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Regional Disparities and their Mitigation in Slovakia: Selected Features and Approaches

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R Re ev vi is st ta a R Ro om mâ ân nă ă d de e G Ge eo og gr ra af fi ie e P Po ol li it ti ic că ă Year X XV VI I, no. 2 2, N No ov ve em mb be er r 2 Abstract: The presented paper pays attention to the regional disparities, which are one the current issues faced not only by geographically large but also smaller countries. Even though our study discusses regional disparities only in Slovakia, its main goal is to provide some general conclusions and recommendations, which could initiate a potential international discussion in terms of exchange of good practices solving the presented issue. The first part of paper deals with basic terminology and justifies the meaning of the examination of regional disparities. In the second part, based on selected indicators, we identify the rate of regional disparities in Slovakia and we examine the trends in the development of the rate of regional disparities during the years 2000-2012. The last part of paper examines the use of regional policy as a tool for mitigation of regional disparities in Slovakia.
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University of Presov, Faculty of Humanities and Natural Sciences,
Department of Geography and Applied Geoinformatics,
17. novembra 1, 081 16 Presov, Slovakia, e-mail: kvetoslava.matlovicova@unipo.sk
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University of Presov, Faculty of Humanities and Natural Sciences,
Department of Geography and Applied Geoinformatics,
17. novembra 1, 081 16 Presov, Slovakia, e-mail: anna.zidova@smail.unipo.sk
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University of Presov, Faculty of Humanities and Natural Sciences,
Department of Geography and Applied Geoinformatics,
17. novembra 1, 081 16 Presov, Slovakia, e-mail: jk.kolesarova@gmail.com
Abstract: The presented paper pays attention to the regional disparities,
which are one the current issues faced not only by geographically lar ge but
also smaller countries. Even though our study discusses regional
disparities only in Slovakia, its main goal is to provide some general
conclusions and recommendations, which could initiate a potential
international discussion in terms of exchange of good practices solving the
presented issue. The first part of paper deals with basic terminology and
justifies the meaning of the examination of regional disparities. In the
second part, based on selected indicators, we identify the rate of regional
disparities in Slovakia and we examine the trends in the development of
the rate of regional disparities during the years 2000-2012. The last part of
paper examines the use of regional policy as a tool for mitigation of
regional disparities in Slovakia.
Key words: regional disparities, Slovakia, mitigation of regional disparities,
regional policy
* * * * * *
INTRODUCTION
Regional disparities are quite frequently used term that is understood very
differently in scholarly literature and social practice. In recent years, the issue of
analysing regional development and regional disparities has become very
popular in Slovakia. It is examined by geographers, economists and sociologists,
Matlovičová K. (33%), Gavaľová, A. (33%), Kolesárová, J. (33%) (2015):
Regional Disparities and their Mitigation in Slovakia: Selected Features
And Approaches. In.: Revista Română de Geografie Politică Year XVI, no. 2,
November 2014, ISSN 1454-2749, E-ISSN 2065-1619, pp. 99-118.
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
100
because it is a topic with high degree of social relevance (Matlovič, Matlovičová
2012). A number of theoretical and methodological papers based on empirical
studies have been published; however, it seems that the research of regional
disparities requires an interdisciplinary approach because existing approaches
based on the dominant economic dimensions do not capture the full complexity
of the issue.
In studying regional disparities, it is necessary to define two essential
words: region, which even today is the topic for discussion relating to the
definition of its nature and criteria for its geographic definition, typology and its
qualitative characteristics, and disparity, which is very frequently used term of
the last decade and which is used to denote the fact that its concept on the one
hand contently narrows and on the other hand semantically diversifies, what
makes its semantic interpretation often difficult to understand.
DEFINITION OF REGION AND REGIONALIZATION
Streimikiene (in Kilijoniene et al. 2010) defines region as a territory which
differs by specific natural, demographic, social and economic features that
characterize given territory and that are different from other neighbouring
territories. The region is defined in various conceptions such as social,
territorial, geopolitical, economic, etc., but according to Ţítek (2002) the most
significant interest in the concept of a region is centred in geography. The term
region is the object of regional geography, which is according to Matlovič (2006)
currently the best platform for the integration of geography and for the increase
of its relevance to practice. Regional geography is profiled as an integrated,
cross-disciplinary platform of explaining the processes of structuring space on
one side and understanding the essence of identity and individuality of regional
units of different taxonomic levels in the context of everyday human experience,
on the other side (Matlovič 2006, Michálek 2009).
From the current definitions of the region, we consider the definition by
Hudec et al. (2009), as the most eloquent one. They define the region as a
complex, territorial, open, and dynamic system with a huge number of elements
of different quality and thick linkages. It is richly structured and has a wide
range of diverse features, such as: openness; flow character-transforming inputs
into outputs; interaction with the surroundings; internal differentiation;
hierarchy; and adaptability.
According to Jeţek (2008 in Wokoun et al. 2008) regions cannot exist by
themselves. They are the result of specific processes such as abstraction,
generalization or construction, which is called regionalization. Regionalization is
one of the elementary methods of regional geography.
