GREEN and SILVER ECONOMY in the CONTEXT of RURAL DEVELOPMENT: Case Study of Vastseliina Municipality

NORDPLUS Intensive course

GREEN AND SILVER ECONOMY IN THE CONTEXT OF RURAL DEVELOPMENT: Case study of Vastseliina Municipality

Liis Sisask (University of Tartu, Estonia) Björn Hólmsteinsson (University of Iceland) Rasa Janušaitė (Vilnius University, Lithuania) Kenechukwu Onwuzurumba (University of Eastern Finland)

Riga, 2017 TABLE OF CONTENTS

1. INTRODUCTION ...... 3 2. DESCRIPTION OF VASTSELIINA RURAL MUNICIPALITY ...... 4 3. THEORETICAL FRAMEWORK AND REVIEW OF RELEVANT LITERATURE...... 9 4. METHODOLOGY ...... 13 4.1. Methods of data collection ...... 13 4.1.1. Interviews ...... 13 4.1.2. Observations ...... 13 4.1.3. Secondary data ...... 13 4.2. Challenges ...... 14 4.3. Description of interviewees ...... 14 5. RESULTS AND DISCUSSION ...... 16 5.1. New nursing home in Vastseliina ...... 16 5.2. Youth employment ...... 19 5.3. Green economy in Vastseliina ...... 22 5.4. Municipality reforms ...... 23 6. CONCLUSIONS AND RECOMMENDATIONS ...... 27 7. REFERENCES ...... 28

1. INTRODUCTION In May 2017 a group of students from Nordic and Baltic universities met in Riga, Latvia for an intensive course of 2 weeks time. The project is sponsored by Nordplus foundation and involved making a case study of rural development in various rural areas in the Baltic countries. Students were split into several groups where each group contained students from different countries. This group of 4 students, from Estonia, Iceland, Lithuania and Nigeria had the task to visit the municipality of Vastseliina in south east Estonia to research the rural development in the era of green and silver economy. The main focus of this case study was to ask the question: „How can this area keep a sustainable employment rate for young people and what does the municipality of Vastseliina have to offer young people that want to live and work in the area“. Also we investigated, in regards to the silver economy, the backround and future plans for the local nursing home, which is being transferred from a 30 client facility to a large building with capacity of a 100 beds, in Vastseliina centre. With reference to the green economy we tried to find possible options in the region that could be developed in accordance to green policies. The group stayed in Võru, an urban area close to Vastseliina for 4 days and 3 nights. Every day Vastseliina was visited, key stakeholders were interviewed and questioned, data and information was gathered and the local town area observed.

2. DESCRIPTION OF VASTSELIINA RURAL MUNICIPALITY Vastseliina municipality is located in the south-eastern part of Võru county, near the Russian and Latvian borders (Figure 1). It is bordered with Meremäe, Lasva, Võru, Haanja and Misso rural municipalities (Võru county), Põlva county and Estonian-Russian border. From Vastseliina to Võru (capital of the county) is 24 km, Pihkva 75 km, Tallinn 285 km and Riga 250 km. Through the rural municipality goes Tallinn-Tartu-Võru-Luhamaa highway and there are 11 buslines that are going through the Vastseliina municipality, although the bus service is not so good between the villages.

Figure 1. Location of Vastseliina rural municipality in Võru county. (Source: Vastseliina municipality web page) Vastseliina rural municipality area is 222,78 km2. There is one borough and 46 villages: • Vastseliina (municipality center); • Haava, Halla, Heinasoo, Hinniala, Hinsa, Holsta, Illi, Indra, Jeedasküla, Juraski, Kaagu, Kapera, Kerepäälse, Kirikumäe, Kornitsa, Kõo, Kõrve, Käpa, Külaoru, Kündja, Lindora, Loosi, Luhte, Mutsu, Mäe-Kõoküla, Möldri, Ortuma, Paloveere, Pari, Perametsa, Plessi,

Puutli, Raadi, Saarde, Savioja, Sutte, Tabina, Tallikeste, Tellaste, Tsolli, Vaarkali, Vana- Saaluse, Vana-Vastseliina, Vatsa, Viitka and Voki villages.The biggest villages are Vana-Vastseliina and Viitika. The highest density of residents per km2 is around Vastseliina borough (Figure 2.)

Figure 2. Population density in Vastseliina rural municipality. (Source: Estonian Statistics web page) According to Estonian Statistics, in January 1st 2017 statistics there were 1937 residents in Vastseliina rural municipality and the population of Vastseliina rural municipality is decreasing (Figure 3). There is a rise in the statistics, but unfortunately it is caused by the new methodical change of population calculation in Estonian Statistics. What characterizes the population in Vastseliina, is that the population pyramid is constrictive (Figure 4) and the highest percentage of people are between ages 25-34 and 45-59. This means that in the future there will be a lot of elderly people in Vastseliina rural municipality and not a lot of young residents.

Figure 3. Population of Vastseliina rural municipality. (Source: Estonian Statistics web page)

Figure 4. Population pyramid of Vastseliina rural municipality in 2017. (Source: Estonian Statistics web page) The rural municipality government is located in Vastseliina borough. In the borough you can find family doctor, dentist, pharmacy and there is a nursing home in Külaoru village. There is 6 one kindergarten, high school, youth center, culture house, music school and 3 libraries. You can do different sport activities in Vastseliina, for example play badminton or hockey, and there are different community clubs, like a sport club and handicraft club. The main economic activities are furniture- and wood industries, agriculture, forestry and tourism. You can also go berry picking and mushrooming during the end of the summer and skiing in winter. Vastseliina rural municipality environment and nature is created by Haanja Upland and it covers the whole municipality. The main landforms are domes and valleys and it is hard to find flat land in the area. There is also a river called Piusa, which starts from Perajärve lake and ends in Pihkva lake. In the valley of the river you can find marvelous sights. The biggest lake in the rural municipality is Kirikumäe (Picture 1), which is 61 ha and its depth is 2,8 meters. With the surrounding forests it creates a nature park.

