Monthly Report 1: June 2005

At the request of the Ministry of Economy of Ukraine, the British Government's Department for International Development (DfID) has approved financing for a short-term programme of assistance in the field of regional development policy. The wider context of the assistance is the Government of Ukraine's drive for increasing harmonisation of state policy with the policy and practice of the European Union.

Main Objectives of Assistance

LARGIS II will assist the Ministry of Economy to prepare:

A State Strategy for Regional Development of Ukraine till 2015, reflecting European standards and approaches and including recommendations for the necessary institutional changes to support implementation of the Strategy.

A revised statistical methodology for the measurement of levels of regional, rayon and urban social and economic development and for more precise identification of 'depressed territories.'

Targeted and transparent intergovernmental fiscal instruments to support depressed territories or to stimulate further growth in regions which are relatively stronger and may have strategic importance for the economy as a whole.

Selected institutional instruments widely used in the European Union to support regional development, including Contracts for Regional Development and Regional Development Agencies. LARGIS II will assist the Ministry to identify the necessary conditions for adapting EU experience to the circumstances of Ukraine and the practical procedures and legislative implications of doing so.

A best practice training manual advising regional authorities on practical methodologies of strategic planning and management, and on integration of strategy implementation with effective budget management.

A parallel and important objective of LARGIS II is to strengthen the capacity of the Ministry of Economy specialists in fields of policy analysis, policy development and consensus building with key stakeholders inside and outside government. Objectives 1-5 will all be the result of the work done by Ministry specialists, guided and supported as necessary by LARGIS II experts.

LARGIS II will operate from June to December 2005.

Ministry of Economy of Ukraine - Main Partners

The programme's main partner is the Ministry of Economy, more specifically, Department of Regional Policy.

EU and Ukrainian Expert Counterparts

LARGIS II, like the original LARGIS (2000-2002), is being implemented by the School of Public Policy in the University of Birmingham, England. Its chief Ukrainian expert partner is the Institute for Regional and Euro-Integration Studies "EuroRegio Ukraine" in Kyiv, through which LARGIS II will have access to a network of specialist Ukrainian agencies and experts working in the regional development field. In addition "EuroRegio Ukraine" is also providing office accommodation and project co-ordination.

"EuroRegio Ukraine" is an independent not-for-profit organization, which works to support democratic reforms and consolidation of civil society in Ukraine. "EuroRegio Ukraine" produces research and analysis, as well as provides consultancy services, in such programmatic areas as community and regional development, trans-frontier co-operation, Euro-Atlantic integration and co-operation.

DfID has two other major projects on regional development operating in Ukraine, "Action Donbass" in eastern Ukraine and "Economic and Social Development of Lviv Oblast" in the west. LARGIS II will draw strongly on the practical experience of these projects on the ground.

Personnel - Project Management and Visiting Experts

Duncan Leitch

Serhiy Maksymenko

Tetyana Korneyeva

Expert

Adrian Campbell

Grzegorz Gorzelak

Kenneth Davey

Pawel Swianiewicz

Gerard Marcou

Krzysztof Herbst

Ukrainian Counterparts

Summary of LARGIS II Activities in June 2005

Following an inaugural meeting with the Ministry of Economy and DfID at the end of May, detailed terms of reference and a work plan for LARGIS II have been agreed and Ministry specialists identified to work in all project components.

On 11 June, Grzegorz Gorzelak met with Olena M Nyzhnyk and two ministry specialists to give his comments on the draft State Strategy for Regional Development. Following his advice, the Ministry agreed to establish a small task group of specialists and independent experts to review and redesign the Strategy. Grzegorz Gorzelak will work as lead adviser to the group. Its work is to be completed by the early autumn.

15 June - LARGIS II office established in EuroRegio Ukraine premises.

20 - 22 June, first visit by Gerard Marcou to advise on the possible introduction of Contracts for Regional Development in Ukraine. Meetings with Ministry specialists focused on detailed procedures for introducing the contract, the institutions involved, budgetary implications, qualifying conditions for contracts, procedures for monitoring. Ministry specialists agreed to prepare an initial document addressing these issues by 15 July. Overall, this work is to be completed within the time-scale of LARGIS II, i.e. by December 2005.

Serhiy Maksymenko and Krzysztof Herbst have drawn up terms of reference for the component on Regional Development Agencies. This work will be carried out in consultation with the National Association of Regional Development Agencies (NARDA).

Ukrainian experts have been identified for work on Contracts for Regional Development, Methodology for Measuring Regional or Sub-regional Development, Fiscal Instruments, Regional Development Agencies. Names have been submitted to the Ministry for approval. The Ministry will provide names of its own preferred choice of independent expert(s) for the State Strategy component.

Key Actions for July 2005

First draft of analytical paper on Contracts for Regional Development prepared for comment by Gerard Marcou.

Task group for State Strategy component identified and terms of reference / work plan agreed with Ministry.

Terms of reference / work plan for Regional Development Agency component agreed with Ministry and work with main stakeholders begins.

First expert visit on Fiscal Instruments component to be agreed for early August.

Ukrainian experts confirmed for all components.

Establishment of LARGIS II web-site.