Operational Programme for Promotion of Cohesion for 2007–2013
Vilnius, July 5, 2007
TABLE OF CONTENTS
1. analysis of current social and economic condition in lithuania and DEVeLOPMENT PERSPECTIVES 6
1.1 LOCAL AND URBAN DEVELOPMENTPOTENTIAL
1.1.1 Social-economic situation of the regions of the country
1.1.2 Social-economic situation of rural areas
1.1.3. Cultural heritage and tourism
1.2 QUALITY AND AVAILABILITY OF PUBLIC SERVICES
1.2.1 Health care services
1.2.2 Education services
1.2.3 Services provided by vocational training institutions, institutions implementing state employment policy, out-patient social services and services to the disabled
1.3 ENVIRONMENTAL QUALITY
1.3.1 Water protection and implementation of water management means
1.3.2 Waste management
1.3.3 Air quality
1.3.4 Protection of biodiversity and landscape
1.3.5. Increase of energy production and use as well as use of renewable resources
1.3.6 Institutional environmental quality management
1.3.7 Informing society, participating in making decision-making and education
1.4 STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATSANALYSIS
2. STRATEGY OF THE operational PROGRAMme
2.1 ViSiON AND AIMS
2.1.1 Vision
2.1.2 First aim of the operational programme – to provide all prerequisites necessary for strengthening and revealing local development potential
2.1.3 Second aim of the operational programme – to ensure available and high-quality essential public services of health care, education, institutions implementing state employment policy, out-patient social services and services to the disabled
2.1.4 Third aim of the operational programme – to pursue better environmental quality by giving special attention to increasing efficiency of using energy
2.2 prioritY 1. LOCAL AND URBAN DEVELOPMENT, PRESERVATION OF CULTURAL HERITAGE AND PROTECTION OF NATURE AND ITS ADAPTATION TO DEVELOPMENT OF TOURISM
2.3 prioritY 2. QUALITY AND AVAILABILITY OF PUBLIC SERVICES: HEALTH CARE, EDUCATION AND SOCIAL infrastruCtUrE
2.4 prioritY 3. ENVIRONMENT AND Sustainable DEVELOPMENT
2.5 prioritY 4. TechniCAL ASSISTAnCE FOR IMPLEMENTING Operational programME for promotion ofCOHESION
2.6 COMPLIANCE WITH HORIZONTAL THEMES AND THEIR IMPLEMENTATION
3. Subsidization plan
4. expression of tasks in numbers
5. preparing operational programme
5.1 partnership
5.2 ex-ante evaluation
5.3 strategic environmental assessment
6. implementation provisions
appendix...... 144
appendix i: distribution of expenses according to categories...... 144
appendIx II. list of projects of high value...... 145
appendix III. FINANcial flowS...... 146
appendix iV. EX-ANTE REcOMmENDAtIOnS – Operational programME for promotion of COHESION 147
aPpendix V. compatibility of support with other operational programmes and other EU financial INSTRUMENTS 151
aPpendix VI. state aidSTIPULATION...... 158
aPpendix VII. Public procurement...... 159
aPpendix VIII. INITIATIVE “REGIONS FOR ECONOMIC CHANGES”...... 160
APpendix IX. COOPERATION WITH BALTIC STATES...... 161
APpendix X. RECOMMENDATIONS OF Strategic environmental assessment FOR Operational programME for promotion ofCOHESION 162
LIST OF PICTURES
Picture 1. Average annual unemployment level, in percent.
