Discussion Papers 2008.
Socio-Economic Analysis of the Carpathian Area 93-109. p.
11 The general economic position of the Carpathian region
11.1 Historical background, current processes
The expansion of the European Union in 2004 and in 2007 made possible the
accession of the eastern periphery to the European economic space. The economic
shortfall of these countries is a result of more than a hundred year’s backward-
ness.
a) The industrial revolution here was taken place later and it was caracterised
by a lower intensity of industrialization than in the core areas of the present
European Union. The shortfall of industrial development reduced the
growth of commerce and services as well, partly because the industrial
sector creates demand for itself and partly because of the slower growth of
residential incomes. The flexibility of incomes is a specific feature of the
tertiary sector which can dynamically grow if the volume of residential in-
come growth is sufficient for changing the structure of consumption.
Within this new economic structure the role of agricultural sector was de-
creasing at a slower speed and it has still a higher role in European com-
parison than it could be accounted for its more favourable conditions.
b) From the viewpoint of settlement development the late effects of urbanisa-
tion both in quantitative (the increasing number of urban citizens) and
qualitative (the increasing role of urban lifestyle and infrastructure and
functioning as employment and economic centre) aspects are direct out-
comes of the above-mentioned process.
c) Following World War II the socialist regime, by implementing the two-
sector economic growth model (favouring the manufacturing of production
instruments against consumer goods for ‘closing-up’ purposes) further in-
creased the area‘s economic backwardness. This kind of heavy industry
dominated the industrialization based on mass-scale production plants that
produced weaker net growth and continuously contributed to the quickly
increasing structural problems in the economy; the depression in mostly
mono-cultural heavy industrial zones and the need for restructuring fol-
lowing the raw material crisis at the end of the 1970s. This sector was a
determinant element of the economy and its crisis – with several other fac-
tors – resulted in a massive and serious (foreign) debt crisis in the 1980s
over the whole region making the absence of development capital almost
persistent (both for local communities and economic organisations).
The problems of the socialist development model had already become obvious
by the late 1960s, as in economically advanced countries – chiefly in the USA –
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
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94
SOCIO-ECONOMIC ANALYSIS OF THE CARPATHIAN AREA
some signs of a new world economy emerged (as it was described by the words of
J. K. Galbraith ‘a new industrial state’), that has been purified through the re-
source and energy crisis in the early 1970s and ended up with economic global-
ization.
Since the 1960s, changing the world economy into a three-polar following the
rising economy of Japan (European, Atlantic-American and Pacific-East Asian
economies) – the intensive growth of world economy and consumer society were
practically continuing the expansive, post-fordist economy of the interwar period
with the wasteful utilization of (cheap) resources and energy pursuing the inter-
ests of high gross output values and output-oriented economic philosophy. This
process (with some other world political and social factors) soon led to a resource
and energy crisis in the early 1970s. The quick increase of prices changed the
main trends in economy in a very short time: economic lobby groups and eco-
nomic philosophy are apparently bound to value-added (net increase oriented)
production cutting down resource and energy consumption per product. An in-
creasing number of economic activities is getting free from geographical limita-
tions of resource and energy production and from the physical determinations of
locating their business sites. In the idea of consumer society an ’insider’ global-
isation switches into a higher gear: by the transformation of its economic organi-
sation system (breaking up the big fordist organisation into specific and smaller
internal units, by outsourcing, sub-dividing product manufacturing systems into
smaller parts and separating them geographically and reintegrating them at a later
phase through logistics into an emerging new economic sector). By the rapid de-
velopment of technology and personal skills the minimum level of the economy
of scale is getting higher and higher (the minimum volume of production granting
profitability for the manufacturing of a product or delivery of a service) and the
horizontal scheme of production – the same production phase on geographically
different locations, but manufactured within the same production system by the
same method – is manifested in the spatial division of labour; logics of the con-
sumer society is expanding, manufacturing generates demand. By satisfying and
regenerating demands production will be continuously expanding to an increasing
(or the total by its long-term perspectives) part of the world; the development of
transport and communication provide infrastructure for this with cheaper and
cheaper per unit costs; the increasing number of international organisations and
institutions is either abolishing or unifying the barriers of their regulation. Na-
tional economic policies are increasingly compelled to following forced paths and
they are getting weaker as well: an ‘invisible hand of market’ rules over every-
thing; competitiveness becomes a fundamental category (from European, na-
tional, regional, microregional, local aspects and also from corporate, sectoral and
economic structure perspectives). Competitiveness as a concept is linked to de-
velopment (besides growth it refers to qualitative changes in the living-space of
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
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THE GENERAL ECONOMIC POSITION OF THE CARPATHIAN REGION
95
people), but the rationalization of its operation is mostly determined by growth
only (the quantitative and qualitative improvement of manufactured products and
delivered services).