Picture 1. Kirikumäe lake. The main tourism attraction is Vastseliina Episcopal castle (Picture 2), which was built in 1342 near the frontiers of Old-Livonia and Pskov on the land of the Bishop of Tartu. It turned out to be a powerful border fortress and a place for pilgrims. In 1702, the castle was destroyed by the Russians. Today you can climb up to the remaining tower, light a candle and enjoy beautiful night concerts by the bonfire. Next to the castle is a tavern, which served as a resting point. In the 19th century there was a vodka factory and today there is a museum in the building. You can also take a look of the Vastseliina church and chapel and two memorials.

Picture 2. Vastseliina Episcopal castle ruins. The biggest event in Vastseliina rural municipality is “Maarahva Laat”, which is a fair that takes place in June. The main purpose of the fair is trading, but it is a good platform for businesses to advertise their products. It is also a good place for locals to have extra income. There is also a second fair “Lindora Laat” in October, which includes 3 municipalities and it is described as a meeting place for locals. Third event in Vastseliina is “Vana*Aja*Päev”, where people can see, how life was during the medieval times.

3. THEORETICAL FRAMEWORK AND REVIEW OF RELEVANT LITERATURE Traditional models of the modernization theory or paradigm had a more exogenous and sectoral approach to rural development but in recent times, it has been overtaken with a new rural development paradigm which is local, endogenous and integrated in nature (Guinjoan et al 2016). At the end of the World War II, modernization was the generally accepted as the right model for development and at the backdrop of that, societies needed to evolve from an irrational and technologically limited state to a rational and technologically advanced state. In contrast to urban areas, rural areas were perceived as backward, mainly serving the purpose of production while urban areas are magnetic for economic growth and development. Therefore, there is a need to bring modernity from the city to the countryside and more especially, to the agricultural sector (Ward et al, 2005). Agrarian production became characterized by mechanization and industrialization of agricultural processes which had serious environmental, economic and social implications on the society and regardless of efforts made to encourage agricultural specialization in rural areas, there was an eventual decline of the agricultural sector (Wood, 2011). The modernization theory apparently has its flaws and in the 1960s, some people began to challenge it and the policies related to it because it focuses mainly on the economy. Following the economic crisis of the 1970s, it was obvious that regional policies created on the foundation of modernization was unable to bring about sustainable rural development. Consequently, the concept of territorial development began to emerge and it focused more on people instead of production. So beyond just economic growth, there is need to pay attention to which is qualitative and sustainable dimensions of economic growth and development (Pike et all 2007). The focus of rural development changed from sectors to territorial cohesion and many researches began to spring up in this direction (Barke and Newton, 1997). The new focus highlighted three things which it considered important. Firstly is the need to use resources that are available within a territory; secondly, the local control of the development process and thirdly, retention of profits in the local area (Bowler 1999). The underlining notion of this approach to development is that each territory has its own economic, social, technological, institutional, infrastructural, environmental and cultural resources that comprise its developmental potential (High and Nemes, 2007). The transition from the modernization theory or paradigm has led the conceptualization of new frameworks or ideas that are well recognized and which forms the basis for sustainable rural development in recent times. On a global scale and on the European Union level (with special reference to the Baltic and Nordic states), there are ongoing discussions about the challenge of rural development especially with the phenomenon of ageing population. Rural regions in Europe are experiencing dynamic pathways in development and pertinent questions about how it should or could be developing are being asked. This reflects a strong feeling that rural change, although something that has of course always been with us, has intensified in terms of both pace and persistence and this change is being increasingly total and interconnected (Woods 2005). Also the influence of globalization, urbanization and the intensification of upscaling of agriculture make it more difficult for many regions to remain distinctive and increase sustainability (Horlings 2014). Consequently, new models or strategies are being developed to counteract the current dynamics of rural change. The models attempt to create a “New Rural Paradigm” for economic growth and sustainable rural development. Two of such models are the bio-economy model and the eco-economy model. Each model claims it is sustainable and can be analyzed in the context of overarching development theory of ecological modernization.

