regional development strategy

8/6/2019 Regional Development Strategy

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Approved by the Decision of North

Regional Development CouncilNo. __ of ___March 2010

North

Development Region

R i l


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R i l

This Regional Development Strategy was developed by the North Regional Development Agency with the

support of the Moldova: Cooperation in Regional Development Project. The Project is funded by the UK

Department for International Development (DFID) and the Swedish Agency for International

Development Cooperation (SIDA), and implemented by a consortium led by Oxford Policy Management

(UK). The Institute for Public Policy (Republic of Moldova) and Birmingham University (UK) are also

members of the consortium. The opinions expressed in the report belong to the authors and may not

necessarily represent the views of DFID or SIDA.


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Regional Development Strategy North Development Region

Preface

Dear friends and colleagues,

We have developed and approved the North Development Region Strategy, which we hopewill become a guide for the planning and streamlining of our activities, and will support us inpromoting new policies for regional development.

The document emphasises the values, abilities, needs, and opportunities that are specific tothe North Region. Also, it includes development priorities, institutional and legal frameworks,together with new ideas for projects to contribute to the growth of the economy, improvementof the environment, and increase the level living standards of the regions citizens.

Proper use of the National Fund for Regional Development (NFRD) funds and sourcesgranted by regional and international donors; cooperation between the government, first- andsecond-tier local public administration authorities, companies and the citizens themselves; aswell as the implication of the entire society in capitalising on current and future possibilitieswill lead to essential transformations, which will help bring us closer to European standards.

We are convinced that regional development projects will have a positive influence on allaspects of the social and economic life of the region, while the North Regional DevelopmentAgency will contribute all available means to promoting and implementing such projects,creating sustainable and effective partnerships, and providing assistance and qualifiedadvice.

We can offer ork conditions and s pport F rther e ill mobilise to gi e an e ample of the


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Table of Contents

Preface iiiTable of Contents .....................................................................................................................ivExecutive summary .................................................................................................................viiAbbreviations ...........................................................................................................................xi

1 Introduction ....................................................................................................................... 1

1.1 The importance of regional development ............................................................... 11.2 Strategic context .................................................................................................... 11.3 Process and principles for strategy development ................................................... 21.4 Principles for supporting regional development ...................................................... 4

2 Situation analysis.............................................................................................................. 52.1 General data .......................................................................................................... 52.2 Geographic location and spatial development ........................................................ 62.3 Connectivity, accessibility, and infrastructure ......................................................... 92.4 Demography .........................................................................................................152 5 Economic development 20


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6 Monitoring, reporting and evaluation .............................................................................447 The framework of resources and financing ...................................................................46

7.1 Existing financing commitments ............................................................................46Annex A Network of communities and distribution of the population by district .................. 49

Annex B Natural state protected areas .............................................................................. 50

Annex C Network of roads ................................................................................................. 51

Annex D Railways and waterways ..................................................................................... 52

Annex E Water supply and sewage network and treatment plants..................................... 53

Annex F Regional sewage scheme ................................................................................... 54

Annex G Gas network scheme .......................................................................................... 55

Annex H Energy system .................................................................................................... 56

Annex I Scheme of economic sector location ................................................................... 57

Annex J Potential of the agro-industrial system ................................................................. 58

Annex K Main indicators of NDR socio-economic development ......................................... 59


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Figure 17 Regional GAV per capita, MDL 20Figure 18 Regional GAV in 2008 as a percentage of national allocable GAV in 2008 20Figure 19 Sectoral structure of GAV,% 21Figure 20 Industrial specialisation indicator by number of personnel, 2007 21Figure 21 Structure of agricultural land, % 22Figure 22 Evolution of enterprises and jobs, 2004 = 100% 23Figure 23 Number of enterprises in 10,000 inhabitants, 2008 23Figure 24 Trend of capital investment in fixed assets and construction works in 2004

prices 24Figure 25 Share of capital investment in fixed assets 24Figure 26 FDI per capita (% average for country, 2007) 24Figure 27 Poverty level by region, 2006 25Figure 28

Deprivation level by area 26

Figure 29 Map of educational deprivation 26Figure 30 Health care deprivation map 26Figure 31 Sources of income 27Figure 32 Expenses by category 27Figure 33 Number of organisations, professional, economic and consultancy

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Executive summary

1. The Regional Development Strategy (RDS) for the North Development Region (NDR)represents a public policy document aimed at devising medium-term development paths forthe region. It is consistent with the main national policy documents related to regionaldevelopment:

The National Development Strategy for the period 200811,which identifies regionaldevelopment as one of the five national priorities and expresses the responsibility

undertaken by the Government of the Republic of Moldova for implementing statepolicies in the area of regional development; and

The National Strategy for Regional Development (NSRD), as a sectoral document forpolicy planning, under the responsibility of the Ministry for Construction and RegionalDevelopment (MCRD). The RDS represents a strategic framework for facilitating andpromoting integrated, economic and social development at the regional level, and forcontributing to the achievement of regional sustainable development objectives in themedium term.