At the time of the economic transition in the East-European countries in late
1980s and the early 1990s economic development policies were facing extraordi-
narily big challenges due to the following circumstances:
a) The transition to market economy was accompanied by the urgent demand
of adaptation to a completely different environment of world economy;
b) There was an inappropriate development trend of economy based on
depressing structure of obsolete industry and stagnating service sector;
c) There was a significant deficiency in domestic capital funds with high for-
eign debts.
The economic transition of the 1990s in Eastern Europe was simultaneous with
the faster expansion of globalization (multinational) in Europe. As it is seen from
the above-mentioned facts the major part of the new economy is necessarily based
on foreign investment-based or restructured economic organizations. The
expansion of multinational firms yielding their profits from their absolute price
advantages (cheap products) in the first period of transition served as a basis for
this new economy. East-Europe proved to be a good territory for this. The region
has been preserving its advantages for attracting foreign direct investments. After
the turn of millennium absolute price advantages gradually have been replaced by
quality-price ratio (comparative advantages in a sense) and the majority of East-
European countries are keeping pace with their European competitors. The new
economic development model is primarily built on product export-oriented
processing industry, its relation and cooperation system (both in market and
development aspects) are determined by international networks.
All these have several major implications on the economic situation and
position of the Carpathian region:
a) The economic performance of national economies primarily depends on the
performance of multinational companies; their spatial expansion is follow-
ing a hierarchical pattern, usually they are strengthening the earlier spatial
structure, even if they were built int he framework of ’green field invest-
ment’ projects (conditions of the site are generally favourable in areas with
prospering economy in the past). From spatial structural viewpoint they are
increasing spatial development differences and the backwardness of pe-
ripheral areas.
b) The majority of relations and interests having a vital role in the economy is
selected by the system itself. Multinational firms are typically less embed-
ded into their host country’s or region’s economy (the local environment of
multinational firms plays a minor role in their economic activity and it is
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
96
SOCIO-ECONOMIC ANALYSIS OF THE CARPATHIAN AREA
limited to direct product manufacturing process only). Local embedment is
mostly achieved through the building of local subcontractor networks, but
these networks do not play a vital role in the overall activity of multina-
tional firms as a whole unit. Currently, their multiplier effects are low for
other actors of economy, such as SMEs, major organisations and major
employers of the economic system. They have only a minor direct role in
the renewal of the whole national economy, although they grant higher
economic development ratio for their host countries than the average of the
economically advanced countries (as regards the objectives of the EU they
facilitate economic cohesion but this is not true for the regional level).
c) From the early 1980s the orientation of international economic relations of
East-European countries gradually shifted towards the economically ad-
vanced countries of West-Europe. By the early 1990s the common foreign
relations of post-communist countries dropped to a minimum level and they
built concurrent cooperations with West-European countries. During the
1980s this process was generated mostly by the problems of domestic
economy and the increasing national debts, but in the 1990s it was evi-
dently facilitated by the expanding relations with European economic net-
works resulting from the inflow of multinational investments and their
quick market-driven economic growth. All these are encouraged by the ef-
forts for EU accession and by the preparation for the EU membership
which means an adaptation to the patterns provided by EU-15 countries. As
regards markets and production factors, multinational investors evaluated
the countries of this region as homogenous. Strong competition started
among East-European countries for attracting investors by using a compre-
hensive system of tax reduction, tax benefits which was a further step to-
wards reducing intra-regional cooperation.
d) On the scale of national economies West-European orientation has serious
impacts on cross-border cooperation as well. It can partially be explained
by historical reasons: borders were functioning rather as separating ‘bor-
ders’ than open ‘frontiers’ connecting neighbourhoods with each others.