Bašovský, Lauko (1990, p. 42) define it as: "the process of dividing the
territorial units which have a certain character(s) and their separation in the
territory which this character(s) do not have."
Nuts classification
In defining the regions in terms of the planning units of regional policy in
the EU and its individual member countries, including Slovakia, institutional
classification so called NUTS is preferred (Sloboda 2006). The name comes from
the French La Nomenclature des Unités Territoriales Statistiques. At the
beginning of 1970's, Eurostat launched the process of creating the NUTS
classification in each member state based on bilateral agreements. The main
Regional Disparities and Their Mitigation in Slovakia: Selected Features and...
101
reasons for creating such classifications were on one hand constantly enlarging
of the European Union and on the other hand the growing demand for statistical
data according to a uniform methodology. For these reasons, the complete
unification of the classification of territorial structures for statistical purposes
was created.
According to Eurostat, NUTS classification was created for:
1. Collection, development and harmonization of regional statistics in the
European Union,
2. Socioeconomic analysis of the regions,
3. Definition of regional policy in EU member states.
Table 1. NUTS classification in Slovakia
(Source: Statistical Office of the SR)
NUTS 1
NUTS 2
LAU 1
LAU 2
Number of
Population
NUTS 2
(31.12.2012)
Number of
Population
NUTS 3
(31.12.2012)
Slovak
Republic
Bratislava Region
8
73
612,000
612,000
Western Slovakia
7
251
1,838,136
556,577
9
276
593,159
7
354
688,400
Central Slovakia
11
315
1,348,611
690,121
13
516
658,490
Eastern Slovakia
13
665
1,611,407
817,382
11
440
794,025
TOTAL
4
79
2890
5,410,154
5,410,154
WHAT IS DISPARITY AND WHY IS IT IMPORTANT TO STUDY
REGIONAL DISPARITIES?
The origin of the word dates from the 16th century of French disparié,
based on the Latin origin disparitas which means split (Oxford dictionary). The
Cambridge dictionary defines the word disparity as a lack of equality (Cambridge
dictionary). Slovak dictionary of foreign words defines disparity as diversity and
inequality (Slovník cudzích slov). What kind of inequality is it?
According to Hučka, Kutscherauer, Tománek (2008) it is inequality arising
as a result of the basic trends of development, which is a considerable degree of
its variability, resulting in uneven development. Consequently, they define the
regional disparity as "diversity, respectively inequality of characters, events, or
processes, which have an explicit territorial location (they can be allocated in a
defined territorial structure) and which identification and comparison has any
rational sense (cognitive, psychological, social, economic, political)" (2008, p. 5).
Examination of regional disparities is currently based on two basic
approaches. The first one is based on the Neoclassical and Neoliberal
(convergent) theoretical basic basis, which emphasizes the natural
counterbalancing tendencies in the development of the region in the long term.
Disparities between regions are understood as natural, given by different
conditions and regional specificities of different origins. The emphasis is rather
on the positive sides that regional disparities bring. Efficient allocation of
resources is provided by market mechanisms and artificial state interventions
into this mechanism are unacceptable, (excluding reinsurance of the legal
framework for the market operation, maintaining the order and law enforcement,
the freedom of information and the repression of cartels). The second approach
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
102
is based on Keynesian and Marxist (divergent) theories, according to which the
main reason of regional disparities is the spontaneous nature of capitalism,
which causes a social injustice and related social instability, concentrated in
troubled regions. Without the intervention of the state, the trend towards
deepening disparities would prevail, which would then exist a long time or
permanently (Blaţek, Uhlíř 2011). Based on divergent theories, regional policy
was created.
In Slovakia, the phenomenon of regional disparities is linked to the
regional impacts of post-communist economic transformation after 1989. In the
initial period of transformation, the dominance of neoliberal economic
approaches prevailed and there was a general reluctance to planning and
regional policy (Hampl, Müller 2011 in Matlovič, Matlovičová 2011). Investigative
attitude towards regional disparities had been changed only gradually, and was
conditioned by the group of impulses. According to Hampl, Müller (2011), and
Sloboda (2006) it can be stated that the interest for regional disparities have
increased in relation to the constitution and a growing role of regional
governments and also the European integration, namely the accession of
Slovakia into the European Union in 2004, which applies regional policy
inspired by the group of divergent theories the objective of which is to mitigate
regional disparities.
Methodological problems of the analysis of regional disparities
From the methodological point of view, in studying regional disparities, we
have to take into consideration two issues. The first one is the use of proper
territorial units and the second one the use of proper indicators.
In connection with the use of proper territorial classification, it can be
stated that the definition of regions used in the EU for the statistical purposes
(NUTS 2, NUTS 3) is often inappropriate. The regions are often markedly
heterogeneous what is reducing their comparability. In many cases, regions are
not internally integrated or their boundaries artificially divide natural units.