2. The RDS is grounded on a thorough economic, social and environmental appraisal of thepotential of the North region, based on the findings of numerous background documents,including Economic and Social Background Studies, an Environmental Report, a PrivateSector Development Study, a Roads Sector Study, SADI and other statistical data.

3. The principle of active participation of local and regional stakeholders has been embodiedthroughout the RDS drafting process. Regional working groups have been established,bringing together government and non-government stakeholders, creating sustainable

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7. The promotion of regional development policies and the focus of the Government on

decentralisation open new perspectives for the regions development. In this context, thepriorities defined by the RDS are:

Rehabilitation of physical infrastructure;

Support for the development of the private sector and labour market; and

Improvement of the environment and attractiveness to tourists.

8. The NDR is building on such strong points as the availability of natural resources/raw

materials for developing a diversified industrial base in the processing industry, buildingmaterials, energy, machinery and construction, the food industry, human potential, the activegrowth of private businesses and an increased number of foreign investors expressinginterest in doing business in the region, an extended transportation network, and powergeneration and gas storage capacities.

9. Moreover, the proximity of the EU opens up new opportunities both for companies and forpublic authorities in the region, which have obtained direct access to EU cross-bordercooperation funding programmes. The use of national and external funds for rehabilitation of

regional infrastructure, implementation of programmes to support businesses andimprovement of the environment will eliminate constraints to economic growth andaccelerate development of the NDR.

10. The NDR is expected to become a dynamic and united region, where present and futuregenerations will have a high quality of life, secured by diversified economic activities, anopen attitude towards technological innovation, a healthy environment and a distinct regionalculture. Everyone will have the opportunity to realise their own potential to the fullest extent.

T bl 1 S f d l t i iti f th N th


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Priority Measures Output indicators Outcome

indicators

Impact

indicators

Cost

investment increatingcrossing pointsbetweenMoldova andRomania,located on theNDR

Romania

2. Supportingprivate sectordevelopmentand thelabour market

Trainingdevelopment

Support forqualification andretraining of theemployedpopulation inrural areas

Number of upgradedretraining programmesin cooperation with theprivate sector

Number ofpeople in thelabour marketwho havereceivedretraining

Productionvolume(GAV at theregionallevel)

[XX]% oftotalresources

StimulatingSMEs bydevelopinginformation andconsultancyservices(industry,services,tourism, etc.)

S t th

Number of SMEs thathave benefited fromadvisory services

Number ofjobs createdin fundedSMEs

Employmentrate


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Priority Measures Output indicators Outcome

indicators

Impact

indicators

Cost

producers,processors andtraders

3.Improvementin theattractiveness

of theenvironmentand tourism

Increase accesstoenvironmentalinformation and

promoteenvironmentaleducation

Develop andimplement informationcampaigns

Number ofsocial orenvironmentalactions

developedandimplemented

Volumeproduction(GAV at theregional

level)

[XX]% oftotalresources

Development ofintegratedmanagement ofsolid waste,includingseparate

collection, andrecycling, andcreating modernpolygons forrecyclablewaste storage.

The number of newwaste storagepolygons

Number of sewagetreatment plantsrehabilitated /

constructed

Reducing thefrequency oferosion andimproving soilquality

Employmentrate

Enhancingenvironmentalsecurity in the

i b

Develop a system toanticipate and respondto extreme weather

diti


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1 Introduction

1.1 The importance of regional development

11. Any country needs dynamic and competitive regions to reach its national objectives foreconomic and social development; thus, regional development represents a complementarypolicy to any macroeconomic and structural policies.

12. Globalisation provides a strong argument for a regional approach in finding solutions tosocial-economic development problems, by operating at the intermediary level between localcompanies and the national economy system. It is universally recognised that a coherent,credible regional development policy, well adapted to the special features of the region, canneither be promoted by the government alone, nor by any individual local authority, withoutcreating partnerships that are necessary to generate the required synergies. Having adeeper perspective on regional needs than the central government, local authoritiesgenerate more effective proposals for joint efforts to mobilise the resources of the region.

13. Sustainable regional development is an imperative for the Government of the Republic ofMoldova, which has confirmed its commitment to the equitable distribution of developmentopportunities throughout the country. This commitment is confirmed both within the legalframework and at the level of strategic planning. The successful implementation of regionalpolicies will give impetus and will accelerate the development of the country in general, withthe ultimate aim of improving quality of life in all areas within the territory of the Republic ofMoldova.

1.2 Strategic context


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stakeholders and approved it on 26 March 2010 at a meeting of the Regional District Council

(RDC).18. As opposed to the NDS, the National Strategy for Regional Development (NDSR) is a

sectoral document for regional development policy planning under the responsibility of theMinistry of Construction and Regional Development (MCRD). Funding sources for the twodocuments are different; in the case of the NDS, the source is the entire state budget; incase of the NSRD, it is mainly the National Fund for Regional Development (NFRD).

