Discussion Papers 2010. No. 81.
Territorial Cohesion in the Carpathian Basin: Trends and Tasks
CENTRE FOR REGIONAL STUDIES
OF HUNGARIAN ACADEMY OF SCIENCES
DISCUSSION PAPERS
No. 81
Territorial cohesion in the Carpathian
basin: trends and tasks
by
Gyula HORVÁTH
Series editor
Gábor LUX
Pécs
2010
Discussion Papers 2010. No. 81.
Territorial Cohesion in the Carpathian Basin: Trends and Tasks
ISSN 0238–2008
ISBN 978 963 9899 34 6
© Gyula Horváth
© Centre for Regional Studies of the Hungarian Academy of Sciences
2010 by Centre for Regional Studies of the Hungarian Academy of Sciences.
Technical editor: Ilona Csapó.
Printed in Hungary by Sümegi Nyomdaipari, Kereskedelmi és Szolgáltató Ltd., Pécs.
Discussion Papers 2010. No. 81.
Territorial Cohesion in the Carpathian Basin: Trends and Tasks
CONTENTS
1 Introduction .................................................................................................................. 5
2 Regions with uneven development............................................................................... 6
2.1 The roots of territorial differences........................................................................ 6
2.2 The degree of developmental disparities .............................................................. 8
2.3 Regional situation report .................................................................................... 12
2.4 Declining areas ................................................................................................... 18
2.5 Successful regions .............................................................................................. 19
2.6 A weak urban system.......................................................................................... 21
2.7 Weak R&D capacities ........................................................................................ 23
3 New tendencies in regional development................................................................... 24
3.1 EU–compatible territorial policy ........................................................................ 24
3.2 Cross-border territorial cooperation ................................................................... 27
3.3 Development plans for the period between 2007–2013 ..................................... 29
4 Tasks for strengthening territorial cohesion ............................................................... 31
References........................................................................................................................ 36
Discussion Papers 2010. No. 81.
Territorial Cohesion in the Carpathian Basin: Trends and Tasks
List of figures
Figure 1 GDP per capita in the regions of the Carpathian Basin, 2006........................ 10
Figure 2 GDP per capita and structure of employment by economic sector in
the regions of the Carpathian Basin, 2007 .................................................... 12
Figure 3 Problem regions in the Carpathian Basin....................................................... 19
Figure 4 Towns with a population over 50 thousand in the Carpathian Basin ............. 22
List of tables
Table 1
Major data of the regions of the Carpathian Basin, 2006............................... 11
Table 2
EU support for operational programmes, 2007–2013 .................................... 30
Horváth, Gyula : Territorial Cohesion in the Carpathian Basin: Trends and Tasks.
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Discussion Papers, No. 81.
1 Introduction
The political changes and economic reforms of the 1990s have produced ambigu-
ous results in the development of natural regions, economic spaces and
administrative units of the Carpathian Basin.1 The gradual and problematic transi-
tion to Imarket economy has led to profound spatial differentiation in every coun-
try. The collapse of the former economic structure and the building of the new
economy have affected the different areas in various ways, the territorial differ-
ences have started to grow, and the benefits of the regime change do not show a
spatially even distribution either.
Among factors producing a beneficial effect on economic restructuring, an
important role is played by the European integration relationships in countries
recently joining the European Union. As a basic condition of accession, the new
member states were to be prepared for the implementation of an efficient regional
policy, set objectives and apply tools in the implementation of their economic
policy aimed at the decrease of spatial differences, establish new institutions, and
create the possibility of cross-border development of regional cohesion. A long-
term result of EU membership may be the reconstruction of the former integration
relationships in the Carpathian Basin developed through centuries. Due to the
geopolitical situation, and the varying degree of integration maturity, achieving
the desirable outcome provides tasks for politicians, researchers and economic
professionals alike for the decades to come.
The transformation of the economy has produced particularly negative effects
in most Hungarian communities beyond the borders. Beneficiaries of the market
economy have emerged in large cities and settlements with a particularly favour-
able geopolitical position. This former group includes several successful border
settlements, which initially exploited the informal, and later on cooperation-based
economy and labour market demand. The majority of ethnic Hungarians live in
rural areas, while well-paid jobs in tertiary branches, financial services, and
export-based enterprises have been created in cities. Following the collapse of
large-scale industry, the under-qualified rural population formerly commuting to
towns was deprived of a steady income.
Nationality factors have played a limited role in the spatial diffusion of
development. State subsidy policy can of course influence the development of
individual areas. State influence may have positive and restrictive aspects. In sev-
eral Western European countries, special advantages were granted to encourage
the economic closing up of under-developed areas with an ethnic minority
1 The Carpathian or Pannonian Basin is a large basin in Central Europe. The basin covers all of
Hungary and Slovakia, as well as parts of Serbia, Croatia, Slovenia, Austria and Ukraine. It forms
a topographically discrete unit set in the European landscape, surrounded by imposing geographic
boundaries.
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population, and additional resources were provided to support culture and educa-
tion. In the meantime, ethnic areas in Eastern Europe have been neglected for a
long period and negative discrimination still seems to haunt economic and re-
gional development policies. It is a fact that modern regional development policy
– including the structural and cohesion policies of the European Union – lays the
emphasis on the spatially homogenous distribution of economic advantages. This
implies an equal distribution of the positive effects of economic growth among all
ethnic groups in the area.
The present study provides arguments to support the creation of the Carpathian
Basin trans-national macro-region, while giving an overview of the major phases
of regional transformation and the experiences of initial programmes underlying
the basis for long-term cohesion tasks. In order to improve the income position of
the large Hungarian minority in the Carpathian Basin living outside Hungarian
borders, the successful implementation of an overall regional development strat-
egy is necessary. A basic condition of successful development is the acquisition
and utilisation of competences facilitating competitiveness in the framework of
equal opportunity.
This study does not deal with the regional elements of Hungary, as these ques-
tions have been discussed in several issues of the Discussion Papers series (Barta,
2006; Gál – Rácz, 2008; Hardi, 2008; Illés, 2008; Rechnitzer, 2000; Rechitzer –
Smahó, 2006) or in other publications (Barta – G. Fekete – Kukorelli Szörényiné
– Timár, 2005; Horváth, 2008; Territorial Reviews: Hungary, 2001).
2 Regions with uneven development
2.1 The roots of territorial differences
In the twentieth century development of the former planned economies, despite
being members of the same alliance and rooted in the same ideology for four dec-
ades, apart from a few outward similarities arising from the political system, it
was basically the differences that had played a dominant role. In the course of
history, these countries and areas which united in the beginning of the 20th cen-
tury to form the Central European nation-states, were previously bound to differ-
ent geopolitical fields. Being member countries of the same empire, Hungary and
the Czechoslovakia, once integrated in the Central European macro-region, were
able to connect to the mainstream of European industrial transformation. Roma-
nia, formed by the unification of two principalities and counting a population of 5
million at the end of the 19th century, just embarked on the road to capitalist econ-
omy: the economic census of 1886 listed only 150 companies which employed
more than 25 workers (Berend – Ránki, 1982).
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After World War I, significant changes took place in the Central and Eastern
European economic and political area. The primary task of national governments
became the organisation of the internal administrative-political, and later on infra-
structural and economic cohesion of those parts of the country that formerly be-
longed to different economic spaces.
The most striking territorial disparities were witnessed by the new nation-state
in Romania. In Transylvania, the level of urbanisation (density of settlement net-
work) and industrialisation was considerably higher than in the regions of the
Romanian Old Kingdom. The Transylvanian region contained 30 percent of the
new Romania’s population, while it had a 40–70 percent share of industrial
capacities in different branches. Significant spatial disparities characterised
Czechoslovakia, which manifested themselves not only in the income producing
capacity of individual regions, but in the varying development levels of their
infrastructural networks. In western parts of the country, the density of railroad
network was six times higher than in the east.
In the years following the World War II, agriculture provided the majority of
employment in every country, 74 percent in Romania, 51 percent in Hungary. Its
share in the industrialised Czechoslovakia reached 39 percent. In the other coun-
tries, the indices of industrialisation reached only a half or third of the Western
European average. In the beginning of the 1950s, the rate of industrial employ-
ment was 14 percent in Romania, 23 percent in Hungary and 19 percent in
Yugoslavia. The leading industrial state in the area was Czechoslovakia, where
the rate of industrial employment was 39 percent. The low number of industrial
workers (800 thousand in Romania, 700 thousand in Hungary) shows strong spa-
tial concentration (Enyedi, 1978). In most of the countries, aside from capital
cities only large towns could claim a significant number of industrial jobs. The
historical Czech and Moravian regions provided the only exceptions, where large-
scale industrial centres of the traditionally developed textile industry, coal mining
and metallurgy were counterbalanced by a network of smaller hubs.