Initiations usually got stuck just on the level of plans due to insufficient lo-
cal competences or development resources. The Austrian-Hungarian border
zone and some parts of the Czech-German and Polish-German border are
the only exceptions of this rule as they were much more successful in
building their cross-border relation systems.
Summarizing the facts above we can firmly declare that the economic proc-
esses and trends following the early 1990s have not favoured so far the rebuilding
of economic relations and cooperations between the countries of the Carpathian
and East-European Region. Although these countries are facing the same prob-
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
THE GENERAL ECONOMIC POSITION OF THE CARPATHIAN REGION
97
lems and have common interests they are still competing for better positions in
linking themselves to the advanced countries of the Western world. For this rea-
son cross-border cooperation among the countries of the Carpathian region is
rather an issue of serious challenge. It might even be regarded as a pilot project as
there are only very few ‘best practices’ in the field of European cross-border co-
operation.
It seems quite evident that Carpathian countries do have common interests in
such issues as managing environmental problems for example (the environmental
rehabilitation and development of the Carpathians provides a fundamental solu-
tion for the flooding problems of rivers and inland waters in the southern plains of
the Carpathian Basin). The identification of common interests in the concrete
socio-economic issues of cross-border cooperation seems to be a far more chal-
lenging task.
11.2 The region’s socio-economic position
In the development history of the European integration each accession period was
followed by a more or less decreasing economic performance of the newly joined
territories (the average GDP per capita). The new accessions in 2004 and 2007
(which can be regarded as two phases of the same accession period) had such
great impacts – together with the special features of the new member states – that
may influence the European Union’s regional policy as a whole.
The territory and the population of the European Union has significantly in-
creased with the entry of countries with weak economic and employment per-
formance and the ’statistical phenomenon’ has been set up: the average GDP
(PPS) per capita in the EU, and the 75% threshold limit for the classification of
convergence regions would have been set so low that several NUTS2 territorial
units would have surpassed the eligibility criteria of subsidization. For these more
than 10 regions the EU (following the earlier scheme and practice of phasing-out)
has introduced the phasing-in model. From the Carpathian region Central-
Hungary with Budapest as regional centre belongs to this model (The Bratislava
NUTS2-NUTS3 region has already been headed under this chapter for competi-
tiveness purposes) (Figure 8).
The general underdevelopment of the whole group of the new members had
further impacts as well.
The economic backwardness of the new East-European members can be illus-
trated by the following fact. Their lagging behind of the EU-15 average on indi-
vidual state level is on the same scale of a convergence problem as the develop-
ment differences between the new member states’ regions, since these are gener-
ally smaller than the regional differences within the advanced EU member states
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
98
SOCIO-ECONOMIC ANALYSIS OF THE CARPATHIAN AREA
(Figure 9). According to the preliminary statistical data of the year 2006 the dif-
ference between the two extreme values of GDP per capita (Luxemburg and Bul-
garia) was sevenfold.
In this case, besides the convergence of the Carpathian new member states to-
wards the EU standards the convergence of the Carpathian region as a whole is a
part of a more comprehensive spatial problem. The best chances of economic
development may be offered by decentralised regional programmes and the re-
gion could best benefit from its special geographic features – besides the imple-
mentation of environmental programmes and the intensification of cross-border
cooperation as a part of socio-economic development project – in such a way.