19. According to the NDS, the NSRD is a framework document for establishing the institutional

arrangements for regional development. Its scope is limited to establishing and maintaining aframework for management, implementation, funding, monitoring, and evaluation of regionaldevelopment, without going into detail on the content of the regional development strategiesor the ways in which regions will conceive their development.

20. The RDS represents a medium-term policy document at regional level, and a strategicframework for facilitating and promoting integrated spatial, economic, and socialdevelopment at the level of the development region and for contributing to achieving regionalsustainable development objectives. Additionally, it is clear that spatial problems and

solutions do not strictly observe the administrative borders, and the process for developingthe RDS therefore provides an opportunity for discussing the common problems of allregions, problems that exceed the boundaries of development regions as territorial-statisticaland functional units.

21. The RDSs provide a wider horizontal context to development, which should allow a moreefficient coordination and concentration of sectoral expenditures by the ministries and donorsin the regions. The Strategies will also seek to enhance regional capacity for efficientabsorption of investment funds, and the Republic of Moldova, in conformity with European

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infrastructure;

the environment; and the social sphere including health, education and protection of socially vulnerable

groups.

25. In addition, to support the empirical background to the North RDS, a number ofcomprehensive studies were made regarding economic development, problems related toenvironment, social aspects, physical infrastructure, and the infrastructure for supportingbusiness development in the RDS.

26. The format of the groups has ensured an equitable representation of local public authoritiesfrom all districts of the Region, the private sector, and civil society - through the presence ofnon-governmental organisations (NGOs) and business associations. Gender and socialgroups were equitably represented. Seven sessions of the working groups took place, theaverage proportion of women represented in the working groups being 21%. The outputs ofthese sessions were a finalised sectoral SWOT1 analysis, a strategic vision, identifiedpriorities, and development measures for Centre Region. These documents were used as abasis for developing the Centre RDS. The Centre Regional Development Agency (RDA)became involved at the finalising of the strategy.

27. The process was grounded on observing the following key principles:

Consistency. The North RDS is consistent with the main policy documents, whichreflect regional development, especially with the Law on Regional Development, theNDS, and the NSRD. The methodology and processes for reviewing the RDS overthe subsequent stages of regional development, as proposed by the RDA, shouldcomply with the guidelines of the MCRD and should be accepted by the RDC.

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2 Situation analysis

2.1 General data

29. The situation analysis is a broad chapter designed to provide a comprehensive overview ofthe CDRs social and economic development trends, and covers the following fields:

Geographic location and spatial development that represents the administrativestructure and environmental aspects, such as the regions hydrological network,natural protected zones, available mineral resources, climate characteristics and soon;

The section on connectivity, accessibility, and infrastructure gives information on theinter- and intra-regional roads network, water supply and sewage systems, gas,electricity and power supply, and internet coverage;

The demography section shows the structure of the CDR population by gender andage, and presents migration trends;

Economic development includes sectoral profiles and investment trends in the CDR;

The section on the social condition is focused on poverty level and deprivation indexanalysis based on SADI indexes; and

Information on the regions institutional capacities provides profiles of all significantregional social partners local public administration (LPA) authorities, RDAs, RDCs,local councils, and mayors offices.


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All sections are supported by maps attached to the RDS and serve as source of background

information for the analytical element of this report SWOT analysis.30. The main development indicators of the region are given in Table 2. A benchmarking of

these indicators is described in the sectoral sub-chapters.

2.2 Geographic location and spatial development

General data

31. The NDR covers the northern territory of the Republic of Moldova. Geographically, the regionborders in the north and east with Ukraine, in the west with Romania, in the southeast withCamenca district (the Transnistria Development Region TDR), and in the south with thedistricts of Ungheni, Telenesti and Soldanesti.

32. The NDR includes the municipality of Balti, 11 districts (Briceni, Edinet, Donduseni, Drochia,Falesti, Floresti, Glodeni, Ocnita, Riscani, Singerei, and Soroca). It has a total area of about10,014 km (1,001,394 hectares), which is approximately 29.6% of the total area of theRepublic of Moldova. As at 1 January 2009, the population of the region was 967,000 people(25% of the countrys population), including 305,000 urban residents (32% of the totalpopulation of the region).

33. The region comprises 315 administrative territorial units, which cover 571 communities,including 20 towns. Most of the population (over 60%) lives in communities with fewer than5000 people, 20% of the population lives in towns and villages with populations between5000 and 20,000 people. The total number of communities in the region amounts toapproximately 33.8% of the total number of communities for the country, the proportion of

b i f 32% M d il d d h di ib i f h l i b i


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35. As at 1 January 2009, the population of the region is 1,013,700. A decrease in the population

of 21,600 was registered during the period 2004 to 2008. The main reason for this decreaseis the negative natural growth and migration of the population.