Figure 5. Eco-economy model with its interconnections. The structural changes occurring in rural areas of Europe results from changes in rural economies and societies themselves and scaling up functions such as agriculture spurred on by landscape and eroding physical variety. These changes are diversifying and complicating the rural arena, raising questions about more traditional conceptions of rural space (Frouws, 1998). Rural communities either choose the bio -economy or eco economy development model to enable them deal with issues associated with being in the periphery; such issues as agricultural decline, decreasing levels of economic activities, and expectations, aging population and increasing rural-urban migration especially by young people. The “rural web” theory is one of the new approaches that emerged regarding rural development and it serves as a heuristic analytical device that encourages both the eco-economy model of development and the bio-economy model of development to focus on green economy and green investments. The rural web theory provides a way of harnessing diversity and “photographs” the configuration of six interrelated dimensions to rural development, namely; endogeneity, novelty, production of social capital, new governance, new institutional arrangements and sustainability (Van Der Ploeg and Marseden, 2008). Endogeneity relates to the extent to which rural economies are built on available local resources, arranged in line with local models of resource combination and made stronger through distribution and reinvestment of wealth within the local area and region while novelty is concerned with new innovations, ideas, knowledge, artefacts and how they combine leading to sustainable development. Social relations are a fundamental aspect of human behaviour and through it, social networks are formed with norms that enable people to act collectively in the community, otherwise called social capital (Woolcook and Narayan 2000). Market governance deals with the important aspect of harnessing institutional capacities to strengthen and control the market or facilitate the construction of new ones but it is important 10 that institutions and other rural actors within rural areas work together to achieve their common goals and solve existing problems. Sustainability is supposed to be the binding factor which highlights the social and ecological conditions that are necessary to support human life at a certain level of well-being through future generations (Earth Council 1994). In the rural web model, sustainability is considered territorially based and therefore, rural development takes the shape of a dynamic web of linkages that reshapes the rural area and is at same time enlarging its competitiveness and enhancing its quality of life (Horlings et all 2014). Many rural areas are now growing at a faster rate than urban districts, while others experience a decline in population and employment: the economic and social processes underlying these diverse trends are not always well understood. One very important element is the increasingly global penetration of local markets, with many rural areas and firms seeking to protect themselves from global competition by establishing local products which depend on local identity for their market niche. There is a general shift to a service-based economy in which the information and knowledge-based industries have a more and more vital role, bringing both opportunities and threats to rural areas. In Vastseliina parish the largest employer is the sawmill company Förmann, with 50 persons employed. However, in the last years machinery has gradually replaced man power. With the arrival of the new nursing home, employing some 30 people when all the beds are in use, it should be a typical example of the rise of a service sector unit in a rural area. Significant demographic, social and cultural transformations also characterize rural areas of Europe. A growing number of the elderly in the population is occurring at the same time as economic restructuring, leading to increased dependency ratios, casualization and part-time working, and less job security. Migration flows are critical in determining population levels and, while some societies continue to lose population, in many parts of Europe people are moving into rural areas because of the new values placed on rural space (for example a clean environment, healthy lifestyles and community life). The consequences of the imposition of such values on rural communities may be extensive. Social relations are also changing in other ways with the growth of individualist attitudes and the decline of traditional institutions (Shucksmith & Chapman, 1998). In a report on unification of rural areas in Iceland, Eyþórsson (2002) finds that looking at social services especially from the studies that have been conducted, it can be said that the level of service has increased, especially in the small rural communities. Therefore, integration brings together the most changes in social services where urban and rural areas combine. It appears that the cause for this is that there are hidden social problems in rural areas, and therefore the need for services do not appear to the surface until the distance to the government services increases. People seem to be more willing than before to seek assistance from social services that are able to provide proffesional assistance. These changes also appear to be in the form of cost increases to the category. In the past two decades there have been considerable reforms on the municipality level in Iceland. Many rural areas and villages that used to govern themselves have gone through unification processes, mainly for economical reasons. In a study by Bjarnason (2004), around 69% of adolescents in the age group of 14-16 years old expected to migrate, and further population decline seemed inevitable in the years to come. Believing that job opportunities were better elsewhere dominated migration intentions, but lack of parental control, not being raised in the community, and lack of interest in working in the primary industry also emerge as predictors of migration intentions. Parental involvement in the primary industry and lack of well-being in

11 school predicted more migration intentions in the early 1990s, but these arguments no longer appeared to be a factor in the early 2000s YOUNG PEOPLE AND RURAL URBAN MIGARTION Arnett (2000) argues that the ages of 18-25, whcih he calls emerging adulthood, is neither adolescence nor young adulthood, but is theoretically and empirically distinct from them both. Emerging adulthood is characterized by relative independence from social roles and from normative expectations. After leaving the dependency of childhood and adolescence, and having not entered the so called adult years, with all its responsibilities, emerging adults are in seek of possible life directions in love, work and views. It is a time of life when many different paths seem possible and little about the future is decided. A time where there is perhaps the biggest chance of people´s lives to explore. Usually, the late teens through the mid twenties are the years of freedom of our lives. Nevertheless, cultural influences structure and sometimes limit the extent to which emerging adults are able to use their late teens and twenties in this way, and not all young people in this age period are able to use these years for independent exploration. Like adolescence, emerging adulthood is a time period of the life course that is culturally constructed, not universal and inflexible. Different push and pull factors make people want to leave their places of residence and in many countries, rural areas are poorer than urban areas with fewer jobs availalable to people , young people especially (Riley 2011). Consequently, many young people are “ pushed ’’ by lack of cultural and social opportunities in the rural areas. The pull factors make people attracted to a particular or new location and youn people are “pulled’’ to urban areas because they tend to have better things; better schools, more job opportunities and diverse cultural and social amenities (Siaw 2013). THE EUROPEAN UNION’S RURAL DEVELOPMENT POLICY (2014-2020). The European Union came up with rural development policy to tackle the diverse economic, environmental and social challenges that exist currently. It is usually referred to as “the second pillar’’ of Common Agricultural Policy (CAP), and it compliments the system of direct payments to farmers. The EU’s rural development policy shares a number of objectives with European Structural and Investment Funds (ESIF). This policy is funded through the European Agricultural Fund for Rural Development (EAFRD) which is worth 100 billion Euros from 2014-2020 and each EU country recieve a financial allocation throuh out the seven year period of the policy implementation. Also, there are 118 rural development programmes (RDP) existing in the 28 EU countries which are based on the peculiar needs of their territories which must address at least four out of the EU priorities which include • Fostering knowledge transfer and innovation in agriculture, forestry and rural areas • Enhancing the viability and competitiveness of all types of agriculture and promoting innovative farm technologies and sustainable forest management • Promoting food chain organization, animal welfare and risk management • Restoring , preserving and enhancing ecosystems related to agriculture and forestry • Promoting resource efficiency and supporting the shift toward a low-carbon and climate resilient economy in the agriculture, food and forestry sectors • Promoting social inclusion , poverty reduction and economic development in rural areas.

