republic of Croatia and in the County...... 66 Table 42 Number of employed in distributive trade...... 66 Table 43 Size of Mine Suspected Areas (MSP) and distribution by counties...... 78 Table 44 Overview of mine cleared area in the Osijek - Baranja County by years ...... 78 Table 45 Status of mine contamination of agricultural land of the County...... 79 Table 46 Intensity of influences of priority areas for intervention and measures required to achieve those objectives ...... 105

147 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Table 47 Agreed project selection criteria...... 112 Table 48 Organizational Responsibilities Related to the ROP...... 115 Table 49 Logical Framework Matrix for the Osijek and Baranja County...... 117

Graphs Graph 1 Population age structure ...... 29 Graph 2 Economic situation in the Osijek-Baranja County ...... 31 Graph 3 Structure of investing in long-term assets by basic economic activities ...... 32 Graph 4 Employed by economic activities...... 35

Maps Map 1 From the Project Proposal to Implementation...... 112 Map 2 Distribution of Project Ideas per Status ...... 114 Map 3 Participants in the Regional Operational Program Implementation...... 114 Map 4 Evaluation Framework...... 117

148 The 2006 to 2013 Regional Operational Program of the Osijek and Baranja County

Sources

1. State Institute of Statistics, 2. Financial Agency, FINA, 3. HNB (Croatian National Bank), 4. Croatian Chamber of Economy (Croatian Chamber of Economy), the County Chamber, Osijek, 5. Osijek - Baranja County, 6. Commission of the Osijek City, 7. Spatial plan of the Osijek - Baranja County („Županijski glasnik“ the Osijek - Baranja County, Number 01/02), Institute for Spatial Planning, Osijek - Baranja County.

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