Picture 2. Gross Domestic Product per one resident in comparison with Lithuanian average
Picture 3. Guests from the most important foreign markets accommodated in Lithuanian accommodation enterprises, guests in thousands 17
Picture 4. Employment of Lithuanian hotels rooms in 2004–2005, in percent...... 20
Picture 5. Number of beds per 10 000 residents...... 23
Picture 6. Hospitalization per 1000 residents...... 24
Picture 7. Death rate per 100 000 residents...... 24
Picture 9. Children’s education in institutions in accordance with their age in 2003, in percent.28
Picture 11. Changes in emission of main pollutants to the air...... 44
Picture 12. Changes in the area of protected territories (percent of total are of the country)....45
Picture 13. Administration scheme of Operational programme for Promotion of Cohesion..131
LIST OF TABLES
Table 1. The most significant differences in social-economic field of the EU and Lithuanian regions
Table 2. The most significant differences in social-economic field of the EU and Lithuanian rural districts 15
Table 3. The most significant differences in the field of the EU and Lithuanian cultural heritage and tourism 21
Table 4. The most significant differences in the field of the EU and Lithuanian health care services 26
Table 5. Percentage of teaching and studies institutions graduates who registered in Labour exchange of the country before September 1, 2005 31
Table 6. Percentage of teaching and studies institutions graduates who are employed in accordance with their professional qualification among all employed graduates. 31
Table 7. The most significant differences in the field of the EU and Lithuanian education services 33
Table 8. The most significant differences in the EU and Lithuanian labour market, education and social fields 40
Table 9. The most significant differences in the field of the EU and Lithuanian water protection 43
Table 10. The most significant differences in the field of the EU and Lithuanian waste management 45
Table 11. The most significant differences in the field of the EU and Lithuanian improvement of air quality 46
Table 12. The most significant differences in the field of the EU and Lithuanian environmental protection 48
Table 13. The most significant differences in the field of the EU and Lithuanian use of renewable energy sources 50
Table 14. Strengths, weaknesses, opportunities and threats analysis...... 52
Table 15. Predicted distribution of expenses of the first priority according to the categories ..79
Table 16. Predicted distribution of expenses of the second priority according to the categories.96
Table 17. Predicted distribution of expenses of the third priority according to the categories...... 101
Table 18. Predicted distribution of expenses of the fouth priority according to the categories.104
Table 19. Subsidization plan of Operational Programme for Promotion of Cohesionaccording to the funds and year. 109
Table 20.Subsidization plan of Operational Programme for Promotion of Cohesionaccording to the priorities and subsidization sources...... 109
1. analysis of current social and economic condition in lithuania and DEVeLOPMENT PERSPECTIVES
1.1 LOCAL AND URBAN DEVELOPMENT POTENTIAL
1.1.1 Social-economic situation of the regions of the country
Main statements:While Lithuanian economy is developing rapidly, social, economic and territorial differences are growing; however, evenly situated Lithuanian towns provide favourable conditions for sustainable growth of economy and the whole country. Regional policy of Lithuaniais based on development of regional economic growth centres (Alytus, Marijampolė, Mažeikiai, Tauragė, Telšiai, Utena and Visaginas) and additional support to distinguished problematic territories.
Insufficient competitiveness of Lithuanian regional economic growth centres and attractiveness of investment and residential environment is caused by, besides other factors, poor condition of urban environment, transport and community infrastructure as well as quite often – its lack.
Non-decreasing social, economic and territorial differences between different Lithuanian regions as well as between urban and rural areas cause unequal opportunities to keep, maintain properly and renew available housing; therefore, physical degradation of residential environment and residential buildings as well as lack of social housing in noticed in certain areas of the country (especially problematic territories).
While Lithuanian economy is developing rapidly and Gross Domestic Product (hereinafter – GDP) is increasing on an average of 6.7 percent per year (during the period from 2000 to 2004), social, economic and territorial differences between Lithuanian regions and within them are not decreasing.
Regional policy strategy of Lithuania until 2013states that main problem of national regional policy during the period until 2013is great social and economic differences between Lithuanian regions and within them, and their main reason is insufficiently even territorial economic growth.
Territorial social cohesion is measured by evaluating territorial differences between its main components – residents’ income and unemployment level (or occupation) in the country. Therefore, territorial social cohesion in Lithuanian is evaluated on the basis of income from wage labour per one member of a household per year and average annual unemployment level.
Income from wage labour (hereinafter – IWL) amounts to about 60 percent of all income of households. Statistics shows that IWL was lower than the state average (3238 Litas). even in 7 from 10 counties in 2004. Only Vilnius county (4417 Litas), Klaipėda county (3672Litas) and Kaunas county (3410 Litas)exceeded the state average. Residents’ of Tauragė county (which is the smallest one in the country) IWL did not even amount to a half of the rate of Vilnius county (which is the biggest one in the country) and was over 1.5 times lower than the state average. IWL was almost 25 percent lower than the state average in half of the counties (Alytus, Marijampolė, Panevėžys, Tauragė and Utena).
