1
BUKOVYNA
PARTNERSHIP
AGENCY
MONITORING OF LOCAL AUTHORITIES'
ANTI-CRISIS POLICY AND STUDYING ITS
IMPACT ON THE ECONOMIC STATUS OF
CHERNIVTSI OBLAST
The publication is carried out within the "Small and Medium Enterprises: regional
dimension of overcoming the economic crisis" Project at financial support of Kyiv
Coordination Office of German Technical Cooperation (GTZ) Gmbh
ChCCU "Bukovyna Partnership Agency"
Chernivtsi – 2010
2
Monitoring of local authorities' anti-crisis policy and studying its impact on
the economic status of Chernivtsi oblast
Chernivtsi Oblast is located in the southwest of Ukraine. By the number of
population (904.1 thousand people) and the territory (8.1 thousand km2), it is the
smallest oblast in Ukraine.
The following types of activity prevail in the oblast's economy: industry,
agriculture, trade, and construction. The output structure and the gross added value
broken down by types of economic activity are shown in tables 1 and 2,
respectively.
Table 1
Output by types of economic activity
Activity type
Agriculture, hunting, forestry
Processing industry
Construction
Trade; repair of motor-car, household devices and
individual consumption articles
Transport and communication activity
Real estate operations, lease, engineering and
provision of services for entrepreneurs
State administration
Education
mln
UAH
1936
1852
633
2005
% of the
total
23.5
22.5
7.7
mln
UAH
2015
2160
990
1
2006
% of the
total
20.4
21.9
10
mln
UAH
2563
3014
1495
2007
% of the
total
19.4
22.8
11.3
1072
13
1222
12.4
1782
13.5
663
8.1
779
7.9
857
6.5
294
3.6
443
4.5
578
4.4
405
489
4.9
5.9
523
602
5.3
6.1
660
772
5
5.8
Table 2
Gross added value by types of economic activity
Activity type
Agriculture, hunting, forestry
Processing industry
Construction
Trade; repair of motor-car, household devices and
individual consumption articles
Transport and communication activity
Real estate operations, lease, engineering and
provision of services for entrepreneurs
State administration
Education
mln
UAH
894
470
233
2005
% of the
total
22.4
11.8
5.8
mln
UAH
916
604
326
2
2006
% of the
total
18.9
12.5
6.7
mln
UAH
1194
860
464
2007
% of the
total
18.7
13.4
7.3
708
17.7
804
16.6
1127
17.6
356
8.9
432
8.9
472
7.4
174
4.4
258
5.3
337
5.3
285
375
7.1
9.4
379
466
7.8
9.6
483
583
7.5
9.1
Agricultural specialization of the oblast becomes evident based on the
official statistical data (tables No. 1, 2), which is confirmed by effectiveness for
Statistics Year-Book of Chernivtsi Oblast for 2008. – Chernivtsi: Head Statistics Department in Chernivtsi Oblast,
2010. – 43-46 p.
2
Statistics Year-Book of Chernivtsi Oblast for 2008. – Chernivtsi: Head Statistics Department in Chernivtsi Oblast,
2010. – 43-46 p.
1
3
this type of activity (its gross added value share in the total volume in 2007 was the
largest). At the same time, percentage of agriculture in the total volume of both
output and added value has been reducing during the recent years, which is an
evidence of a structural transformation of the economy. In the economy of the
oblast, construction plays a significant role, its output and GAV are growing both
in absolute measuring, and in the relative one.
Besides, a significant feature of Chernivtsi Oblast's economy is notable
development of small and medium businesses. This is proved, in particular, by that
the share of employees of small enterprises in their total number in 2008 made up
37.4% (in 2007 – 36.5%; in 2006 – 36.1%)3. And the part of products of small
enterprises in the total volume of the products (works, services) realized in 2008
was 28.5% (in 2007 – 32.6%; in 2006 – 33.2%)4. An impetus for development of
small and medium businesses in Bukovyna was provided by the crisis of the 1990s,
when the largest industrial enterprises of the region terminated their activity,
among which enterprises of the military industrial complex having many thousands
of staff and a significant scientific and engineering technical potential prevailed.