The forced industrialisation characterising the socialist planned economy pro-
duced conflicting results in the 1950s and 1960s. The politics of the era formally
supported the growth and spatial diffusion of industrial employment, strongly
influenced the settlement structure, enhanced the speed of urbanisation, through
its socio-political and cultural measures raised to a certain extent the civilisation
standard of rural areas. We can observe an apparent change in the indices
representing quantitative growth. Between 1950 and 1970, the rate of urban
population increased from 23 to 41percent in Romania, and from 37 to 48 percent
in Hungary. By 1970, the number of industrial workers reached 2 million in
Romania and 1.7 million in Hungary. The structural changes of the economy led
to decreasing regional disparities, while the relative spatial cohesion meant an
even distribution of the basically weak industrial outputs. GNP per capita rates
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were approximately the same in the three observed countries in 1975, while spa-
tial discrepancies were by far not equal. GNP values in most spatial administra-
tive units were lagging behind the average GNP of CMEA countries. In Romania,
32 out of the 40, and in Hungary, 12 out of the 20 counties remained below the
Eastern European average. The spatial structure of Czechoslovakia was the most
homogenous even at that period, with just 1 out of the 12 districts (East Slovakia)
showing weaker performance than the Eastern European average (Nemes Nagy,
1987).
The centrally controlled economy appeared in strongly differentiated forms in
the region, and the countries showed significant heterogeneity in the organisation
of their economies, economic policy instruments and orientations of European
relationships. In Hungary, in addition to the instruments of national economic
planning, elements of normative regulation also appeared in the control of re-
gional development (Enyedi, 1989). The Hungarian government laid down the
long–term objectives of spatial and settlement policy in a decree in 1971, and the
parliament accepted a spatial development act in 1985. Romania, on the other
hand, continued to enforce its low technology level, Stalinist industrial policy.
The more developed areas and the 17 provincial capitals were affected by the
concentrated location of industry until the end of the 1960s, while the
industrialisation of rural areas (e.g. Szekler Land) sped up in the 1970s (Benedek,
2006). Forced industrialisation was coupled with a fatal settlement policy in
Romania. Strict anti-rural spatial planning norms were introduced already in the
beginning of the Ceauescu era, and the excessive urbanisation campaign had
peaked in the final years of the 1980s with the launch of the rural rationalisation
programme. The objective of the Romanian Communist Party’s programme was
to reduce by half the number of villages, and in the meantime, the creation of 558
agro-industrial towns and regional organising centres was planned in order to
control the agricultural sector (Hunya – Réti – R. Süle – Tóth, 1990).
2.2 The degree of developmental disparities
The territory of the Carpathian Basin, as measured by European standards, is
characterised by a general backwardness. Without counting the developed Slove-
nia, the per unit indicators of performance of the countries reach only a half or
third of the EU average. Among the regions, only Bratislava and Budapest sur-
pass the average GDP per capita of the European Union. The reduction of state
subsidies, the changes in the geographic orientation of foreign relationships, the
disintegration of large companies, the crisis of heavy industry and agriculture
resulting from the collapse of the planned economies have affected the core and
peripheral regions in diverse ways. Even though the process of restructuring had a
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negative impact on traditional development poles, former metropolitan areas with
a more complex economy and socio-economic functions are less severely affected
by the transformation process than monocultural industrial regions and rural ar-
eas. The conquest of marketisation and the development of modern economy can
be observed in Transylvanian large cities, Slovakian medium-sized cities, and in
the core region and tourism centres of Croatia. The number of private enterprises
and the share of FDI significantly surpass the national average in these areas. The
tertiary sector is on the road to become the most dominant sector of the economy,
due largely to the expanding business and financial services. The most dynami-
cally growing regions are producers of major innovations and new products and
members of international economic co-operations as well.
Among the countries of the area, Romania’s case illustrates the failure and
ineffectiveness of the former state spatial development policy. The main conclu-
sion regarding the present state of economic and social structures is that after the
birth of the independent Romania, economic policy based on various ideologies
had only a modest impact on the country’s traditional spatial structure, and while
regional disparities decreased in quantity, the territorial pattern of developed and
backward regions remained largely unchanged in the 20th century despite the
efforts of forced industrialisation demanding great sacrifices. On the historical
territory of Romania, Bucharest and some large cities (Craiova, Piteti and
ContanĠa) with their surrounding areas show structural characteristics which
enable them to embark on the road to modernisation. Transylvania, which be-
longed to a different economic system 90 years ago, was more or less able to con-
serve its advantages inherent in its settlement structure (dense network of small
towns) and qualified human resources. Out of the three administrative regions of
Transylvania, two had GDP per capita rates above the national average. The
Western region (Hunedoara, Arad, Timi, Cara-Severin counties) is the second
most developed after Bucharest, where GDP per capita exceeds by 14 percent the
national average, while the third in the row is the Central Region (Mure, Har-
ghita, Covasna, Braov, Alba and Sibiu counties), where regional income rates are
13 percent higher than the national average. The northern areas of Transylvania,
the North West region comprised of Bihor, Satu Mare, Sălaj, BistriĠa-Năsăud,
Maramure and Cluj counties, ranks the sixth among the eight Romanian regions,
its economic performance is 90 percent of the national average. According to the
global development index, 4 out of the 16 Transylvanian counties can be called
highly developed, 3 developed, and 6 middle developed, and there are only 3
underdeveloped counties in the three regions of Transylvania.
The same degree of spatial disparities characterises the rest of countries in the
Carpathian Basin. Those areas where Hungarian minorities are dominant reveal
large developmental disparities: there are relatively developed areas in a more
favourable position than the national average (e.g. areas of Žitný Ostrov near
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Bratislava or certain parts of Vojvodina) and there are several underdeveloped
peripheral regions (e.g. the Eastern Slovakian counties, Zakarpattia oblast, and
Croatian Slavonia). In the Slovakian counties of Trnava and Košice with large
Hungarian populations, GDP per capita almost reaches the national average;
in Banská Bystrica and Nitra, it reaches only 75 percent. The income levels of the
regions are shown in Figure 1. Table 1 depicts the disparities of demographic
potential, labour force and income positions as compared to EU standards. Both
data sets show NUTS2 units (the EU’s statistical development regions) in the
countries. For the sake of comparison, Vienna and Burgenland are present on
Figure 1. Vienna is one of the most developed areas of the EU, its income indica-
tor was 178 percent of the EU average in 2005, and Burgenland, the least devel-
oped territory of Austria, still shows a significantly higher performance (89 per-
cent) than most regions of the Carpathian Basin. A sign of the economic
vulnerability of the Carpathian economy is the persistence of traditional features
in the employment structure. Predominance of the agrarian sector and weak pres-
ence of the tertiary sector characterise the Eastern regions (Figure 2).
Figure 1
GDP per capita in the regions of the Carpathian Basin, 2006
* Author’s estimates.
Source: European Commission, Eurostat, 2009.
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Horváth, Gyula : Territorial Cohesion in the Carpathian Basin: Trends and Tasks.
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Figure 2
GDP per capita and structure of employment by economic sector in the regions
of the Carpathian Basin, 2007
Source: Authors calculations based on national statistical yearbooks.
2.3 Regional situation report
The different political-economic environment of the regions of the Carpathian
Basin led to the development of an economy functioning in the form of highly
segmented, largely independent submarkets (Balcsók – Koncz, 2008b).
Market fragmentation in our days is further strengthened by the fact that
different countries are at different phases in the Euro-Atlantic integration process,
therefore the free movement of manpower may be inhibited by factors such as the
variety of border crossings and the temporary legal restrictions on employment
opportunities. With the advancement of the integration process, the system of
relations of the different market segments will significantly improve; however,
the problems in Zakarpattia oblast and Autonomous Province of Vojvodina will
likely persist in the long run, since Serbia and Ukraine will not become members
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of the EU in the foreseeable future and in these cases the restrictive external bor-
der policies will be maintained.