These rural development prorities are broken down into focus areas. EU countries ,set targets along the lines of these focus areas and then stipulate goals that will enable them achieve them.

4. METHODOLOGY

4.1. Methods of data collection Data for this case study was collected by conducting semi-structured interviews with different research subject groups from Vastseliina rural municipality – local young people, elderly, business owners, a doctor and municipality workers (mayor, secretary and social worker). All together we conducted 9 interviews, from which 8 were in-depth interviews and 1 was a group interview. We also tried to use the „walking and talking method“– conduct an interview while we were walking. It succeeded with the nursing home director, while we visited the old and the new nursing homes. We used interviews to gather information for our research questions and to find more information about Vastseliina in general. We also used observation for data collection – driving around the Vastseliina rural municipality and observing the municipality centre, villages, people, buildings, environment and nature. We also gathered secondary data from the internet and brochures. 4.1.1. Interviews In-depth interview is a qualitative research technique, that involves conducting intensive face-to- face interviews to explore their perspectives of certain idea or a situation (Boyce & Neale, 2006). Since our main focus was problems with the youth staying in the area and aspects that come with ageing population, like needing a bigger nursing home, then in-depth interviews were useful to get detailed information about a person’s thoughts and a great way to explore new issues in depth. We also needed in-depth interviews to collect data to have more complete picture of the research. Most of our interviews were expert interviews, since the problems covered interviewees job tasks. We contacted experts from political, economic, educational, social and health fields, who had experience with the relating problems. We also had few informants in the group interview. We had a big help from the Vastseliina municipality mayor, who set up all our interviews. Since our main research focus was about youth and the job possibilities for young people, including the new nursing home, which will create jobs in Vastseliina, then we conducted a semi-structured interview guide with main topics to get information for our research. In semi- structured interview, you can use a guide with questions and topics that you want to cover to get deeply into the topic and at the same time be flexible with the questions (Harrell & Bradley, 2009). Our group had following tasks: 2 of our group asked question, one was translator for people, who did not spoke English so well and one took notes. 4.1.2. Observations Observation is a systematic data collection approach. In this research, we used observation to gather information about Vastseliina rural municipality to have a better picture of the area, because to each group member it was a new place to discover. We drove around the municipality and looked at the places, which were part of our research, like the new nursing home, Vastseliina Episcopal castle ruins, youth centre, etc, to create an image of the area and to bind it to the research. We took pictures of every place we visited to add to the case study. 4.1.3. Secondary data For secondary data, we gathered information from different brochures we got from Vastseliina municipality government, businesses and tourism places, and from the Internet, for example Estonian Statistics and Vastseliina municipality home page.

4.2. Challenges The main challenge in our research was the suspicion, because a lot of people did not fully understand our reason of interviewing them. Also the language barrier, because there were a few people who did not speak English; and some that also did not speak English, but understood, or did speak English, but in the end started talking in Estonian, because they did not feel comfortable. Also some were hesitated, because we were taking notes. We also noticed that the youth center worker spoke too much, and did not let the informants (children from Vastseliina High School) speak. This could have been due to our mistake, because in group interviews it is important to have a moderator and we did not choose one. 4.3. Description of interviewees At the beggining of the interview we asked a few basic questions about interviewees, which helped to understand how they are related to Vastseliina and what their background is. During our first day in Vastseliina we had 4 expert interviews and one group interview. Our first interviewee was Raul Tohv, the mayor of Vastseliina. His hometown is Pärnu, but his mother is from Vastseliina. The mayor was studying at Tallinn University of Technology and when he became the mayor he also finished University of Tartu. Raul Tohv has already been a mayor of Vastseliina for 12 years. Our second interviewee was Terje Otsatalu, the director of nursing home in Külaoru village, Vastseliina municipality. She has been working in this nursing home for 8 years and previously she worked in real estate sector. She is from Mõniste village, which is in Võru county, and currently is living in Võru with her husband. She has a degree in business management and like she said, has been working with people as long as she remembers. She is doing her job with a big heart and has put her soul into this nursing home. Our third interviewee was a supervisor in the Youth Center of Vastseliina Merlis Pajustik. He comes from Misso, but moved to Vastseliina when he was in 7th grade. At school he was an active youngster and participated in various projects. Later he finished chemistry in University in Tartu. He has been doing sales job in Estonia and abroad before. Now he is married and has two children (2 and 4 years old). We also had a group interview at the Youth Center with three female students who were described as very active both in school and after school activities. Our final interview on the first day in Vastseliina was with the owner of log houses company Taavi Tuvike. His hometown is about 100 km away from Vastseliina, but he has been living here for over 20 years and started his log house business in 2002. He has a university degree as a forest specialist from Estonian University of Life Sciences in Tartu. During our second day in Vastseliina we had 3 expert interviews. First (fifth in total) interviewee was a social worker of Vastseliina municipality Epp Jõgiste. She has been working in Vastseliina municipality for 13 years and she has been working as a social worker in other municipalities and schools since 1995. Epp Jõgiste studied social work at Tallinn University. Sixth interviewee in Vastseliina municipality was Taavi Nassar, sales manager of wood processing company Förman NT. He comes from Võrumaa county, Võru town. He has a bachelors degree in logistics from Tallinn Univesity and a masters degree in marketing.