Starting from the end of the 1990s, small and medium enterprises (SMEs)
played an important role in the economy of Bukovyna, especially in the field of
trade and services, and demonstrated a stable growth trend. But in 2008 the global
financial and economic crisis, which negatively impacted Ukraine, inflicted a blow
both on ordinary citizens and on entrepreneurship as a whole. Having appeared
unprepared for such shocks, the Ukrainian economy started “receding”. Exportoriented sectors suffered most, as well as the banking sector.
The serious problems observed in the national economy actualize study of
the state of economy of the Ukrainian regions. For this reason, we conduct
diagnostics of socio-economic development of Chernivtsi Oblast for the period of
2007-2009. The respective data are shown in table 3.
Table 3
Statistics Year-Book of Chernivtsi Oblast for 2008. – Chernivtsi: Head Statistics Department in Chernivtsi Oblast,
2010. – 268 p.
4
Statistics Year-Book of Chernivtsi Oblast for 2008. – Chernivtsi: Head Statistics Department in Chernivtsi Oblast,
2010. – 270 p.
3
4
Chernivtsi Oblast socio-economic development indicators for 2007-20095
Indicators
Industrial products index,
in relative prices, % to the previous year
Amount of industrial products (work, services) realized, mln UAH
Amount of agricultural products, mln UAH
% to the previous year
Amount of construction work realized,
in actual prices, mln UAH
in relative prices, % to the previous year
Goods turnover, % to the previous year
Passengers turnover, % to the previous year
Investments into fixed assets,
in actual prices, mln UAH
in relative prices, % to the previous year
Financial output of basic activity before taxation (balance), mln UAH
Loss of the regular activity before taxation, mln UAH
Wages arrears, mln UAH
Nominal average monthly wages, UAH
% to the previous year
Actual average monthly wages,
% to the previous year
Number of registered unemployed people (as of the end of the reporting period),
thousand people
Registered unemployment rate, % to the number of population of the working
age
2007
2008
2009
121.3
2363.5
1984.2
105.4
104.0
3184.8
2001.3
100.9
74.6
2657.5
2066.6
103.3
763
108.5
118.6
94.4
1214.4
108.6
164.0
110.1
826.1
60.0
92.2
92.7
2332.0
132.1
275.7
232.9
3732.6
125.5
47.8
801.7
1646.6
81.9
-200.8
440.1
as on
01.01.08
as on
01.01.09
as on
01.12.09
2.7
1051.0
128.4
5.4
1402.0
133.4
6.6
1497.0
108.5
113.0
107.4
95.3
15.5
18.2
10.3
2.9
3.4
1.9
As follows from table 3, a substantial reduction of industrial production (25.4 %), construction work volumes (-40.0 %) and investments into fixed assets (18.1 %) have taken place in Chernivtsi Oblast. At the same time, the agricultural
sector has shown inertia growth by 3.3 %.
Growth, against this background, of nominal average monthly wages
(+8.5%) is an evidence of a vicious development model of the Ukrainian economy
and a consequence of the populist policy of central authorities in conditions of the
crisis accompanied by the presidential election campaign. In general, it is possible
to conclude that the economy of Bukovyna experienced a negative impact of the
crisis, however, its consequences were attenuated due to absence of large exportoriented enterprises and a significant (based on various assessments, approx. 40%)
“shadow” sector. The advantage of the oblast, represented by significant
development of small and medium businesses, appeared an efficient tool. These
5
Key macroeconomic indicators of socio-economic development of Chernivtsi Oblast for 2009. Express issue No.
15 of 19.01.2010. – Chernivtsi: Head Statistics Department in Chernivtsi Oblast, 2010.
5
businesses also felt consequences of the recession, but due to their flexibility they
demonstrate robustness and the ability to survive in complicated conditions. As a
result, it is possible to even state a reduction of the official unemployment rate in
2009 by 2.5%.