Environment

36. The topography of the NDR comprises the Plateau of Moldova in the north, the Plain ofNorthern Moldova in the centre, the Middle Prut Plain in the west, the Nistru Plateau in theeast, and the northern sector of the Central Moldova Plateau in the south. The relief of theregion is a largely a hilly plain heavily fragmented by valleys, with a general decrease in

altitude from the north-west to the south-east. The maximum altitudes are in Lipnic (259 m),Visoca (348 m), and Baxani (349 m) in the north-east. The relief of the NDR is heavilyaffected by exogenous processes (landslides and soil erosion). There are between 10 and30 landslides per 100 km, the most affected districts being Riscani, Glodeni, and Singerei(with between 30 and 50 landslides per 100 km). The gullies formed by soil erosion show afrequency of five gullies in 10 km. The districts of Ocnita and Soroca are the most affectedby soil erosion (between 20 and 30 gullies per 10 km).

37. The climate is continental, with warm, dry summers and cold winters. The average volume ofprecipitation varies between 520mm and 620 mm. The average annual temperature is +8degrees Centigrade. The absolute minimum temperature recorded was -36 degrees, whilethe mean temperature for January is -5. The maximum recorded temperature is +38, whilethe average temperature for May is +20. The northern agro-climate shows optimal moisture,with the shortest period of active vegetation (between 175 and 182 days). For comparison, inthe southern region this indicator is 180190 days. The North of the region has the shortestfrost-free period (between 178 and 188 days). The region boasts favourable agro-climaticconditions for the cultivation of cereals, sugar beet, sunflowers, tobacco and fruit trees.

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40. Solid mineral resources are used mostly as building materials. Calcareous stone used in

construction is found extensively in Ocnita, Riscani, Edinet, and Briceni. The sand forproducing glass is found in Ocnita, gypsum resources are to be found in Briceni, andmaterials for construction are found in Floresti, Glodeni, Singerei, Ocnita, and Soroca. Theclay for brick production and the production of tiles is widespread, and is located in thedistricts of Floresti, Glodeni, Riscani, Singerei, Drochia, Balti and Ocnita. The only technicalchalk deposits are located and extracted in the district of Soroca, together with the extractionof granite and limestone. Tripoli deposits have been found (which are used in the productionof detergents and thermal insulation plating), as have synthetic zeolites (used in the

manufacture of water softer. However, inefficient and insufficient use of available mineralresources increases the environmental impact of the waste from extraction and buildingactivities.

41. The region has significant mineral water resources. In the northern part of the region, waterscontaining sulphate, bicarbonate, calcium, or sodium predominate (for example, Soroca,Balti, and Gura Cainarului); in the north-western part of the region, waters containingbicarbonate or sodium are found. Currently, mineral water wells are exploited in Soroca, theirwater being suitable for treating cardiovascular and gastrointestinal health problems. The

mineral waters found at Gura Cainarului and Criscauti are currently bottled for consumption.42. Over the recent decades, air pollution from stationary sources has decreased, mainly due to

massive replacement of solid fuel with natural gas in the energy and heat generation sectors.Emissions into the atmosphere from stationary sources have decreased by almost 25%during the period 1999 to 2004. However, following a considerable increase in the number ofvehicles, most of them being relatively old, emissions into the atmosphere from mobilesources have increased by almost 30%.

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Mindic Park is situated 4 km from Mindic village and 7 km from Cotova village. The

park covers 16.4 ha, and is home to a collection of flora and dendroflora speciesthat are considered rare and valuable in the Republic of Moldova. Overall, it has 15alleys, five springs, three lakes and two streams.

46. Other important nature reserves are:

Pavlovka village park (18.3 ha), the lime tree avenue between Pavlovka and Largavillages (3 ha), Iasnaia Poliana park (12.8 ha), Branzeni village park (2 ha),Hincauti village park (27 ha), and Stolniceni village park (3 ha).

There are two natural forest reserves; one in the district of Ocnita, the other in thedistrict of Briceni.

2.3 Connectivity, accessibility, and infrastructure

Connectivity

47. The NDR has 11 cross-border connection points with Romania and Ukraine. The greatest

number of connection points are with Ukraine: four railway border-crossing points (CrivaMamaliga, LargaKelmenti, OcnitaSokireani, and ValcinetMoghilev-Podolsk); five motorvehicle border-crossing points (CirvaMamaliga, LargaKelmenti, OcnitaSokireani, OtaciMoghilev-Podolsk, and UnguriBronnita); two river crossing points (SorocaTekinovka andCosautiYampil); and four motor vehicle border-crossing points with simplified regime(MedvejaZelionaia, LipcaniPodvorievka, GrimancautiVaskivti, and ClocusnaSokireani).

48. The connection with the European Union through Romania is made at the CostestiStancaborder crossing point, although recently two further crossing points were built in Lipcani

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open for passenger and cargo transportation; however, it is currently used only for infrequent

flights. The hard cover of the runway is suitable for regular use by IL-18, AN-12, YAC-42 andTU-134 planes of the smaller class.

55. Marculesti airport was certified by the State Administration of Civil Aviation and has recentlybecome the largest cargo airport in the region. The airport has a runway, an access road, aplatform, a radio navigation system. These facilities permit the use of the airport by differenttypes of plane including the IL-76, TU-154, Boeing, Airbus and heavy cargo aircraftat anytime of day and in difficult weather conditions.