They often have very different size parameters (number of inhabitants, size)
what again complicates their comparability. Very well-known problem is the
"effect of the capital city", which is demonstrated by statistical overestimation
of observed indicators in the region of the capital city. It results from the fact
that the capital cities benefit from metropolisation and significant
concentration of capital, economic activities using agglomeration effects, saves
from the extent a size of the market. In metropolitan areas, companies with a
nationwide sphere of action reside which are obtaining the results in several
regions, but statistically they obtain the results in the region of the capital city
(Sloboda 2006). Another problem is that the capital cities usually belong to the
most important centres of commuting, what makes the application of the
indicator of regional GDP per capita problematic. On the other hand, the
advantage of artificial statistical regions is good data availability (Matlovič,
Matlovičová 2011).
We come to the problem of choosing the proper indicators of regional
disparities. In general, we face the problem of limited database, available in
comparable time lines for territorial units of different scale denominator level
along the local-global/continental continuum. The GDP per capita is the most
frequently used indicator. The main problem with the use of GDP per capita
arises with the effect of commuting. It means that the creation of a regional GDP
Regional Disparities and Their Mitigation in Slovakia: Selected Features and...
103
involve also people who commute from another region. It is quite known that
their incomes tend to be spent in their home regions. Therefore, regional GDP
per capita is statistically overestimated in the target region and statistically
underestimated in the region of commuting (Lapišáková 2002 in Matlovič,
Matlovičová 2011).
Summarizing the mentioned facts, it can be stated that in the analysis of
regional disparities, it is appropriate to take into consideration a number of
relevant indicators which we will explain in the next part of the paper.
METHODOLOGY
In order to assess the rate of regional disparities in Slovakia, we were
analysing several indicators of socioeconomic nature while each of them was
given equal weight. We applied a multi-criteria evaluation of the NUTS 3 regions
(8 units), which we consider to be more objective than evaluation on the basis of
only one indicator (regional GDP per capita in case of EU). We share the idea
that the use of several indicators has a potential to point at problematic regions
and to reduce some of the above mention problematic features of the regional
GDP. Accordingly, except of the regional GDP, also the following indicators were
selected and analysed:
- Unemployment rate
- Average monthly wage
- Net disposable income per capita
- Net cash monthly costs per capita
- Incomes of the health insurance companies from the insurance
payments per capita
- Foreign direct investments,
- Profit-oriented organisations
- Enterprises with 250 or more employees per 1000 inhabitants
- Tradesmen per 1000 inhabitants,
- Dwellings completed per 1000 inhabitants,
- Gross fixed capital per capita,
- Expenditures on research and development.
Consequently, the Gini coefficient and coefficient of variation were used as
statistical tools for measuring of regional disparities. Gini coefficient, as a
measure of statistical dispersion, was used in assessing the overall development
of the regional disparities in terms of individual indicators during the years 2000
- 2012. The value of this coefficient was calculated according to the formula:
n
i
n
j
yjyi
yn
Gini
1 1
2
2
1
Coefficient of variation, a measure of variability of the data, was used in
examining the differences in the rate of increase or decrease of the regional
disparities from 2000 to 2012. The higher value of coefficient of variation means
that the data has high variability and less stability.
In the further part of the paper, we examine whether implemented regional
policy after the adoption of this resolution aimed towards the declared gradual
weakening of divergence and thus to reverse the trends of increase of regional
disparities in Slovakia. The subject of our evaluation will be two examples of
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
104
financial aid in accordance with the principle of complementarity (the principle
of complemantarity is based on the principle that funds of the state are not the
major, but only additional source contributing to the support of activities
emerging in the region):
- The state financial aid in the example of regional aid (so-called investment
stimuli),
- The financial aid from EU structural funds.
In the analysis, we observe percentage share of financial aid raised in the
region of the total amount of allocated financial aid and also the amount of
funding per capita.
ANALYSIS OF SELECTED INDICATORS
The GDP per capita characterizes economic prosperity or backwardness of
the region due to its productive potential (Regional Statistical Yearbook 2009).
The Dynamics of development of the GDP in individual regions in the recent
years shows that there is a reduction in lagging behind the EU average in all
regions of the SR. Great improvement was recorded in Bratislava Region, which
has the highest regional GDP in Slovakia. A relatively good situation is also in
the Trnava Region. Other regions (the Trenčín, Ţilina, and Nitra Region) are
below the national average, while the Prešov Region and Banská Bystrica Region
are the most deprived. However, according to the development of the Gini
coefficient (Figure 2), there is a constant increase in regional disparities since
2000 and GDP per capita is significantly differentiated on the regional level
(Figure 1). The year 2008 was the only exception, when the mitigation of regional
disparities was recorded. Thus, the above facts indicate that despite the overall
convergence is taking place, regional disparities in the SR are growing to the
detriment of southern and eastern NUTS 3 regions in Slovakia.
Figure 1. Regional GDP in Slovakia during the years 1997-2010
Regional Disparities and Their Mitigation in Slovakia: Selected Features and...