Seventh interviewee was Tiina-Maarja Einla, who works in the Castle ruins of Vastseliina. She has been working in the castle for 5 years now. Tiina-Maarja has a university degree in entrepreneurship and project management. She comes from one of the villages in Vastseliina municipality. On our last day in Vastseliina we had an appointment with our last interviewee - Doctor Aune Rehema, who comes to Vastseliina from Tartu every week. She comes from Tartu where she got her phD. Besides treatment of patients she is teaching at University of Tartu biochemistry. Table 1. List of interviewees. Type of Nr. Name Gender Occupation interview 1. Raul Tohv Male The Mayor of Vastseliina 2. Terje Otsatalu Female Director of nursing home in Külaoru village 3. Merlis Pajustik Male Supervisor in the Youth Center of Vastseliina Taavi Tuvike Male The owner of log house company Vipson 4. Expert Projekt 5. interviews Epp Jõgiste Female Social worker of Vastseliina municipality Taavi Nassar Male Sales manager of wood processing company 6. Förman NT 7. Tiina-Maarja Einla Female Head of the castle house of Vastseliina 8. Aune Rehema Female Doctor 9. Anonymous Female School student (9th grade) Group 10. Anonymous Female School student (9th grade) interview 11. Anonymous Female School student (8 th grade)

5. RESULTS AND DISCUSSION 5.1. New nursing home in Vastseliina

Description of Vastseliina Nursing home

The nursing home (Picture 3) is located in Külaoru village, just outside Vastseliina and it belongs to the church, which is right next to the nursing home. It has been a nursing home for 20 years and before that it was a hospital. The building has a local heating system, which costs 12 000 Euros per year. As for now, the rural municipality is paying for the nursing home. Since the building is old and the population is ageing, a bigger nursing home is needed in the area. According to the Vastseliina nursing home and pansionate profitability analysis, the current old nursing home building does not satisfy requirements for a nursing home and in 2015 the community had discussions about the use of the empty boarding school house in the center of Vastseliina. There were two choices how to use this building: as a nursing home or as a special care home for people with special needs. Since Vastseliina already had a nursing home in municipality, the community decided that it would be a better idea to use a building of boarding school as a nursing home.

Picture 3. The old nursing home in Külaoru village (on the top) and the new nursing home building in the centre of Vastseliina (at the bottom).

Currently there are 31 people living in the nursing home and the establishment has 11 employees. The place is always open for visitors during daytime, but unfortunately there are people who do not have any relatives or their children are not visiting them. To take care for the patients the workforce has a chef, nurses and caretakers. Doctor visits patients once a month, or if needed self-employed nurses will come once or twice a week to help. Nursing home fee is from 18-20 Euros per day and the pension does not cover it all, so the relatives or municipality are paying the rest. Since the people in the nursing home prefer to speak to their priest, no psychologist is needed. The people of the nursing home are involved in handicraft activities and youngsters from the high school occasionally perform for the elderly. After the nursing home moves to the new location in Vastseliina, the church will take over the old building. The new nursing home will be located in the Vastseliina borough center in a Soviet time building (Picture 3). It was built in 1952 and before it served as a boarding school for children with behaviour and mental issues. The concept of the new nursing home says that it should be cosy, comfortable and related to municipality. The estimated number of people who will live there will be approximately 100. Also, there should be additional guest rooms for nursing home visitors. There will also be a winter garden, a swimming pool and a therapy room and they are creating a job position which has the task to keep the elderly active. The building will have central heating system. The boarding school was closed mainly because of economic inefficiency as there were as many students as there were workers. Most of the workers from Vastseliina lost their jobs and most of them are around Võru now. The nursing home manager explained that there are 4-5 municipalities around Võru building nursing homes and they are all fighting for funding. The new nursing home will create jobs for maximum 30 people and they are already looking for workforce. As of 15th of May 2017, there are already 20 applications for the jobs and 10 applications for a place in the new nursing home. For 2020, all workforce must have a qualification to work in nursing homes. Since the new nursing home will be like a center of nursing homes in Võru county, it is likely that the smaller nursing homes in surrounding municipalities will not survive and the people that lose their jobs in those homes, will come to work in Vastseliina. But the unfortunate truth is that there are not a lot of young people who are willing to come and work in the new nursing home. The nursing home manager emphasizes that the work can be quite hard and clients frequently pass away. Employees have to have a big heart and a lot of empathy for the clients. The mayor of Vastseliina says that there has been interest from private companies to come with the investment, so they started a company, owned by the municipality along with private investors to run the nursing home. As our project focuses on the funcionality of green and silver economy in Vastseliina parish we wanted to know how this nursing home would fit into the environment in regards to green economy and silver economy (elderly people). We asked how the new nursing home would affect local employment. He said that there would definitely be a positive change since the numbers of employees would increase from approximately 10 to 30. That is 30 employees, when the full capacity of the nursing home is in use. When we asked about if there were people in the area that were available or wanted to work there, he said that there was surely a supply of work force in the area. Also, according to the nursing home manager, there were plenty of applications that she had received, however before hiring, she would have applicants on trial to see if the person would be fitting the job. Also, the mayor mentioned that there was a school in the area that prepared people for social care so that was an advantage.

Asked if the building would be used for other kind of operation along with funcioning as a nursing home, the mayor said no, and it would only be used as a home for the elderly. Asked about who was investing in this project, the mayor said that there are some companies interested in investing in the new nursing home. For this issue, some other local´s opinion was gathered. The owner of Vipson Projekt, a log house producer, thinks it is a good idea to move the nursing home to the large building since otherwise the building would simply be demolished. The local youth council supervisor believes young people are not interested in working there. He emphasizes the work they are doing with the youngsters, as to motivate them to seek their own desires and be entrepreneurs and create their own companies and jobs themselves. The municipality of Vastseliina employees a social worker that is very much involved with the elderly in the area. She says that there is a partnership between herself and the nursing home. She explained that when people are unable to take care of themselves (and that applies not only for old people) she is able to step in and be involved. She checks if a person is willing to move to a nursing home and have the municipality pay for it. She also sorts out real estate issues, communication with relatives, funeral matters and such. Her opinion of the new nursing home is very positive and welcomes the development. With the much more needed space the clients can enjoy more privacy than in the old home. It is also better for visits of relatives because of space and comfort.