Dynamics of another indicator of the residents’ income – average gross monthly wage – according to the counties in 2000–2004 also shows stability of considerably great territorial differentiation and increase of differences between the regions of Lithuania.
Average annual unemployment level in Lithuania amounted to 11.4 percent in 2004. Territorial differentiation in Lithuania in the aforementioned year was quite great. Average annual unemployment level lower than the state average was in Marijampolė (6.9 percent), Tauragė (8.9 percent), Kaunas (10.3 percent), Telšiai (10.3 percent) and Vilnius (11,1 percent) counties. In the rest 5 counties, unemployment level was higher than the state average (12.3–12.7 percent). Difference between the counties where the indicator was the highest (Klaipėda county) and the lowest (Marijampolė county) was 1.8 times, while territorial differentiation according to this indicator was much lower in 2000 and difference between the counties where the indicator was the highest and the lowest was only 1.5 times. This indicated increasing territorial differentiation.
1 picture. Average annual unemployment level, in percent.
Source: Department of Statistics under the Government of the Republic of Lithuania
During the period from 2004 to 2006, both average annual unemployment level of the country (in 2005, it amounted to 8.5 percent in the country) and territorial differences of this indicator between the regions were decreasing. Similar tendency was typical in case of the indicator of proportion of registered unemployed residents and residents of employable age. However, these seemingly positive changes did not determine greater territorial and social cohesion of the regions of the country. Decreasing unemployment level and number of the unemployed was, first of all, strongly determined by residents’ emigration from the country induced by admission of Lithuania into the EU and residents’ movement to the cities of the country. In 2004-2005, over 30 thousand people left the country. Residents’ migration within the country amounted to over 130 thousand people during the aforementioned period. It is likely that the majority of the people who left the country are residents of employable age (e.g. according to the data obtained by the Institute for Social Research, about 75 percent of people who leave Lithuania are labour migrants) who aim to emigrate to other areas of the country or abroad because of unfavourable social, economic and territorial living conditions.
Territorial differentiation of the indicator defining situation in labour market – proportion of registered unemployed residents and residents of employable age – changed as well, which also shows non-decreasing territorial differences. In 2004, the average of Lithuania according to this indicator amounted to 6.8 percent. Territorial differentiation is also bound to increase, and in 2004, the indicator of Tauragė county (the highest one in Lithuania) was more than 2 times higher than the indicator of Kaunas county (the lowest one in Lithuania).
Dynamics of unemployment level and proportion of registered unemployed residents and residents of employable age in 2000–2004 shows stability of considerably great territorial differentiation and absence of features of cohesion. It is likely that predicted tendencies of specialization and concentration of agriculture in Lithuania will increase exclusion of the counties where the percentage of residents engaged in agriculture is the greatest one and which fall behind according to the aforementioned indicators even more.
Assessing the fact that regions (counties) in Lithuania are characterized by non-increasing territorial social cohesion, main direction of regional policy until 2013will be increasing territorial social cohesion between regions by not increasing territorial, social and economic differentiation within the regions.
Picture 2. Gross Domestic Product per one resident in comparison with Lithuanian average
Source: Department of Statistics under the Government of the Republic of Lithuania
Lithuania is characterized by considerably great and still-increasing differences between economic growth of different regions. The gap between Vilnius county which is developed the most and Tauragė county which is the poorest one according to GDP per one resident (hereinafter – GDP/resident) in 2004 was approximately 2.7 times (this difference increased by 1.2 times during the period from 2000 to 2004). That is to say, GDP/resident was even 44 percent higher than the average of Lithuania in Vilnius county in 2004, and in Tauragė county it amounted to only 53.5 percent of the average of Lithuania. Whereas in 2000, GDP/resident was only 33.4 percent higher than the average of Lithuania in Vilnius county, and in Tauragė county it amounted to 61.7 percent of the average of Lithuania. This shows increasing economic differentiation between separate regions.
GDP of Lithuania is predicted to increase rapidly in the nearest future as well. Predicted decrease of the number of residents of Lithuania should also increase GDP growth in the future. In spite of that, differences of this indicator between developed and non-developed regions of the country are bound to increase.
