Specifics of regional policy in the Baltic States

The experience of the formation and implementation of regional policy in the Baltic States deserves special attention, since it has common features characteristic of the countries of Central and Eastern Europe, and at the same time is associated with a persistent departure from the system of state power and administration of the Soviet type. Since the uncontrollable desire for independence and sovereignty even in the days of the USSR was the most important feature of these countries, by the time of the restoration of state independence in the Baltic countries, some independent experience of lawmaking in the field of reforming local self-government and changes in the field of state administration of the regions had already been accumulated.

The most developed conceptual foundations of regional policy by the time of the restoration of state sovereignty were in Estonia, since already in 1991 strategic directions of changes in the sphere of regional relations were developed  in this republic – diversification of the structure of the economy (especially in rural regions), intensive development of small enterprises, expansion of the initiative of local authorities, streamlining of the resettlement system. In accordance with the Constitution of the Republic of Estonia (1992), rural municipalities and cities are classified as units of local self-government. In 1993, the Local Government Act was adopted in this country, and in 1995 – the Act on the Administrative-Territorial Structure of Estonia, according to which the list of administrative units of this republic consists of 15 counties, 47 cities and 207 parishes.

Experts note that the main result of all the changes that have taken place in estonia’s regional policy over these years is a deep awareness of the importance of the idea of self-government both at the state level and in each administrative unit. In addition, thanks to the support of its northern neighbours Finland and Sweden, as well as the relatively rapid implementation of market reforms and the desire to join the EU, Estonia’s regional policy is increasingly similar to that pursued in Western European countries. At the same time, it is necessary to note the commonality of Estonia’s regional problems with Western Europe – uneven development in the “center-periphery” direction, a significant variation in unemployment in the regions (1.9–11.5%), wage differentiation (more than 1.7 times), social disproportions (inequality of opportunities in education, health care, culture, etc.).

According to Latvian experts, the problems of regional development of Latvia are among the most acute and least studied. There is every reason to believe that the severity of these problems lies both in the alarming scale of territorial disparities and in the fact that the Government of Latvia has not yet been able to achieve tangible results in overcoming sharp regional differences.

The objects of regional policy in Latvia are its administrative-territorial units – 26 districts and 492 parishes (pagasti), as well as 4 cultural and historical regions (novades), 7 large and 69 smaller cities.

In 1997, this country adopted a special Law on Regions In Need of Special Assistance, the main purpose of which is to support entrepreneurship in depressed areas, and considerable attention during this period is paid to solving the problem of transparency and objectivity of the choice of regions – objects of state regulation and assistance.

In particular, it should be noted the development of a methodology for classifying regions proposed by the Ministry of Environmental Protection and Regional Development of the Republic of Latvia. According to this methodology, the classification of areas is based on a “synthetic indicator” – an index of living conditions, for the calculation of which the following baseline indicators are used:

average salary (LVL, per 1 person); retail turnover (lats, per 1 person); the number of passenger cars per thousand of the population; number of telephones per thousand rural population.

On the basis of this methodology, all districts of Latvia are divided into three groups – with low, medium and high values of the index of living conditions.

Another method of classification of pagasti, based on the methods of statistical and multivariate analysis, took into account other most significant variables:

the proportion of the population of working age; the proportion of the unemployed in the total working-age population; income of local self-government bodies (lats, per 1 person); adjusted value of agricultural land (lats, per hectare).

As a result of the use of this methodology, all rural municipalities and pagasti in Latvia are ranked in descending order of the final indicator, taking into account the above parameters.

Calculations using both methods showed that in Latvia there is a significant differentiation of regions in the directions “north-south” and “west-east”. However, thanks to the efforts of the Government of Latvia and the implementation of the administrative-territorial reform, since 1998 the situation in the field of regional administration has begun to improve.

Lithuania is one of the few countries with economies in transition that managed to carry out a radical reform of the administrative-territorial division of the country in the first half of the 90s. Based on the experiences of Denmark, Finland and Sweden, it was decided that the most rational form was a two-tier system of administration.

The highest or regional level was represented by 10 counties with centers in large cities. Counties are administered by civil servants appointed and dismissed from the center. At the lower or local level, 56 local governments (municipalities) have been formed, including 44 districts and 12 cities with equal rights. The list of regional problems of Lithuania is generally standard – a high variation in unemployment in counties (3.8–16.5%), differentiation of incomes of the population in the direction of “center-periphery” (1.8 times), etc. A specific feature of the studied situation with the development of regions is the absence in Lithuania of a pronounced polarization along the “west-east” and “north-south” axes.

The main body responsible for the state regulation of regional development in Lithuania is the Ministry of Public Administration Reforms and Local Authorities of the Republic of Lithuania. The ultimate goal of the current regional policy is to create in all
The 10 counties have equivalent conditions for socio-economic development, and its main tasks are:

creation of conditions for long-term economic development; the establishment of appropriate infrastructure (taking into account socio-economic and environmental needs); reduction of differences between regions in terms of living standards, economic, cultural and educational conditions.

Experts admit that the new state regional policy in Lithuania is still in its infancy, but it is progressing very rapidly and in the coming years will undoubtedly have a positive impact on the development of regional and local communities within this Baltic state.