Regional Polarisation in Central and Eastern Europe
AbstractThe transformation countries in Central and Eastern Europe are undergoing rapid change in their sectoral and regional economic structures. In many regions, manufacturing industries which had had a dominant position during the time of socialist controlled economy have since given way to services industries. Farming was subject to a similar retreat. In a phase of transformation, manufacturing tends to deconcentrate whereas services focus on a contracting number of locations. Yet inspite of rapid structural change, manufacturing is still more important in the CEECs than in the EU, while the CEECs are still lagging behind the EU in their change-over to tertiary sectors. The structural change did not affect all regions in the same manner. Transformation produced greater regional disparities, and social inequalities are reflected in geographic terms. Regional differences are high also in an international comparison; regional development levels vary much more than in EU countries. Differences between relatively affluent and poor regions are particularly evident in Slovakia and Hungary, whereas Poland and especially Slovenia experienced less divergence. Some regions are on course to growth, others are mired in an intractable structural crisis. In the 1990s, the greatest dynamism was found in the capitals and big cities, which profited from the locational advantages offered to the services industry. Apart from concentrating on agglomerations, regional development was also subject to a west-east decline. Regions with large investments in manufacturing were growing nicely. Regions along EU borders and industrial regions with an innovative capacity were found to be especially attractive by investors. "Old" industrial regions, on the other hand, dominated by mining or heavy industries, were held back in their transformation to market economy by excess capacities and detrimental structures, and have consequently suffered high unemployment for years. Imbalanced labour markets are also found in the rural periphery. Excess capacities in farming and inadequate location factors produced tenacious structural problems. With crisis regions concentrated in certain parts of countries, the risk of regional disintegration is growing. Serious polarisation in the regional structure is found in Poland, Hungary and Slovakia, where 50 to 60 percent of the population live in industrial or rural problem areas. Handling regional crises is the major challenge facing experts and regional politicians. Development conditions simply vary too much to allow identifying almost all CEE regions as objective-1 regions for EU aid, as would be the case if current criteria for EU structural policy were applied. It appears more sensible for EU regional policy to give preference to regions with massive structural problems. For regions which, while not suffering from major structural problems, still have a relatively low income compared to the EU average, consideration should be given to primarily national aid within the scope of regional growth policy.
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Bibliographic InfoArticle provided by WIFO in its journal WIFO-Monatsberichte.
Volume (Year): 74 (2001)
Issue (Month): 3 (March)
Postal: Austrian Institute of Economic Research Publikationsverkauf und Abonnentenbetreuung Arsenal, Objekt 20 A-1030 Vienna/Austria
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