Nonetheless, development differences may not only serve as a factor inhibiting
cooperation; on the contrary, they may well improve its chances. The political-
economic changes of the 1990s brought forth totally new conditions of operation
with the openness of borders and the possibility of cooperation between border
areas. Through their labour demand and export activity, economically more ad-
vanced areas were and will still be able to stimulate the labour market of
neighbouring regions. This, of course, will not happen if the countries’ peripheral
and backward regions encounter each another, for there will be a total lack of the
necessary development dynamism (the labour market indices of South Transdanu-
bia and East Croatia provide a good example).
All the regions of the Carpathian Basin witnessed an improvement regarding
their labour market before the global financial crisis, with rising employment and
declining unemployment. Available data indicated that this phenomenon might
become a permanent tendency if major shocks did not occur; however, the global
economic recession has put this development into question. Since we are talking
about sensitive labour markets in highly vulnerable economies, the inversion of
the positive processes may occur with the speed of light, and the most up-to-date
forecasts seem to hint at this possibility.
The prolongation of the recession poses a great threat to the further integration
of the labour market, since several regions will be forced to enter into competition
instead of cooperating, even within their national territories. Rising market ten-
sions hardly create favourable conditions for employment in the neighbouring
countries, not to mention the general lack of foreign language skills. Potentially
accessible jobs on the other side of the border provide no benefit if the available
professional knowledge cannot be utilised due to difficulties in communication.
Already, there are examples of this unfortunate situation, since it was partially
due to this reason that Southern Slovakian industrial parks and other prospering
companies were unable to employ Hungarian workforce (the knowledge of Slova-
kian and/or English is a basic requirement).
The exchange of employees between regions of the Carpathian Basin can be
further hindered by emerging political conflicts stemming from the common
historical heritage, but the western orientation among the circle of mobile
employees is even more characteristic. In most cases, the neighbouring region is
not the final migration destination, it serves only as a stepping-stone towards
domestic labour markets with higher wages or more likely towards more devel-
oped countries of the EU (this tendency is clearly visible in the case of foreign
citizens employed in Hungary). The willingness to migrate does not decrease
among employees of the Central European countries in question; however, after
returning voluntarily or out of necessity to their home countries, chances are less
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that Western workers reappear on the given submarket due to the economic reces-
sion.
The intensity and direction of workforce migration is not by any means con-
stant, and radical changes might occur as a result of changing macro-economic
conditions. The Hungarian–Romanian border illustrates this phenomenon, since
in the 1990s, Hungary was the only recipient of occasional mass migration flows,
while in our days, due to the dynamically growing Romanian economy and rising
wages, employment on the other side of the border – a formerly unthinkable
alternative – becomes a realistic possibility for Hungarian rural population living
in underdeveloped, enclosed areas (Balcsók – Koncz, 2008b).
In Slovakia, the concentration of economic activities in the Bratislava Region
does not equal that of Central Hungary, the region has a 25 percent share in the
country’s GDP. Its leading position is affirmed by the level of wages exceeding
the national average by one-third, and labour market relations characterised by
excess labour demand. The region’s economy is mainly based on industry,
particularly on the Volkswagen-centred automotive industry, but also oil refining,
organic and non-organic chemical industry production hallmarked by Slovnaft
and Istrochem. In addition to Volkswagen and Slovnaft, other large-scale employ-
ers are Železniná SpolonosĢ Cargo Slovakia (railway transportation), Sociálna
PoisĢovĖa Ústredia (social security), Orange, T-Mobile (telecommunication),
DELL (IT) and Coca-Cola.
A wide range of large industrial plants and the proximity of the capital play a
significant and positive role in the life of the West Slovakian Region. The
predominant role of Nitra – the region’s largest city – underlined by the
concentration of regional central functions, is further enhanced by the presence of
the Volkswagen Elektrické Systémy, the largest subcontractor of the mother com-
pany in Bratislava. The second largest city in the region is Trnava, where the
French PSA Peugeot Citroen set up the country’s second largest car factory half a
decade ago. In addition to the automotive sector, the electronic industry hall-
marked by the South-Korean SAMSUNG (Galanta) and the Japanese SONY
(Trnava and Nitra) are responsible for a large share of regional output. The most
important petrochemical complex in the area, The Duslo chemical works in ŠaĐa
produces nitrogenous fertilizers and rubber industry products in addition to natu-
ral gas processing. Other significant employers are Danfoss Compressors in Ni-
tra, OSRAM in Nove Zamky, Slovenské Energetické Strojárne in Levice, EU-
ROOBUV in Komarno and SEWS in Topol'any.
Central Slovakia is a region showing no above–average characteristics. The
largest share of industrial output is provided by the traditionally important
mechanical engineering, chemical, pharmaceutical and paper industries. The
country’s largest printing industrial capacity was developed in Martin. The South
Korean automotive company KIA set up its single European plant in the region
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near Žilina. The tourism potential of the region is great, but the low quality of
tourism services and the lack of marketing activity lead to the under-exploitation
of this asset. The southern part of the region (the area of Luenec and Rimavská
Sobota) has faced the most severe problems of unemployment in the country for
almost a decade.
Eastern Slovakia is the most underdeveloped region in the country. Economic
activity is essentially concentrated in Košice. The largest employers are US Steel
in Košice, Východoslovenská Energetika, TepláreĖ Košice (thermal power sta-
tion), Yazaki Wiring Technologies, BSH Drivers and Pumps (Michalovce), Gem-
tex (Kežmarok ), and Embraco and Panasonic AVC Networks (Spišská Nová
Ves). One of the most successful industrial parks of the country is located in this
region, the 300 hectare industrial park in Kechnec, a settlement with a Hungarian
population, giving home to 12 foreign companies with 2,000 employees. An
important factor of regional competitiveness is the airport of Košice registering
500 thousand passengers per year.
Transcarpathia is the region showing the weakest economic performance
among those discussed here, with a GDP per capita below 25 percent of the EU
average. However, it is in a relatively good position compared to other Ukrainian
regions. According to surveys about the investment attractiveness of Ukrainian
regions (regarding the general level of economic development, state of market
infrastructure, financial sector, state of human resources, operation of local enter-
prises and local governments) the most attractive destination after Kiev and Lviv
is Transcarpathia. Another positive sign is that according to the complex regional
development index, Transcarpathia was among the most dynamic regions of
Ukraine in the last few years. Regarding the adequate functioning of the labour
market, the situation is much less favourable; Transcarpathia performs well below
the average in terms of entrepreneurial activity. The general performance of the
economy is illustrated by the fact that industrial workers provide 16 percent of the
total employment, and over 50 percent of the GDP. The number of industrial
employees fell by 60 percent by the beginning of the 21st century. The areas of
Mukacheve and Uzhhorod show signs of depression. The role of Foreign Direct
Investment is still modest in our days. The most significant foreign investment in
the region, the Škoda and Volkswagen car-assembly factory is located near the
Hungarian border in Solomonovo.
The Romanian Northwest Region has an agrarian type economy based on the
number and proportion of agricultural workers (the agrarian sector is the major
income source for over 50 percent of the population); however, light and heavy
industrial branches also play an important role in the nationally significant re-
gional industrial centres (Cluj-Napoca, Oradea, Baia Mare and Satu Mare). Due
to its economic structure, the region’s GDP per capita remains below the Roma-
nian average, despite the fact that Cluj-Napoca and Oradea are the most dynami-
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cally developing cities of the country. These large cities offer a wide range of
business services with elements that are otherwise only characteristic of Bucha-
rest. Foreign Direct Investment amounting to 1.7 billion Euro (4.6 percent of the
total FDI in Romania) represents a minor or major share in 13 thousand compa-
nies, and is the creator of a large number of new jobs (among others in the
entrepreneurial zone in Bor, situated directly on the Romanian-Hungarian bor-
der, which is a potential destination for Hungarian workforce). This region may
be considered the main destination of Hungarian investment activity in Romania:
43 percent is concentrated in Cluj, Bihor and Satu Mare counties. The airport of
Cluj-Napoca registered 750 thousand passengers in 2008; the terminal opened in
the same year has a capacity to receive 2 million passengers.
In terms of development, the West Region has a high position in the country.