Official statistics traditionally do not take into account the impact on the
region's economy of revenues in foreign currency from “labor migrants”. Based on
evaluation data (no official data are available), approx. 150 thousand of Bukovyna
residents annually “pump” into the regional economy about 750 million US
dollars. It is due to these funds that the consumption market and the services sector
of the region are supported. Based on data of the Head Department of Statistics,
the volumes of retail sales of goods and consumption of services in 2001-2009
were the following (tables 4, 5).
Table 4
Consumption market of Chernivtsi Oblast
Retail trade
turnover6, mln UAH
Retail turnover of
enterprises7, mln
UAH
Retail turnover of
enterprises per capita,
UAH
2001
2002
2003
2004
2005
891
1069
1421.4
1815
2532.1
561.1
674.3
872.5
1103.3
1435
607
733
952
1208
1578
2006
2008
2009
3356.2 4846.4
6871.2
6773.8
1806.6 2679.6
3663.8
3584.3
4052
3984
1991
2007
2960
It follows from table 4 that the consumption market grew rapidly during the
indicated period, which is confirmed by the increase of retail commodity turnover
of enterprises per capita in 2007 by 48.7%, and in 2008 – by 36.9%. In 2009, the
impact of the crisis on consumer intentions of the population became noticeable.
Thus, foreign currency revenues from abroad, which have a substantial impact on
dynamics of the consumption market, in 2009 demonstrated the trend of reduction,
therefore, this fact also explains its relatively small contraction.
Table 5
6
The retail trade turnover includes the retail commodity turnover of the enterprises that carry out retail trade
activity, as well as evaluated volumes of sales of commodities in open markets and by individual sole proprietors.
7
The volume of sales of consumption commodities through the retail trade network and the restaurant economy
network by all active enterprises, as well as industrial, transport and other non-trade enterprises, directly to
population through the cash-desk of the enterprise.
6
Consumption in Chernivtsi Oblast, mln UAH (with VAT)
Volume of services
realized, total
Volume of services
provided for population
Share of services
provided for population
as % of the total
volume
2001
2002
2003
2004
2005
2006
2007
2008
2009
325.3
371.8
427.9
463.9
641.7
778.5
1009.7
1206.5
1131.5
179
191.7
232.1
266.8
300.5
353.5
428.2
493.3
464.7
55.0
51.6
54.2
57.5
46.8
45.4
42.4
40.9
41.1
Similar trends are observed for consumption of services (table 5). Thus, the
volume of services realized grew rapidly in 2007 (+29.7%) and in 2008 (+19.5%),
however, in 2009 it reduced (-6.2%). The specific feature is that at the stage of
economic growth, the percentage of services provided for population reduces.
When a crisis takes place, a reverse process is observed. Thus, this indicator was
reducing starting from 2001, and in 2009 (crisis) – it grew.
If we compare retail commodity turnover volumes and those of services
consumption with incomes of population, we will have the situation represented in
Fig. 1.
14000
12000
10000
8000
6000
4000
2000
0
2001
2002
2003
2004
Retail trade and services realized volumes
2005
2006
2007
2008
Incomes of population
Figure 1. Correlation of incomes of population and retail trade and services realized
volumes
Fig. 1 confirms the assumption about a considerable impact of the shadow
sector on the economy of the oblast, in particular – of unaccounted foreign
currency revenues.
7
In accordance with statistical data, incomes of population go virtually in line
with retail trade and realized services volumes. Pay attention to that here we don't
take into account bank deposits, real estate sales volumes, etc. An interesting fact
is that by the rates of industrial production growth, Chernivtsi Oblast has the 20 th
rate among other regions (for the period of January-November 2009), while by the
rates of construction work and retail trade turnover growth – the 3rd and 3rd-4th
rates, respectively8.