When asked how this will benefit the community, she says that it is way better in comparison with the boarding school and gives the community a better image. She also says that it will create jobs for people locally and beyond and that people are already applying. It is also economically beneficial as there will be local persons working there, and paying taxes to the local municipality and spending money within the area.

The social worker was asked if they provide any home care services. She said: “Yes, they do”. There are 2 people employed with the municipality that provide home care services to ageing people. That way, they do not have to move to the nursing home. There are about 200 people who need such services and the municipality has an electric car which is used for visiting the ageing people in their homes. There is a schedule for the visitation, but they constantly keep in touch with the ageing people. On average, they get delivered food and groceries once a month and most of them still have relatives who visit them also. However, they need more help in the winter than in the summer. In the doctor’s opinion, the new nursing home is a very good thing because the existing one is not adequately serving the needs of the community and municipality at large. Förmann Sawmill sales manager thinks that new nursing home is a good idea. Maybe here will come more people and it is good for Vastseliina, he says. But it has no effect on their business.

Profability analysis of the new nursing home in Vastseliina Since the old nursing home does not satisfy the nursing home service requirements and will need investments, which are not coming, to comply the requirements, new and bigger nursing home is in need. Because there are a lot of small nursing homes in the South-Eastern Estonia area like in Vastseliina, then creating one big nursing home in the region can bring already 57 clients, plus additional demand, which is emerging from the missing places in all the nursing homes from this area. New nursing home location and size will also give additional development of rehabilitation 18 services fo the elderly. Rebuilding of the new nursing home will cost with inventory approximately 1,3 million Euros. The new nursing home will be filled with one year and the planned turnover for the year 2018 will be 550 000 Euros and the business profit 48 000 Euros. The main selling arguments of Vastseliina new nursing home were: • comfortable and home-like building; • connection to the events in Vastseliina; • events in the near areas; • diverse rooms; • high-quality infrastructure and service; • reasonable cost.

The new nursing home will have a big impact to the area. Firstly, there is a high demand for nursing home services. Secondly, in 2014 the tax return of the boarding school members was 16 000 Euros, and with the new nursing home the municipality could keep the tax return on the same level or even higher. Additionally, there will be a connection with the nursing home and the high school, since kids could come and perform. The new nursing home will also activate other services, like commerce. 5.2. Youth employment When the mayor of Vastseliina is asked about the youth in the local area and their involvement in the community, he explains that the youth in the area is not very interested in politics. Young people go away to secondary school and to university and like so often with rural areas there are few jobs that is fitting for highly educated persons. However, when later visiting the youth council supervisor, he said that some of the kids are very active and they do get a lot of motivation for making their dreams come true, and there are many projects and programs available to support their ideas. So perhaps they are being encouraged for positive things regarding their own lives, and maybe the age group of youngsters that do live in the area is too young to be involved in governance issues, as older kids are living and staying away during their university years. The main idea with the current youth leader is supporting these kids with activities that motivate their individual interests, their personal future plans and assisting them in finding out what it is that they want to do. Almost it seems like there is couching of entrepreneurs and encouraging youngsters to be self-sufficient, creative and self-reliant; a lesson that these kids take with them into the future. The supervisor informed us that the youth council center (Picture 4) was built in 2011, but before that, it was a garage for the school bus, tractors and other equipment. It was built from EU regional funding. They also got some funding from a Leader program. He says they try to equip it with funds from free donations from different groups of people: “We got some wood for skate park from a local wood processing companies and made the ramps ourselves. We also got a sofa from one of the parents”.

Picture 4. The youth center building. Kids come to the youth center from the municipality and around. They enjoy the skating park and other things. There is also table tennis, pool table, basketball, x-box room and many board and card games. There is also a kitchen where they have cooking lessons and for example there was a project where some Slovenians visited and cooked their national food in the kitchen. In the center is also a gym and women have training sessions on Tuesdays, but many of the boys use the gym often. A play room for small children is also available, because some parents cannot have their children in the kindergarten, so it is some sort of a day care. In the warehouse, there is a photo studio and one of the youngster is planning to start a YouTube channel. On the school premises, there is a football field, and one of the students has applied for funds to build seats alongside the pitch. When asked if the youngsters would be interested in working in the new nursing home, he says that active youngsters can create job themselves, create their own companies be entrepreneurs. They will not be willing to work there. The supervisor says they are doing small projects, amongst those is a youth leaders program. There are 4 youth group projects that have been written to get some infrastructure. By those projects, they encourage children’s dreams and help them to realize what they want. Most of the money comes from non-municipality funds. He says: “Total municipality budget is only 2 million Euros, it’s really small. We are getting a lot of money, more than other organizations in Vastseliina. Countryside get more money than towns because of Leader program and because its smaller, it’s easier to get it.” There are 4 high schools in Võru county, but the government is thinking about closing one of them because there are not many children, and that could be the case for the high school in Vastseliina. When asked how youth work is in general in Estonia, the supervisor says that Estonia has separate study programs for youth work and social work. They are trying to focus on youngsters and pay attention to their special needs because they are a special focus group of people – “that is exactly what youth work is about. There is not much factory works anymore, so we have to teach children business, marketing, IT…I think that it is important to focus on distant work,” he says. When talking to the youth council supervisor, there were also three young girls there who regularly attend the youth center. They were asked to tell us about what their plans were in the 20 future. They were in the 8th and 9th grade and all are very active in school projects. They informed us that they did not really learn about green economy, but mostly about recycling. One of the said she want to stay in Vastseliina in the future because it is her home, but she also wants to travel a lot and perhaps do similar work as the youth council supervisor. Second girl planned on going to Tartu after 9th grade and then later return to Vastseliina and work with children. The third was very active in sports and planned to continue that but could not decide exactly what type of sport. Vastseliina´s social worker is quite involved in work with youngsters in the area. When asked about job opportunities available for young people in the area, she said that the outlook was not so good. The biggest employer of labor is the wood processing company (Picture 5) and the other places where is work is the school and kindergarten. A lot of young people move to Võru and Finland to work. She says to have more opportunities for youngster in the area, simply more companies and jobs must be created and wages have to be increased. The social worker is cooperating with the youth center. “We usually communicate with the youth center. The youth center usually notifies us when there are youngsters related issues and we tackle it accordingly. We talk to parents, school personnel, etc. When necessary, external authorities also visit to provide support, access their needs and offer solutions.”