The economy benefits well from its traditionally western orientation, its historical
and gradually reviving economic-spatial structural connections and the existence
of developed and high quality cross-border transportation networks. Various
elements of the transportation system (different types of railways and public
roads, international airport in Timioara with 1 million passengers in 2008) made
it possible for this area to become a transit region for international trade between
the EU and countries outside the EU, and to provide a large scope for action for a
diversified economy. Preceded only by Bucharest, this region provides about one-
fifth of Romania’s export. On the basis of its Foreign Direct Investment stock of
2.0 billion Euro, it has the second largest value in the country.
The Centre Region, referred to as the heart of Transylvania, produces 12 per-
cent of the national GDP, and the proportion of industry and construction industry
(40 percent) is relatively high. The sufficiently advanced system of public roads
and railway infrastructure, the two airports (Târgu Mure and Sibiu) and one un-
der construction (Braov) and the diversified industry were sufficient to attract
Foreign Direct Investment of 2.6 billion Euro (7.7 percent of Romania’s). The
region already benefits from its location at the intersection of key strategic public
roads and railways (three European main routes passing through it) but the lack of
significant developments has hindered the full exploitation of this benefit. Capital
investments are concentrated in the region’s traditionally developed areas popu-
lated in the past by the Saxons. As a further sign of spatial concentration, 18 out
of the region’s 30 most prominent companies are located in Braov and Sibiu
counties.
Szekler Land2 also belongs to this region. Szekler (székely) counties are near
the Romanian average in terms of GDP per capita, Mure is 17th, Covasna 17th
2 Szekler (Székely) Land refers to the territories inhabited mainly by the Székely, a Hungarian-
speaking ethnic group from Eastern Transylvania. They live in the valleys and hills of the Eastern
Carpathian Mountains corresponding to the present-day Harghita, Covasna, and parts of Mure
counties in Romania. Originally, the name Szekler Land denoted an autonomous region within
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and Harghita 19th among 41 Romanian counties. In his PhD thesis, István Nagy
from Miercurea Ciuc determined the three counties’ location in the Romanian
economic space based on 65 indicators (by rank order calculation) and found that
Mure is 12th, Covasna 18th and Harghita 19th according to the rank order indica-
tors. Regarding temporal dynamics, Mure is in the 9th, Covasna in the 22nd, and
Harghita in the 24th position in ranking of the 42 counties of Romania (Nagy,
2009). Forty percent of Hungarian Foreign Direct Investment was directed to
Harghita and Covasna counties.
The Autonomous Province of Vojvodina is considered to be a developed terri-
tory of Serbia. Income values per capita exceed the national average, as the prov-
ince generates 30 percent of the national GDP, 33 percent of the national export
and contains 27 percent of the country’s population. The position of Vojvodina
and its developmental potential (based not only on the income situation, but eco-
nomic structure, the quality of human resources and the institutional system) is by
no means worse than that of most backward regions of the Carpathian Basin,
including some more underdeveloped regions of Hungary. Disregarding the con-
tent, the institutional administrative structure of the autonomous province bears
the closest formal resemblance to the decentralised institutional system of most
Western European regionalised states.
There are large developmental disparities inside the region. West Baka is the
most developed district of the province. The level of GDP per capita is 2.5 times
as high as the provincial average in the area of Apatin, whereas it is only one–
third the amount in the small region of Sremski Karlocki (near Novi Sad). GDP
values in surroundings of larger cities are 1.5 times or twice as high as the provin-
cial average. The value of the complex development index in North Baka and
North Banat, areas with a large Hungarian population, is twice as high as the
provincial average. Industry accounts for 33 percent of the total employment, and
agriculture for 10 percent. Vojvodina’s food industry is the largest supplier of the
Serbian market, 50–80 percent of a wide range of products are manufactured in
the province.
Transylvania. It existed as a legal entity from medieval times until the Austro–Hungarian
Compromise of 1867, when its role was replaced by the county system. Along with Transylvania,
it became part of Romania in 1920, returned to Hungary in 1940 and was again attached to
Romania in 1945. The area was an autonomous region within Romania between 1952–1968, and
today there are Székely autonomy initiatives to reach a higher level of self-governance for Szekler
Land within Romania.
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2.4 Declining areas
A considerable part of the industry established in the socialist era disappeared due
to the economic crisis that preceded systematic change and the privatisation and
restructuring process that followed. The demand for low-quality products
involving high production costs has considerably diminished in Eastern Europe
and also on domestic markets. The decrease in production capacities led to the
downsizing of the majority of the workforce. The unemployment rate increased
drastically, the income level of the population was reduced and territorial–local
conflicts multiplied. The situation is aggravated in regions where one single com-
pany was the main employer. The liquidation of the dominant company resulted
in the disappearance of a range of services for the population.
The largest group of depressed areas is constituted of the heavy industrial,
mainly mining and metallurgical regions. Mining used to employ 450,000 work-
ers in the 1970s in the Carpathian Basin, and by 2006, the number of jobs in this
branch fell by one–fourth, i.e. to 114,000 (Visions and strategies, 2008). These
areas struggle with severe structural problems: transportation, communication and
public services infrastructure are underdeveloped, agricultural areas polluted and
of low quality. Therefore, these regions have a low capacity to attract capital. In
several cases we can find ore processing plants and metallurgical centres in the
proximity of mining sites.
There is a great number of depressed areas in Eastern Slovakia and in
Transylvania (Figure 3). A large Hungarian population lives in the backward re-
gions of Southern and Eastern Slovakia. The most lagging townships contain 33
percent of Slovakia’s Hungarian population. A whole range of areas in South
Transylvania (Hunedoara, ReiĠa, OraviĠa, OĠelu Rou, Cugir and Făgăra) be-
long to the group of declining industrial areas. For instance, the number of mining
workers diminished from 45 thousand to 18 thousand in the Petrosani Basin with
a population of 160 thousand. The most vulnerable areas in North-western
Transylvania are those towns where the local economy is based on non-ferrous
ore processing, the regions of Zlatna and Copa Mică is classified as environ-
mental disaster zones. Only two settlements are categorised as depressed areas in
Szekler Land: Bălan in Harghita county and Baraolt in Covasna county. In both
towns, the difficulties of transformation are linked to the decline of mining indus-
try. The population of the depressed areas of Transylvania – as a result of the
inward migration occurring simultaneously with forced industrialisation – is
predominantly Romanian.
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Figure 3
Problem regions in the Carpathian Basin
Source: Based on Benedek, 2004, 2008; Lelkes, 2008.
2.5 Successful regions
In the market economy, companies, settlements and regions compete with each
other to obtain development resources, institutions, infrastructure and human re-
sources in order to create an increasingly favourable entrepreneurial environment
which facilitates social and economic revival of their area. We can find successful
areas in every region of the Carpathian Basin.
According to a survey of the Entrepreneur Association of Slovakia (2004),
among Slovakian–Hungarian border districts, the district of Dunajská Streda of-
fers the most favourable entrepreneurial environment. The district predominantly
inhabited by ethnic Hungarian population (over 83 percent), occupies the promi-
nent 13th position in the list of the country’s 79 districts. The district outranks the
country’s several other outstanding territories (Košice and Banská Bystrica
among others).
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The once agrarian district has undergone an exemplary process of renewal in
the last two decades, becoming an industrial, commercial, logistic and touristic
center and an active region at the growth axis between Vienna, Bratislava and
GyĘr (Gajdoš, 2004). The district’s centre (populated by 25,000 inhabitants, and
50,000 with the surrounding agglomeration) exploited its developmental
opportunities to an outstanding degree at the time of the change of the regime.
The development of Dunajská Streda has been constant for over half a century,
transforming the town into one of the most attractive social and economic centres
of South Slovakia. Two other settlements with city status, Šamorín (12,500
inhabitants) and VeĐký Meder (9,000 inhabitants) which were successful in their
transition to market economy, contribute to the outstanding competitive position
of the district.
The public opinion on Szekler Land associates the region with an extreme re-
spect for tradition and conservatism constituting an insurmountable obstacle to
modernisation. Nevertheless, the last hundred years witnessed the birth of several
remarkable innovative initiatives and attempts which deserved attention not only
in Transylvania, but also in Hungary and Europe.
The need for structural renewal and definite intervention was articulated at the
Székely Congress of 1902 and during the subsequent attempts of economic
development to fight against the general state of backwardness and peripheral
belated development prevailing through the centuries. No such comprehensive
development strategies were articulated in other areas of the country in the begin-
ning of the last century. The Székely Congress – which integrated the develop-
ment endeavours of territorial stakeholders into a unified system in an exemplary
manner – is duly considered to be an important element of the tradition of
Hungarian spatial development. The storms of history eliminated the possibility
of the propositions being followed by actual forms of governmental and local
action, yet regional development experts may find the minutes of the congress an
important reading of interesting and thought provoking methodology even in our
days (Székely Kongresszus… 2001).