In accordance with the resolution of the CMU on overcoming the financial
and economic crisis, Chernivtsy regional council approved a set of anti-crisis
activities related to minimization of the negative impact of the global crisis on the
oblast's economy. Following resolution No. 301-25/08 passed by the regional
council on Decembers, 23, 2008 “On regional activities for strengthening the
financial and budgetary discipline and minimization of the negative impact of the
global financial crisis on the oblast's economy” and based on data of the Head
Department of Statistics in Chernivtsi Oblast related to the socio-economic status
of the region in 20099, we will try to evaluate the status of these activities'
implementation and their impact on the economic situation in Chernivtsi Oblast.
We will follow the sequence of sections as suggested by Chernivtsi regional
council in the abovementioned document.
In the field of the consumer goods and services price policy, among other
things, the intentions to introduce monitoring of dynamics of prices on consumer
goods and services, strengthen control over application of trade markups and
pricing mechanisms, consideration of reasons for change of prices on food
products were declared.
The Head Department of Statistics states: in 2009, food products' prices
increased by 8%. Among them, the most substantial increase in prices is observed
for sugar (1.7 times), butter (29.8%), milk (13.8%), fish and fish products (12.2%).
8
Chernivtsi Oblast on the Economic Map of Ukraine for the Period of January-November 2009. Express issue No.
13 of 19.01.2010. – Chernivtsi: Head Statistics Department in Chernivtsi Oblast, 2010.
9
Economic and Social Status of Chernivtsi Oblast in 2009. – Chernivtsi: Head Statistics Department in Chernivtsi
Oblast, 2010. – 126 p.
8
Besides, prices on vegetable oil, meat and meat products, cheese and soft cheese,
macaroni products, bread increased by 9.6-5.8%. At the same time, substantial
reduction of prices was observed for vegetables – by 15%, fruit – by 6% and eggs
– by 5.1%. Soft drinks increased in price by 20.8%.
In the healthcare sector, prices increased by 28.4%. At the same time, the
cost of pharmaceutical products, medical products and equipment grew by 38.1%,
of ambulatory services – by 12.3%.
Prices on transport grew by 14%. Fuel and lubricating materials became
43.6% and 12.4% more expensive, respectively, which resulted in growth of the
cost of transportation services (by 3.4%) due to an increase of the cost of travel by
railway (by 17.1%) and motor-car (by 0.5%) passenger transport.
Speaking about prices on public utilities, electric power, gas and other types
of fuel, their price rose by 4%, incl. the sewage fee – by 24.5%, water-supply fee –
by 16.4%, heating fee – by 8.9%, residential premises maintenance and repair costs
– by 6.2%.
It is possible to assert that activities aimed at prevention of an increase of
prices on consumer goods have not achieved their objective or have not fully
achieved it. These administrative control activities did not have legitimate levers,
and they did not take into account the economic laws of prices' increase inhibition
due to liberalization of market conditions and contributing into an increase of the
goods and services offer.
Results of implementing the set of activities intended for minimizing
negative consequences of the crisis in the construction industry can be estimated
based on the following data: during 2009, enterprises of the oblast carried out
construction work for the amount of 826.1 mln UAH, which is 60% of the volumes
of 2008.
The volumes of work performed by types of construction activity are
characterized by the following data (table 6).
Table 6
Volumes of work performed by types of construction activity
Volumes
% of
Construction activity types
9
Construction
Preparation of construction sites
Construction of buildings and constructions
General construction work
among them
construction of buildings
construction of bridges, trestle bridges, tunnels and the metro
construction of main pipelines, communication and energy
supply lines
construction of local pipelines, communication and energy
supply lines
construction of power enterprises, extraction and processing
industries
construction of other constructions
assemblage and installation of composite constructions
construction of roads, air fields and arrangement of the surface
of sports constructions
water constructions
other construction work
Installation of engineering equipment of buildings and
constructions
Construction completion work
Lease of construction equipment with an operator
of work
in 2009,
mln
UAH.
