Discussion Papers 2009.
Old and New Borderlines /Frontiers/ Margins 122-131. p.
SOME FACTORS OF DEVELOPMENT OF THE
UNDERDEVELOPED BORDER COMMUNITIES IN
VOIVODINA (SERBIA)
IMRE NAGY – ROMELIĆ JOVAN
Introduction
The regional policy of the European Union strives, in principle, to direct its activi-
ties onto the elimination of differences in development between the Member States
and regions in Europe. Having in mind financial solidarity, it directs the contribu-
tions of the Member States into the least prosperous regions in order to provide
support aimed at the elimination of economic and social differences between re-
gions and the approximation of GDPs per capita in regions that are lagging behind
the European Union average.
A significant item within this policy is the assistance provided to the border re-
gions within the EU, as well as on the periphery of the EU, which means that bor-
der regions of the EU neighbouring countries also enter the circle of regions eligi-
ble for funding. This financing is justified with the fact that border regions are of-
ten in a poor economic position, distanced from economic centres, with poor infra-
structure, deprived in the economic sense, and also that national borders are the
obstacle for balanced and integrated development of Europe (via language barriers,
legal and cultural differences). That is why the realisation of economic and social
cohesion, the balanced and sustainable development of the territory of Europe as
well as territorial integration with the neighbouring countries is indisputable.
Underdeveloped and insufficiently developed municipalities
in Voivodina/Serbia
According to the criteria of economic development, underdeveloped municipalities
in the Autonomous Province of Voivodina in 2009 are: Bač and Odžaci toward
Croatia, and Plandište and Bela Crkva toward Romania. According to the criteria
and measured by indicators, insufficiently developed municipalities in border areas
of the Province in 2009 are: towards the Croatian border – Šid, towards the Hun-
garian and Romanian border – Novi Kneževac, towards Romania – Nova Crnja,
Žitište, Sečanj and Alibunar.

Nagy, Imre - Romelic Jovan :
Some Factors of Development of the Underdeveloped Border Communities in Voivodina ( Serbia ).
In:Old and New Borderlines /Frontiers/ Margins. Pécs: Centre for Regional Studies, 2009. 122-131. p. Discussion Papers, Special

124
IMRE NAGY – ROMELIĆ JOVAN
INTERREG IIIA (CARDS, PHARE) experiences in cross-border
cooperation, with special regard to underdeveloped border villages
of the Voivodina region
In the 2004–2006 period, in the framework of the EU-supported neighbourhood
programmes, the underdeveloped villages in the Hungarian-Serbian and the Hun-
garian-Romanian border regions were eligible for support. With regards to the fact
that the whole territory of Voivodina was eligible in the framework of the Hun-
gary–Serbia Neighbourhood Programme as it was the only administrative territorial
unit between the local (municipality) and national level, all backwards regions
were eligible for this support. The eligible areas of the Neighbourhood Programme
of Romania with Serbia (-Montenegro) were communities (opština) of the follow-
ing districts in Voivodina and Central Serbia: Severno-Banatski (Northern Banat),
Srednje-Banatski (Central Banat), Južno-Banatski (South Banat), Braničevski and
Borski.
Neighbourhood Programme Hungary-Serbia (Montenegro) 2004–2006
The comparison of the two Calls of the Neighbourhood Programme (February
2005, August 2006) indicates in general that the circle of potential and actual ap-
plicants did not change significantly for the 2nd Call. A higher number of selected
proposals (almost one-third of the supported projects) were joint ones showing that
the level of co-operation between the two sides was increasing. Unfortunately there
were only two underdeveloped borders villages that were awarded support in the
two turns of the tender: Novi Kneževac and Odžaci (2–3 projects).
Neighbourhood Programme Romania-Serbia 2004–2006 – Examples for tourism
co-operations in the symmetric border region of Romania and Serbia
Cooperation in the field of tourism, the organised development of which started
in the framework of the Danube–Cris–Maros–Tisa Euroregion, has substantially
expanded both in content and in space since 2004.
A tourism project covering the whole of the Banat region was launched, titled
“The development of cultural tourism in the Banat – a cross-border challenge”. The
almost one-year project, whose objective was the management and tourism utili-
sation of the cultural heritage in the historical Banat region, was financed by the
European Union. Bilateral participants were, in the framework of the Romania–
Serbia Neighbourhood Programme, the Intercultural Institute of Timişoara, the
CulTours and the Banat.eu associations from Romania, from the Serb side the Civil
Parlament of Vršac and the European Movement from Zrenjanin (ERIC). A similar
cooperation was established between the twin municipalities of Lugoj (Romania)