105
Figure 2. Development of the Gini coefficient
in terms of the analysed indicators in 2000-2012
Figure 3. Development of the coefficient of variation
in terms of the analysed indicators in 2000-2012
The unemployment rate is another indicator, which reflects the
socioeconomic development in the regions. It is calculated as a proportion of the
disposable registered number of unemployed to the number of economically
active population. The cartodiagram on the figure 4 for individual regions shows
that the development of the unemployment rate in the SR was constantly
decreasing till 2008. However, according to the Gini coefficient (Figure 2) (as well
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
106
as coefficient of variation), during the same period, the regional disparities in
unemployment rates were increasing. Since 2008, the unemployment rate in SR
has been growing (this change in development can be attributed to the impacts
of the crisis) and at the same time the regional disparities has been mitigated. In
other words, we can say that during the period of decline in the unemployment
rate, the regional disparities were exacerbated and the rise in the unemployment
rate has led to the elimination of regional disparities. Till 2008, the most
significant was a gradual deepening of lagging of the Banská Bystrica Region.
Since 2009, such a tendency has been more characteristic of the Košice Region,
which currently has the highest unemployment rate (19.7 % in 2012). In terms
of unemployment rate in 2012, the SR can be divided into 2 sub-regions. The
first one is the region of developed north-western Slovakia (Bratislava, Trnava,
Trenčín, and Ţilina Region), where the unemployment rate is below the national
average (14%). The second sub-region includes the marginal NUTS 3 regions of
the Southeast Slovakia (i.e. Nitra, Banská Bystrica, Košice, and Prešov Region),
where the unemployment rate is above the national average. The unemployment
rate points significantly at the uneven regional development in the country and
at the deepening of regional disparities. The lagging of the Prešov and Banská
Bystrica Region is becoming more significant.
Figure 4. Unemployment rate in the regions of the SR in 1997-2012
The value of average monthly wage also reflects a differentiated
development in the regions. In general, we can state that a more rapid growth of
average wages till 2007 was also linked to the increase in regional disparities.
Regional Disparities and Their Mitigation in Slovakia: Selected Features and...
107
The polarization between the Bratislava Region and the rest of Slovakia was
deepened during the years 2000-2007. Since 2008 the increase of average
monthly wage has been less significant and the elimination of regional
disparities has occurred. However, significant regional disparities still exist. Only
the dominant Bratislava Region has its average monthly wage 1029 EUR above
the national average (805 EUR). All other regions didn't reach the national
average. The second highest average monthly wage was in Trnava Region. The
lowest average wage was in the Nitra Region (661 EUR) and Prešov (613 EUR)
region. The Prešov Region permanently has had the lowest wage since the
beginning of the analysed period.
Net disposable income and net monthly costs per capita are economic
indicators of regional disparities, which provide reliable information about the
total incomes and consumption expenditures of inhabitants. They are indirect
indicators of the purchasing power, which may be used in the analysis of the
business environment. During the analysed period, the development of the both
indicators was rather changeable, with increasing and decreasing periods.
However, comparing the years 2000 and 2012, in terms of the Gini coefficient
(Figure 2), we can observe the increase of regional disparities. The best results,
i.e. the highest net income per capita as well as the higher expenditures
throughout the analysed period were recorded in the Bratislava Region. On the
other hand, the poorest values of indicators were recognized in the Prešov region.
The incomes of the health insurance companies per capita represents the
payments from the insurance payments of payers under the generally applicable
law. It includes the levies paid by employers, workers, self-employed people, self-
payers, levies paid for insured people to the state. This indicator thus provides
a certain picture of the economic situation of residents and subjects located in
the region (Regional Statistical Yearbook 2008). According to this economic
indicator, regional disparities were growing during the whole analysed period.
The only exception was the year 2007, when the decrease was recorded, as
shown by the Gini coefficient (Figure 2). During the analysed period, the best
results, i.e. the highest incomes of the health insurance companies per capita,
were recorded in the Bratislava Region. On the other hand, the lowest incomes of
the health insurance companies per capita were recorded in the Prešov Region.
Similarly as in the case of the previous indicator, also this one is strongly
influenced by the effect of the capital city, which indicates the distance between
Bratislava and all other regions. There are relatively low disparities between the
remaining regions.
The amount of foreign direct investments per capita (to the end of the
calendar year) reflects the investment attractiveness of regions and their
development dynamics. Direct Foreign investments bring a number of effects to
the region and act as an impuls for economic development. During the analysed
period, the Gini coefficient increased from 0.611 in 2000 to 0.644 in 2011
(Figure 2). Even the increase of regional disparities in foreign direct investments
was not significant, they are on the high level oscillating around the value of
0.62. In the last analysed year 2011, the highest share of the total foreign direct
investments was made in the Bratislava Region (67.6 %) followed by the Trnava
Region with a share of 7%, the Košice Region (6.6 %), the Ţilina Region (6.6 %),
the Trenčín Region (4.7%), and the Nitra Region (4%). The lowest proportion of
the total investments in Slovakia was made in the Banská Bystrica Region
(2.5%) and in the Prešov Region (only 0.9%).
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
108
In terms of further development of the regions in the SR and efforts to
balance regional disparities, it is necessary to pay attention also to the
development of the entrepreneurial structure which is characterized by the
profit-oriented organizations per 1000 inhabitants, enterprises with 250 or more
employees per capita, as well as tradesmen per 1000 inhabitants.