Figure 8
GDP per head (PPS, EU27=100) in 2004
Source: On the base of 1.2 Map in 4th Cohesion Report of EU, p. 8 and national statistical year-
books.
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
THE GENERAL ECONOMIC POSITION OF THE CARPATHIAN REGION
99
Figure 9
GDP per head (PPS) by country and regional extremes (2004)
* In these regions, the GDP per head figure tends to be overestimated because of commuter flows.
Source: 4th Cohesion Report of EU, p. 10.
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
100
SOCIO-ECONOMIC ANALYSIS OF THE CARPATHIAN AREA
Both in the European Union and in the member states this decentralisation
process has slowed down and the concept of achieving convergence through re-
gional level development projects – i.e. the idea of the Europe of regions – has
been suppressed for the time being.
Due to the EU’s internal institutional problems and reforms, to the problems of
the social macro-systems of member states (acquis communautaire), to the tasks
of their transformation, to the slow progress of the Lisbon process and to the
weaknesses of European competitiveness the EU’s decentralised, regional-level
development strategy was neglected. It was replaced – or rather supplemented –
by a polycentric model of spatial development.
The new regional development scheme based on (big) cities and their envi-
ronment and on the functional cooperation of urban networks is satisfying the
demands of global development and of the changing spatial structure: today the
satisfactory and at the same time attractive resources for foreign capital, good
geographical location for transport connections and the easy accessibility of mar-
kets are the most essential factors of the site selection strategy in businesses: This
scheme should follow the main stream of growth (export-oriented processing
industry in medium or big-sized organisational units having close links to big
multinational corporation systems).
The Carpathian region, particularly its highland territories, is rather unsuitable
for meeting these criteria. Due to its geographical formation it has a lower than
average population density, central cities are concentrating lower amount of re-
sources, the physical accessibility of their gravity zones is limited or inappropri-
ately shaped1, the majority of their former industries – generally bulk manufactur-
ing or heavy industry with their complementary light industry (based mostly on
female labour force) – were terminated during at the introduction of market econ-
omy, and the majority of the regions has been excluded from foreign direct in-
vestments (and from privatization process) in general, therefore their industrial
restructuring has not been accomplished yet. Instead of introducing business sec-
tors that could guarantee an East-European style sustainable economic growth
some small-scale manufacturing and service sectors have been introduced here.
The region – particularly its highland zone – is much more suitable for the im-
plementation of a rural style economic development programme. The rural devel-
opment strategy is based on alternative, complementary and external territories
and centres regarding employment, income-earning and partly public service
functions. The impact of rural development initiatives is generally restricted to
microregions and very rarely covers the whole territory of NUTS3 areas.
1 The European Union’s Third Cohesion Report among others provides details on the problems of
regions with extreme geographical position. Within the Carpathian region only the territories of
Slovakia are evaluated as areas with good physical accessibility.
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
THE GENERAL ECONOMIC POSITION OF THE CARPATHIAN REGION
101
During the delimitation of the borders of the Carpathian region with the inclu-
sion of its lowland regions – being sometimes on the development level of the
European Union – the programme was aware of and even took this aspect with its
possible outcomes into consideration. However, we have no information what
kind of economic-employment links these economically advanced satellite re-
gions have built with highland territories. Practice has proved that even in coun-
tries having some traditions in the development strategy of decentralised regions
very few horizontal-schemed inter-regional relations have been established. These
relations have rather more of a vertical character cooperating with central state
organisations (and very often this is the way how cross-border cooperation, but
otherwise neighbourhood-like programmes ’de facto’, are launched).
The limitations in gaining or enhancing decentralised regional-level compe-
tences for the territories of the Carpathian region originated not only from the
EU’s changed opinion on regions. Apart from Austria, the countries of the Car-
pathian region have long traditions in central state initiated and funded regional
development policies. This is true even in case of Poland and Hungary where
regionalisation was a ‘living practice’ even before the 1990s. The preparation for
the EU accession and the regional development practice of the new EU states did
not accelerate the process of decentralisation neither on NUTS2 nor on NUTS3
levels (local communities may be the only exceptions from this rule). Before the
accession of the new members in the year 2004 no regional-level operation plans
had been prepared, regional level development projects were initiated by central
state authorities only (it was among others explained by the insufficiency of de-
centralised regional-level administrative management capacities for the planning
and implementation of independent from the state regional development pro-
grammes).