Nagy, Imre - Romelic Jovan :
Some Factors of Development of the Underdeveloped Border Communities in Voivodina ( Serbia ).
In:Old and New Borderlines /Frontiers/ Margins. Pécs: Centre for Regional Studies, 2009. 122-131. p. Discussion Papers, Special
SOME FACTORS OF DEVELOPMENT OF THE UNDERDEVELOPED BORDER…
125
and Vršac, in the framework of which the objective to utilise the local and regional
tourism potential was set. The concrete goal of the cooperation is the issuing of
multi-lingual tourism publications, the creation of a tourism website, the placement
of tourism information signs directing the visitors to the tourism attractions, but an
essential part of the cooperation is the collaboration of the representatives of the
offices as well.
In the project called Banat–22, the partner of the Timişoara institute is the city
management of Pančevo (Serbia), its financing background is provided by the
European Union, in the framework of the Phare CBC 2005 Romania-Serbia
Neighbourhood Programme. The project has identified a total of 22 tourism objects
and events in the Romanian and the Serbian Banat area, and features them as the
distinctive units of the tourism sector of the Banat region. The objective of the
project is to increase the main economic indices of the tourism industry of the Ba-
nat region by 5% (ERIC).
The “Support of rural tourism in the poorly developed border regions of Ro-
mania and Serbia” is the title of the project in the framework of which a tourism
development centre is established in the Traian Vuia micro-region in Timiş county.
The project was launched by two municipalities, Dumbrava in Timiş county and
Totovo Selo in Voivodina, in cooperation with the municipalities around Făget in
Romania, the development association of the Traian Vuia micro-region, the Padis
Society in Făget, the tourism association of Kanjiža (Serbia) and the Iringó Envi-
ronmental Association. The joint meeting was an occasion for the introduction of
the analysis of the tourism potential and the tourism development and cross-border
cooperation strategy of the Traian Vuia micro-region.
A broad cooperation has been created among the physicians of the baths of
Băile Herculane (Romania) and the Rusanda medicinal spa in Melenci (Serbia).
Also, the development of bilateral student and cultural tourism is planned in the
framework of the further co-operations.
Future support possibilities of the underdeveloped border villages
National Funds incentives for underdeveloped municipalities
The funding of regional development and support system for underdeveloped
municipalities in the present period is conducted by means of direct or indirect
incentives realised by ministries and national funds. Since 2000, the most signifi-
cant direct measures of government incentives have been realised through funds
provided by the following institutions:
  Fund for the Development of the Republic of Serbia,
  Specialised Budget Funds,
  The Development Fund of the Autonomous Province of Vojvodina,
  Guarantee Fund,
  National Employment Bureau,

Nagy, Imre - Romelic Jovan :
Some Factors of Development of the Underdeveloped Border Communities in Voivodina ( Serbia ).
In:Old and New Borderlines /Frontiers/ Margins. Pécs: Centre for Regional Studies, 2009. 122-131. p. Discussion Papers, Special