Among recent innovations, the Miercurea Ciuc and Târgu-Mure faculties of
Sapientia Hungarian University in Transylvania are worth noting. Intellectuals of
Szekler Land recognised that the use of knowledge acquired in the region was
more profitable in the development of local economies. The Szekler university
was not established – and we are right to investigate for what reasons – yet higher
education endeavours originate from the modern idea that development of the
knowledge–based society will be inevitable in the future. Intellectual achieve-
ments are perceived in the economy, too. Modern industrial clusters (printing and
confection industry clusters) are emerging at several points of the region, regional
development strategies with scientific pretensions are being formulated, social
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forums of community planning are being set up and the urban planning concept of
Odorheiu Secuiesc meets European standards.
Hopefully these factors of the Szekler paradigm shift – that may heavily rely
on past experiences in history − will continue to gain strength, transforming the
region of Szekler Land into a key driver of modernisation of the Romanian eco-
nomic space. All this will not be fed by nostalgic sentiments, but forced by the
demand to create European-level living standards. The optimal harmonisation of
this triple linkage – which serves as an important driving force in several Euro-
pean regions – requires special managing structures. This summarises the basic
essence of the concept of autonomy.
2.6 A weak urban system
The Carpathian Basin belongs to the less urbanised territories of Europe. There
are 59 large and medium-sized towns with a population above 50 thousand in the
Carpathian Basin, out of which 21 belong to Hungary, 17 to Romania, 11 to
Slovakia, 3 to Croatia, and 2 to Ukraine. Population in the capitals of NUTS2
regions exceeds 50 thousand, even 100 thousand in almost all cases. Central
Slovakia, despite its relatively dense urban system, lacks a dominant large city
which could serve as a leading development pole (Figure 4).
The four NUTS2 regions of Slovakia have 138 towns which concentrate over
56 percent of the population. Only Bratislava (425 thousand inhabitants) and
Košice (235 thousand inhabitants) are counted among large cities according to
European standards. There are only 9 cities with a population ranging from 50 to
100 thousand. The level of urbanisation in Southern Slovakia is below the na-
tional average.
Transcarpathia has only 11 settlements with city status. The characteristic fea-
ture of its settlement system is that among the mid–level territorial units of
Ukraine, this region has the lowest proportion of urban inhabitants (37.0 percent
in contrast with the national average of 67.5 percent).
Thanks to historical traditions, the Central Region has the densest urban
network (57 cities) among Romanian regions; a well–structured urban system was
developed in the Saxon populated areas several hundred years ago. The
urbanisation level in the 6 counties of the North-west Region is 53.1 percent.
Apart from Cluj-Napoca and Oradea, the region has only two cities with a
population exceeding 100 thousand, Baia Mare (141 thousand) and Satu Mare
(115 thousand). A further 9 cities have a population above 20,000, and 29
settlements with city status have smaller populations. The spatial distribution of
small cities is quite uneven, 13 are located in Maramure, 10 in Bihor, while the
rest of the counties have only 4–6 towns. The proportion of urban population in
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the West Region is higher than the national average (64 percent), whereas rural
areas are extremely sparsely populated.
Figure 4
Towns with a population over 50 thousand in the Carpathian Basin
Source: Balcsók – Koncz, 2008.
In terms of size, the spatial distribution of the 52 cities of AP of Vojvodina is
quite even, the largest city (Novi Sad – 191 thousand) is followed by 4 medium-
sized towns on the provincial scale (Subotica – 100 thousand, Zrenjanin – 80
thousand, Panevo – 77 thousand and Sombor – 51 thousand inhabitants). Despite
the strikingly large number of small cities in some areas, Vojvodina has no urban
settlements with a population below 1,000 inhabitants. The proportion of urban
population (56.7 percent) is higher in Vojvodina than in other regions of Serbia,
although it is still lagging behind the European average.
Apart from Budapest, two large cities with a population above 1.5 million
inhabitants, situated outside the borders of the Carpathian Basin exert a
significant influence on the development of the region’s urban network. Vienna is
situated at the western and Belgrade at the southern gate of the region, with the
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former being the more influential player on the basis of its position and level of
development. Two other capitals, Zagreb and Bratislava lie on the border of the
Carpathian Basin, and despite its 50 percent smaller population size, the latter is
regionally more significant in terms of geographical position and relation to
Slovakia. Dominant regional centres whose population generally exceeds 200
thousand form the second level of the urban hierarchy. These are in most cases
situated in the eastern part of the Basin, while the majority of towns with a
population between 100 and 200 thousand inhabitants are located in Hungary and
Romania.
The cities of each country fulfil altering roles and realise quite different
objectives of spatial and settlement network development according to their
region’s position in the Carpathian Basin. The whole area of Hungary and
Slovakia is situated within the Carpathian Basin, and while less urbanised parts of
Austria and Ukraine lie on its territory, South Transylvanian cities of Romania
have the deepest historical roots and this region is characterised by the densest
urban system in the country (Hardi – Hajdú – Mezei, 2009).
The spatial distribution of large and middle–sized towns is not even, although
their scarcity is obvious in mountainous regions in particular. Strong county
capitals can seldom be found in the proximity of dominant regional centres,
although when they are, their existence proves to be fairly advantageous in the
designation of potential developmental axes (such as Košice–Prešov, Uzhhorod–
Mukacheve, Timioara–Arad).
2.7 Weak R&D capacities
The change of the regime had a controversial effect on the state of scientific
research in the neighbouring countries. On one hand, political and legal
frameworks were set up guaranteeing scientific liberty, but on the other hand,
R&D capacities decreased from one-half to one-third of their former level, and
the number of R&D staff also diminished considerably. At present, only 0.2 to 0.6
per cent of the GNP in neighbouring countries is allocated to R&D purposes (the
1.6 percent rate of Slovenia is the highest in Central and Eastern Europe). These
low rates are further compounded by the presence of significant regional
disparities in each of the countries. In counties and regions with Hungarian
populated areas, the value of this index is considerably lower than the national
average (e.g. in Covasna and Harghita on the territory of Szekler Land, the
estimated R&D expenditure values fall within the statistical error ranges).
The legislation creating scientific liberty in the area of ethnic Hungarian re-
search has proved to be a dynamic force. Formerly latent scientific forces were
mobilised, and have taken institutional form. Results of the Hungarian world of
science were shortly presented in publications, scientific workshops and
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independent journals and professional forums. These remarkable results were
attributed to the ambitions of leading scientists and the young generation of
researchers. Still, the level of R&D expenditure remained quite low. Even though
it is possible to achieve results with a lower expenditure in the development of a
qualified scientific experts group and in individual scientific progress, this will
hardly generate progressive and development energies for the Hungarian
communities.
The institutionalisation of Hungarian science witnessed extensive development
at the stage of formation. Research teams and workshops were formed at several
spots of the Carpathian Basin which were organised keeping in view the national
legal systems for optimal financial resourcing. The common feature of the re-
search institutions of different size and nature is that they are primarily financed
by Hungarian funds and research programmes. The research units operate in
isolation, have short-term plans, the continuous implementation of their pro-
grammes and the income of their research staff depend almost entirely on quite
often unpredictable, arbitrary and non-transparent decisions of Hungarian founda-
tion boards of trustees. The lack of resources for basic operation and the depend-
ence on external financing hinders the conscious and long-term planning and or-
ganic development process. The need for external financial resources due to
inadequate financing does not promote cooperation among research units and the
implementation of large-scale, multi-annual research programmes and the
application of up-to-date instruments of modern science organisation. The
involuntary dependence on minimal financing of basic activities, the organisa-
tional size below the level of scale economies cannot promote international co-
operation; moreover, it inhibits the articulation of ambitious research pro-
grammes.
Effective cooperation is further hindered by the specific case that research
teams operating in public institutions beyond the borders can be supported from
Hungarian sources only to a very limited extent. Even the most efficient research
units are unable to exploit their competitive advantage for the benefit of Hungar-
ian communities.