The fact that after the economic restructuring of the 1990s the indicator of the
former socialist countries presumably exceeded the EU’s economic growth within
an unchanged spatial structure and that politicians’ concepts on economic reforms
were reduced to ‘tax competition’ between the new EU members has another
negative impact on the economic development of the Carpathian region and on
the region’s international and interregional cooperation system which is necessary
for the expansion and enhancement of local-regional power and competences.
These growth potentials can be utilised principally through the investments of
multinational firms. The development of their subcontractor, small and medium-
sized enterprises and their adaptation to the standards of European and global
markets has a much inferior role in the economic growth process. As the creation
of new jobs is getting more and more dependant on these elements, their produc-
tivity (GDP per employee): the most critical factor of cohesion is increasing at a
slower pace than it would be necessary for the economic convergence.
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
102
SOCIO-ECONOMIC ANALYSIS OF THE CARPATHIAN AREA
As a summary, we can conclude that the economic convergence of the Carpa-
thian region as a target should be achieved in a context of large underdeveloped
regions with low productivity of their domestic economies. The Carpathian re-
gion’s special geographical environment and historical background require a spe-
cific developement trends programmes which are different from the standard
European and which can be implemented only in those cases where the heavy
dominance of state gives way for the recognition and enforcement of regional
interests and local-regional platform-based initiatives can be launched for the
implementation of regional development programmes.
The EU’s social cohesion objectives are targeted at the life quality of member
states and spatial units. The population strategy was based on the idea of ‘pre-
serving and improving the acquis communautaire’. The formulation of objectives
in such a more generalised framework can be reasoned by two basic factors:
a) The term ‘life quality’ itself has a complex meaning comprising such
components as employment, income, age and professional skills of the
population, health and expected lifetime. The chances of integration into
socio-economic life, as well as its opposite, the socio-economic exclusion
are also integral parts of the meaning of this term.
b) There are significant differences in the welfare systems of the different EU
member states and development policies may also follow different strate-
gies: total economic freedom was granted to interventions (subsidizations)
even by the treaty of Rome for member states (it is excluded from the rules
of competition regulation).2
The general objectives of the EU’s social cohesion policy comprise two pri-
orities: the increase of employment (which serves as a basis for life quality) and
combating socio-economic exclusion (which serves as a basis for granting equal
chances for individuals). Indicators and indexes can be used only for the compari-
son of employment in case of the member states.
Both in the new EU member states and in the countries of the Carpathian re-
gion employment and unemployment – unlike in the cases of economic develop-
ment and performance – have no special characteristic features and differing from
the EU-15 (Figure 10). Although practically all the regions of Poland and
Slovakia have the highest unemployment indicators in the EU, several regions in
East-Germany, Southern-Italy, Southern-Spain or North-Finland are facing the
same problem. The unemployment indicators of the other three new EU states and
Austria are average or even better than the EU average.
2 This difference is reflected by the fact that during the assessment of economic performance and
development level GDP per head values are calculated on the basis of PPP (purchasing power
parity); therefore nominal values should be modified by wage-price ratio.
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
THE GENERAL ECONOMIC POSITION OF THE CARPATHIAN REGION
103
Figure 10
Unemployment rates, % of labour force (2005)
Notice: EU27= 9.0%.
Source: On the base of 1.9 Map in 4th Cohesion Report of EU, p. 26 and national statistical year-
books.
Different levels of economic development and performance are just like the
unemployment ‘heritages of the past’ in a sense: with the economic transitions of
the 1990s the population of the new member states was for the first time hit by
unemployment in large scale; this was a serious shock for them. For this reason
government policies in these countries were very sensitive for employment-un-
employment issues. This made them set up large-scale employment instead of
optimal-scale employment as the main objective of their employment policies.
