Aims of the Assessment

1. The Role of Community Fundsin the Dynamization of Underdeveloped RegionsPresentation of Assessments in Regional Development – workshop 25. 04. 2013.Hajnalka Lőcsei(Pannon.Elemző Kft.)

2. Aims of the Assessment The assessment of disadvantaged regions discovers: • what the primer aims, tools and institutional solutions of the development policy in relation with disadvantaged regions are; • how did the absorption of sources change in the regions, and how did the sources serve the solution of social and economic problems; • what role the local development institution system has; • what suggestions can be formulated in relation with the shaping up of the future application of development funds that could serve the harmonious development of disadvantaged regions.

3. The subject of the assessment • In focus: • The 33 most disadvantaged microregions, which were supported by the initiative of complex recovery program • 24 truly disadvantaged microregions, of which the relatively poor socio-economic situation continued to deteriorate over the past decade

4. Significant findings • Weight of EU Fundings • The implementation of development intentions (NHDP) • The importance of the Most Disadvantaged Microregions Program • Recommendations

5. Weight of EU Fundings What is the connection between the volume of development sources in the disadvantaged microregions and the inflow of market investments and domestic financial subsidies, and to what extent the spatial patterns of those three sources are similar?

6. The relation between market investments and state subsidies in the counties of Hungary, 2004-06 • Market processes result regional differentiation, while state subvention policy has an affect on convergence. The first has much stronger influencing power. • The weight of regional development sources is small, although those have larger significance in disadvantaged regions. Per cap private investments Per cap EU fundings Source: Kullmann 2009:54

7. Per capita resources in different types of Disadvantageous Microregions

8. Per capita private investments, 2007-2011 Per capita public grants for local govt. investments, 2007-2011 Per capita EU fundings, 2007-2011

9. Regional development funds in function of the population Sources Sources Public grants for local govt. Inv. Public grants for local govt. Inv. Private inv. Private inv. EU funding EU funding Cumulative population (developmental ranking) Cumulative population (developmental ranking)

10. II. The implementation of development intentions (NHDP) What did the development policy intend to do with disadvantaged regions? To what extent was it successful to allocate resources to MDMs?

11. Development policy intentionsto catch up disadvantaged regions Various accents in concepts, strategies and plans Regional development: important Rural development: not treated separately (2014-2020 EU draft plans: important) Important compared to neighbouring countries

12. Implementation The definition of disadvantaged microregions („DM”) is defined in governmental decree Institutions for catching up underdeveloped regions: „Preference method” MDM Program in 33 MD microregions Additional to NSRF: Start labour program Rural development (Leader Program) Domestic decentralized sources

13. Differences of the structure of sources 3274 bill. HUF 396 bill. HUF 174 bill. HUF 547 bill. HUF 128 bill. HUF

14. Per capita granted funds in different types of microregions (The New Hungary Development Plan, 2007- Aug. 2012) Over average NHDP sources flew to 33 MDMs. (Less sources were received by 14 other MDMs and regional DMs.)

15. Per capita paid funds in different types of microregions (NHDP, 2004-2011, HUF) The advantage of 33 MDMs is increasing in time (14 other MDMs, regional DMs can be considered as relative losers.)

16. Per capita granted funds in different types of microregions, in different Operative Programmes (NHDP, 2007- Aug. 2012) The advantage of the 33 MDMs is shown mainly in ROP and Social Renewal Operational Programme funds The influence of Economic Development Operational Programme is rather local

17. III. The importance of the Most Disadvantaged Microregions Program

18. MDM Programcomplex program for 33 most disadvantageous micro-regions Dedicated support framework (97 bill. HUF) The MDM Program tried to develop both regulatory and operating environment in a positive direction planning of complex project packages in an iterative way, improvement of local development capacity, Incitement of collaboration, stimulating economy, reducing inner social and regional inequalities.

19. Per capita EU funding sources in different types of Disadvantageous Micro-regions (The New Hungary Development Plan, 2007-2012 Aug.) Per capita granted funds, HUF Per capita paid funds, HUF

20. Effects and results of the MDM Program All regions received supports, while NDP sources, the preference method and the investment supports of the local governments were incidental; Sources were directed from local communal infrastructure development towards the development of public services; Also the least developed territories received funds It strengthened and developed local development capacities it helped to improve relationships among local and between local and central development policy actors, it encouraged (forced) confidence, partnership, coordination and cooperation; Many developments were implemented, which were not mentioned in previous planning documents.

21. Problems of the MDM program It was elaborated „on the fly” Rural development can not be linked to it The implementation had conflicts both with central administration and on local level The development of disadvantaged social groups (especially the improvement of the situation of gipsy population) have not reached the critical mass, not any significant changes happened. The direct or indirect enhancement of the economy, and the creation of workplaces was slightly successful

22. IV. Recommendations

23. General recommendations co-operation, co-ordination of regional development, rural development and the social profession; support of regional planning; establishing a real program which flexibly links to the problems, circumstances and needs of disadvantaged regions, with the help of complex regional programs of the present term, such as with the use of experience of the MDM and LEADER Program, incorporating their results and avoiding their pitfalls; encouraging cooperation and coordination rather than competition; improvement of the quality of public tasks with normative or task-based financing; supporting the involvement of external, experienced experts in the planning processes, which moderates the economic divergence due to local lack of capacity, increases source absorption and utilization.

24. Differentiated treatment of problems Average incomes, near to labour market Free enterprise zones, supporting SMEs Usually under subsistence level, on the verge of primary labour market Social co-operatives, protected employment Misery, unmet demands for means of sustenance, lack of working ability, debt crisis public employment, community farming as a tool for social work

25. Differentiated treatment of microregions The highlighting of disadvantaged microregions is a necessary tool, since in a competitive system the most problematic regions would receive sources with small chance Specific delimitation and tool set should be developed in relation with microregions and settlements having deep poverty problems The industrial depression areas in the agglomeration of major cities, and microregions with significant urban cores, where the traditional tools of economic development could be efficient(complemented by human resource and infrastructure development), should be treated differently.

26. Thank you for the attention!