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Seminar on Regional Development Policies in Romania

September 19, 1998

The EastWest Institute

 

On 19 September 1998, the EastWest Institute and the Pro Democracy Association hosted a Seminar on Regional Development Policies in Romania for representatives from the North-west Development Region in the town of Felix near Oradea in Bihor county. The participants included central governmental officials responsible for implementing the newly adopted Law on Regional Development, Members of Parliaments from the region, and representatives from regional and local institutions, local business and non-governmental organisations.

The seminar was one of the first occasions where central government officials and MPs have had an opportunity to discuss the Law on Regional Development with local representatives. It was obvious that local participants had limited knowledge about how the law will influence their work and how the allocated funds will promote economic development. The seminar offered local actors valuable insight into the implementation process for regional development policy. At the same time the central government officials gathered useful feedback from regional leaders to guide their work. These officials also learned that providing more information to the regions will be essential for successful reform.

In his opening remarks, the Prefect of Bihor County (Judet), Mr. Lucian Silaghi emphasised the importance of the regional development in Bihor, and pointed out the specific challenges his county faces: non-industrial economy, two-thirds of population lives in rural areas, and a large (30%) Hungarian minority.

The Prefect highlighted the newness of regional development policy as a concept for Romania. Both local and central administrations need to understand the purpose and mechanics of this policy. Local interest groups need to learn also need to learn what their roles are in this process.

The following key questions formed the core of the day’s discussion:

• What will happen with the present regional and sector policy?
• How will existing regional development agencies be integrated into the new institutional framework?
• What is the role of local and regional government in regional policy?
• What will be the role of non-governmental organisations in regional policy and how can they participate in the strategic planning process?

 

Impact of the Law on Regional Development

Gheorghe Vlad, legislative expert with the Council of Reform, explained the provisions of the Law on Regional Development, Law no. 151, passed by Parliament 15 July 1998. Since 1990, the government has attempted a number of special programs to support economic development in certain under-developed regions, unfortunately, without success. The main objective of the new regional development policy is to decrease regional disparities in Romania.

Mr. Vlad emphasised the coherence and comprehensiveness of the new policy. It will influence all regions, regardless of their current capacity for cross-sector cooperation. The policy replaces some sector-focused programs, but extra assistance for complex problem areas will be available.

Law 151 provides a uniform national framework through which local and regional actors can define their own regional development strategies, combine their local resources and also receive state and international assistance. The law provides for the establishment of eight development regions. These regions are not administrative units. They are empowered only to implement regional development initiatives as defined by elected officials from local and regional governments. Within the Council of Reform, there is a special department in charge of regional development, assisted by Phare program of the European Union. Actual funding of regional development projects is expected to start in late spring 1999.

Mr. Robert McKean, team leader of a Phare-financed Regional Development Institution Building Programme, described the responsibilities and functions of the new institutions for regional development being created:

Each Regional Development Board is free to establish its agency as deemed appropriate. Thus existing regional development agencies (such as those in the four counties of the West Development region) may continue to function in the context of the new law, though some form of inter-county or centralised co-ordination will be necessary.

Mr. McKean emphasised the need for swift and professional implementation of the new law in order to assure the proper dispersion of EU funds. “There will be a lot of support available for Romania. Everything depends on Romanian officials to respect the timetable, build the institutions, promote the legal framework and start the process of regional development.”

There were many questions concerning the management of the National Regional Development Fund. Mr. Vlad explained that projects would be evaluated at the national level by the National Agency for Regional Development, according to criteria to be agreed by the National Regional Development Board, and through a transparent process.

There was considerable confusion among participants over the differences between the current National Development Agency and the future National Agency for Regional Development. Theodor Petroni, of the Bihor Development Agency CASTTEL emphasised the need to ensure that the two institutions will co-ordinate their efforts in order to make sure they do not overlap or, even worse, counteract each other. Gheorghe Vlad acknowledged that such co-ordination has not yet been discussed, but efforts will be made so the two institutions complement each other. Many participants expressed their opinion that the current National Development Agency should be transformed into the new National Agency for Regional Development.

Liliana Ghica, parliamentary expert at the Senate, summarised the status of legislative initiatives related to the regional development. The most important of these, the Law on Local Public Finances is currently under debate in the parliament, along with a modified Law on Local Administration, recently drafted by the Government. The Law on the Status of Civil Servants, which is also under debate in the parliament, will also influence many of the people involved in regional development. Ms. Ghica stated that the Judicial Commission of the Senate is ensuring that the laws are harmonised with the provisions in the Law on Regional Development.

 

The Role Local and Regional Actors in Regional Development Policy

Discussion of local and regional roles under the Law on Regional Development centred on the fact that the law does not mention a specific role for non-governmental actors.

Dan Ciceu, Program Coordinator at CENTRAS, stated that a variety of independent groups need to be educated on what regional development is and encouraged to participate in development initiatives. He felt that the central Government should seek and encourage the participation of civil society from the beginning, and representatives of different groups should be included on the Regional and the National Councils.

