Intra-Regional Disparities in South-West Development Region (Romania): Dynamics and Trends

1. URBAN INDUSTRY INTRA-REGIONAL DISPARITIES OF THE SOUTH-WEST DEVELOPMENT REGION (ROMANIA). PRESENT-DAY DYNAMICS AND EVOLUTION TRENDS Costin Dumitraşcu*, Bianca Dumitrescu** *Faculty of Geography, ‘Spiru Haret’ University, Bucharest, ROMANIA **Institute of Geography, Romanian Academy, ROMANIA

2. CONTENTS • Introduction • Geographical Features • Intra-Regional Disparities in the Distribution of Industrial Activities • Disparities in the Labour Force Industry • Employed population structure by activity sectors • Employment and unemployment rate • Industrial Parks and Research-Development-Innovation Infrastructure • References

3. INTRODUCTION • In centralized economy period - the objective of socialist politics - to develop in a balanced way all the regions by centralized planning • Despite to political view to equalize the development level by creating new regions and growth centers old cities and development regions have remained of interest • After 1990 the regional disparities have focused due to the transition • The regions benefiting from consolidated and industrially developed urban systems have born much more easily the process of restructuring and de-industrialization • Less developed regions reacted differently to the major structural and functional changes

4. Old factors for regional differentiation have reacted differently to structural and functional changes: - the degree of industrialization has decreased in relevance, - the level of urbanizing has remained constant, - the demographic regime and the territorial mobility have lost their significance. New factors for regional differentiation have surged: - the regional GDP which evaluates the economic performance, - the volume of direct foreign investments, - the levels of individual income, - the rate of unemployment (Popescu Claudia, 2004)

5. Geographical Position

6. Craiova Municipality - first-rank city - in the context of the national system of settlements In a continental context - pole of national-trans-national influence (the ESPON classification system). On a regional level - capital of the South-West Oltenia Development Region

7. Intra-Regional Disparities in the Distribution of Industrial Activities The South-West Oltenia development region is economically divided between: • agriculture (Dolj and Olt counties) and • industry based especially on the massive exploitation of pre-existing natural resources (Gorj, Vâlcea and Mehedinţi counties) In the industrial sector 4040 IMM are functioning, (11.7% of the total of IMMs in the South-West Region's economy)

8. The largest number of IMMs • Dolj county – 1396 (34.6% of the IMMs in the industrial sector), • followed by Valcea county with only 876 of them (21.7%). • At the opposite extreme • the smallest number of IMMs in industry can be found in Mehedinţi county – 431 (10.7%). • The South-West Oltenia Region has the smallest number of IMMs in Romania and the smallest number of IMMs with a foreign capital • The role of large businesses is highly important, their size and the shares they hold granting them considerable advantages - the access to the market and to financing, - a greater capacity to invest in technology and research-development activities • In 2005, 68% (137) of the large businesses within the South-West Oltenia region activated in the industrial sector

9. DOLJ COUNTY • there were 39 large businesses in the industry → 19.4% of the large units • The main industrial products: - electric energy production (photo 1) (Craiova Power Complex SA), - engines, generators and transformers production (Electroputers SA and Newage AVK SA), - the production of steam generators (The Company for Repairs and Termoserv Serices Craiova SA). • the presence of foreign investments in key industrial units: Daewoo (photo 2 – taken over by Ford in 2007), Topway Industries SA (Norway), Newage AVK Romania SA (Germany, UK) Photo 2. Daewoo Craiova car Factory, taken over by Ford in 2007 Photo 1. Craiova Power Complex SA

10. GORJ COUNTY • 30 large industrial businesses (14.9%) - 17 were active in the manufacturing industry. - coal (The National Lignite Society OlteniaSA), - electrical energy coming from plants (SC Turceni SA Energy Complex), SC Rovinari Energy Complex SA - rubber technical products (Artego SA), - glass and construction material industry (Star Glass SA) Photo 3. SC Turceni SA Energy Complex Photo 4. SC Rovinary Energy Complex SA

11. Photo 5. ROMAG Prod, Drobeta Turnu Severin MEHEDINŢI COUNTY • 17 large businesses in the industrial sector (8.5% in Oltenia region) → half were active in the manufacturing industry. • the manufacturing of basic anorganic chemical • products (ROMAG Prod – Autonomous Nuclear activities RA) • cars for merchandise shipment (Meva SA), • naval constructions (Severnav SA, Orşova shipyard SA), • the electric energy produced in water plants (Hidroelectrica Bucuresti SA) Foreign investment is present in top businesses → Meva SA, Orsova Shipyard (Holland – 20.81%, Cildro SA, Lamdro SA (Germany). Photo 6. Orsova shipyard SA

12. VÂLCEA COUNTY Photo 7. Oltchim SA Râmnicu Vâlcea • 24 large businesses active in the industrial sector (11.9%) → 17 were active in the manufacturing industry. - fabricating basic chemical products (Oltchim SA), metal products (Vilmar SA), - salt (sodium chloride, soda ash, caustic soda) (the Govora SA soda plants), - graining products (Boromir Ind. SRL), - electric energy (Hidroserv Râmnicu Vâlcea SA – Branch for Repairs and Services). • Foreign investors are active in top businesses - Vilmar SA (France), Magnetto Wheels Romania SA. Photo 8. CET Govora

