Local economic development plan, Konotop city UTC Sumy region PLAN LOCAL ECONOMIC DEVELOPMENT Konotop City United Territorial Community Konotop – open investment area! This Plan was prepared with technical support from the Mayors for Economic Growth initiative of the European Commission. It was reviewed by the experts of the World Bank and commended as good by the Mayors for Economic Growth initiative. Its content is owned by and remains the sole responsibility of Konotop City Council. Ukraine December - 2019 1 Local economic development plan, Konotop city UTC Sumy region Preface Dear community partners, Konotop is a city of Cossack glory, a powerful railway junction with developed infrastructure, located in the most picturesque and ecologically clean part of Slobozhanshchina. By joining the European Union's Initiative “Mayors for Economic Growth”, we have made a voluntary commitment to channel every effort into creating a favorable business environment for community economic growth as well as attracting investment and increasing employment. Being aware of future challenges, a fundamentally new approach to planning has been applied in consolidation with the private sector and local community. The Local Economic Development Plan has been devised due to effective teamwork, systematic involvement and constant round-table discussions. Our city has a number of problems, but at the same time it has considerable potential for development. City officials, local community leaders, and the business community feel responsible for the future of the community, they are ready to collaborate, dedicate their time and resources to achieve the targets that were jointly defined and outlined in the Plan. We want the Konotop city United Territorial Community to become a truly open investment area and developing the Plan is the first step towards the community well-being. I am absolutely convinced that the realization of the planned intentions will allow developing Konotop as a territory comfortable for life, work, comprehensive personality development, implementation of project initiatives and profitable investment. The community is the only "organism" and it depends on each of us whether its economy will be healthy. Development is possible only through interaction, so we are open to dialogue, we are interested in cooperation and effective partnership! Regards, Mayor Artem SEMENIKHIN ___________ To obtain a copy of the Local Economic Development Plan of Konotop city United Territorial Community, refer to: Liudmila Gapeeva, Department of Economy, Konotop City Council Address: 8, Myr Avenue, Konotop City, Sumy Region, 41600 Phone: +3 8 (05447) 6 61 66, 2 63 75 Email: [email protected] Website: http://konotop-rada.gov.ua/ Skype: ekonomkonotop 2 Local economic development plan, Konotop city UTC Sumy region Content Preface ……………………………………………………………………… 2 1. Executive Summary ………………………………………...……………… 4 2. List of Tables and Figures…………………………………..……….……... 5 3. List of abbreviations………………..…………………………………….… 5 4. Introduction to the Plan …………………………………………………….. 5 5. Process of Local Economic Development Plan Development …………….. 6 6. Local Economic Analysis ……………………………………….………….. 7 6.1. Analysis of Local Economic Structure ……………………………… 7 6.2. Local Cooperation and Networking ………………………………… 8 6.3. Business-friendly, Transparent and Corruption Free Administration… 9 6.4. Access to Finance …………………………………………………….. 10 6.5. Land and Infrastructure ………………….………………..………….. 10 6.6. Regulatory and Institutional Framework …………………………….. 11 6.7. Skills and Human Capital, Inclusiveness ……….……………………. 12 6.8. External Positioning and Marketing ………………………………… 13 7. SWOT Analysis …………………………………………………………….. 14 8. Vision and Objectives .……………………………………………………... 14 9. Action Plan ………..……………………………………………………….. 16 10. Financing Scheme ………………………………………………………….. 18 11. Monitoring Indicators and Mechanisms .…………………………………... 19 12. Annex …………………………………………………………………….. 22 Annex 1. City Mayor Ordinance Annex 2. The composition of the working group 3 Local economic development plan, Konotop city UTC Sumy region 1. Executive Summary Konotop is an administrative, railway, industrial and cultural center of Konotop district and a united territorial community. It is located in the western part of Sumy region. It is the second largest community in the region with 89.9thousand of people, 54.5% of them is women, 45.5% is men. 71.6% is the population aged 15-64 years. The territory of OTG is 10,294 thousand hectares, including 4,378 thousand hectares - the city. In the sectoral structure of local industry mechanical engineering prevails(33,3%). Growth rates of industrial production are stable, with annual1-2% increase. The foreign trade positive surplus is maintained. The main source of financing of capital investments is own funds of the enterprises (their specific gravity is 71%). 