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Social Capital and Socio Economic Development the case of Romania’s NW and NE Region PH.D Elena Porumb BABEŞ-BOLYAI UNIVERSITY CLUJ NAPOCA, ROMANIA AAG Conference Boston MA April 2008 [email protected] April 15 2008 AAG Boston MA 1 European Regional Policy Intervention of the socioeconomical parts European Regional Policy O.P. ESF National Strategic Document National Strategic Reference Framework NSRF Negotiations with the European Commission Services April 15 2008 O.P. ERDF Approval of the Operational Programmes O.P. ERDF + Cohesion Fund Commission presentation AAG Boston MA 2 Frame of Regional Planning MONITORING COMMITTEE Community Support Frame MANAGEMENT AUTHORITY Community Support Frame Public Finance Ministry MONITORING COMMITTEES SOP Economical Competitivity SOP Transport Infrastructure SOP Environment Infrastructure SOP Human Resources Development OP Administrative Capacity Development ROP Regional Development OP Tehnical Assistance MEI Ministry of European Integration MPF Ministry of Public Finance MANAGEMENT AUTHORITIES MTE Ministry of Trade and Economy MTCT Ministry of Transport Constructions and Tourism MEA Ministry of Environment and Water MLSSF Min of Labor Social Solidarity and Family MAIA Ministry of Administration and Internal Affairs INTERMEDIARY BODIES ANIMMC MEdC MCTI MER NAY 8 LPRA MEdR NALFO 8 RDA END BENEFICIARIES April 15 2008 AAG Boston MA 3 Regions in Romania April 15 2008 AAG Boston MA 4 Counties of the NW Region? April 15 2008 AAG Boston MA Fig. 1Counties of the North-West Region 5 Why the NW Region? • the main characteristics correspond to the national average level; • the only Pilot project in Regional Development Policy (RDP) at regional level; • corporate social responsibility and community-oriented context; • networks for regional development policy cooperation through the public/ private/ NGO’s partnership evolution; • favourable arena for debating conceptual and best practices in RDP; • labour force adequate for knowledge-based economy and new technologies (100.000 students); • tradition for multi-cultural, ethnicity and religiosity April 15 2008 AAG Boston MA 6 Network of institutions Total institutions: 77 EU-level: 1 Central administration: 10 Regional administration: 3 Local administration: 24 Private institutions: 39 April 15 2008 AAG Boston MA 7 Network centrality Freeman’s Degree Centrality Measures: • Network Centralization = 21.74% • Heterogeneity = 2.50%. Normalized = 1.21% • Network Centralization Index = 24.14% April 15 2008 AAG Boston MA 8 Metric MDS CCIAMS PRIMZA CCSJ PRESJ PRESM CCIABHUTCNCCIASJ CCBH AJOFMCJ CCSM AJOFMSM GEA PWC_RO AJOFMSJ CAR FDSE USAMV MMGA EDC FDSC MAPDR MCTI MEdC AJOFMMM CLR UBB CCIACJ MTCT MFP AJOFMBH FNASR ERCD MIE MMSSF ARMediu FTTCJ EUR MEC MAI CRCR IER Civitas ECR PRIMBM ADRNV PRIMBI CCIABNPREBN AJOFMBN CCBN DPSCBNPRIMOR ADR PRECJ CCCJ RBC AIRDD PRIMCJN YAPCJ Patrir BiblOG AFIVCJ ALFA CAT April 15 2008 ApaCJ CCIASM SME_MM LAPUS FPBH CCMM PRIMSM CCIAMM FRO PREMM FSD PREBH AAG Boston MA 9 SNA county variation Cluj County April 15 2008 Sălaj County AAG Boston MA 10 Why the NE Region? • the main characteristics correspond to the national average level; • favourable institutional and legislative framework for regional development policy; • strong emphasize on social responsibility; • networks for regional development policy cooperation; • qualified labour force adequate for knowledge-based economy; • regional development strategy in close relation with strengthening the social cohesion; • the only region with positive natural increase (about 1.0‰) April 15 2008 AAG Boston MA 11 NE Region April 15 2008 AAG Boston MA 12 Network of institutions Total institutions: 33 EU-level: 1 Central administration: 6 Regional administration: 4 Local administration: 11 Private institutions: 11 April 15 2008 AAG Boston MA 13 Network centrality Freeman’s Degree Centrality Measures: • Network Centralization = 39.08% • Heterogeneity = 5.56%. • Normalized = 2.60% April 15 2008 AAG Boston MA 14 Metric MDS PRIMIS MAI MDPWH AJOFMVS CCSV PREVS ECR CCIS ARMediu TANEL ADR PREIS MIE MMDD PRODL CCIASV MEF CCBC REGCO MANPU AJOFMBC PRIMBC TEHNO ADRNE PREBC MEdC ARNSV SAPARD COLT CARSV BURSV April 15 2008 AJOFMIS AXICON AAG Boston MA 15 Social capital April 15 2008 AAG Boston MA 16 EU Values Orientation EU Values Orientation 80 75 70 60 69 61 50 58 52 40 40 30 38 36 32 27 20 53 50 43 33 24 Trusting EU Content in life in general General personal optimism Opinion regarding country economic dev Trust in justice 10 0 SW April 15 2008 NW Bucharest