Development Strategies of Pilot Territories in Pskov Region Project part-financed by the European Union (ERDF) HINTERLAND FORUM Denmark February, 2007 «Pogranichnaya volost» (Krasnogorodsk District) «Gavrovskaya volost» (Pytalovo District) «Vasilyevskaya volost» (Palkino District)

Pskov Region Pskov Region is located in the North-West of the Russian Federation. It covers 55,3 thousand km 2. The population of Pskov Region is about 750 thousand people. There are 2 big cities in the region: Pskov (200 thousand people) and Velikie Luki (100 thousand people) and 24 districts (28 municipalities, 28 urban and 192 rural settlements) There is an: internal border with Novgorod and Leningrad Regions in the North-West and with Tver and Smolensk Regions in the South-East; external border with Belarus (352 km long), Estonia (249 km) and Latvia (270 km). The region is a tourist link joining the tourist facilities of the North-West and Central parts of Russia. The region is situated at the crossroads of highways and railways connecting Moscow with Riga and Tallinn and St.-Petersburg with Riga and Kiev. Pskov is located relatively close to such big cities as St.-Petersburg (280 km), Tallinn (280 km), Riga (260 km) and Moscow (650 km).

Population Difference, % The Russian Federation, mln. people146,3142,8-2,4 North-West Federal District, thousand people ,0 Kareliya Republic ,3 Komi Republic ,6 Arkhangelsk Region ,7 Vologda Region ,3 Kaliningrad Region ,8 Leningrad Region ,1 Murmansk Region ,3 Novgorod Region ,3 Pskov Region ,3 Saint-Petersburg ,8

Population Forecast in the Region YearsTotalUrban population Rural population Labour Force ,7469,0214,7425, ,8446,0188,8370, ,4415,1147,3305,3

Analysis of Social and Economic Situation in the Districts of Pskov Region In rural population has shown the decline in all the spheres for the period of market reforms Urban population has decreased by 7.8% from thousand people to thousand people In sown areas has decreased twice from thousand hectare to thousand hectare

Factor Analysis of Transformational Dynamics in the Economy of the Districts The main reason of decline of basic industries is the crisis of traditional fields of specialization, primarily, in agriculture. In the pre-reform period the cooperation system between settlings of various hierarchical level was destroyed The basis of the local economy was agriculture

Existing Development Strategies Social and economic situation in the districts of Pskov Region is developing by inertia scenario under the influence of external factors

Territorial Strategic Planning Strategic planning has been used on the corporate and territorial levels since 1990s when stability in economic and social spheres was achieved Problems: the system of budget relations and instability of tax legislation lead to improper use of existing resources and promote use of upper budgets in solution of territorial problems inertness of the territorial social and economic processes, caused by diversity of incomes and support measures, partly conceal the crisis of the territories that becomes apparent in degradation of existing resources and sharp fall of standard of living

The Necessity of Strategic Planning in Pskov Region Further degradation of traditional industries of specialization Inefficiency of inertia strategy even in the conditions of economic growth Specialists understanding the necessity and importance of strategic planning who were trained and got experience within the Federal Projects

The Conception of Social and Economic Development Initial evaluation of social and economic situation Strategic goal-setting of social and economic development Choice of economic growth poles Development of basic directions of social and economic policy Development of policys implementation mechanisms

Initial Evaluation of Social and Economic Situation Reevaluation of the importance of natural resources in economic development Problems arose in analysis and evaluation of financial, investment and labour potential Problems in evaluation of natural resources and their proper use promote orientation on the regional budget (most settlings put subsidies from the regional budget in the first place but search of investor and use of own resources still remain in the second place)

Strategic Goal-setting of Social and Economic Development The objective of all the concepts is to improve the living standard of the population, but it is not structurized and it has declarative character Settlings put a special emphasis on support of some enterprises and projects only but not on stimulation of business activity and reconstruction of the economy

Choice of Economic Growth Poles Agriculture Timber felling and wood-processing Food industry Light Industry Tourism

Agriculture In spite of the crisis in agriculture it is still one of the leading branches of the economy on the number of people involved in it (16,5%) in the region Its input Gross Regional Product is 10% Dairy industry is considered to be perspective Agriculture is supported with the National Project