Picture 5. Pictures of Förmann NT wood processing company – the biggest employer in Vastseliina municipality.

Regarding the overall development of the people in the municipality, she thinks that there will be less young people in future, more of middle aged and old people. Young people are increasingly having mental health issues also. The internet and social media plays a role in this new social phenomenon. Young people are more and more socially isolated in real life and also they have more and more work to do in school. She explains that in general she feels that they do not participate in social activities and sports as much as they should. Parents also do not spend sufficient time with their children, leaving everything to teachers and school. The doctor and the social worker share very similar views concerning the mental health status of young people but she sees it more as a problem of the era, not a problem of the area. Young people experience difficulties in finding their place in life. She plans to continue to cooperate both formally and informally with the youth center. According to the Förmann production manager, it is difficult to get young people to work in the sawmill. After finishing school, they leave for Tartu or Tallinn and it is a problem in Vastseliina. The company is not looking for a specific age of work force, it has not many options. He mentions for example that the average age of work force in the sawmill is increasing, in 1993 average age of company’s employees was 22,5 years. There were 70 people working back then. Now average age in the company is around 35-40 years and there are only around 50 employees left because they are replacing them with machines. As this kind of an enterprise would be ideal for local youngsters to seek employment, the marketing manager informed us that they have been struggling to hire people for full and part time jobs during the tourist season, which only last for 2 months in the summertime, from mid- June to mid-August. Even though she has visited the local school and presented these job offerings, the students seem to have little interest in working in the castle, its history and what it has to offer. She says they are struggling to motivate the students to work and that these jobs do not require specific qualifications, and most young people today speak good English, which is the most preferable attribute, along with having an outspoken personality. However, there is a new museum under construction and it will require more qualified employees. Regarding if there is any cooperation with the Vastseliina youth center, there have been presentations for the kids and they know of each other and have had communications. The doctor however, thinks that young people would not be very willing to work there because they do not like simple jobs. They prefer more mentally engaging jobs and preferably in the cities. She thinks it makes sense in it because it is important that they go out there, get an education and then come back better equipped to make contributions to the community. 5.3. Green economy in Vastseliina A concept of green economy was coined in the United Nations “Rio+20” conference (Barbier, 2012). According to the document of “Rio+20”, “In a green economy, growth in income and employment should be driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services. These investments need to be catalyzed and supported by targeted public expenditure, policy reforms and regulation changes.” (UNEP, 2011). In this definition, green economy is mostly related to environmental benefits. Most of national policies, strategies and programs follows this concept. In scientific context, green economy can be defined in broader sense and it can be related to several different economic theories, concepts, practical approaches and assessment tools (e.g., environmental economics, ecological economics). Besides environmental benefits, it can also be associated with economic (e.g., improvement in economic growth, productivity, competitiveness, accelerated innovation) and social benefits (e.g., 22 reduction of environment induced health problems, job creation and poverty reduction) (Loiseau et al., 2016). Implementation of green economy depends on several critical factors like economic variability, public funding, technological development, impact assessments, public policies and regulation, social capital, leadership and coordination as well as public acceptability and image (Loiseau et al., 2016). Therefore, we interviewed people from official authorities, public and private sector in order to find out how green economy is implemented in Vastseliina and what vision of green economy community of Vastseliina has. All interviewees were familiar with the idea of green economy. Most of them related it with alternative energy and discussed possibility to install solar panels. Only the mayor gave some different thoughts about organic farming. Also, children we talked to at the youth center mentioned that in the context of green economy they are mostly taught about recycling. Vastseliina is a small rural area with only two thousand people living in municipality, a lot of green areas, fields, forests and lakes exist in Vastseliina municipality, pollution is not considered to be a present issue here. For this reason, most of interviewees consider Vastseliina green already and see no need for green policy. Local businesses have no plans for alternative energy in Vastseliina. For example, the sawmill sales manager said that they thought about introducing solar energy in the area of their company but company is trying to invest more in the production and support their business. He noted that burning wood chips is much cheaper. Wood processing industry is dominant in Vastseliina municipality and heating system here mostly relies on burning wood. It is the most efficient way for local companies to use wood as a fuel since they get a lot wood chips and sawdust which derives from wood processing as a waste. But local business men ensured us that they are trying to be as green as they can. For example, the sawmill sales manager highlighted that all the packages from their production are recycled. Most interviewees talked about constructing solar panels in the nursing home and using them instead of central heating system. The old nursing home is now using central heating system and its annual cost is very high. Due to this fact, solar panels seemed as a good idea for a new nursing home, but later they gave up on it. As the doctor we interviewed mentioned, installing solar panels is very expensive but it will be a worthwhile project and should therefore be kept in view. Also, there are little prospects for organic farming in the area. As far as we found out, there is not much agriculture in the municipality. As the mayor of Vastseliina noted, there are only two farms. But there are more possibilities for rural tourism. For example, log house company owner is running another business. He has a wooden house to rent for various parties and celebrations and he is expanding this business by building another house for accommodation. To sum up, Vastseliina people are happy with the green environment in their area. They see no environmental problems in the municipality and consider it green enough. For this reason, there wasn’t a lot of solutions of green economy in our field area. 5.4. Municipality reforms Administrative municipal and regional reforms include changes in the organization of authorities and in the distribution of responsibilities. In some cases, the reforms create new geographic boundaries for administrative units. The main goal of these reforms is the improvement of governance systems (Nordregio, 2017). In Estonia, the plan of administrative municipal and regional reforms started already in 1997, but due to political consideration and the opposition of municipalities the bigger reform had been 23 postponed. The plan was activated again in 2015 and they hope to finish the reform in 2017. The goal of Estonia’s administrative municipal and regional reforms is to create efficient municipalities which can develop local life as a whole for the greater cause of well-being. The reforms also should ensure the increase of competitiveness in areas and municipalities should fulfill the tasks that has been given to them by the law. The reforms will reduce more than 200 municipalities to 100 municipalities (Picture 6)