Profit-oriented organizations are profit-making organisations registered
under the Commercial Code and contributory organizations whose turnovers
exceed more than 50% of the reporting cost. The number of profit-oriented
organizations in Slovakia rose from 93,072 in 2000 to 164,771 in 2012. As
indicated by the Gini coefficient (Figure 2), there exist regional disparities in the
above indicator across the regions in the SR. Since 2006 the regional disparities
have been exacerbated in terms of given indicator. In 2012 the value of Gini
coefficient was 0.285. The highest number of the profit-oriented organizations
per 1000 inhabitants is again in the dominant Bratislava Region. In 2012, there
were 95.32 profit-oriented organizations per 1000 inhabitants. In all other
regions, there were recorded significantly lower numbers oscillating around 20-
30 profit-oriented organizations per 1000 inhabitants. The fact that all other
regions are below the national average can be reasoned by the generally high
concentration of organisations in the capital city.
In terms of enterprises with 250 or more employees per capita, again the
increase in regional disparities has occurred during the analysed period. The
best results, i.e. the highest number of enterprises with 250 or more employees
per capita was recorded in the Bratislava Region, which was followed by the
Trenčín Region. Both of these regions occupied the leading positions over other
regions during the whole analysed period. A worse situation is in the rest of the
regions. Since 2001, the regional disparities were strongly exacerbated. Increase
in regional disparities is documented also by the Gini coefficient (Figure 2),
which moved from 0.172 in 2001 to 0.287 in 2012 and coefficient of variation
(Figure 3) which moved from 0.383 in 2001 to 0.698 in 2012.
The other important indicator of business structure is tradesmen and its
number calculated per 1000 inhabitants. Tradesman is a person who is doing
business based on the Trade Act. The number of tradesmen in Slovakia during
the period of years 2000-2012 increased from 279,597 to 387,452. The Gini
coefficient shows, that there are regional differences in terms of this indicator.
However, the positive fact is that from 1999 till 2010, regional disparities were
reduced. The Gini coefficient (Figure 2) decreased from 0.119 in 1999 to 0.0847
in 2009. The coefficient of variation (Figure 3) also decreased from 0.264 in 1999
to 0.173 in 2009. The increase appeared again in 2010. The trend of reduction
in regional disparities was apparent from the increased number of tradesman
per 1000 inhabitants in less developed regions (Prešov, Banská Bystrica, and
Košice) and less intensive growth in the developed regions (Bratislava, Ţilina).
However, during the whole analysed period, the weakest positions have been
occupied by the Kosice region, the Banská Bystrica Region and the Prešov
Region. On the contrary, the strongest position has been occupied by the
dominant Bratislava region, followed by the Ţilina Region and the Trnava
Region.
The quality and affordable housing is an important factor influencing
labour mobility, which is a serious problem in the Slovak economy. According to
the analysis, housing conditions are considerably varied within regions of the
SR. In terms of dwellings completed per 1000 inhabitants, there was a continual
Regional Disparities and Their Mitigation in Slovakia: Selected Features and...
109
deepening of regional disparities until the year 2007. This situation was reflected
also by the increasing value of the Gini coefficient (Figure 2), which icreased
from 0,196 in 2002 to 0.374 in 2007, and the coefficient of variation (Figure 3)
from 0.391 to 0.853. This increase was primarily caused by the fact that in the
regions with significant foreign investments (i.e. Bratislava, Trnava, and Ţilina)
also the construction of flat buildings was of great importance. In 2007, 63% of
the total amount of completed dwellings in Slovakia were in above mentioned
three regions. On the contrary, Prešov and Košice regions accounted only for
13,3%, although there are the 2nd and 3rd largest cities in Slovakia. At the
beginning of the analysed period (in 2002) the above proportion was only 49.2 %
and 22.8 %. During the years 2008-2011, there was a period of mitigation of
regional disparities in the number of completed dwellings per 1000 inhabitants.
In the 2012, the above regional proportion was 56.6 % and 17.3 %, which
confirms the new increase of regional disparities in dwellings.
The indicator of gross fixed capital per capita reflects the acquisition of
long-term assets, which are deducted by the reduced long-term assets by
producers - residents during the year. The formation of the gross fixed regional
capital is the sum of gross capital, which was formed in the various sectors in
the region (Regional Statistical Yearbook, 2009). In terms of this economic
indicator of regional disparities, the regional disparities were exacerbated during
the analysed period, which is confirmed by both Gini coefficient (Figure 2) and
coefficient of variation (Figure 3). The most significant increase occurred in the
years 2007 and 2010. In the last analysed year, the value of Gini coefficient was
0.309 and coefficient of variation 0.722. The best results, i.e. the highest
production level of the gross fixed capital per capita were recorded in Bratislava
Region throughout the whole analysed period. On the contrary, the poorest
situation is permanently in the Prešov region.