2008
the total
volume
826.1
0.3
759.2
697.7
60.0
4.1
61.9
62.4
100.0
0.0
91.9
84.5
362.2
247.4
63.3
55.7
43.9
30.0
9.2
43.5
1.1
0.2
32.6
0.0
65.6
12.3
0.8
97.6
112.3
104.2
7.9
1.5
0.1
14.2
33.9
13.4
36.9
74.1
52.1
1.7
4.1
1.6
66.5
0.1
–
49.0
1.0
–
8.1
0.0
–
Reduction of volumes of construction work compared with 2008 took place
at enterprises of all rayons of the oblast. The highest level of it was registered in
Vyzhnytsky (11.5 times) and Hertsaivsky (6.5 times) rayons. Volumes of
construction work performed by builders of Chernivtsi and Novodnistrovsk
reduced by 40.4% and by 30.7%, respectively. This conditioned the general
indicators of construction work reduction volumes, for in these two cities in 2009
62.3% and 27.6%, respectively, of this work was performed compared with the
total oblast volume. But already in January, 2010 construction enterprises of the
oblast performed construction work for the amount of 10.4 mln UAH, which was
only 33.2% of the volumes in 2009. In January, 2010, in six out of eleven rayons
construction enterprises did not operate. In the cities of Chernivtsi and
Novodnistrovsk, volumes of construction work reduced 2.8 and 3.4 times,
respectively. Only 27% of construction enterprises in Chernivtsy operated (based
on data of the Head Department of Statistics).
10
The situation in the construction sphere fully reflected the general Ukrainian
trend. Foremost, it is related to the banking crisis, as a result of which financial
institutions suspended crediting mortgage programs, as well as crediting for
builders, which during the previous years of the “construction boom” and
excessive profits had not managed to provide themselves with working assets at
least for completion of objects initiated. At the same time, the increase of prices on
key items of domestically produced construction materials looks paradoxical.
Producers of concrete, metal, having lost their positions in foreign markets, try to
compensate the losses at the expense of the domestic consumer instead of
stimulating the internal demand by competitive offers.
Speaking about prevention of employees' lay-off, available statistics
demonstrate: the number of economically active population of Chernivtsi Oblast
aged 15-70 during the period of January-September, 2009 made up 415.6 thousand
persons, among them 378.5 thousand persons were employed in economic activity,
while the rest were unemployed. The population employment level (based on ILO
methodology) compared with January-September, 2008 reduced for population
aged 15-70 by 0.7 percent, and for population of the working age – by 2.6 percent,
and made up 56.8% and 57.2%, respectively. The number of unemployed persons
aged 15-70 increased during the period of January-September, 2009 by 8.5%.
2.2 thousand citizens unemployed in labor activity contacted the state
employment service for employment assistance during December, 2009, which is
17.3% more than in November, 2009 but 2.3 times less than in December, 2008.
The registered unemployment rate on the whole for the oblast in December,
2009 grew by 0.1 %, and as on January, 1 2010 it constituted 1.9% of the number
of working age population. The abovementioned indicator in rural areas grew by
0.2% and made up 2.3% of rural population of the working age, while among
urban population – by 0.1% and made up, respectively, 1.4%. At the same time,
there was a significant differentiation of this indicator's values in rayons of the
oblast observed: from 1.1% – in Novoselytsky up to 4.4% – in Zastavninsky
11
rayons. In the cities of Chernivtsi and Novodnistrovsk, it was 0.7% and 6.6%,
respectively.
An abrupt increase of the ratio of unemployed population per one vacant
work place, i.e. the actual work place offer, became the result of the growth of the
unemployment rate. The respective indicator as on January, 1 2010 made up 25
persons (remained at the level of January, 1 2009) and increased by 7 persons
compared with December, 1 2009. The largest average number of unemployed
population per one vacant working place (vacancy) was observed in Vyzhnytsky
(397 persons), Kitsmansky (378 persons) and Kelmenetsky (303 persons) rayons.
Such significant differentiation is explained by availability of the major share of
vacancies in the regional center and their insignificant number in rayons of the
region. Moreover, the need of enterprises for employees reduced from 757 persons
in 2009 to 427 persons in 2010 (data as on January, 1).