Sustainable employment primarily depends on the improvement of economic
performance and on the modernisation of the structure of economy. (This is true
for all the actors of employment: for employees, sole traders or wage earners of
any other employment category).
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
104
SOCIO-ECONOMIC ANALYSIS OF THE CARPATHIAN AREA
In many cases economic interventions of social type are unavoidable, but if
growth and development capacities of the economy are left idle, i.e. the tasks of
economic reforms and the modernisation of the economy (e.g. terminating the
dual economy of multinational firms and domestic small and medium-sized
enterprises in all the countries of the Carpathian region) are not accomplished it
may lead to permanent contradictions between economic performance and
employment positions, i.e. low economic productivity and performance.
The present development practice of lagging or rural areas tends to support
local employment programmes (in NUTS3 or NUTS4 areas) albeit the evaluation
of European trends shows that on the level of balanced and polycentric regions
(NUTS2 areas) only an optimal-sized employment level can be regarded as
appropriate. In case of the Carpathian region this means that for highland areas
the economically much more advanced satellite regions will preserve their
employment function for a long time.
11.3 The internal structure of the economic development and employment
level of the Carpathian region
Before evaluating the internal circumstances of the Carpathian region some meth-
odological remarks should be made. The weak points of any cross-country
evaluations are the absence of reliable and comparable data which were based on
a common database structure and content. Within the ESPON programme the
final lesson of researches targeted at the structure of the European space and at
the evaluation of the effect of development policies was that although a method-
ology was elaborated for cross-country researches, no common statistical systems
are available for the applications (as within the member states it is available the
method has a case study character, i.e. it is a comparison of country-level re-
searches or a comparison of country reports, tailored to the potentials of the given
country).
For cross-country researches no common research programmes have been
elaborated (even within the EU-15 countries) which could be implemented within
the territory of a member state.3
Eurostat has a statistical system which is limited to some basic indicators (ter-
ritory, population, age-grouped population structure, GDP, GDP-PPS, unem-
ployment rate) and it is used on a regular basis. Paradoxically, in methodological
sense, the most frequently used statistical data, the GDP-PPS, among others due
to the currency rate calculation of the domestic currency of countries falling out
3 Sometimes research task is nothing more than selecting the most suitable data from the different
ones from different resources for a specific phenomenon.
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
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THE GENERAL ECONOMIC POSITION OF THE CARPATHIAN REGION
105
of the euro-zone is not free of errors. The fact that the EU’s 3rd Cohesion Report
is devoting nearly one page to methodical remarks of this and similar phenomena
also refers to the existence of problems in research methodology.
The complexity of this problem is even higher in case of the Carpathian re-
gion. In the majority of the new EU member states regional policy and regional
development were pushed into the background with only a limited amount of
statistical categories. The adaptation to the statistical system of the Eurostat is
slow. And there are still many other problems to combat: the system and registra-
tion of enterprises varies by countries and the comparison of relevant statistical
data (e.g. economic structure, the distribution of economic sectors) requires great
care with taking the methodological comments and comparison methods of the
relevant statistical information into account.
Another problem is that the territory of the Carpathian region covers such
countries as Serbia and Ukraine where very limited statistical information is
available on territorial units and both the methodology of collection and the exact
content of these data are unknown.
Even if a standardized series of statistical data has been collected the majority
of problems is still not eliminated. In our case let us see the NUTS3 and NUTS2
level data of unemployment. In the Carpathian region the relevant statistical re-
sources indicate missing data in two Austrian and two Romanian NUTS3 areas
(commented as ‘unreliable or uncertain data’). Even if we can find some data
sometimes we should be suspicious of their validity. It is hard to accept the 9.1%
unemployment rate of Vienna if the same indicators of all the surrounding Aus-
trian regions show by far lower figures. We also should think that the very high
unemployment rates of Slovakia have resulted from their data collection method
which is different from the EU’s standard.