126
IMRE NAGY – ROMELIĆ JOVAN
  Republic Agency for Small and Medium-Sized Enterprises and Entrepreneur-
ship,
  Ministry of Agriculture, Forestry and Water Management,
  National Investment Plan,
  Local Funds
  Fund for the Development of the Republic of Serbia.
The Law on the Fund for the Development of the Republic of Serbia was en-
acted in 1992 with the amendments of economic, systematic and functional solu-
tions, continuing the policy of material support with the aim of achieving steady
regional development.
During the period 1994–2006, the Fund for the Development of the Republic of
Serbia was giving financial support to 6,198 programmes in the area of economic
and regional development.
The investments into underdeveloped areas doubled in 2006 compared to 2001
(2.9 million Euros was granted for 26 new programmes in 2001, and 5.2 million
Euros for 106 new programmes in 2006). However, the activities of the Fund for
the Development of the Republic of Serbia failed to accomplish one of its principal
purposes, i.e. to grant the majority of support to the underdeveloped areas com-
pared to other areas. Nonlinearity within the scope of funds utilisation is reflected
in low participation of the underdeveloped in the total funding, which totalled
13.6% in 2001, and 14.2% in 2006. The outset for funding distribution of the Fund
for the Development of the Republic of Serbia depended upon the number and
quality of submitted investment programmes.
Compared to the period up to 1990, when the Fund for the Development of the
Republic of Serbia granted 66% of the total sum for the underdeveloped munici-
palities, the period 2001–2006 reduced the funding to 20.1%. The reasons lie in the
fact that up to the 1990s the incentives were awarded to the special programmes for
underdeveloped areas (feasibility study, programmes, projects, investment and
technical documentation, staff, etc.). However, since 2001 the programme readi-
ness of the underdeveloped municipality has been imposed among the credit re-
quirements. Therefore, the underdeveloped municipalities could not submit quality
programmes due to the lack of professionals.
Fiscal politics has not valued the regional component especially with respect to
the difficulties of regional development programmes. Nowadays, there are few re-
gionally determined fiscal stimuli, whereas the process of fiscal decentralisation
was conducted slowly for the five years following democratic changes. It was in-
tensified only in 2006.
In order to fulfil the aim regarding the improvement of the circumstances for the
attraction of investments and reduction of unemployment in regionally underdevel-
oped areas, the activities should be moving in two directions. The first direction

Nagy, Imre - Romelic Jovan :
Some Factors of Development of the Underdeveloped Border Communities in Voivodina ( Serbia ).
In:Old and New Borderlines /Frontiers/ Margins. Pécs: Centre for Regional Studies, 2009. 122-131. p. Discussion Papers, Special
SOME FACTORS OF DEVELOPMENT OF THE UNDERDEVELOPED BORDER…
127
implies modification and improvement of the existing instruments, whereas the
second direction implies the introduction of new instruments in fiscal policy high-
lighting the regional component. The following fiscal stimulus packages for accel-
eration of development in underdeveloped areas are available: production tax
stimulus, employment fiscal stimulus package, profit fiscal stimulus package and
investment fiscal stimulus package.
Credit Policy for regional development purposes has been conducted mainly
through the Fund for the Development of the Republic of Serbia. It implied the
funding of small and medium-sized enterprises and activities under conditions
more favourable than the market ones, as well as the approval of micro-credits and
credits for the unemployed who start new businesses. Incentives in this sector were
highly important due to its restrictive access to bank credits.
The funds of the republic budget, local government budget and funds obtained
from the international aid would be coordinated and directed for programmes of
regional development. The funds intended for a steady regional development
should be directed towards programmes and projects in the following areas: em-
ployment incentives, industrial infrastructure development (energy, telecommuni-
cations, transport), the development of social infrastructure (health and education),
economic development (industrial zones, business parks, business incubators, in-
novative centres, information and consulting centres), environment protection and
tourism development. Moreover, this strategy anticipates support to balanced de-
velopment support for villages through the introduction of LFA (Less Favourite
Areas) criteria.
Alongside the building of regional development institutions, it is necessary to
continually direct financial support to underdeveloped areas, assuming favourable
conditions. Apart from the support to the Fund for the Development of the Repub-
lic of Serbia, the support is necessary for the institutions indirectly supporting re-
gional development, primarily the National Employment Bureau, the Guarantee
Fund and the Agency for Development of Small and Medium-Sized Enterprises
and Entrepreneurship.
Financial and technical support is necessary in the preparation of regional de-
velopment plans as well as in building business incubators in cooperation with
local governments.
International funding would be directed largely to underdeveloped areas in the
following period. The highest importance would be assigned to the utilisation of
donations for the approval of micro-credits, through banks and non-commercial
institutions, for enterprises in underdeveloped areas.
Considering the fact that the countries in Central and Eastern Europe have
achieved a low realisation of the total support of the European Union, it is neces-
sary to enlarge institutional capacities of the ministries in charge and regional de-
velopment agencies for the utilisation of IPA Funds. Thus, the Republic of Serbia

Nagy, Imre - Romelic Jovan :
Some Factors of Development of the Underdeveloped Border Communities in Voivodina ( Serbia ).
In:Old and New Borderlines /Frontiers/ Margins. Pécs: Centre for Regional Studies, 2009. 122-131. p. Discussion Papers, Special