For the purpose of attenuating the negative impact of the financial and
economic crisis on the employment rate in Bukovina, the “Regional Activities”
announced training of young people and adult population in professions aimed at
self-employment and engagement in entrepreneurial activity.
It is known that professional training and retraining is important for
increasing competitiveness of unemployed persons in the labor market. However,
in spite of this, for the purpose of acquiring a new profession or specialty, during
December, 2009 at educational facilities of all types only 291 persons passed
professional training, which is 3.3 times less than in December, 2008. Besides, at
the support of the state employment service, in December 2009 406 persons were
employed, which is 1.7 times less than in December, 2008. Concerning social
work, during December, 2009 only 132 unemployed citizens were engaged for
their performance, which is 2.1 times less than in November, 2009.
Considerable budgetary losses were the consequence of insufficient
implementation of specific activities. Thus, during December, 2009 5264.3
thousand UAH were spent from the Fund of Mandatory State Social Insurance
against Unemployment for unemployment allowances, which is 36.5% more than
12
in November, 2009. The average registered number of the unemployed persons
who received the allowances in December, 2009 increased by 33.8% compared
with November, 2009.
In November, 2009 there was a 7% increase of volumes of forced part-time
employment of workers. Thus, 8.8 thousand persons worked under the part-time
daily (weekly) schedule in November, 2009, which is 0.3% more than in October,
2009.
One would not refer to the dynamics of the amount of wages arrears as
positive ones. Without regard to that in November, 2009 the total amount of wages
arrears reduced by 3.1%, or by 210.4 thousand UAH, and as on December, 1 2009
it made up 6609.6 thousand UAH, compared with the beginning of 2009 the
outstanding amount increased by 22.7%, or by 1224.4 thousand UAH.
Anti-crisis activities planned at the regional level are not focused on
mobilization of the limited funds of the budget for improving the employment
situation by involving unemployed citizens for work in infrastructure projects
(construction and repair of roads, social sphere objects, etc.). Instead, significant
funds are spent on social unemployment allowances. At the same time, they do not
take into account such factors as “fictitious employment”, hidden unemployment,
and, on the other hand, the “shadow” labor market, into which the budgetary funds
of unemployment allowances are also streamlined.
In the field of the economy and production, “achievements” of the region are
insignificant. Based on results of operation of industrial enterprises in 2009
compared with 2008, the production index was 74.6%, in December 2009
compared with the previous month – 99.8%, with December 2008 – 81.2%. The
2008 production level was not achieved for all key types of extraction and
processing industries. The growth rate of volumes of mined-out and processed
products made up 72.5%. A negative factor is that compared with JanuaryNovember 2008 the share of investment products in the structure of the sales
volume of extraction and processing industries reduced by 1.7%.
13
During the period of January-November, 2009 profit-making enterprises, the
share of which in the total number was 55.6%, obtained 239.3 mln UAH of profit,
which is 7.8% less than for the period of January-November 2008. During the
period of January-November 2009, 44.4% of enterprises worked unprofitably,
which is 9% more than in the period of January-November 2008. These enterprises
obtained 440.1 mln UAH of losses, which is 1.6 times (156.4 mln UAH) more
compared with the period of January-November 2008.
Against the background of the negative trends in the oblast's industry,
agricultural production demonstrated growth. Thus, in 2009 the volume of gross
agricultural products (in relative prices of 2005) was, based on preliminary
calculation, 2066.6 mln UAH, which is 3.3% more than in 2008. At agricultural
enterprises, production of commodities in value increased by 0.5%, in population's
households – by 4%. This can be explained by the cyclic nature of agricultural
production and the positive inertia due to funds and resources invested in 2008.
In Chernivtsi Oblast, less gross regional product (GRP) per capita is
produced than on average in Ukraine and than in other regions. Thus, in 2007 the
part of GRP was only 0.9% of the national indicator.
Information about volumes of the gross regional product is shown in table 7.