AAG Boston MA 17 Comparison between regions Unemployment rate by Region 20 Total TOTAL 15 - NORTH - EAST 10 - NORTH - WEST 5 April 15 2008 93 19 95 19 97 19 99 20 01 20 03 20 05 19 19 91 0 AAG Boston MA Years 18 Comparison between regions GDP/inhabitant dynamics by regions 250000000 200000000 Total N-E ROL 150000000 N-V Bucuresti 100000000 © 1998 - 2007 INSTITUTUL NATIONAL DE STATISTICA 50000000 0 Lei Lei Lei Lei Lei Lei Lei MU: Lei, lei RON (from Year 1998 Year 1999 Year 2000 Year 2001 Year 2002 Year 2003 Year 2004 Years years April 15 2008 AAG Boston MA 19 Comparison between regions April 15 2008 AAG Boston MA 20 Comparison between regions April 15 2008 AAG Boston MA 21 Connection GDP – EU trust Low PIB in ROMANIA No Trust in EU 20 0% 13 20% 67 40% no trust April 15 2008 60% no opinion AAG Boston MA 80% 100% trustful 22 NW Regional Programming April 15 2008 AAG Boston MA 23 NW Region – economic structure Structure of regional economy Health and social assistance 100% Education Public administration and defence Real estate 80% Financial services Transportation, logistics and communications Hotels and restaurants 60% Commerce Constructions Electric, thermal energy, natural gases, water Processing industry 40% Extraction industry 20% Industry Fishing aqnd fishery Agriculture, hunting and forestry 0% 1995 April 15 2008 2000 2001 2002 2003 2004 AAG Boston MA 24 NW Region – unemployment rate 16 14 12 ROMANIA REGIUNEA NV 10 BIHOR BISTRITA NASAUD 8 CLUJ MARAMURES 6 SATU MARE SALAJ 4 2 0 1999 April 15 2008 2000 2001 2002 2003 2004 AAG Boston MA 2005 25 Patterns of interest intermediation-representation Local authorities and governmental agencies: • Characteristics: Administrative conflict, insufficient use of funding opportunities. • Interests and motivation: Getting more autonomy; access to more funding opportunities • Potential and type of power: Authority power; community actions catalyst; future control of EU funds • Implications and conclusions: Enhancement of an articulate strategy for local development April 15 2008 AAG Boston MA 26 Patterns of interest intermediation-representation Companies • Characteristics: Low interest in marketing approach and use of intangible resources • Interests and motivation: Strategic alliances and facilities (technological clusters) • Potential and type of power: Resource management power (HR brands, marketing) • Implications and conclusions: Development of competitive marketing mix and PR strategy; Lobby activities April 15 2008 AAG Boston MA 27 Patterns of interest intermediation-representation Local and Foreign Investors • Characteristics: Low technologic transfer and added value; low investment/investor • Interests and motivation: More facilities; economic and administrative stability • Potential and type of power: Financial power • Implications and conclusions: Development of networks (local authorities and foreign investors) April 15 2008 AAG Boston MA 28 Patterns of interest intermediation-representation Cultural and Academic Institutions •Characteristics: Strong multicultural institutions; lack of sufficient and multiple funding •Interests and motivation: Join cultural networks, co-organisation of scientific, cultural and educational events •Potential and type of power: Information and knowledge power, catalyst power. A major feature of Cluj identity and image •Implications and conclusions: Articulation of a strategic perspective based on European core values April 15 2008 AAG Boston MA 29 Patterns of interest intermediation-representation Professional Associations • Characteristics: not sufficiently active in networking • Interests and motivation: Professional culture • Potential and type of power: Expert and relation power • Implications and conclusions: Training performance April 15 2008 AAG Boston MA 30 Best Practices in Romania Social Capital and Civil Society 2.1. Regional impact on civil society development 50 Mures 40 Harghita 30 Cluj Covasna 20 Transylvania 1.00 10 .00 Total Population 0 Rsq = 0.4092 0.0 .2 .4 .6 .8 1.0 ong in 1998 / population Figure 6 The relationship between the number of NGOs in 1998 (*1000/total population) and the proportion of those who gave 1% in 2004 (*1000/total at the county level. April 15 2008 AAG Bostonpopulation) MA 31 The NorthEastern Region Conclusions - high development potential in the research- development- innovation field - varied tourist potential - existence of foreign investors on the labor market - better paid jobs - the jobs offer is higher then the jobs demanding - encouragement of local initiatives attract the foreign investors by