3 New tendencies in regional development
3.1 EU–compatible territorial policy
Three factors hindered the elaboration and continuous implementation of long–
term strategies to reduce regional development problems in the Carpathian Ba-
sin’s post socialist countries in the first phase of the transition lasting until the
middle of the 1990s: the limited support of an independent regional policy at the
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government level, the underdevelopment of institutions of regional development
and the unresolved situation of territorial administration. At that time, among the
respective countries, only Hungary and Slovenia elaborated governmental re-
gional development programmes. The establishment of regional development
institutions began during the second half of the 1990s, partially due to the grave
consequences of the continuously deepening territorial crisis in the four countries
that applied for EU membership, and also due to pressure from the EU. The first
country where paradigm change took place was Hungary. The 1998 Report of the
European Commission declared that Hungary appeared to be the best prepared in
terms of regional policy.
After Hungary, Romania was the second to prepare a plan about the elabora-
tion of objectives, tools and institutions of regional development. The Green Pa-
per elaborated within the PHARE framework highlighted the problems of spatial
development, analysed the situation of the country’s spatial structure and made
suggestions about the construction of the Romanian model of spatial development
(Green Paper, 1997). The document summarised the most urgent tasks of Roma-
nian spatial development policy in nine articles ranging on a wide scale from the
establishment of basic institutions of spatial development, the introduction of
regional programming, to the organisation of the training of regional development
professionals. These proposals are quite self-evident and reasonable in developed
market economies and civil democracies with articulated institutional systems, yet
in case of the Romanian democracy based on new principles while conserving the
old structures, obstacles to realisation are considerable.
Due to pressure from the EU, spatial development policy plays an important
role among the reform initiatives of Romanian governments. The Act on spatial
development (1998) defined the role of regional development as follows: „…to
diminish existing regional disparities through promoting balanced development,
reducing the backwardness of less favoured areas due to historical, geographical,
social and political conditions, and preventing the development of new inequali-
ties” (Green Paper, p. 3.).
The Soviet type of councils in transition countries were replaced by local
governments based on the European model. Local governments became the main
stakeholders in the new distribution of power. Due to democratic euphoria and the
dislike towards former territorial administrative organisations, territorial meso
levels in Romania gained only limited functions. The elected county councils
remained, but a system of prefecture with large competencies was organised. Re-
gions were abolished in Slovakia and public authorities were established in the
districts, and public administration offices also operate in the newly formed dis-
tricts of Serbia. The four–level Soviet administration remained in Ukraine, while
in areas over the Carpathians and its districts, elected councils and presidential
delegates operate.
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The revaluation of spatial development had a binding influence on the disinte-
grated public administration, too. The territorial administration reforms in the mid
1990s led to the setting up of larger territorial units. Eight counties were created
in Slovakia and twenty in Croatia.
The objectives and the institutional system of an EU–compatible spatial
development, the preparation of planning and structural policy decisions require
larger territorial units in the new EU member states. The economic potential and
the size of the 42 Romanian, the 19 Hungarian and 8 Slovakian territorial–
administrative units are too modest to provide an opportunity for territorial
organisations to articulate and implement comprehensive and complex spatial
development objectives. Consequently, counties of different socio–economic
structure were organised into development regions. In principle, the size of
development regions allows the effective utilisation of resources and the elabora-
tion and realisation of regional development strategies. Regions are also the basic
units of statistical data collection and processing.
The delimitation of development regions and the selection of their capitals are
the most debated questions of the institutional system of spatial development in
each country. Several concepts were articulated in Romania about the delimitation
of regions and finally the 8 region version following the historical borders of
Transylvania, also respecting the existing county based delimitation became the
basis of regulation. The internal structure of the Transylvanian regions may give
rise to new disputes. The Centre Region in Romania provides an unfavourable
structural framework for the three Szekler counties, and the decision to put the
headquarters of the regional development organisation to Alba Iulia further aggra-
vated this situation. Due to historical traditions and urban network features, the
conditions are more favourable for the organisation of regions in Romania in cer-
tain aspects, for the following reasons:
− 17 provinces constituted the territorial meso level between 1953 and 1965,
the administrative structure of the country changed several times in the 20th
century, and, contrary to Hungary, territorial administration is not rooted in
century-long traditions. Despite the multiple-decade forced homogenisation,
the country’s historical regions (Oltenia, Muntenia, Moldova, Transylvania,
Banat etc.) still reveal traces of regional identity upon which a conscious re-
gional policy can be based;
− Romania’s network of large cities offers relatively favourable conditions for
decentralised spatial development. Cluj-Napoca, Oradea, Timioara, Arad,
Braov, Sibiu, Târgu-Mure, Craiova, ContanĠa, GalaĠi, Iai, Ploeti, Piteti
can be considered as real growth centres both in terms of population and
multifunctional profile. Large cities have strong intellectual and cultural
functions, at several locations there are R&D capacities with 2 to 5 thousand
employees and universities with 10 to 30 thousand enrolled students.
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Difficulties should be considered like factors preventing the diffusion of the
efficient institutional model of the regional policy of the European Union and its
organisational forms encouraging autonomous decision–making in unitary states
with a homogenous nation–state ideology. Attempts in Szekler Land to elaborate
the bottom-up, integrative regional development model were received with aver-
sion by the local and central Romanian political elite and administration. Regional
development scientific forums in Szekler Land are regularly followed by sharp
counter-opinions. The circles of opposition tend to forget that conclusions of the
research laying down the foundation of new regional policy and the scientific
debates serving for the evaluation of results do not point towards the
institutionalisation of disintegration; on the contrary, an attempt is being made to
elaborate the organisational forms and models boosting economic performance
and regional competitiveness.
Extreme Slovak nationalism has left its mark on the institutional system of
Slovakian regional development. After gaining independence in 1993, the major-
ity of development policy decisions, the delimitation of territorial units on
NUTS2 and NUTS3 levels, the regulation of local government competences and
spatial development measures (without considering the institutionalization of
decentralization which was a requirement of the EU) had ethnic reasons (namely
the breaking up of Hungarian ethnic territory in north–south direction, the nega-
tive discrimination of areas with a Hungarian population in development policy).
The approach of spatial development questions on an ethnical basis (dating back
to 1918) weakens cohesion, and is a cause of large socio-economic disparities
among the country’s macroregions.
3.2 Cross-border territorial cooperation
Overall, systematic change has created favourable conditions for regional
cooperation in the Carpathian Basin, even if weaknesses and previous conflicts,
fears and suspicions were brought to the surface at the same time. The EU’s
Interreg CBC programmes played a primary role in the formation of the new ap-
proach. A number of areas on two sides of Central and Eastern European state
borders are underdeveloped, the Slovakian, Ukrainian and Romanian border areas
adjacent to Northeast Hungary are among the least developed territories of the
new European Community (Baranyi, 2004). Romanian and Serbian regions along
our south–eastern and southern borders show a slightly better performance. The
performance of the two adjoining Croatian macroregions is below the average
national GDP, just as Burgenland is qualified as the most underdeveloped prov-
ince of Austria.
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The currently disadvantageous cross-border situation, the predominance of
rural areas, the chronic lack of capital, the acute employment crisis urge the
development of marginal areas and their settlements. The dissolution of the rigid
dividing role of state borders and their gradual spiritualisation is a basic national
interest for transition countries.
The institutional background of cross-border structures has been implemented
on each Hungarian frontier area; since the ratification of the Madrid Agreement in
1993, a real cooperation and foundation wave has swept through the country’s
borders. The eventuality of the large number of newly formed organisations and
co-operations is accompanied by several problems which hinder their efficient
functioning. The extremely wide range of organisational structures and
stakeholders, the overly generous and generalised definition of tasks and the
related modest sources of financing pose such problems. The institutionalisation
of linkages reached its peak in Central and Eastern Europe in the formation of the
euro-regional organisations, which, despite their name, do not share borders with
the EU.
Hungarian counties are currently involved in 16 organisations of cross-border
interregional cooperation. The organisations of cooperation alter in their formal
framework and content, their motives are varied, yet a common feature is that
these organisations have the potential to broaden the market spaces of all
cooperating regions, may raise economies of scale and promote the market
expansion of companies. At present, however, only weak signs indicate the
presence of this opportunity. Member states allocate only modest resources to the
development of cross-border economic cooperation. Neither the support system
for economic planning and economic development, nor the corporate strategies
are able to transform cross-border relationships into forces of integration yet.