Table 7
Gross regional product for the period of
Gross regional product, mln UAH
Ukraine
ARC
Vynnytsya
Volyn
Dnipropetrovsk
Donetsk
Zhytomyr
Zakarpattya
Zaporizhya
Ivano-Frankivsk
10
2004-200710
Gross regional product per capita, UAH
2004
2005
2006
2007
2004
2005
2006
2007
345113
9901
8123
4994
30040
45617
5947
5297
15255
7311
441452
12848
10207
6553
41227
58044
7430
6700
19968
9622
544153
16044
12414
7687
52347
72361
8784
8185
24787
11316
720731
20874
15381
10072
71173
92093
11127
10508
33158
13916
7273
4951
4700
4771
8609
9713
4397
4238
8093
5238
9372
6460
5966
6285
11909
12490
5554
5373
10683
6916
11630
8101
7328
7397
15239
15725
6636
6576
13369
8157
15496
10574
9159
9711
20868
20197
8485
8452
18022
10055
Web site of the State Statistics Committee of Ukraine. – Accessed: www.ukrstat.gov.ua
14
Kyiv
Kirovograd
Lugansk
Lviv
Mykolaiv
Odessa
Poltava
Rivne
Sumy
Ternopil
Kharkiv
Kherson
Khmelnytsky
Черкаська
Chernivtsi
Chernigiv
Kyiv
Sevastopol
11883
5594
14672
13992
7934
17029
13983
5599
6275
3948
20524
5200
6344
6623
3277
6181
61357
2213
15362
6877
19716
17192
9553
20762
18099
7263
8025
5137
25618
6469
7958
9014
4234
7627
77124
2823
19188
8187
24159
21486
11876
24898
22179
8924
9566
6452
32023
7565
9603
10957
5126
8950
95267
3822
26221
9989
32280
27987
14767
33116
28355
11180
12341
8276
43868
9034
12339
13656
6672
11532
135900
4916
6652
5122
5973
5396
6424
7028
8841
4817
5009
3516
7182
4546
4549
4853
3589
5163
23130
5847
8673
6394
8131
6657
7801
8619
11574
6269
6497
4603
9025
5713
5764
6681
4654
6474
28780
7452
10918
7723
10085
8351
9769
10379
14330
7724
7848
5819
11353
6744
7023
8209
5650
7714
35210
10079
15033
9546
13628
10915
12227
13827
18500
9695
10249
7510
15645
8122
9100
10331
7369
10081
49795
12961
From this table, it is possible to conclude that Chernivtsi Oblast on the
whole falls behind all oblasts of Ukraine. This is the result of that during the recent
several years little has been done for strengthening the innovative vector of
development of the oblast's economy, forming modern competitive advantages.
The capacities of high technologies production, which Bukovyna owned before
1991, as well as the tourist and recreation potential of the oblast, are being lost.
At the same time, in accordance with the report of Chernivtsi OSA for 2009
(published on the official web site of the regional state administration
www.bukoda.cv.ua), efforts of local executive authorities during the recent year
were concentrated on realization of the tasks and activities of the program of
economic and social development of the oblast, the regional budget for 2009 and
programs for development of the respective industries, regional activities for
strengthening the financial and budgetary discipline and minimization of the
negative impact of the global financial crisis on the economy of the oblast. In the
economic sphere, actions of authorities were aimed at overcoming current
problems and obstacles on the way to market economy development, involvement
of internal and foreign investments, expansion of the domestic market,
implementation of economic processes' de-shadowing activities.
15
As a result, the oblast is one of leaders in Ukraine. The second rate of the
region is conditioned by high rating positions of the social sector sphere,
consumption market, the best (compared with other regions) indicators of the real
sector development, investment and foreign economic activity. This period is
characterized by the following positive trends. As on January, 1, 2010, no wages
arrears were accumulated in the oblast for employees of the budgetary sphere,
which are financed from local budgets, the region has a positive balance of foreign
trade in goods, the volume of direct foreign investments has increased. During the
previous year it managed to preserve the cost-of-living-index lower than in average
in Ukraine.