Assessing the fact that great and non-decreasing territorial, social and economic differences between the regions and within them, national regional policy is implemented and territorial cohesion is promoted in two directions. The first direction covers promotion of long-term growth of economy of the country and increase of social cohesion between the regions by complexely developing infrastructure of regional economy development centres. The second one is directed towards improvement of quality of life in problematic territories in this way promoting regional cohesion within the regions.
Regional economic growth centres and problematic territories
In modern economy, the majority of GDP is created and growth takes place in urban territories. However, not all urban territories attract investment and, at the same time, promotion of growth of economy because of different reasons equally. Usually, a network of evenly distributed towns ensures a more even development of the country; besides, it is the basis of increase of social and economic cohesion. There is a network of sufficiently evenly distributed towns in Lithuania which should allow the country to develop further. However, the majority of investment is attracted to the cities of Lithuania – Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys. Possibilities of other Lithuanian towns – regional centres possessing economic growth potential – are used insufficiently. Due to poor investment attractiveness and factors of agglomeration economies local and regional economic growth centres are insufficiently competitive in comparison with the cities; however, during the period from 2000 to 2004, percentage of direct foreign investment in more developed areas decreased from 95.1 to 89.5 percent.
Additional state intervention measures intended to increase attractiveness of investment and residential environment must be implemented in regional economy development centres. Following regional policy strategy of Lithuania until 2013 Alytus, Marijampolė, Mažeikiai, Tauragė, Telšiai, Utena ir Visaginas are attributed to such towns – regional economy development centres. These regional economic growth centres are distinguished regarding the fact that Alytus, Marijampolė, Tauragė and Telšiai are regional economic growth centres provided for in the general plan of the territory of the Republic of Lithuania which carry out administrative functions and are located in the counties which fall behind the most according to social condition; Utena is a regional economy development centre, located near the region of Ignalina atomic power plant of the Republic of Lithuania, economic potential of which will especially contribute to solving future social problems of this region; Mažeikiai and Visaginas are regional economic growth centres possessing economic potential located near regional economic growth centres which are proposed to be developed (respectively Telšiai and Utena), their added potential (when constituting axes of growth of economy together with regional economy development centres) creates preconditions of more rapid economic growth of these regions.
Following the Regional Development Law, a part of the territory of the country where specific social and economic problems exist is called a problematic territory. On the basis of data of 2005, 14 municipalities meet the criteria of distinguishing problematic territories. The majority of municipalities which meet determined criteria of distinguishing problematic territories are in the outskirts of Lithuania, further away from regional economy development centres. These municipalities are characterized by high unemployment level, labour force of low qualification, rapid decrease of the number of residents and their ageing, low attractiveness of residential environment, poor social infrastructure, high level of social exclusion and weak level of pendulum labour migration of residents. Due to these reasons problematic territories are also characterized by low competitiveness and poor investment attractiveness. Aiming to solve both these and demographic problems, it is necessary to implement intervention measures intended to improve environment and quality of life by giving most attention to modernization of public infrastructure in those territories.
Aiming to increase competitiveness and attractiveness of investment and residential environment of regional economic growth centres and distinguished problematic territories, it is necessary to solve present problems complexely by preparing and implementing programs of development of respective regional economic growth centres and their integration in surrounding (at the radius of 50-70 km) territories.
Urban infrastructure of smaller towns of the country
Regional policy strategy of Lithuania until 2013 states that competitiveness and investment attractiveness of distinguished regional economic growth centres is determined by, besides other factors, poor condition of infrastructure and quite often – a lack of it. Due to poor condition of urban environment, transport and community infrastructure or a lack of it environment favourable to business is not created as well as suitable environment and quality of life is not ensured for residents. The latter ones, especially qualified residents of employable age, leave the regions and move to other towns of the country or other countries.
According to preliminary data of 2005, over 15 thousand residents left the country; natural annual movement of residents in the counties and municipalities amounted to almost 60 thousand people, the majority of which (almost 24 percent) moved to Vilnius. The majority of all residents who left their residences were from Alytus (2.6 percent), Telšiai (2.5 percent), Šiauliai (2.3 percent), Klaipėda, Tauragė and Utena (2.2. percent) counties, while the state average amounted to 2 percent. Statistics about migration of qualified labour force is not presented; however, it is likely that a considerable part of residents who left their residences are highly qualified. Migration of qualified labour force induced not only by low wage level present in regional economic growth centres but also low attractiveness of their labour environment.