As it comes from the above-mentioned facts – on the basis of the detailed data
of the Carpathian region’s NUTS3 and NUTS2 units and their dispersion values –
the internal economic development of the Carpathian region and the region’s
spatial structure of unemployment can be characterised by five general factors or
tendencies as follows:
a) The development level of the NUTS3 and NUTS2 units in the Carpathian
region on the basis of GDP per head (PPS) with the unemployment indica-
tors are primarily depending on their own country’s general economic-
employment indicators. Local features based on the territorial unit’s geo-
graphical or landscape dependent delimitation have secondary impacts on
them.
b) Geographical and landscape level impacts are principally manifested by the
fact that the majority of the Carpathian region consists of NUTS3 and
NUTS2 units situated in peripheral border zones. The economically ad-
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
106
SOCIO-ECONOMIC ANALYSIS OF THE CARPATHIAN AREA
vanced foreground areas lying off the border are the only exceptions from
this rule. In highland border-zone territories practically no areas can be
found which could get into the ‘phasing out’ development stage in optimal
case. This chance is available only for some Czech and Hungarian territo-
ries beyond those Austrian, Hungarian and Slovakian territories which have
already exceeded the 75% GDP per capita threshold value of phasing out.
(In Austria Burgenland is a phasing-out region since the beginning of the
current programming period while the development indices of Lower-Aus-
tria and Vienna exceeded the EU’s average development level for a longer
period. Central Hungary with Budapest as regional centre is a phasing-out
region since the new programming period beginning by the year 2007
while the development index of Budapest, Hungary’s capital city is
131.3%. In Slovakia the Bratislava region had a 129% development index
of the EU average in the year of Slovakia’s EU accession). Beyond the
above-mentioned regions in Poland the NUTS3 territory of Cracow (in the
year 2004 the area’s GDP (PPS) per capita value was nearly 79% of the EU
average) and in Romania the Bucharest region (67.1%) can be mentioned
as regions with outstanding economic development. The GDP per capita
indexes of the majority of the Carpathian region’s NUTS2 and NUTS3
units are about half of the EU’s average while in Romania several NUTS2
and NUTS3 units produce only 30% economic development indices of the
EU average (Table 20 and 21).
Table 20
GDP per capita (PPS) in percentage of the EU25 average
in Carpathian region (2004)
Name
GDP per capita (PPS) in percentage of the EU25 average
Country in NUTS2
NUTS2
NUTS2
NUTS3
NUTS3
NUTS3
EU25
maximum minimum difference maximum minimum difference
average
Austria
128.7 179.7 89.8 89.9 179.7 67.9 111.8
Czech
Republic 75.2 67.4 59.8 7.6 69.7 59.8 9.9
Hungary
64.0 101.6 41.9 59.7 131.3 34.6 96.7
Poland
50.7 57.0 35.4 21.6 78.7 29.5 49.2
Romania
34.0 64.5 23.6 40.9 67.1 22.9 44.2
Slovenia 56.7
129.3
42.3 87.0
129.3 34.4 94.9
Serbia n/a
n/a
n/a – n/a n/a –
Ukraine n/a
n/a
n/a – n/a n/a –
Source: Eurostat (calculations by authors).
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
THE GENERAL ECONOMIC POSITION OF THE CARPATHIAN REGION
107
Table 21
GDP per capita in euro in Carpathian region (2004)
Name
GDP per capita in euro
Country
NUTS2
NUTS2
NUTS2
NUTS3
NUTS3
NUTS3
NUTS3
NUTS3
average
maximum
minimum
max/min,
maximum
maximum
minimum
max/min,
max/min
%
(without
%
without
capital city
capital city,
NUTS3)
%
Austria 31,019* 40,281* 20,129* 200.1 40,281
32,518 15,233 264.4 213.5
Czech Republic
8,544* 7,652* 6,792* 112.7 7,920 7,920 6,791 116.6 116.6
Hungary 8,143* 12,931* 5,331* 242.6 16,718 9,413 4,409 379.2 213.5
Poland 5,342* 6,004* 3,730* 161.0 8,283 8,283 3,111 266.2 266.2
Romania 2,806* 5,328* 1,949* 273.4 5,544 3,894 1,890 293.3 206.0
Slovenia 6,292* 14,342* 4,696* 305.4 14,342 6,456 3,817 375.7 169.1
Serbia 2,643* n/a * n/a * – n/a n/a n/a –
–
Ukraine 1,467*
1,082*
728*
148.6 n/a n/a n/a –
–
* Date of Statistical Office of Ukraine; territorial units: oblast; 2005.