Expenditures on the research and development is another indicator within
which the increase in regional disparities was observed during the analysed
period. The value of Gini coefficient (Figure 2) changed from 0.396 in 2000 to
0.529 in 2012 and coefficient variation (Figure 3) changed from 0.965 in 2000 to
1.4557 in 2012. The substantial amount of the total expenditures on research
and development were directed to the Bratislava region. The all other regions
have been significantly below the national average since 2000. In 2012,
Bratislava region accounted for 57% of the total expenditures provided for
research and development. There were recorded relatively low disparities
between the remaining regions.
REGIONAL POLICY AS A TOOL FOR MITIGATION OF REGIONAL
DISPARITIES
Výrostová (2010) defines regional policy as: "a part of the state policy which
represents a set of objectives, tools and activities to improve the spatial
organization of economic activities to reduce regional disparities and to ensure
economic, social and territorial development of the regions."
It was based on divergent theories which consider the spontaneous nature
of capitalism to be the cause of regional disparities influencing social injustice
and related social instability concentrated in undeveloped regions. The beginning
of regional policy is associated with the United Kingdom, where during the Great
Depression in 1930's, the socioeconomic disparities between regions deepened.
EU regional policy began to develop gradually, depending on the different stages
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
110
of building a common market, from which it was expected that can provide
spontaneous mitigation of regional disparities (Ţítek, Klimová 2008).
In 1987, the Single European Act entered into force, which is considered
one of the most important milestones in the development of regional policy. In
this document, a separate section titled "Economic and social cohesion" was
devoted to the regional policy. This article declares the effort that the EU will
focus on the reduction of regional disparities between the individual regions,
which should contribute to the overall strengthening of its economic and social
cohesion. To achieve these goals, the EU will benefit funds (ESF, AEGGF ERDF)
(Čajka, Rýsová, Pešout 2005).
According to the Government Resolution from 13th September 2000, no.
725/2000, regional policy was defined. It is understood as conceptual and
executive action of the state, local government and other subjects which aim is:
- to contribute to the harmonious and balanced development of regions,
- to mitigate disparities between the levels of development of individual
regions,
- to promote economic and social development of individual regions,
particularly in terms of their activation of underused economic and social
potential and to promote the rational use of nature and natural resources,
including environmental protection, i.e. to promote sustainable regional
development.
State financial aid
The state financial aid as a tool of regional policy has started to function
since 2002, based on the Law no. 565/2002 collection of laws about the
Investment stimuli and in accordance with the map of regional aid for Slovakia.
Since 2008, the investment stimuli have been provided under the Law no.
561/2007 collection of laws about the Investment stimuli and on amendments
to certain laws. On the basis of this law, the investment assistance and
unemployment assistance are used for investment projects, projects of
expansion of industrial production, technology centres, centres of strategic
services and centres of tourism.
From the analysis of the allocation of financial funds from the State
financial aid (investment stimuli), approved by the Slovak government, it results
the strong spatial non-uniformity. In the period 2002-2013, the highest
proportions of allocated financial funds (table 2) reached the Ţilina Region
(23.99%), the Trnava Region (23.65%) and the Nitra Region (14.77%).
Paradoxically, the least supported regions, which received the lowest proportion
of allocated financial funds, were the Banská Bystrica Region (5.85%), the
Bratislava Region (4.35%) and the Prešov Region (2.94%). In the case of the
Bratislava Region, it is understandable as it is the most economically developed
region in Slovakia, but the lower proportion also reached the Banská Bystrica
Region and the Prešov Region which belong to the least developed regions in
Slovakia. It is paradoxical that even the Bratislava Region has obtained greater
support from the state than the least developed Prešov Region. Three most
problematic regions (the Prešov, Košice, Banská Bystrica Region) reached a total
share of 20.93 % (i.e. less than obtained separately the Ţilina and Trnava
Region). While one inhabitant of the Trnava Region obtained through the state
aid 614.72 EUR, on the other hand, one inhabitant of the Prešov Region
obtained only 52.94 EUR. The range of disparities (the ratio between the best
Regional Disparities and Their Mitigation in Slovakia: Selected Features and...
111
and worst region) in the allocation of state aid per capita reached in the period
from 2002 to 2013, 1,161.1 % which is eleven times more.