Timber Felling and Wood-processing (1) Total wood area in Pskov Region is about 40% of the territory Total wood reserves are approximately 250 million m3 (45% - coniferous forests, 35% - birch forests) The resources allow felling up to 3,5 million m3 of timber yearly (30% - coniferous forests), but at present only 25-30% of possible volume is processed

Timber Felling and Wood-processing (2) Due to the Programme of social and economic development of Pskov Region, pulp and paper mill (output 600 thousand tons per year) may become the core of wood-processing cluster It requires raw materials – approximately 1,5 million m3 per year (mostly aspen) 1400 working places will be created to start up the mill and provide it with raw materials

Food industry is closely connected with agriculture is included in dairy industry has capacious markets is characterized as stable

Light Industry Light industry is considered to be an economic growth pole in 11 districts of Pskov Region Light industry as well as food industry and machine-building are traditional industries of specialization for Pskov Region

Construction Materials Production The potential of resources for construction materials production is one of the most significant in the Pskov Region Only 4 districts included production of construction materials into their strategic plan

Tourism Tourism is characterized by a multiplicative effect for the local economy Pskov Region has all the conditions for developing tourism There is a necessity to create infrastructure for tourism development

Development of Policys Implementation Mechanisms Development of corporate cooperation Support of entrepreneurship National projects Involvement of migrants into the local economy Deepening cooperation between municipalities Resources of educational institutions

The project started in June pilot territories (rural settlements) were chosen: Pogranichnaya volost (the Krasnogorodsk District) Gavrovskaya volost (the Pytalovo District) Vasilyevskaya volost (the Palkino District) HinterLand Project in Pskov Region (1)

Regular meetings of the representatives of Pskov State Polytechnic Institute with Pskov Region Administration and project coordinators Constant cooperation and information exchange with pilot territories (by telephone, fax and ) Preliminary factor analysis in pilot territories development (Methodology Table) Draft SWOT of pilot territories (Advantages / Disadvantages in Methodology Table) Study visits to pilot territories for meeting people, getting information at place, arranging seminars Series of regular expert meetings at Pskov State Polytechnic Institute Definition of priority strategic development directions of pilot territories and resources of the territories (Drafts of the strategic development directions) HinterLand Project in Pskov Region (2)

Scientific and practical conference «Strategic planning and development sources of municipal institutions» (Pskov, December 2006) 45 participants from Pskov Region (including participants from 3 pilot territories), Pskov Region Administration, Pskov State Polytechnic Institute, the Ministry of Economic Development and Trade of Russia, Russian scientific centre on state and municipal management, Saint-Petersburg Academy of Management and Economics The following questions were discussed at the event: Federal policy in strategic planning in regions and municipalities of Russia Strategic planning in municipalities in new legal conditions Innovative resources in strategic development of settlings Municipalities cooperation as an instrument of strategic development As the result, drafts of the strategic development directions were worked out during the conference. HinterLand Project in Pskov Region (3)

HinterLand Project in Pskov Region (4) Gavrovskaya volost (the Pytalovo District) It is planned to develop the following directions: Economic a.Effective use of natural resources (peat, sand, gravel, wood-felling, animal farming) b.Infrastructure development (cafes, service centres along the highway etc) Social (new working places, income increase) Cultural (tourism) Ecological (environment protection programme) International cooperation with Latvia (Malnava)

HinterLand Project in Pskov Region (5) Pogranichnaya volost (the Krasnogorodsk District) It is planned to build a new customs terminal at the border with Latvia. It is planned to develop the following directions: 1.Increase of building materials/ production (including for road-building needs) 2.Cultural tourism (Lyamonov Park is a natural historical area connected with A. Pushkin.) 3.SMEs development 4.Flax production including for the needs of military- industrial complex of Russia.

HinterLand Project in Pskov Region (6) Vasilyevskaya volost (the Palkino District) It is planned to develop the following directions: 1. Effective use of natural resources (timber production, pulp and paper production) 2. Agriculture development and income increase in the industry (animal husbandry, land plots to farmers and agricultural enterprises) 3. Tourism (sport activities, recreational and cultural tourism)

Further steps Continue active cooperation with all the parties involved in the project Continue developing strategic plans for pilot territories Host a HinterLand Forum in Pskov (Autumn 2007) Approve the developed strategic plans by representative authorities of pilot territories HinterLand Project in Pskov Region (7)

Thank you for your attention!