Source: Eurostat (calculations by authors).
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
108
SOCIO-ECONOMIC ANALYSIS OF THE CARPATHIAN AREA
c) As the above listing shows, in countries of smaller territory or population
the regions are more advanced economically while the spatial units of
Poland, Slovakia, Ukraine and Romania (with their host countries occu-
pying the major part of the Carpathian region are on a lower level of de-
velopment stage and in some areas are seriously backwarded. In case of
Ukraine it should be remarked, however, that the country’s GDP per capita
indicator was unavailable, but in the currency of euro only, therefore the
above-mentioned statement can be verified only by the literature of the
Ukrainian spatial structure. The availability of spatial economic data is
similarly poor in case of Serbia, but its spatial units belonging to the
Carpathian region are economically more advanced in general than the
average development level of their domestic economy.
d) Both the GDP per head and unemployment rate values are verifying the
fact – taken into account during the delimitation of the Carpathian region –
that a strong core-periphery relationship has evolved between the region’s
lowland and highland territories (Table 22).
e) And finally the spatial units of the Carpathian region follow the standard
spatial formation of the west-eastward development slope. In Europe this
means that moving off the so-called European growth (competitivness)
pentagon the level of economic development is gradually decreasing in a
linear way. It is not only the physical distance that rules this process, but
also the European history of economic development and the present-day
‘invisible hand of the market’.
In the Carpathian region, by progressing eastward from the west the develop-
ment level of spatial units gradually decreases, prooved by the in a decreasing
development level of national economic environment. The continuous reference
to national economic environment has impacts on the region’s socio-economic
development chances as well: the success of international (cross-border) coopera-
tion depends on the fact whether cooperation projects and programmes can be
integrated into the national development plans of the Carpathian countries. It does
not seem that the Carpathians as a mountain chair would represent any particular
interests concerning the socio-economic development of its countries. Its special
interests are rather bound to the protection (rehabilitation) of its natural heritage.
The General Economic Position of the Carpathian Region.
In: Socio-Economic Analysis of the Carpathian Area.
Pécs: Centre for Regional Studies, 2008. 93-109. p. Discussion Papers, Special
THE GENERAL ECONOMIC POSITION OF THE CARPATHIAN REGION
109
Table 22
Unemployment rate (15 years and over) in Carpathian region (2005)
Name
Unemployment rate (15 years and over)
Country
NUTS2
NUTS2
NUTS2
NUTS3
NUTS3
NUTS3
average maximum minimum max/min, maximum minimum max/min,
%
%
Austriaa) 5.2
9.1
4.3
212
9.1
3.3
276
Czech Republic
7.9
13.9
7.7
181
13.9
8.1
172
Hungary 7.2
10.6
5.1
208
12.0
4.3
279
Poland 17.7
19.0
15.2
125
21.5
14.2
151
Romaniaa) 7.2
9.2
5.7
161
15.1
4.2
360
Slovenia 16.3
23.1
5.3 436 24.7 5.3 466
Serbia
20.8
n/a n/a – n/a n/a –
Ukraine 6.7b) 9.8c) 7.0c) 140 n/a n/a –
a) 2 NUTS3 units have no relevant data.
b) ILO estimation.
c) Date of Statistical Office of Ukraine; territorial units: oblast.
Source: Eurostat (calculations by authors).