EU to allocate €31 million to boost Ukraine’s regional development – interview

José Roman Leon Lora, head of the section for Economic Cooperation, Regional and Social Development of the EU Delegation to Ukraine
José Roman Leon Lora, head of the section for Economic Cooperation, Regional and Social Development of the EU Delegation to Ukraine

In today’s world, a key goal is not only to boost development of particular areas, but also to decrease inequality between regions. This is why regional development is one of the priorities of the EU’s own policies, as well as of its assistance to Ukraine.

We met with José Roman Leon Lora, head of the section for Economic Cooperation, Regional and Social Development of the EU Delegation to Ukraine, to talk more about the EU’s new regional policy initiative in the country.  

 

What is the EU doing to promote Ukrainian regional development?

The partnership between the EU and Ukraine is a global one. We are not only concentrating our attention on the political or economic issues, but we also try to tackle social and regional problems, particularly in the area of regional development.

In the EU, we call it a principle of cohesion, or a so-called, “cohesion policy.” It is not only important to develop the country; it is also important to develop it in a cohesive manner. Today it is clearly proved that societies that have succeeded in putting in place cohesive development, aiming at the reduction of inequalities between regions and people, are more competitive, contrary to what the classic economic theories and approaches tend to say.

How would do you assess Ukraine’s regional development since its independence?

The economic development of Ukraine over the last 20 years has not equally favoured all the regions. There is almost no difference between the city centre of Kyiv and the city centre of any other big European city. However, when you go to a rural area or to other regions, the cleavage is visible. In the last 20 years, statistics show that those differences have increased to the benefit of the most industrialised and urban areas, but against the development of the most rural ones.

What is your response to this challenge?

First of all we hold a policy dialogue with the government in order to draw its attention to regional development as an important component of the country’s governance. Second element – we have an active policy dialogue with regional and local authorities as well.

In addition, from 2011 we have launched the preparation of a big program to promote regional development in Ukraine. We want to support development projects in the regions with almost €31 million. We already have strong technical assistance to help the regional authorities, and now we will have funds to finance regional development projects in each region.

What is the model of this assistance? Is it budgetary support or it is project-based approach?

In a first phase, the model will be project-based. Very soon we want to launch a call for proposals, through which we will fund the best projects coming from the regions.

In a second phase, if policy conditions allow it, it would be possible to also finance a Budget Support Programme.

What will be the eligible candidates for this call? Local NGOs, local governance bodies?

The eligible candidates are the regional and local authorities who will implement their own development programs. Regional and local authorities will be able to put in place consortiums, groups with NGOs, or with international partners. We know that in Ukraine cooperation between regions is very active.

Are you going to prioritise the cooperation of the Ukrainian regions with the EU regions?

We are going to respect and promote the autonomy of the authorities. If authorities want to go alone, it is fine for us. If they want to go with NGOs, or if they want to go with other regional authorities – they can do that.

What will be the priorities of the upcoming call?

The priorities of the program will coincide with the priorities of the regional strategy and the local strategy put in place by those authorities. In short, if one regional authority tells us that the priority of development is health, transport sectors or SMEs promotion, it has to present a project in line with that strategy. If the proposal is coherent with the regional strategy, well-designed and sustainable, we will select and finance it.

What level – oblast, rayon, small town, etc – do you prioritise?

First, there will be two main levels: the oblast level and the level of local and rayon authorities. Secondly, we will base the selection on Ukraine’s own policy. The regional development policy of Ukraine has put in place cohesion criteria, focusing on the regions that are below 70% of the average gross national product. This will probably exclude some of the most prosperous regions of the country, but we want to focus on those that are the least developed. This is also a criterion that exists in the European Union. The richest regions of Europe do not benefit from those funds.

How would you control the spending of the funds?

This program will be managed by the EU Delegation, where we have a team of four people working on this program, as well as a strong team of technical assistants who will monitor the implementation of this program together with Ukrainian partners. In practice, it means that if we have a project worth €2 million (maximum level) that goes to a given oblast, the authorities will be responsible for managing this money. We will monitor them on a monthly basis also through special missions; by so doing, we will make sure that procedures are respected and things are done correctly.

How will you use the Association Agreement recently initialed to promote EU-inspired regional development reforms in Ukraine?

Through the Association Agreement we are going to tackle several issues that are already addressed in the EU-Ukraine Association Agenda: balanced development of the country, social protection, etc. The point is now to cooperate with regional authorities. The Association Agreement must be a global partnership in which we talk to all authorities: not only to the government, but also to the mayors of small and medium cities.

Our support to Ukraine’s regional development is not new. But this is the first time we have a global project that focuses on the national policy as a whole.