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Gagauzia: The Region of Development
Galina Selari, November 15, 2006
At the beginning of September the Government examined and established the "tasks" concerning one of the most discussed issues of its Programme - "the two magical threes": 300 thou new labour places and the country average wage of 300 USD. Common interest to both problem per se and the variants of its solution is understandable and explicable since it concerns each of us who live in Moldova. The question of all questions though is the same as it was almost two years ago - is this possible? The Government answered through its corresponding decision followed, further on, by comments of experts, journalists and the electorate.
In the meantime, the Government answered once again to the above mentioned question through approval of the draft law on regional development perhaps without even knowing it. After all, it is the country's regions combining its natural, demographic and production resources, settlements, infrastructure, that form the natural basis of sustainable development, which means that the actions to support regional development undertaken in the "legal basis - structures - processes" system should ensure higher effectiveness of the country's economy as a whole through expansion of economic growth and, more important, of its results away from the centre (Chisinau first of all) towards the regions.
NB: regions of development superimpose on the existing administrative-territorial structure, while keeping the historically established division into sub-regions: North, Centre, Chisinau, South-East in the prospect, South and ATU Gagauzia.
Among all future regions of development only two exist today in reality: Chisinau, where economic life is concentrated and accrues, and Gagauzia, of which is much less known. The "rest" of Moldova is rarely discussed at all.
Moreover, at the first place Gagauzia is taken as political category, and just this feature is usually discussed and such debates go even more active now spread from the autonomy to the centre.
At the same time, economic peculiarity of the region is obvious. Unlike other administrative-territorial units whose number and border are flexible and are set starting from the specific tasks of state management, Gagauzia - as an autonomous territorial formation - enjoys the special treatment and differs through a considerable advantage: its territorial "stability" initially rests upon the results of the referendum of 1995, which means that, considering the expanded powers and increased responsibility, real (in its European meaning) regional development is possible here.
Given the "scarceness" of information let us try to answer the question put at the beginning - is it possible in Gagauzia, for instance?
Let us remember, that the first Programme of socio-economic development of Gagauzia (Gagauz-Eri) approved by the People's Assembly of Gagauzia in April of 1997, established priorities and indicators of development for 1996-2000. But it appears that the initial lack of coordination of goals and their financial backing, aggravated by the force majeur of 1998, affected the implementation so much that its outcome still waits to be given publicity.
Later, in 2001 an attempt was undertaken (the first in the history of the independent Moldova!) to elaborate the Regional programme of development of Gagauz-Eri. It was planned that that programme would set priorities and mechanisms of ensuring sustainable human development in Gagauzia, as the region of the Republic of Moldova, till 2003, with its further development till 2005 and even 2020. At that, most importantly, the emphasis during setting goals and priorities was done on local conditions and resources, taking into account the capacities of the state as a whole. Unfortunately, the work "ended" just with the assessment of the initial basis, advantages, potential and factors of the region's development, as well as eventual risks were analyzed, but elaboration of the concept of sustainable development of the region and the programme per se never started.
So, Gagauzia today. First, about the most important - the people. Noteworthy is that the natural habitat of concentration of the Gagauz population has been almost the same during the modern history - and mainly coincides with the data of the censuses of Bessarabian population of 1897 and 1907, but compared to that data the region's population grew three times as much.
Truth to tell, comparison with the census of 1989 is not so optimistic: the population reduced, but nevertheless twice as little as in Moldova as a whole. The share of the capable population has abruptly increased (64%), while traditionally, due to high "children's quote" it was 45-50%. Here, at least two problems are beginning to emerge. First, employment today is not a comforting answer; the number of those employed dropped by 17% during the last 5 years (in Moldova, on average - by 5%). At that, average wage is 25% lower the average in Moldova and less by half (!) as compared to the capital. Apparently, this is the reason cca 20 thou persons (according to official estimates) have left their homes in search of better life abroad. Second, who will be able to work tomorrow, but it is today when we have to start thinking about it (which is also the task of the regional policy).
The direction of the search: structural shifts in the real sector of economy, encouragement of entrepreneurship, attraction of internal and external investments.
By the way, as for the investment legislation, Gagauzia has some positive experience of its own. Under the Law on Investments and Investment Activity of ATU Gagauzia, starting from 2001 all agents of the investment activity enjoy benefits provided by the legislation of Moldova and extra benefits - under the local law. In the Republic of Moldova, it was only 2004 when foreign and domestic investors were afforded equal treatment. It seems that transport and geographical closeness to the countries of the Danube-Balkans region and the Black Sea basin, traditional close cultural and economic ties with them, together with traditional enterprise of the population and acceptable legislation have attracted investors to the region, both domestic and foreign. Noteworthy is that the structure of Gagauz investments from the point of view of property differs from the country average - about 50% investments are of foreign or "mixed" origin (in Moldova as a whole - about 30%).
In 2001, Turkish holding "Asena-Textil" has commenced its operation. Having started in Ciadir-Lunga, it currently operates in two more settlements, which means real jobs and wages.
It was more than 10 years ago when the American company "Redeco" started extracting petroleum in Valeni village, and this summer petroleum will began to be processed by the first Moldovan refinery (owner "AS Petrol Moldova"): 70 work places have been already created, and 100 more are in the offing.
Still exists and tries to develop FEZ "Production Park "Valacanes". As of the end of 2005, 15 residents are registered there (there were 16 in 2004), but unfortunately more than a half of them does not operate in reality (reserve!), and work places are still obviously little - slightly more than 400. Production of elite wines is the main activity. As regards equipment, laboratory instrument of control and analysis the enterprise (DK Intertrade SRL, Russia) is one of the leading in Moldova. It is assumed that FEZ production range will become more varied: there were registered new residents planning to produce dried fruits and wool. The present companies will also broaden their activity - "Metalgazcon SRL" is going to produce walnut oil (plus no less than 60 work places).
But there are enough problems in Gagauzia as well. And the relations with the centre is the most evident. There is a lot to think about in the context of the state regional policy currently formed by the Government, especially as regards financial, economic and organizational mechanisms of its implementation. And today, mutual reproaches can be periodically heard concerning inter-budget relations. The centre is displeased with discrepancies in legislation, Gagauzia - with the amount of transfers. Despite the changes undertaken at the legislative, including the constitutional, level, the compromise is still to be found. Unfortunately, the reality of Moldova is that these legally established rights are not fully backed by own resources yet. One may surmise that once regions of development are created these problems can acquire a new characteristic - the necessity to reach judicious compromise between the intraregional community, including local administrations.
Regional policy has to stop being associated mainly with distribution of resources granted by the centre. Only in this case growth driven by regions is possible in Moldova - activization of the economy in the regions, improvement of living standards, and the social stability as the result.
1 Regional programme Gagauz-Eri: Analysis of the Initial Basis, www.cisr-md.org