The new institutionalised border regions rarely overlap real functional frontier
areas. Even though positive examples can be found (e.g. the Košice–Miskolc
Euroregion); since the creation of the euroregions which initially encompassed
huge areas (Carpathian Euroregion, Danube–Kri–Mure–Tisza Euroregion), it
has become more customary that co-operations along the eastern frontiers are
formed on ever smaller areas respecting real spatial relationships (Interregion,
Bihar–Bihor Euroregion). The underlying reason for these basically positive
processes is that microregions and settlements on both sides of the frontier
became aware of the opportunities created by their common interests, especially
those in the natural geographical, spatial structural and ethnic interdependence of
territories divided by frontiers after the Treaty of Trianon, while evading the still
significant nation-state obstacles and focusing on the advantages of local
cooperation (Baranyi, 2003, 2007; Hardi, 2008).
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3.3 Development plans for the period between 2007–2013
With the elaboration of national development plans of EU member states for the
periods between 2004–2006 and 2007–2013, a new era began in determining
development directions of the Carpathian Basin’s regions. National development
plans were made using the EU planning methodology.
The number and nomination of operational programmes of the national
development plans vary from country to country. National programmes are di-
vided into five large groups of activities in harmony with EU requirements. The
Economic Competitiveness OP covers the development of small and medium–
sized enterprises, the support of research & development and investments in
technology. The Environmental Protection and Infrastructure OP focuses on the
development of a healthy domestic environment through the creation of environ-
mental infrastructure, the improvement of environmental safety and aims to de-
velop transport infrastructure. The objectives of the Human Resources Develop-
ment OP are to raise the standard of training and education, to improve the
competitiveness of the workforce and to promote social inclusion. The Agricul-
tural and Rural Development OP focuses on the modernisation and increased
efficiency of agricultural production on one hand, partially through the develop-
ment of production technologies and food processing; and on the other hand, on
the development of rural areas, the creation of alternative income opportunities
for the population. Regional OPs cover developments under the responsibility of
development regions.
A negative phenomenon is that the process of accession to the European Union
has had a centralising effect on all new member states. National development
plans reflected a top-down approach, the central government had an almost exclu-
sive role in the elaboration of programmes, the development regions – not being
administrative units – could only partially enforce their interests and development
ideas, their role was mostly limited to the collection of projects. National develop-
ment plans denominate mostly sectoral development tasks. Regional operational
programmes were not based on the development ideas of regions; instead, tasks
omitted from sectoral operational programmes were regarded as of regional
significance. A sign of the undervaluation of the regions is that the rate of
development resources allocated to regional operational programmes does not
reach 25 percent of the development resources in any country (Table 2).
EU-financed developments will be mainly infrastructure-related (roads, sew-
age system construction, etc.) and in environmental protection (48 percent of the
expenditure in Romania, 45 percent in Slovakia), which can temporarily improve
the conditions for local entrepreneurs involved in these construction works and
develop the local environment, improve the accessibility and living standards, but
they do not provide adequate resources for sustainable growth. Romanian
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Pécs : Centre for Regional Studies, 2010. 38. p.
Discussion Papers, No. 81.
development policy allocates much fewer resources to the development of a
competitive economy and to regional programmes than required. Therefore, other
methods should be used for the reinforcement of economic bases. The methods
and techniques of the market-based development of the economy (which means
the production of internationally marketable products and services) can and must
be mastered. This is necessary, because fundamental changes are expected in the
support policy of the EU from 2014 onwards. We must be prepared for this.
Hungarian communities ought to be involved in this preparation work. It is still a
false conception, even in Hungary, that the creation of a competitive society can
be based on EU support. However, healthy communities do not require the socio-
political control of society.
Table 2
EU support for operational programmes, 2007–2013
Hungary
Romania
Slovakia
Million Euro
%
Million Euro
%
Million Euro
%
Competitive economy
2,810
11.3
2,724
14.2
2,975
26.4
Environment and infrastructure
10,905
43.8
9,286
48.3
5,007
44.5
Human resources development
5,430
21.8
3,476
18.1
1,750
15.5
Regional development
5,771
23.1
3,726
19.4
1,532
13.6
Total
24,916
100.0
19,212
100.0
11,264
100.0
Source: Eligible areas under the Convergence Objective and the Regional Competitiveness and
Employment Objective. http://ec.europa.eu/regional_policy/atlas2007 [2009. 04.19.]
The result of the strong dependence on the central government is that local and
regional synergies are neglected. The experiences of concluded or still effective
national development plans indicate that the mechanism of centralised decision-
making does not support the reduction of spatial disparities but their increase.
Regional financial resources are not capable of investments in cross-border
cooperation since they are primarily allocated to tasks related to settlement
regeneration, education, culture and tourism development. While Interreg pro-
grammes extend the frameworks of cooperation between areas overlapping
national borders, they are less capable for establishing long-term economic rela-
tions. The results of an international research project conducted in the Hungarian-
Romanian frontier area warns that the efficiency of centrally controlled pro-
grammes for the development of peripheries is low, offices of central administra-
tion located in frontier areas are insensitive to local specificities, the bureaucratic
nature of the organisation disables cooperation among the actors of spatial
development policies (Koncz, 2006).
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Discussion Papers, No. 81.
4 Tasks for strengthening territorial cohesion
The group of countries (excluding Ukraine) with 54 million inhabitants, constitut-
ing or overlapping the Carpathian Basin is characterised by large disparities in
their territorial structure of demographic potential and settlement network. The
population distribution in Romania and Slovakia is relatively balanced, and they
have a deconcentrated settlement structure. There are several densely populated
areas in the settlement network of Romania, regional centres with a significant
population and economic potential grew up outside the capital. The capitals in the
majority of the eight countries of the Carpathian Basin − while being dominant
economic, political decision-making centres and the most developed territorial
units of their countries at the same time − are located in this large natural area or
in its proximity. This geopolitical position may have an advantageous effect on
the integration of the region, since the modernisation of the urban agglomerations
of capitals forms the basis for integration into European economic space. Due to
the proximity to state frontiers, economies of scale cannot be achieved without
taking into account the interests of the neighbouring countries. In the case of
Bucharest and Kiev, which are far from the Carpathian Basin, it is not their
agglomeration but their national strategic interests that require strengthening spa-
tial relations. In order to access EU markets, these two countries have to use the
transportation networks of the Carpathian Basin.
The future of certain elements of the fragmented Hungarian nation is shaped
primarily by national development strategies. Only slow and less forceful correc-
tions are brought about by the support policy of Hungarian governments. The
logical system of Hungarian development concepts did not incorporate potential
effects of cross-border cooperation between several regions. Activities promoting
the economic and cultural development of ethnic Hungarian territories do not
form a unified system; they disregard the regional distribution of labour but seem
to remain isolated initiatives independent of the development of the Hungarian
economy. In the absence of organically linked elements, the consequences are
incidental, the efficiency of intervention is low, there are no synergic effects, and
the chances of sustainable development are limited. As an example, the absence
of coordination can be mentioned among economic development initiatives of the
Hungarian-populated areas and Hungarian higher education and research.
The notion of a national strategy in our days is primarily present in political
documents, keeping in view the requirements to preserve the autonomy of ethnic
Hungarian territories and to keep the Hungarian population in their homeland.
The obvious and understandable basis of this idea is that the Hungarian popula-
tion is decreasing, demographic indices deteriorate, while according to Hungarian
labour-market prognoses, economic development cannot be implemented without
the settlement of a significant number of workers. A strategic answer has to be
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Discussion Papers, No. 81.
given to this significant question, too, keeping in mind that the flow of Hungarian
working capital into foreign countries can create additional workforce for the
Hungarian economy in other regions. The content of the term used in political
discourse is not elaborated, it has no exact definition, its content is not clarified,
its elements and their interrelations are not clear.
Besides more or less positive experiences of integration in modern European
history, the following arguments support the creation of the Carpathian Basin
macro-region:
− Cohesion problems of this area with a population of nearly 25 million show
similarities (poor accessibility, outdated economic structure, capital city-
based regions of modernisation), common objectives may facilitate the
definition of modern European development directions and the financing of
the implementation of programmes;
− The efficiency of uniform environmental protection across the Carpathian
Basin and of common flood prevention programmes can be improved;
− Economies of scale requirements of modern driving forces of spatial
development (high-level business services, R&D) are easier to meet, ele-
ments of the economic competitive strength can be more favourably devel-
oped;
− The organisation of regional capitals (large and middle-sized cities) into co-
operation networks may contribute to the implementation of polycentric
development set by the EU and to validate the strategic requirement of a
polycentric regional development;
− New cross-border cooperation objectives can be defined, the optimal utilisa-
tion of local labour markets and service networks can be strengthened
through cooperative linkages between neighbouring territories;
− The territory – due to its ethnic structure unique in Europe – may become
the experimental field for the democratic exercise of power and regional
autonomies. The institute of trans-national macroregions may serve to elimi-
nate the national obstacles of transition to a decentralised and regionalised
political system.
