Integrated Development and Increasing Prosperity of Southern Estonia Kadri Uustal Ministry of Finance of Estonia Permanent Representation of Estonia to the EU

Estonia in Europe Figures (2006): Population: 1 344 684 Area: 45 227 km² Population density: 29 persons/km² GDP - 2004: 53.4% of EU25 - 2006: 65% of EU25 - GDP growth in 2006 – 11%

Southern Estonia Lower salaries Migration to the capital 30% higher salaries in the capital area (2005) GDP per capita in the Southern Estonia 4 018 EUR vs 10 864 EUR in the capital area (2004) Lower salaries Migration to the capital Higher share of primary sector Production relatively inefficient Lack of qualified labour Fragmented regional public administration Relative importance of production in GDP – capital area 56%, Southern Estonia 18% (2005) Regional Policy Zoning 3 times more people live in the capital area than in the Southern Estonia (2005)

Funding Integrated Development Structural Funds Cohesion Fund Other Equal Private Sector Integrated development Interreg State Municipal

Problems-opportunities Low income level Low GDP Few enterprises and foreign financiers High share of primary sector Emigration to the capital Inefficient production Low added value in production chain Low investments Low competitiveness Poor infrastructure Unqualified labour Human resource development Development of agriculture and fisheries Development of environmental conditions Development of local living infrastructure Tourism development Development of the transport infrastructure Development of educational and social infrastructure Business start-up and development

Getting there… Integration of unemployed and disabled people into the labour market Unemployment rate in the southern region has dropped from 8.1% (2003) to 2% (2006) The percentage of dependent people has decreased from 55.9% (2003) to 52.2% (2005)

Getting there… Start-up support for new businesses The average income per household member has increased by 44 euros in southern Estonia (2003-2005) Getting there… Start-up support for new businesses Training and competitiveness of enterprises Tourism The average monthly salary has increased by 25.4% in Southern Estonia (2003-2005)

Life expectancy has increased by 1. 1 years (men) and 1 Life expectancy has increased by 1.1 years (men) and 1.2 years (women) (2003-2005) Getting there… Local development, renovation of schools, kindergartens, health care institutions, improvement of leisure facilities Development and preservation of local heritage and culture (villages, museums, playgrounds etc) Leader pilot The average birth rate has increased by 3.6% and death rate has decreased by 3.7% (2003-2005)

Getting there… Building roads, renewal of water and sewage systems

Structural Funds added value County development centers: to coordinate funding and consult enterprises Every county has a strategy (regional development programmes) Integrated system of funding: using different financial sources to gain synergy in development Increased cooperation between enterprises, state, counties, municipalities, citizens, NGOs Cooperation outweighs competition Long-term perspective

We have done great but we can do better! Better cooperation between different counterparts in planning but also in initiation and implementation of projects Long-term perspective through the municipal and county development strategies/sectoral strategies Combination of different financial mechanisms Exchange of experience across borders – learning from successes and failures of others

Kadri Uustal kadri.uustal@eu.estemb.be THANK YOU! Kadri Uustal kadri.uustal@eu.estemb.be