56. The NDR has only one international route, the 460 km-long GiurgiulestiBriceni corridor(GBC) which is not operational (unfinished), and two operational national routes, the M14and M2. Other roads of international and national importance that cross NDR are:

northwards, to CernautiJitomirLvovWarsaw: the 14 up to the border withUkraine and further along route E583;

north-easterly, to VinnitsyaKiev: the 2 up to the border with Ukraine and furtheralong routes A253 and E95;

southerly, to ChisinauCahulGalatiTulcea-ConstantaVarnaIstanbul: the M14up to the border with Ukraine and European highway E80;

south- easterly, to ChisinauOdessaNicolaevHersonYalta: the M2 and R30 upto the border with Ukraine and further along European highway E581; and

westerly, to BotosaniSuceavaClujOradeaBudapest: European highway E581.

57. Inter-regional road network. Connection with the CDR is made through the capital city ofChisinau (routes 14, and M2, and R13, R14, and R17). Connection with the TDR is made

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The greatest road density is in the districts of Briceni, Soroca and Ocnita; the districts of

Drochia and Glodeni are the least well-served.

Figure 1 Density of public roads, km /100 km2 by district, 2008

Figure 2 Density of public roads, km /100 km2 by region, 2008

Source: NBS, 2008

61. Railway transportation. The density of the railway network in the NDR is the lowest in thecountry and amounts to 2.1 km /100 km2, which is less than the national average of 3.3km/100 km2. The main railway junctions of the NDR are in the city of Balti and the town ofOcnita.3 Through these junctions, the Moldovan railways branch out to serve the followingdestinations: Russia (Moscow and Saint Petersburg), Belarus (Minsk), Ukraine (for example,

0.0

5.0

10.0

15.0

20.0

25.030.0

35.0

NDR CDR SDRUTA GagauziaChisinau

33.6


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This is caused by the outdated water supply network and outdated standards and equipment

for water treatment.65. According to statistical data, the density of water supply networks in 2008 was 39.2 km/km2.

Only Chisinau ranks higher than the NDR for this indicator and has a higher average ratingin Moldova. The communities with the greatest proportion of water supply networks arelocated in Balti and the districts of Floresti and Glodeni. The districts with the lowestproportion are Falesti, Rascani and Donduseni. A great discrepancy exists in the region withregard to the quality and quantity of water supply in Balti and that of other communities. Thecondition of water supply systems in most NDR communities is poor, as large financial

resources are needed for building water supply networks and local authorities are unable tofund such projects. Therefore, implementation of different national and internationalprogrammes in this area is needed.

Figure 3 Density of water supplynetworks, km / 100 km2 bydistrict, 2008

Figure 4 Density of water supplynetworks, km / 100 km2 byregion, 2008

150.0

200.0

250.0

300.0

350.0

100.0

150.0

200.0

250.0

300.0

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aggravated by the outdated sewage system and by the technical condition of waste water

treatment plants, which are absent in most communities. The town of Soroca, with apopulation of about 40,000 inhabitants, has no water treatment station at all: 2,040 tons ofuntreated waste is flowing into the river daily. A map of waste water evacuation networks andwater treatment stations is given in Annex E.

69. Waste management. In the NDR, the infrastructure and management of solid domesticwaste is underdeveloped. At the regional level, soil, water and air are heavily polluted, mainlydue to lack of systems for integrated waste management and an underdeveloped system forcollection of solid and liquid waste, including toxic waste. Except for Balti, the region features

a lack of enterprises, and advanced recycling technologies and practices. In the NDR,thousands of tons of solid domestic waste is produced every day; this is collected and storedin over 350 small warehouses, located, as a rule, at the periphery of communities. Most ofthese warehouses are unauthorised and are not properly equipped.

70. Efficient and safe measures are required for a radical change in the infrastructure forcollecting domestic waste, which would entail collecting waste on large organic ramps,followed by separation, partial recycling, and the collection of biogas produced by thedecomposition of non-recyclable waste. According to National Plan on Territory Landscaping

and of the Ministry of Environment project, it is planned to build four large polygons (Glodeni,Drochia, Ocnita, and Sangerei) provide for the more efficient management of solid waste. Amap of the regional scheme of warehouses for storage and processing of waste is given inAnnex F.

Supply of natural gas

71. It is planned that provision of a natural gas supply to communities in the NDR will be made


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Supply of electricity and heat

72. Electricity supply. The energy sector of the Republic of Moldova operates almost entirely(98%) on imported energy resources: both electricity and fuel for its production industry areimported. The electricity supply in the NDR is provided by distribution networks provided bythe state-owned company North Electricity Networks and the electricity distribution companyRED NordVest JSC. All communities in the region are connected to electricity networks.Each electricity consumer has an individual contract with the distribution company.