offering financial stimulations as a financial source of implementing improvement of economical policy - The need of helping the SME, the promotion of tourism, the improvement of the environment contributing to the improvement of region image for the potentials Romanian and foreign investors - Promotion the cooperation between strategic investors and local businesses from region - create new professions at the same level of the world evolution - encourage the development of interregional and international economical relationships April 15 2008 The North West Region of the region. AAG Boston MA 32 The NorthEastern Region The North West Region The Private Initiative Dynamic - not adapted economy - Early industrial development (easy industry, automobile industry, electrotechnics etc.) - good environment for the production foreign investments - the lack of development infrastructure - the development of tourism, general services, transports, professional services. structure - low economical productivity and efficiency - the main activity: agriculture - decreasing trend of private initiative - reduced weigh of SME in the production and services sectors - low quality of serviced delivered to population April 15 2008 AAG Boston MA 33 The NorthEastern Region - The state sustains some measures which will end to “increase the life standard of community and the sustainable development of the Region” - Strategic directions: The development of businesses and entrepreneurship; the development of human resources; the promotion of the potential development of the Region - Increased weight of population with law training Aprillevel 15 2008 Conclusions: The Western Region - general development of the region - good business environment - competitive economical spirit - lots of foreign entrepreneurs - high trained level of population - trained labor forced - the region unemployment rate is lower than the national one. AAG Boston MA 34 April 15 2008 AAG Boston MA 35 ARC as relationships broker April 15 2008 AAG Boston MA Figure 7: Overview of Arc’s approach and areas of work 36 A) Between nonprofits involved in community fundraising - exploring opportunities for creating a more structured space for interaction and common action as part of a network of organizations involved in community fundraising. B) Between nonprofits and businesses interested in supporting a certain field of work – identifzing common interests such as – at national level preventing measures for traffic safety, interest of national grant-making and community development organizations to support long-term reconstruction process in communities affected by floods in 2005 C) At the level of four local communities involved in community foundations development pilot program - test need and feasibility of a shared and transparent framework for mobilizing community resources, based on involvement of key stakeholders – NGOs, companies and government. April 15 2008 AAG Boston MA 37 Conclusions Administrative absorption capacity is influenced by: quality of the programming documents: OP, PC, manuals for applicants; quality of the information campaigns regarding funding possibilities; the existence of a project pipeline; capacity to carry out the implementation process per se at MA/IB level; this involves the existence of appropriate procedures and the necessary human resources April 15 2008 AAG Boston MA 38 Concluding remarks •no clear differences between old, new, and the former communist countries, with one important exception. •length of democratic rule does not have a significant effect on the quality of social participation. •as a former communist country Romania - caught in the middle in the debates on social capital in this part of the world. •differences in social capital might be expected according to age groups as different gene-rations have different resources available to them., or to social and educational groups – poorer communities rely on the intense informal relationships associated with bonding social capital, while wealthier communities are associated with more formal organisational participation. April 15 2008 AAG Boston MA 39 Conclusions The current institutional framework does not admit/legitimise specific attributions, competences or responsibilities for regional development at regional level Major difficulties for local/regional communities in transposing into practice a development vision (the development is the result of individual, separate actions) ; Difficulties in developing and sustaining projects with regional impact and interest; April 15 2008 AAG Boston MA 40