128
IMRE NAGY – ROMELIĆ JOVAN
would have sufficient absorption capacity for the utilisation of the regional compo-
nent within IPA Funds when it acquires a candidate country status.
EU support schemes
The catching up of the underdeveloped border regions in the future and the rela-
tionship building with the border regions of the neighbour states are supported
recently by the IPA Funds (2007–2013). This means that, in addition to the already
mentioned Hungary–Romania and Hungary–Serbia neighbourhood programme a
new border area is eligible for support: the border region of Serbia and Croatia.
Croatia–Serbia IPA support framework
The possibility of relationships building and cooperation of the two border regions
is of outstanding importance, as there were serious conflicts in this region whose
negative consequences can be considerably lessened by the support of this
cooperation. The focus – first priority – of the support is on Sustainable Socio-
Economic Development, whose tasks are as follows:
  to promote business cooperation, increase cross-border trade, develop labour
market mobility, cross-border RDI and joint economic planning;
  to stimulate tourism development based on the cross-border regional identity
and the natural and cultural assets of the cross-border region;
  to protect and safeguard the natural assets of the cross-border region by tak-
ing joint actions and by increasing public awareness;
  to promote good neighbourly relations across the border between local com-
munities.
The measure within the priority (measure 1.2.) is Environmental protection,
which will support awareness raising activities on environmental issues and joint
actions to ensure that sites of high environmental and landscape value are managed
(Fruška Gora, Danube river area, Bosut river area), so that they can sustain the
pressures of tourism development without losing their value. In addition, the meas-
ure will support the development of more effective systems and approaches to
emergency preparedness in relation to flood prevention and control; cross-border
pollution, food safety and health issues. The measure will also support the devel-
opment of joint waste management and minimisation strategies (Figure 2).
The role of the “People to People” measure of this priority is indisputable, as it
will encourage contacts, communication and cooperation between local communi-
ties and local community organisations/agencies within the cross-border region,
particularly in support, local democracy and the development of civil society.

Nagy, Imre - Romelic Jovan :
Some Factors of Development of the Underdeveloped Border Communities in Voivodina ( Serbia ).
In:Old and New Borderlines /Frontiers/ Margins. Pécs: Centre for Regional Studies, 2009. 122-131. p. Discussion Papers, Special

130
IMRE NAGY – ROMELIĆ JOVAN
Hungary–Serbia IPA support framework
This programme, whose strategic goal is the creation of a harmonic and cooper-
ating region with a sustainable and safe environment concentrates on priorities and
offers support for the eligible underdeveloped villages:
  Infrastructure and Environment, strengthening physical connections and tak-
ing common responsibility on environment;
  Economy, education and culture: stimulating a synergic economy, tourism
and R&D and developing education and culture for a common mind.
It means that the main objectives for the period of 2007–2013 in this border re-
gion are the establishment of appropriate transport infrastructure for crossing the
border and for reducing the isolation of border settlements, co-operation between
SMEs which provides added value and enables the transfer of individual and or-
ganisational knowledge and experience which can be fruitful even if the partners
are located in different countries. Joint products, learning from each other, infor-
mation transfer, joint marketing etc. should be the main elements of a more coop-
erative economy in the symmetrical border region of Hungary and Serbia.
Tourism attractions and tourism development possibilities in border region
villages, in the enhancement of the tourism attraction of the underdeveloped vil-
lages in the border regions, both internal and external factors can play a part. These
potential factors can only be created by a long-term economic development.
Of the villages mentioned above, the communities of Odžaci and Bač are lo-
cated in the neighbourhood of the protected border zone of the Serbian Upper Da-
nube Area bordering Croatia, while the communes of Nova Crnja, Sečanj,
Plandište and Bela Crkva are situated along the border of Serbia to Romania.
Tourism can play a part in their development and improvement if the borders are
made more permeable and, in addition to the possibilities offered by transit tour-
ism, local tourism resources are appreciated too.
With regards to the external factors, the following advantages can be utilised in
the tourism sector of the villages neighbour to Croatia, a country in the process of
EU accession talks: the filtering down of the effects of the new tourism activities
pursued in the villages of the nearby Croatian counties (Vukovarsko-Sremska žu-
panija, Osiječko-Baranjska županija), the use of the comparative advantages pre-
sent in the tourism sector of the counties in the border region, and the conscious
utilisation of the cross-border cooperations.
The Croatian Vukovarsko-sremska županija and the Romanian Caraş-Severin
county (both being in the respective border regions) have initiated cooperation with
the Voivodina government, which includes the development of the tourism sector
as well.