73. The thermal electricity station owned by North Electricity Networks is located in Balti city and

provides a stable power output of 24.0 MW, and a capacity to produce electricity at57,700,000 kW/hour; however, it services only Balti city itself. In the district of Riscani, thereis a hydroelectric power station at Costesti-Stinca that generates about 83,000,000 kW/hour.However, these resources are insufficient for the needs of the region. A solution to thisproblem would to resolve the legal position with regard to the operation of Naslavcea powerstation (24.0 MW). A map of the regional power system is given in Annex H.

74. Heating supply is a common problem in all regions. Of all the NDR communities, only Baltireceives heat from the North Electricity Networks heat producing station. In the other

communities, municipal heat stations are not operational. Thus, the inhabitants of apartmentblocks that have been connected to gas networks have built their own boiler houses. Someinhabitants have built stoves in apartments, while others still use electricity for heating duringthe cold season of the year. According to specialists, this diversity of heating systems inapartment blocks adversely affects the fabric of the walls. The situation is similar in publicinstitutions, which have either built their own heating systems or installed stoves. The ownersof individual houses, both in the urban and in the rural areas, make use of stoves, usingwood and coal as heating resources. The main problems within the heating sector are lack of


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Figure 7 Number of telephone

lines in 100 inhabitants,by district

Figure 8 Number of telephone

lines in 100 inhabitants,by region

Source: Moldtelecom, 2009.

2.4 Demography

78. As at 1 January 2009, the population of the NDR totalled 1,013,700.4 There has been agenerally negative trend in the population during the period between 2004 and 2008 for allcommunities (except for the district of Ocnita). The population decrease recorded over this

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

BL BR DN GL DR SR ED RS OC SG FL FR

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Chisinau ATU

Gagauzia

NDR SDR CDR

2005 2009 RM Average, 2009


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Source: National Bureau for Statistics, Population Census 2004.

Natural population trends and demographic deprivation

83. The negative natural growth of the population registered in the region is the most acutewithin the entire country, being affected by the decreasing fertility rate and an ageingpopulation, thus increasing demographic pressure. In 2008, the natural growth of thepopulation in the NDR was -4618 persons. Rascani and Soroca are the most affecteddistricts in this regard. Only in the district of Sangerei is there positive natural growth.

Table 4 Vital statistics of the population in 1,000 inhabitants

2004

%

2005

%

2006

%

2007

%

2008

%

Birth rate 9.7 9.6 10.0 9.8 10.0

Death rate 14.8 14.9 14.2 14.1 14.2

Natural growth -5.1 -5.3 -4.2 -4.3 -4.2

Source: National Bureau for Statistics, 2009.

84. Migration processes affect the demographic profile, and play an important role in the


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Source: Expert-Grup, 2008 (Unitatea Teritorial Autonom Gguzia: Analiza situaiei economice i a

potenialului de dezvoltare, Study).

85. Poverty in the region can be determined by the demographic deprivation of localcommunities, which is expressed by the small area deprivation index (SADI).5 Thecalculations for 2007 show that only communities in the district of Edinet are moredisadvantaged demographically.

Figure 14 Demographic deprivation index, by district

0

100

200

300

400

500

600

700

ED

DN

GL

BR

DR

SG

SR

OC

FR

R

FL

BL

index

ofde

privation

NDR RM Average


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Figure 15 Structure of employed population, %, 1 January 2008


87. The average monthly salary of an employee in the NDR in 2008 was MDL 2089, which is82% of the national average. The average monthly salary of a Balti employee is about MDL2760 (109% of the national average). During the period between 2005 and 2007, employees productivity grew, together with the absolute salary level. Between 2007 and 2008,productivity showed a decreasing trend, while salaries continued to grow.

Figure 16 Evolution of labour productivity and labour remuneration in the

44.8%

12.3%3.5%

14.0%

3.5%

21.8%

Agriculture Industry

Construction Trade

Transpt & comms Other


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2.5 Economic development

Gross Added Value per region6

89. The GAV of the NDR in 2008 was estimated at MDL 7.22 billion (21% of the nationalallocated GAV).7 As compared with 2006, GAV has not changed significantly. GAV percapita was slightly less than500 (76% of the national average).

Figure 17 Regional GAV per capita,MDL

Figure 18 Regional GAV in 2008 as apercentage of nationalallocable GAV in 2008

Source: Powell, 2009 (Regional Statistics Report).

0

5,000

10,000

15,000

20,000

25,000

RM

allocable

Centre North South UTA

Gagauzia

Chisnau

2006 2007 2008

0%

10%

20%

30%

40%

50%

Centre North South UTA

Gagauzia

Chisnau

0%

50%

100%

150%

200%

250%

GVA per capita GVA per worker GVA


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Figure 19 Sectoral structure of

GAV,%

Figure 20 Industrial specialisation indicator

by number of personnel, 2007

Source: Powell, 2009 (Regional Statistics Report).Note: Calculations made within ASEM study.