13. OLT COUNTY • 27 large industrial businesses (13.4%) → 23 were functioning in the field of manufacturing industry. - aluminium and primary alloys (Alro SA), - the production of car parts and accessories (Altur SA), - non-ferrous mineral products (Electrocarbon SA), - tin foils and bands of Aluminium alloy, - isolated Aluminium cables (Alprom SA), - steel pipes (Artrom SA), - car axis (Romvag SA Caracal, SMR SA Balş), - clothing articles (Romanita SA). • foreign investment →Alro SA (Holland), Altur SA, Artrom SA (Germany), Spar SRL (France) Photo 9. Aluminium and primary alloys - ALRO Slatina Photo 10. Car Axis ROMVAG, Caracal

14. Disparities in the Labour Force Industry • 1992 - 2006 population migrations between economy branches, both at a national and local level • the structure of employed population depending on economy activities has been altered • The diminishing of industrial activity, especially of large economic units, unprofitable, has led to the diminishing of the active population in the secondary sector • The tendency in the past years - reducing the number of active employees to the advantage of inactive persons - Increase in the number of active persons in the private sector • A consequence of the surging of the private sector within the economy → - the increase in the number of private entrepreneurs - the decrease in the number of employees

15. Employed population structure by activity sectors • after 1990 → the structure of the active population per sector highlight a de-industrialization and re-agrarisation of the economy, without registering a progress in the services sector • agricultural activities and those in the manufacturing industry are dominant • counties are separated mainly from the point of view of occupations in agriculture (Olt (51%), Dolj and Mehedinţi counties), and in the extraction industry (the northern counties) • other economic activity types is almost equal

16. Employment and Unemployment Rate • the counties are individualized by the high number of labour force resources and by the unbalanced structures of their occupation • occupation in the urban sector is differentiated by the power of urban economies to attract investment • the general direction of labour force occupation → negative (64.8% in 2000, 53.7% in 2007) • in the towns the degree of labour force occupation → a falling dynamics from 1992 to 2006 • labour market is affected by the imbalance due to: - the offer of labour force higher than the demand - and aggravated by the descending trend in terms of activity and occupation rates (young labour force has the most reduced occupation rates) - by the growth in unemployment among the young

17. in 2006, unemployment have increased in the case of cities, but opposed to the national urban rate of 12.8%, the cities in this area have ranked under this value – 6.2% • lately the phenomenon of population displacement to other countries in search of a better job has manifested • a part of them come from mono- industrial cities, (pockets of severe poverty following the industrial restructuring process • programs for adult were involved

18. Industrial Parks and Research-Development-Innovation Infrastructure • The Research-Development-Innovation Infrastructure (DII) plays a very important role in the development process • The research activity → 26 research institutes, the majority of them located in Dolj countyand in Vâlcea county • The Romanian Government has elaborated and adopted - H.G. 1116/2001 the program „Industrial Parks”, reinforced since 2002 • A vital role is to be played by the affairs incubators →5 such incubators functioning in the Region • three areas highly affected by the industrial restructuring and particularly by the restructuring in the mining field– less defavoured areas

19. THE ECONOMIC CRISIS EFECTS(1) • The world economic crisis originated in the US – the first signs appeared in 2007; • The economic crisis that hit Romania is primarly an internal one; • It is the consequence of the erroneous macro-economic policy; • Signs of crisis: - unhealthy consumption-based growth with borrowed money - the absence of orders; - forced lay-offs and dismissals

20. ECONOMIC CRISIS EFECTS (2)

21. -places AVAILABLE WORKPLACES IN VÂLCEA COUNTY

22. OLTCHIM – EFECTS OF ECONOMIC CRISIS • Oltchim Râmnicu Vâlcea Works → losses of 27.7 mill. lei (7.6 mill. euro) in the first nine months of 2008 • Over the same 2007 interval it had a profit of 3.4 mill. lei Source: Stock-Exchange

23. CONCLUSIONS • the counties from this Development Region were exposed to a difficult period from socio-economical point of view. • the counties situated in the northern part (Gorj and Vâlcea) were profoundly affected by economy restructuring inducing a high degree of unemployment • and the agricultural area from the southern part (Dolj, Olt and Mehedinţi counties) was extremely affected by the low level of productivity inducing a higher increase of poverty in this area known for its traditional underdevelopment.

24. BIBLIOGRAPHY Erdeli, G., Dumitrescu, Bianca, Mocanu, Irena (2010), Industry in Vâlcea County – between transition period and financial and economic crisis, Proceedings of the sixth Romania-Turkey Geographical Academic Seminar, Bucharest Fota, D., Băcescu, M., (2009), Criza economică din România anului 2009 – cauză, efecte, soluţii, Ed. Universitară, Bucharest. Ianoş, I., 2004:Dinamica urbană. Aplicaţii la oraşul şi sistemul urban românesc, Editura Tehnică, Bucureşti, 213 p. Ianoş, I., Heller, W., 2006:Spaţiu economie şi sisteme de aşezări, Editura Tehnică, Bucureşti, 373 p. Popescu Claudia Rodica (2000), Industria României în secolul XX – analiză geografică, Ed. Oscar Print, Bucharest. *** (2000), Strategia naţională de dezvoltare economică pe termen mediu (2000-2004), www.ccir.ro. *** (2006), Planul de dezvoltare regională 2007 – 2013. Regiunea Sud – Vest Oltenia. South-West Oltenia Development Region Agency. *** (2004), România. Planul Naţional de Dezvoltare 2004-2006, Agenţia Naţională pentru Dezvoltare Regională, Bucureşti. *** Anuarele statistice ale României, INS, Bucureşti. *** Recensămintele populaţiei şi locuinţelor, INS, Bucureşti. www.wall-street.ro, data access 11.10.2009 www.gov.ro, data access 11.03.2008.