Picture 6. New municipalities after the reform in Estonia. (Source: https://haldusreform.fin.ee)

Current unifications in Estonia has showed that with united forces you can provide residents more qualitative and accessible services. The reform has 3 stages: ● I stage - preparation of the reform till June 2016; ● II stage - self-initiative stage till January 2017; ● III stage - Government of Estonia initiative stage - started from February 2017 and reforms come into effect with local municipalities selections in 15.10.2017 Every municipality has to comply with a criterion of 5000 residents, from which the new municipalities will start showing their capability. One criterion is also geographical peculiarity. From 2013 the Ministry of Finance has created a poll about people’s attitude towards the reform. It includes 1000 people from age 15+. The poll has only 1 question - what is their attitude of the reform. In 2015, the results were 48% in favor and 28% against, 24% did not have an opinion (Picture…). The biggest opposition is in West-Estonia.

Figure 6. Diagram of attitude towards the reform in 2015. (Source: https://haldusreform.fin.ee)

On the 21st of December 2016, Vastseliina rural municipality and its neighbour, Orava, decided to approve the unification contract to create a new municipality (Picture 7). Both areas had a referendum, where people could vote for or against the new municipality. Both Vastseliina and Orava voted in favor of the new municipality (from 170 people who voted in Vastseliina, 148 people said “yes”) and it is going to keep the Vastseliina name and the area of the municipality will be 396 km2. There will be approximately 2700 residents. The Government of Estonia approved their unification, but unfortunately the new municipality does not comply with the criterion of 5000 residents and there will be a choice, whether the new municipality is forced to merge with Võru municipality or there will be an exception. The decision will be announced on June 6th. After speaking with our interviewees, the main point with everyone was that the municipality would preserve as it is in the future and that they would not be forced to join with Võru municipality, because Vastseliina area is already culturally different. Also, when the Government of Estonia decides to merge Vastseliina municipality with Võru, all the money and services would go to the center of Võru municipality and Vastseliina, as a periphery of the big municipality, would die out. Also, if Vastseliina municipality will be joined with Võru, school in Vastseliina will be closed. The doctor particularly felt that the reforms does not have any negative implication whatsoever for the medical services and that things will pretty much remain as it is especially because they don’t have significant health issues.

Picture 7. Vastseliina and Orava municipalities. (Source: Vastseliina web page)

6. CONCLUSIONS AND RECOMMENDATIONS In this case study we were looking for answers for the question, how can Vastseliina municipality keep a sustainable employment rate for young people and what does the municipality of Vastseliina have to offer young people, who are living in the area and are working or would like to work in Vastseliina. One of our main focus points were also the new nursing home, in regards to the silver economy, and is it possibile to develop green policies in Vastseliina municipality. In case of migration of youngsters, as seen in the project, there are diverse reasons why young people stay, or return to settle in their local rural areas. The most dominant one is the strong feelings of connection to family roots and the country area itself, that makes them decide on where to stay. Rural area employment has definitely transformed in recent times from being the production area employing a number of persons to a technology empowered region where machines have replaced manpower. Concequently the population have moved towards the service sector to create jobs. Based on the discussions with all the people who participated in the interviews in Vastseliina, one can say that as for the young people, Vastseliina has some opportunities for the youth to work in the area, but they may not be satisfying for them. For example, a young woman in her 20’s may not want to work in a sawmill. Among most modern day youngsters in rural areas there is a desire to go and explore, move away, get experience, but come back and maybe be your own employer. The muncipality is headed in the right direction in terms of rural development related to silver and green economies. All the people who were interviwed agree that the new nursing home is a welcome and positive development, which will create new job opportunities for people. However, most young people will not be excited about the idea of working at a nursing home, because they prefer more mentally challenging jobs. The new nursing home will also have a positiive effect to the municipality economically. It is becoming like a new fashion trend in small villages to establish a nursing home since population is ageing and schools are closing. It is one of the ways to use buildings which lost their purpose and to keep community alive by creating new jobs. As for the green economy, Vastseliina is already so green in people’s thoughts, it does not need any more policies. Regarding to the integration of municipalities in Estonia, some people in Vastseliina, who we interviewed, think that the reforms happening in Estonia will have a negative effect to the community. Since reforms are not finished yet, there is a lot of uncertainty about the future in people’s mind and perhaps there should be a new study done in a few years to find out what effect municipal reform had to the development of Vastseliina.

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