91. The region has relatively well-developed industrial potential. The main industrialagglomerations are: (a) the extractive industry; (b) production of clothing, processing anddyeing furs; (c) production and distribution of electricity and heat, gas and hot water; (d) thefood and beverages industry; and (e) production of medical, precision and optical devicesand equipment. Over 50% of the industrial potential is concentrated in the city of Balti.However, there are several industrial centres with potential for development in the region,

35%

24%

29%

26%

28%

26%

39%

49%

45%

0% 50% 100%

20

06

20

07

20

08

Agriculture

Industry & Construction

Services

-1.55E-150.3 0.6 0.9 1.2 1.5

Extracting Industry

Manufacture of footwear,

processing and dyeing of fur

Production and distribution ofelectricity and gas and hot

Industry of food and beverages

Production of medical,

precision and optical devices


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Figure 21 Structure of agricultural land, %

Source: NBS, 2007

93. The agricultural-industrial potential of the region consists of 51 production cooperatives, 25

joint stock companies, over 530 limited liability companies, and over 90,000 farms registeredas individual companies. The location of production capacities is shown in Annex J. Theentire sugar industry of the country (five sugar factories) is located in the region, togetherwith four high-capacity enterprises for processing fruit and vegetables, five factories forprocessing animal produce, three poultry enterprises, and other companies specialised inprocessing activities. However, the production capacities of these companies are very limitedand 180 agricultural companies generated losses in 2007. The main problems in the sectorare lack of capital investment in agriculture, degenerating land plots, and use of outdated


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Figure 22 Evolution of enterprises and

jobs, 2004 = 100%

Figure 23 Number of enterprises in

10,000 inhabitants, 2008


96. While the number of enterprises is steadily growing, their distribution is rather low with 53

companies in 10,000 inhabitants in 2008, which is 25% of the national average. Similarly, thespatial distribution of enterprise sales is not uniform. The most active economic areas areBalti, Soroca and Rascani, where more than 50 SMEs operate per 10,000 inhabitants.However, in the districts of Floresti and Singerei this indicator is less than 30.

97. The SME sector amounts to 97% of total enterprises and takes up 57% of the employed.Micro-enterprises represent two thirds of the total number of enterprises, and take up 10% ofthe total number of employed and account for 5% of the total revenues.


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100. Investments are funded mainly from private sources. The budgets of central and localgovernment account for only 814% of investment. In addition, investment in constructionworks across the region is not uniform, with discrepancies in investment per capita of up tofive times.

101. Foreign investment has declined in the region. Foreign direct investment in the NDR

Figure 24 Trend of capital investment in

fixed assets and constructionworks in 2004 prices

Figure 25 Share of capital investment in

fixed assets


21%

17%

15%

16%

13%

14%

16%

15%

10%

11%

10%

9%

4%

3%

4%

2%

52%

55%

55%

58%

0% 20% 40% 60% 80% 100%

2004

2005

2006

2007

North Centre South UTA Gagauzia Chisinau


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102. However, the region is known among foreign investors not only through foreign companies

operating in traditional sectors (the banking sector and petrol distribution), but also forproduction of building materials (Knauf), food production (Sudzuker, Metro, and Furshet),and machinery construction (Draexlmair).

2.6 Social condition

103. Living standards in Moldova are relatively low, especially in the areas outside the capital city.One third of the population of the regions is under the threshold of absolute poverty, 20% in

relative poverty, and 46% in conditions of extreme poverty.

8

The welfare level of thepopulation in the areas surrounding the city of Chisinau stands out, being twice as high asthat of the regions.

Figure 27 Poverty level by region, 2006

32.7 33.534.1

19.717.6

20.917.3

10.7

20

30

40

%


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Figure 28 Deprivation level by area

Source: MET 2007; SADI, Report on poverty and policy impact.

105. When analysing the conditions within the region, we find that the greatest access to healthcare is in Balti, Glodeni and Drochia, while access to education is greatest for Donduseniand Ocnita. Further lowest indicators are found in Donduseni and Floresti (for health care),and in Floresti and Balti (for education).


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Figure 31 Sources of income Figure 32 Expenses by category

Source: Powell 2009 (regional statistical report).

107. In terms of expenses, food (48%) and non-food (33%) items are the largest proportions,while services account for 12%. This proportion is valid for all regions. Very little expenditureis incurred on health care (4%) and, especially, for education only MDL 4 per month, whichis 2.5 times less than in the capital city.


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Figure 33 Number of organisations, professional,

economic and consultancy associations


116. Early in 2008, 265 economic, employer and professional structures and organisations wereoperating in the NDR. The main focus of their activity was the provision of consultancy andassistance services in the development and implementation of programmes and projectsdevelopment, research and development (R&D), and other associated activities. Whileduring the period between 2006 and 2008 the number of these organisations has notchanged significantly, the NDR is third in respect of this indicator, behind the CRD andChisinau.

117. In 2008, 1440 people were working within these structures and organisations, the growth of


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MDL 1,102.9 In respect of this indicator, the NDR ranks last among other development

regions. Public expenditures are 50% of those of Chisinau. At the regional level, publicexpenditure per capita is at its highest in Balti (MDL 1269) and Briceni (almost MDL 1200).At the other extreme, the districts of Drochia and Sangerei spend approximately MDL 1000per capita.