2,768 businesses provide 25% of population with jobs. Share of revenues from small businesses to the city budget is 34.2%. The main strengths of the community are: free production space, land and business and investment premises; interest of local authorities in implementing development projects, having relevant experience; favourable location and developed basic infrastructure. The main weaknesses of the community: low attractiveness of the community to investment; lack of a system of business motivation at the local level; poor staff skills to work in small business, low level of knowledge and skills in the field of entrepreneurship. Community vision: "Konotop is Open Investment Space!", with favorable conditions for business development, modern business infrastructure and intellectual resources, comfortable for life and implementation of project initiatives. Objectives: 1.Improvement of mechanisms for implementation of community investment policy. Actions: Compile inventory and create a database of available sites ("Greenfield", "Brownfield"), premises and objects of public and private property that can be offered to potential investors. Develop a community investment passport. Develop a Regulation on the implementation of an investment management system in the City Council with a typical investor escort algorithm). Develop a long-term program for attracting investment in community development. Update the Investment Activity plan (bilingual version - Ukrainian, English) on the official site of the City Council. Disseminate information on investment potential, "success stories" to the community through electronic media, online resources, and social networks. 2. Development of city infrastructure to support entrepreneurship. Actions: Reconstruction of CAS (part of the first floor of the building municipality), providing the CAS with computer equipment, furniture and software. Introduce Electronic Queue Service. Introduce support from the city budget for the implementation of business projects (compensation for loans raised by enterprises). Conduct a cycle of leadership school training for start-ups, business owners, public asset representatives. Conduct optional financial literacy classes in schools. Conduct classes with elements of business education for the able-bodied population not temporarily involved in the labor market. The total financial need for implementation of the LEDP activities is 7.3 million UAH (303.9 thousand EUR), including: 1.6 mln. (66,8 thousand EUR) - the city budget; 4.5 mln. (187.5 thousand EUR) - the state budget; 0.9 million UAH (37.2 thousand EUR) - financing of partners; 0.3 mln. UAH (12.5 thousand EUR) - financing which will be recruited from alternative sources (donors). 2. List of Tables and Figures 4 Local economic development plan, Konotop city UTC Sumy region Table 1. Action Plan Table 2. Financing Scheme Table 3. Monitoring Indicators and Mechanisms 3. List of abbreviations EU Initiative M4EG - European Union Initiative “Mayors for Economic Growth” LEDP - Local Economic Development Plan EU - European Union UTC - Unified territorial community IFI - International financial institution CAS - Center of administrative services Working Group - group of participants in the planning process NGO "IICD" - NGO "Interregional Institute for Community Development" 4. Introduction to the Plan Konotop is a city of regional importance, administrative, railway, industrial and cultural center of Konotop district, united territorial community located in the western part of Sumy region (125 km from Sumy; 247km. from Kyiv). The population of the community is 89.9 thousand people, 54.5% of which is women, 45.5% - men. The population aged 15- 64 is 71.6%. The territory of OTG is 10,294 thousand hectares, including 4,378 thousand hectares occupying by the city. On October 25, 2018, the Konotop City Council took a decision to join the EU's M4EG Initiative aimed at sustainable local economic development. Thus, the city council confirmed the determination, to cooperate with the public and the private sector, create a supportive business environment, improve the conditions for community economic growth and employment. The basis of the local economy is the real sector represented by industrial complex (40% of city budget revenues) and entrepreneurship (34.2% of revenues). Encouraging investment in sectoral projects will add value products, create new jobs, promote the growth of industrial volumes production, will increase economic sustainability and reduce the outflow of personnel. The construction of city business supporting infrastructure will help to overcome imbalances and makes it possible to expand services.