Table 2. Received state financial aid (investment stimuli)
in the SR according to the NUTS 3 regions in 2002-2013
(Source: Calculated according to the results of the report about the state financial
aid of the Ministry of Economy)
NUTS 3
region
The
number
of
projects
The amount
of the
government
investment
stimuli (EUR)
The amount
of the
government
investment
stimuli per
capita (EUR)
The share of
the total
government
investment
stimuli in
the NUTS 3
regions (%)
The number
of planned
working
places
according to
the
government
investment
stimuli
The share of
the total
number of
planned
working
places in the
NUTS 3
regions (%)
Bratislava
Region
8
62,779,914
103.08
4.35
3,399
6.89
Trnava
Region
10
341,687,737
614.72
23.65
7,502
15.21
Trenčín
Region
24
177,992,231
296.77
12.32
9,834
19.94
Nitra
Region
23
213,406,394
302.71
14.77
7,238
14.67
Žilina
Region
18
346,567,876
499.21
23.99
6,891
13.97
Banská Bystrica
Region
17
84,525,752
128.65
5.85
3,307
6.70
Prešov
Region
8
42,488,951
52.94
2.94
1,145
2.32
Košice
Region
31
175,388,531
225.98
12.14
10,014
20.30
Slovakia
139
1,444,837,386
267.59
100.0
49,330
100,0
Figure 5. The amount of the government investment stimuli (mil. EUR)
in the NUTS 3 regions in the SR during the years 2002-2013
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
112
Figure 6. The number of planned working places according to the government investment
stimuli (mil. EUR) in the NUTS 3 regions in the SR during the years 2002-2013
It is also interesting to examine the official support for the creation of
new working places. From the total number of the planned working places
(49,330) in the period 2002-2013, 10,014 working places were planned in the
Košice Region (20.30%), which is followed by The Trenčín Region (19.94%), the
Trnava Region (15.21%) and the Nitra Region (14.67%). The Lowest number of
planned working places was planned in the least developed regions the Banská
Bystrica Region (6.70%) and the Prešov Region (2.32%). It is paradoxical that
in the regard of planned working places, in the most developed Bratislava
Region (6.89%) higher number of working places was planned than in the
Banská Bystrica and Prešov Region.
Structural Funds
After the accession into the European Union in 2004, Slovakia got the
opportunity to use the Structural Funds, which represent an instrument of
regional policy to promote regional development. Each fund defines its domain.
Determination of the amount of the Structural Funds depends on the severity of
the regional problems, the financial strength of a Member State, the interest of
the Community, as well as on the regional interest in the appropriate activity
(Čajka, Rýsová, Pešout 2005). Nowadays, we entered into the fifth programming
period of the EU for the years 2014-2020. For each programming period, a
particular amount of funds is allocated which has been increasing since the first
programming period (1988-1993) as well as with increasing number of new
Member States.
The analysis of the allocation of the Structural Funds in the period 2004-2006
(Figure 6) shows a more even allocation of finance to individual regions as it is in the
case of state financial aid (Table 3). The highest proportions of the Structural Funds
were reached by the Banská Bystrica Region (26.51%), the Prešov Region (16.51%)
and the Nitra Region (12.15%). Three least developed regions (Banská Bystrica,
Košice and Prešov) obtain 53.9% of the total allocated funds. The highest absorption
of the Structural Funds per capita obtained the Banská Bystrica Region (409.23
Regional Disparities and Their Mitigation in Slovakia: Selected Features and...
113
EUR), the Prešov Region (209.63 EUR) and the Trnava Region (201.92 EUR). The
Nitra Region (174.03 EUR) was below the average. Significantly behind the average,
there were the Košice Region (143.12 EUR), the Bratislava Region (147.54 EUR) and
the Ţilina Region (125.61 EUR). The lowest support was received by the Trenčín
Region (93.14 EUR). The range of disparities (the ratio between the best and worst
region) in the allocation of the Structural Funds per capita reached 439.6% in the
programming period 2004-2006.
Table 3. Received Structural Funds in the SR
according to the NUTS 3 regions in 2004-2006
(Source: Calculated according to ITMS, www.nsrr.sk)
NUTS 3 region
The
number of
supported
projects
The amount of
received Structural
Funds (EUR)
The amount of
received Structural
Funds (EUR)
per capita
The share of the
total amount of
received Structural
Funds (%)
Bratislava Region
899
89,091,187.92
147.54
8.78
Trnava Region
582
111,892,029.89
201.92
11.03
Trenčín Region
433
55,934,473.90
93.14
5.51
Nitra Region
810
123,276,784.24
174.03
12.15
Žilina Region
584
87,266,940.49
125.61
8.60
Banská Bystrica Region
734
268,897,873.84
409.23
26.51
Prešov Region
781
167,410,545.72
209.63
16.51
Košice Region
744
110,469,405.83
143.12
10.89
Slovakia
5,567
1,014,239,241.84
188.20
100.0
Figure 7. Received Structural Funds (mil. EUR) in the SR
according to the NUTS 3 regions in 2004-2007
The highest proportions in the Structural Funds during the second
programming period (2007-2013) (Table 4, Figure 8) reached the Trenčín Region
(19.59%), the Ţilina Region (17.10%), the Prešov Region (15.52%), and the Banská
Bystrica Region (13.29%). Above the average in spending Structural Funds per
capita were the Trenčín Region (1,440.14 EUR), the Ţilina Region (1,081.85 EUR),
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
114
the Banská Bystrica Region (891.14 EUR) and the Prešov Region (842.64 EUR).
The Košice Region (677.41 EUR), the Bratislava Region (560.18 EUR) and the
Trnava Region (526.94 EUR) were below the average. The lowest support per
capita was in the Nitra Region (493.50 EUR). The range of disparities (the ratio
between the best and worst region) in the allocation of the Structural Funds per
capita reached 291.8 % in the programming period 2007-2013.