Lorena Stoica, the Romania Country Officer of the Carpathian Foundation observed that, from her experience in supporting regional development, the Law of Regional Development is too vague and permissive. Mr. Vlad answered that the Council of Reform is now completing publication of detailed instructions on how the law should be applied.

Mr. McKean defended the current policy and the EU’s support for the Romanian Government. He emphasised the democratic legitimacy of the current implementation scheme. With or without direct citizen input, elected officials are the main decision-makers in regional development institutions. The extent to which civil society and business actors will be included in development planning and implementation is up to local and regional representatives. According to international best practices it is highly recommended that Regional Development Boards and Agencies involve a broad range of stakeholders in strategic planning and implementation, but this provision does not have to be in the law.

Mihai Bar, President of the Bihor County Council, stated that county councils and local councils have had good experience in developing programs in partnership with civil society actors. The major problem in the regions today, is not bad organisation or lack of knowledge, but rather a lack of sufficient funds to support development. He supports the reorganisation of regional policy, but he stressed that the new law for fiscal decentralisation will have a more important impact on Romanian counties. He also expressed the fear that the Regional Development Boards will be too politicised and not work for the best of the whole region.

His concerns were echoed by other participants who added that local and regional governments are already asked to do too much with their limited resources. The primary need is for short-term development projects to alleviate immediate economic problems, such as unemployment and poverty. These problems and longer-term problems like infrastructure development have been difficult to address in the context of the constantly changing legislation.

Two examples of local best practices in Romania were presented.

The Regional Environmental Resource Centre in Oradea has successfully created an network of 57 NGOs from 6 counties to find and promote alternative, ecological development strategies in the region. Centre Director Viorel Lascu explained the importance of working in partnership with other non-governmental organisations and local public officials. The Centre operates a pilot project for partnership development, which gives information and expertise on public-private partnerships. Another collective interest at the Centre is a lobby for protected areas. This is joined by a specific project on developing a national park in the Apuseni Mountains, while helping the local economy to adapt to its impact. The Centre is partly funded by the Carpathian Foundation.

Klaus-Peter Dietzel, Project Director of the Nordrhien Westfalia - Banat Romania Program spoke about the founding of the first three regional development agencies in Romania. When the initiative began in 1993, the Romanian and German partners had wanted to create one inter-county agency to work in the three counties of the Banat region. Unfortunately, the national government at that time objected to such cross-county cooperation. Thus, three separate agencies were created in the counties of Arad, Caras Severin and Timis. In January 1994 all these counties signed an agreement to support each other’s economic development efforts. Together they have worked on 12 projects, including an investor’s guide to the region, a water management plan, and various tourism development initiatives.

Hunedoara County joined the network in April 1997 as the three regional development agencies of NRW Banat Romania began working on the first regional development strategy. The region approached the strategy by first setting up a “working group” composed of experts from the regional development agencies and facilitated by German partners. The strategy is designed to answer two questions: 1) What are we today? (an analysis of strengths, weaknesses, opportunities and threats) and 2) What will we be in 2-5 years?

The working group then presented its ideas at four regional conferences over the course of one year. The conferences gathered all relevant and active businesses and citizen organisations from the four counties to discuss and seek consensus on the plan. The four associated agencies and county councils adopted their concept for regional development by unanimous consensus in June 1998 in anticipation of the new Law on Regional Development.

 

Conclusion

1. There is an immediate need for technical assistance and advisory support to local and county governments as they proceed with strategic planning. Specifically, the responsible people need:
   • Clear information on the Law on Regional Development (no. 151)
   • Basic instructions for implementation
   • Practical examples and advice on methodologies of implementation and model projects
2. The counties of the Northwest Development region have a strong awareness that NGOs and business are experienced and useful contributors to regional development plans and projects. They should be invited to contribute to the current planning stage and help implement future projects. Understanding of these inclusive strategies for development should be promoted throughout Romania.
3. The Central Government should clarify the revisions to Government Ordinance 22 on local government/NGO relations, in order to facilitate their cooperation.
4. Other laws related to public administration reform, especially the Law on Local Public Finance and the Law on the Status of Civil Servants, should be completed and passed as soon as possible to improve the legislative framework for local initiatives.

 

This meeting was held in the context of the Institute for EastWest Studies’ Parliamentary Democracy Project building on previous work on Regional Development Policy in Romania (sponsored by the Rockefeller Brothers Fund). The Parliamentary Democracy Project works with governments and NGOs in Romania and Bulgaria to improve the independent research capacity of parliaments and constituency relations.

The organisers are grateful for funding provided by the EU Phare Democracy Program, the C. S. Mott Foundation, the Rockefeller Brothers Fund and logistical support provided by the Carpathian Foundation, Romanian Country Office.