The issue

Rural areas, if not located in commuting distance to strong urban centres, have difficulties in giving their populations a proper chance to share benefits from economic and social progress. This applies particularly to areas depending almost totally on low-productivity agriculture with dominance of small farms. There, future job losses in agriculture may not be compensated by development of new employment opportunities.

This would lead to unwanted trends:

                     Migration to major cities outside these rural areas.

                     Ageing of remaining population.

                     Growing difficulty to maintain a decent level of services.

                     Degradation of fallow lands with loss of cultural landscape values being replaced by bush vegetation and dark forest.

                     Growing regional welfare disparities.

                     High public cost of infrastructure for remaining populations.

Basically four different situations (with combinations) can be identified in the BSR:

Type 1: Rural areas with high population density, living on low-productivity fragmented farming, with a weak urban system.

These areas expect significant reductions of traditional job supply in the process of modernisation. A weak urban system restricts the development of job alternatives. Strong out-migration will be the consequence.

Type 2: Rural areas with low population density, high reliance on agriculture and weak urban system:

These areas, too, face shrinking job supply , though to a lesser extent than the previous category. But while migration pressure is lower, they have even more difficulties to develop new sources of employment.

Type 3: Peripheral areas living basically on non-agriculture natural resources, with low population density, weak urban system and stagnant job supply, frequently coupled with accessibility deficits (particularly in mountainous areas):

If the populations in these areas are to participate in general societal progress, they require high-quality services in education, culture, entertainment, and diversification of job supply.

Type 4: Rural areas in commuting distance of dynamic urban centres

These zones tend to develop into urban sprawl areas with a loss of clear lines between urban and rural space. Their problem is not a lack of job supply in non-agricultural sectors, but loss of cultural and natural landscapes.

The proposed concept

The concept suggested by VASAB refers to the first three types of rural areas. They are all characterised by weak urban structures making high-quality services provision and development of new economic activities difficult.

This, in most cases, will only be feasible through a concept of ‘decentralised concentration’: In order for populations to remain in their regions, a concentration process to regional urban centres is required (short-distance instead of long-distance migration, extended commuting of those remaining in the countryside)

In different countries, the problems and potential measures differ. But invariably, comprehensive development measures across sec­tors are needed.

Policy measures would typically include:

                     Higher university and professional education; knowledge and innovation climate promotion to diversify the economy and to improve consumer services.

                     Urban networking where local conditions (time-distances between cooperating cities small enough) allow to develop combined service clusters - including cross-border networking where appropriate.

                     Improvement of accessibility from rural zones to urban centres and between urban centres in these zones. By lowering the cost of travel and transport within the regions an enlarged labour market is created.

                     Decentralisation of public institutions (particularly in higher education, science and research).

                     Support to new enterprises locating in such areas or cities, in particular when peripheral urban centres are too far from metropolitan areas to benefit from spillover.

                     Guided development of valuable cultural landscapes through alternative types of farming combined with rural tourism; development of new kinds of landscapes together with nature protection.

                     A further set of measures deals with the immaterial infrastructure: formal and informal rules constituting the cultural setting and the entrepreneurial climate governing interactions between economic agents. The enterprising spirit can be strengthened by network building between firms and between the private and the public sector.

A number of InterregIIC projects deal with the development of rural areas. But they concentrate mostly on rural tourism, and they don’t explore possibilities to strengthen rural urban centres.

VASAB suggests to promote more applications for Interreg/ Phare/ Tacis projects in this theme field. Such projects shall explore economic development potentials in urban centres of rural areas, in non-agriculture sectors like culture & arts, handicraft, design, entertainment production, tourism as well as new economy knowledge and information based activities. They shall consider complementarities between urban and surrounding rural areas, looking at rural and urban areas common development regions.

Examples for rural regions requiring strengthening of spatial structures

The following list is indicative only and not exhaustive.

1. Rural areas with high population density living primarily on low-productivity fragmented farming, and with a weak urban system.

   This is particularly relevant in major parts of eastern Poland and Lithuania.

2. Rural areas with low population density, high reliance on agriculture and weak urban system:

   This is relevant in many parts of the BSR, e.g.:

   • Major parts of Vorpommern (Germany), Latvia,
   • Western Jutland (Denmark),
   • Northern Poland except urban regions around Gdánsk and Szczecin).
   • Large islands ("Baltic 7 Islands: Rügen, Bornholm, Öland, Gotland, Aland, Hiiumaa, Saaremaa),
   • South-eastern part of Estonia (though most of the agricultural decline has already happened, and population has already migrated or commutes over longer distances).

3. Peripheral areas living basically on natural resources, with low population density, stagnant job supply

   • Forestry: northern parts of Nordic countries and major parts of Russian BSR, increasing also in Latvia and Estonia. Sweden, Finland and Denmark have successfully promoted the development of new economic activities in such regions. But still, there is a growing out-migration from these regions.
   • Fishery: northern parts of Norway

Potential co-operation projects

Cooperation projects may aim at the following:

                     Discussion and evaluation of experience concerning strengthening of weak rural areas, particularly of their urban centres.

                     Assess spatial impacts of economic restructuring in rural areas, including impacts from EU enlargement; identification of most affected areas.

                     Prepare proposals for co-operation of spatial planning with agriculture and other sector institutions towards accelerated development of rural regions.

Co-operation projects of rural regions shall be explored by local, but also regional bodies and actors. In EU accession countries, they shall liaise with the SAPARD facility.