Table 4. Received Structural Funds in the SR
according to the NUTS 3 regions in 2007-2013
(Source: Calculated according to ITMS, www.nsrr.sk)
NUTS 3 region
The amount of
the Contracted
Funds (EUR)
The amount of
received
Structural Funds
(EUR)
The share
of used
Structural
Funds of
the total
Contracted
Funds
(EUR)
The
amount of
received
Structural
Funds
(EUR) per
capita
The share
of the total
amount of
received
Structural
Funds (%)
Bratislava Region
881,001,585.54
345,259,765.77
39.19
560.18
7.86
Trnava Region
516,640,389.09
294,539,858.79
57.01
526.94
6.70
Trenčín Region
1,452,430,920.29
860,499,114.54
59.25
1,440.14
19.59
Nitra Region
572,342,901.68
345,577,441.67
60.38
493.5
7.87
Žilina Region
1,194,293,448.99
751,443,156.99
62.92
1,081.85
17.10
Banská Bystrica Region
1,151,716,808.33
584,054,343.52
50.71
891.14
13.29
Prešov Region
1,170,938,597.96
681,908,553.68
58.24
842.64
15.52
Košice Region
869,891,157.11
530,042,495.63
60.93
677.41
12.06
Slovakia
7,809,255,808.99
4,393,324,730.59
56.26
811.36
100
Figure 8. Received structural funds (mil. EUR)
in the SR according to the NUTS 3 regions in 2007-2013
In this programming period, it is interesting to examine the share of used
Structural Funds of the amount of the Contracted Funds. The highest success in
obtaining Structural Funds in this programming period reported the Ţilina
Regional Disparities and Their Mitigation in Slovakia: Selected Features and...
115
Region (62.92%) followed by the Košice Region (60.93%) and the Nitra Region
(60.38%). The lowest percentage reported the Bratislava Region (39.19%) and the
Banská Bystrica Region (50.71%).
The analysis of the allocation of the Structural Funds in the programming
period 2004-2006 shows more even allocation of financial aid to individual
regions as it is in the state financial aid; however, in comparison of the first
programming period with the second programming period the allocation of
financial aid is less even. When in the first programming period, the share of the
Structural Funds for the least developed regions (Prešov, Bans Bystrica,
Košice Region) was 53.91%, in the second programming period, it was only
40.87 %. Is a decrease of more than 13 %.
CONCLUSIONS
Analysis of the selected indicators of regional disparities in the SR
demonstrates a differentiated development in individual regions. As confirmed by
the development of the Gini coefficient for individual indicators, socioeconomic
development permanently has a strong east-west gradient. A strong economic
core is formed in the Bratislava Region and in its neighbouring regions (Trnava,
Trenčín, and Ţilina Region) and the economic periphery includes the southeast
regions of the republic (Prešov, Banská Bystrica, Košice and Nitra Region). In
terms of individual regions, the best results were recorded in the Bratislava
Region throughout the whole analysed period. On the other hand, Prešov region
shows the worst results in the nine out of thirteen analysed indicators. This
means that it has the worst positions in the regional structure of Slovakia. What
is more, the gap between the economically prosperous regions and the economic
periphery is growing also during the past few years which confirm the fact that
since 2009 the Gini coefficient has been growing in the case of eight out of
thirteen analysed indicators.
The current situation in the peripheral regions is linked to the marginal
eccentric location of given regions, a lower accessibility through the major
transport infrastructure (especially highways), the concentration of population
with a low social status and last but not least, to the incorrect settings of
regional policy with the localization of foreign investment in economically
advanced regions of Slovakia. Summarizing the evaluation of the regional policy
in Slovakia through three financial schemes, it can be stated that the regional
policy did not reflect the full priority to soften polarization of Slovakia in the
developed west/northwest and the lagging southeast/east. A west - east gradient
was reinforced. It is interesting to compare in these three schemes the share of
the financial aid which gained two eastern regions (the Košice and Prešov
Region) in relation to their share of the number of population. In the case of the
state financial aid in 2002-2013, the ratio was 15.08% (29.2%), in the case of
the Structural Funds in the programming period 2004-2006, 27.4% (29.2%),
and the Structural Funds in the programming period of 2007 -2013, 27.58%
(29.2%). This means that eastern Slovakia in any scheme did not receive the
level of share of the financial aid above the level of their share in the number of
population. Analysed regional policy instruments did not mitigate but rather
exacerbated regional disparities in Slovakia. For this reason, effective
approaches to mitigation of regional disparities not only in Slovakia, but also in
other V4 countries and countries in different parts of the world are the
challenging issue for the future.
Kvetoslava MATLOVIČOVÁ, Anna GAVAĽOVÁ, Jana KOLESÁROVÁ
116
Acknowledgements
The article is part of the grant research project VEGA No. 1/0325/12. Intra-urban
structure dynamics in Slovakia in the first decade of the 21st century (20122014).
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Submitted:
Revised:
Accepted:
Published online:
September 01, 2014
October 22, 2014
November 28, 2014
November 28, 2014
... We have inspected the regional differences by comparing ethical leadership between the Bratislava region, which represents the most developed region with the lowest rate of unemployment (see for e.g. Matlovičová et al., 2014) and highest average nominal wage in Slovakia (see for e.g. Uramová and Kožiak, 2008) with the rest of Slovak regions. ...
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