The EU accession of Hungary and the two neighbouring countries with the
largest Hungarian populations has created favourable conditions for long-term
strategy making. EU structural policy relies on farseeing trans-regional (cross-
border and interconnected) territorial strategies. The EU is currently preparing
plans for eight macroregions. From the viewpoint of regional policy, the follow-
ing topics are relevant regarding planning partnership in the Carpathian Basin:
1. The reduction of development disparities between cross-border areas,
cross-border infrastructure development and labour market cooperation.
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Contrary to the present practice, special attention must be paid to the
development of cooperation among large cities in the proximity of frontiers
(Miskolc, Nyíregyháza, Debrecen, Szeged, Békéscsaba, Pécs, GyĘr,
Košice, Satu Mare, Oradea, Arad, Timioara, Novi Sad, Subotica, Osijek).
A weakness of this territory is the low performance of business services, its
development, however, as the core of a knowledge-based economy, can
only be imagined in metropolitan spaces. The quantity and quality of avail-
able information has always influenced the intensity of collaboration be-
tween labour markets significantly. While neighbouring regions on the
Austro–Hungarian frontier have mutually presented their job offers through
existing institutional collaboration for several decades, the necessary
information about conditions of employment is still lacking on the eastern
and southern borders. There is a huge potential reserve in constantly
enhancing and upgrading the knowledge base of employees and employers,
the exploitation of which may contribute to diminishing the chronic lack of
workforce, and simultaneously reduce unemployment.
2. Neighbourhood partnership is a new priority of the EU’s support policy for
the period 2007–2013. The elaboration and harmonisation of development
programmes for frontier regions and the execution of common tasks is
unthinkable without taking an institutional form. The present practice of
programme coordination of decentralised central government offices is
inefficient. These tasks are executed by common bodies in Western Euro-
pean border regions. The functional model, organisational structure and
operational order of common bodies for regional development (trans-
national regional development councils) is to be elaborated.
3. Large cities in the proximity of frontiers (Miskolc, Košice, Debrecen,
Nyíregyháza, Oradea, Satu Mare, Uzhhorod, Arad, Timioara, Szeged,
Subotica, Novi Sad, Pécs,) are or can be developed into dominant national
knowledge centres. A severe problem in the neighbouring five countries is
that their research potential does not attain the competitive size of
organisations in the European knowledge market. The establishment of
common research centres contributes to strengthening industrial linkages
between research in natural sciences and engineering, promotes product
development, the spread of knowledge-intensive small and medium-sized
companies, and serves to raise the export potential of regions. The
elaboration of the concept on the establishment of technological centres is
advisable. The development strategy ought to rely on the specialisation in
research and development of a limited number of internationally
marketable products and services.
4. A similar opportunity of collaboration is offered by the development of the
existing or planned regional airports in the proximity of frontiers. Air
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Discussion Papers, No. 81.
transport can significantly improve the accessibility of these territories.
Currently, several Romanian large cities maintain third-category regional
airports, whereas in Hungary, only the Debrecen airport has the potential of
moving into a higher category. In order to attain this higher ranking, its
agglomeration must be extended to the Romanian Bihor and Satu Mare
counties with a population of approximately one million. The market range
of the international airport of Timioara could comprise the southeast
Hungarian counties, and that of Košice could extend to eastern parts of the
North Hungarian region. An efficient distribution of labour has to be
achieved between the airports of Pécs and Osijek.
5. Regional development professionals of new member states are still quite
few in number and they are lacking adequate qualifications. There will be a
considerable growth in the size of regional development programmes in the
new planning period, and in the meantime, their execution will become
more complicated. A considerably larger number of regional policy experts
will be required not only to organise the implementation of the
programmes, but to monitor the anticipated consequences of the new
European regional policy paradigm in the Central and Eastern European
area struggling with specific problems. There is a need for training and
postgraduate training centres which continuously organise the transfer of
professional knowledge. The establishment of three major centres seems
reasonable: the University of Debrecen (in collaboration with the
University of Oradea, Babe–Bolyai University and the Uzhhorod State
University), the other in Pécs (cooperating with the universities of Osijek
and Novi Sad) and the third in GyĘr (cooperating with universities and
research institutes of Bratislava and the Selye János University of
Komarno). As the leading institute of university training in regional policy
and economics, the HAS Centre for Regional Studies could play an active
role in the operation of these centres. CRS already operates cross-border
documentation centres in Békéscsaba and GyĘr. The training programme of
50 regional experts could be organised with one and two semester courses.
6. The modernisation of the fifteen year old cross-border institutionalised
Hungarian science is advisable. The essence of paradigm change is to
articulate well defined objectives and instruments to implement further
development, to determine relatively significant scientific capacities, to
select leading institutions and to establish coordination forums.
The following objectives must be considered in the operation of Hungarian
scientific workshops in the neighbouring countries:
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Pécs : Centre for Regional Studies, 2010. 38. p.
Discussion Papers, No. 81.
a) Enhancing general Hungarian scientific capacities and results in
order to strengthen the international position of Hungarian
science;
b) Developing the national identity of Hungarian communities and
establishing a solid basis for their modernisation programmes;
c) Taking into account the objectives of the dominant national
science in order to expand resources of financing on one hand,
and promoting cooperation in the European and bilateral research
on the other hand;
d) Setting up scientific basis for Hungarian higher education training
programmes, cooperation in doctoral programmes;
e) Adopting and developing new scientific branches.
7. The activity of cross-border Hungarian organisations may significantly
contribute to strengthening the economy in the Carpathian Basin, to the
revival of cross-border economic relations (nevertheless, significant
regional disparities can be detected in the rate of development along the
same frontier, due to the diverse sectoral structures and market relations in
the regions). Hungarian−Hungarian economic cooperation networks
support primarily the activity of small and medium-sized companies
through organising business meetings, providing information services, and
organising exhibitions and conferences. The conscious and deliberate
development of co-operations results not only in increased trade flow but in
common investments and the establishment of clusters in the long run.
The new European macro-region could also provide a framework for planning
cooperation. It is possible to project the economic and spatial development
impacts of the planned cooperative linkages, to estimate cohesion consequences
and to call the designed programmes into action. National regional scientific
workshops in each country could play a significant role in the implementation of
this task. These research, planning and development programmes are also eligible
for EU funding.
During the preparation for the next programming period of the EU starting
from 2014, Hungarian development policy must take strongly marked positions
in determining the scope and content of measures in favour of strengthening
economic cohesion in the Carpathian Basin, and this must also be revealed in
different forms of Hungarian support policy. The application of this new
philosophy is a much more complex task, it produces less spectacular but more
efficient results.
The objective of organised handling of cross–border affairs is to continuously
maintain and develop national identity. The development of economic relations
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Horváth, Gyula : Territorial Cohesion in the Carpathian Basin: Trends and Tasks.
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Discussion Papers, No. 81.
must be organised by using highly sophisticated methods, countless formal and
informal methods of the institution of partnership. In the future, the capital
expansion in the Hungarian economy must be more intensive, possible directions
for capital export may also include the cross-border Hungarian populated areas.
Economic rationality suggests that these areas must also prepare for the entry of
the Hungarian capital. At the same time, Hungarian economic policy must be
aware of the fact that in the support policy of capital export, investments
undertaken in cross-border Hungarian populated areas require special regulations.
In their case, more factors need to be weighed in order to produce rational
decisions.
The development speed of the real economy, the quality of the structure of the
economy and its income producing capacity – and this is a lesson to be learnt
from the causes of the economic crisis – will be increasingly determined by the
spatial cooperation and the quality of partnership between the state, the local
governments, and the business stakeholders in the future. Partnership needs to be
organised and managed. These functions are successfully practiced by regions in
several European countries. The institutionalisation of the formal regionalisation
of the Carpathian Basin could lead to the economic boost of the area, while
indirectly promoting the development of territorial autonomies. This is why
Hungary ought to be a positive example in the formation of its regions.
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