At the same time, disregarding the significant volumes of the work
conducted for improvement of the socio-economic situation in the oblast, because
of the failure to approve this year's state budget and the economic and social
development program, the respective documents have not been passed at the
regional level either, which, in its turn, does not allow funding regional programs,
anti-crisis activities, continuing construction of launched objects, providing for
proper funding of budgetary facilities, meeting social obligations to citizens of the
region, etc.
To summarize the abovementioned, we would note that the range of anticrisis activities suggested by Chernivtsi Oblast authorities is characterized by
fragmentary outcomes. There are separate positive results, but there is also a
sufficient number of negative ones. This is due to not always successful reaction to
crisis phenomena on the part of regional authorities, as well as on the part of the
government. On the whole, the living standard of population has deteriorated,
while this is the key criterion of progress of any regulatory interventions into the
sphere of economy. Moreover, these interventions must be timely and operative,
not remain on paper only (the decision on anti-crisis activities was passed by
Chernivtsi regional council on 23.12.2008, while the monitoring committee was
formed on 25.03.2009, i.e. 3 months after).
16
Moreover, the overwhelming majority of anti-crisis activities passed by
Chernivtsi regional council are evidently formal, declarative and “distanced” from
the actual situation. Thus, this considerably reduces efficiency of their
implementation and complicates verification of their implementation. Instead of
passing a list of 78 activities, in our view, it would have been more reasonable to
concentrate on 10-15 (maximum 20) priority issues and to regularly conduct
monitoring of their implementation.
For the purpose of overcoming consequences of the crisis for the regional
economy and creation of its sustainable development principles, including the
sector of small and medium businesses, it is necessary, first, to have feasible
programs of state and local support for 2-3 innovative and technological
breakthrough centers, which make it possible to organize the chain reaction –
creation of a train (networks, clusters, other integration forms) of small and
medium enterprises based on principles of, initially, very basic cooperation, and
afterwards – based on international experience. Such center can be represented, for
instance, by the integrated association suggested by researchers in the economy of
the region “Technical Park – Electronics of Bukovyna” for development of high
research-intensive technologies and products, which requires inclusion into the
national complex development program of high research-intensive competitive
technologies in the industry. This would make it possible to create thousands of
additional work places and in line with other activities to slow down the process of
"leakage" of qualified employees. At the same time, this will drastically improve
the level of gross regional product and gross added value production, which means
growth of wages, profits and budgetary revenues.
It is also necessary to have actual, not declarative programs of development
of the tourist and recreation and transit potential of Chernivtsi Oblast.
Secondly, the actual socio-economic backwardness of Bukovyna, which is
presently “disguised” and not so poignantly revealed due to the foreign currency
revenues from labor migrants, urgently requires creation of a special development
mode for the oblast. This implies realization of intentions of enacting the Law of
17
Ukraine “On the special mode of investment activity in priority development
territories in Chernivtsi Oblast”. Absence of this kind of act prevents involvement
of sufficient resources for supporting available competitive advantages and
creation of new ones. Adoption of such legislative act would promote, in our view,
deepening of regional transborder collaboration and using the advantages of
bordering on the European Union.
And, thirdly, important at this stage is awareness of the importance of
deepening internal regional and inter-regional economic integration. This implies
creation of new and strengthening of current cooperation links among subjects of
economic activity for the purpose of increasing their competitiveness. On this
basis, internal regional and inter-regional economic links are simultaneously a
source of new development mechanisms, and a factor of counteracting crisis
phenomena.
Annexes.
1.
Resolution of Chernivtsi regional council of 23.12.2008 "On
regional activities for strengthening the financial and budgetary
discipline and minimization of the negative impact of the global
financial crisis on the oblast's economy".
2.
Regional activities for strengthening the financial and budgetary
discipline and minimization of the negative impact of the global
financial crisis on the economy of Chernivtsi Oblast.