Figure 34 Average publicexpenditures by district,

2004

08 per capita, MDL

Figure 35 Average publicexpenditures by region,

2004

08 per capita, MDL

Source: Ministry of Finance, 2008.

0.0

200.0400.0

600.0

800.0

1000.0

1200.0

1400.0

BL BR SR FROCGLDNRS ED FL DRSG 0.0200.0

400.0

600.0800.0

1000.0

1200.0

1400.0

1600.0

1800.0

2000.0

ChisinauATU GagauziaCDR SDR NDR

1102.5


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3 SWOT Analysis

120. SWOT analysis is a strategic planning method used in the RDS to evaluate the Strengths,Weaknesses, Opportunities, and Threats related to the implementation of regional projectsand programmes. The main purpose of the SWOT analysis is to identify and assign eachfactor, either positive or negative, in order to develop a structured comprehensiveunderstanding of all the factors that determine the development of the North Region.

Table 7 SWOT Analysis of NDR

STRENGTHS WEAKNESSES

Relatively diversified industrial potential

Growth of the number of private enterprises andexistence of renowned foreign investors

Role of Balti municipality as regional growth pole withrelatively high urbanisation

Extended transportation network

Capacity and potential of Balti and Marculesti airports

Capacities for power and heat generation,opportunities for gas storage

Growth of labour productivity and relatively low labour

Use of outdated technologies and equipment in theproduction process

High cost of capital and limited access to funds forbusinesses

Weak representation of businesses

Limited own local public authorities revenues anddependence on transfers from national bodies

Degradation of small towns and of public utilityinfrastructure

Low quality of roads and railways


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3.1 Strengths

121. Relatively diversified industrial potential. The Region has natural resources/raw materialsfor developing a diversified industry sector: the processing industry, building materials,energy, machinery and construction, and the food industry.

122. Growth of the number of private enterprises and the presence of renowned foreigninvestors. During the period between 2004 and 2008, the number of private enterprises hasgrown by 30%. The existence of recognised foreign companies (for example, Knauf,Sudzuker, Metro, Furshet, Draexlmair, and Petrom) increases the attractiveness of the

region and contributes to attracting foreign capital.123. Role of the city of Balti as a regional growth pole and for its relatively high level of

urbanisation. The region has the greatest number of urban centres and has the highestdegree of urbanisation after Chisinau, with the urban population of the region representing32%. The advantages of urbanisation allow the population to have increased access tosocial services and provide greater opportunities for employment or the creation ofbusinesses.

124. Extended transportation network. The region has potential for all means of transportation.Of all regions, the NDRs network of roads has the greatest density of modernised roads,with a high proportion (94%) of roads with metalled surfaces. The existence in the region ofan international highway, two railway nodes and two airports integrates the region ininternational traffic flows.

125. Capacity and potential of Balti and Marculesti airports. Both Balti and Marculesti airportshave international status. Both have the capacity to service internal and international routes.Balti airport is certified and open for passenger and cargo transportation, while Marculesti


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such as limestone, clay, technical chalk, sand, and tripoli. In addition, the region has mineral

water resources, currently bottled for consumption and also used for treatment of certaintypes of illness.

3.2 Weaknesses

131. Use of outdated technologies and equipment in production process. The technologiesused in production, especially in the production and sale of agricultural produce, areoutdated and are no longer efficient. The high cost of capital makes it difficult to invest in newtechnologies, while the use of old technologies reduces companies productivity.

132. High cost of capital and limited access to funds for companies. According to theNational Bank of Moldova, in September 2009 the average weighted interest rate on loans tobusinesses was 19.04% for loans in MDL and 11.89% for loans in foreign currency. The realinterest rates are even higher, as there was a 2.9% decrease of the consumer price indexduring the period between January and September 2009. The high interest rates reduce theaccess of enterprises, especially SMEs, to financial resources and also obstruct privatesector development.

133. Limited localisation of companies. While the number of enterprises is steadily growing, thespatial distribution of production and sales is not uniform, differences between districts beingof the order of ten times. The number of enterprises is somewhat limited and amounted to 53enterprises in 10,000 inhabitants in 2008, which is 50% of the national average.

134. Reduced own revenue of the local public authorities and dependence on transfersfrom national authorities. This is due to the fact that a great number of enterprises thatoperate in the region are registered and pay taxes in Chisinau, as well as the deficientsystem for allocating tax revenues between the central government and the regions. In 2008,


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based on outdated ecologically-unfriendly technologies. While the region has sufficient

potable water resources of good quality both surface sources (the Rivers Prut and Nistru)and underground sources, about 50% of the rural communities have no centralised watersupply systems.

139. Negative demographic trends and population ageing. The region has the lowest naturalgrowth (-4.2 per 1000 inhabitants), the trend being maintained over at least the last fiveyears.

140. Deficit of qualified labour force. Labour force emigration is negatively affecting the labourmarket. Those that have emigrated frequently obtain jobs abroad as unqualified labourers,

subsequently losing their qualification and typically never returning to their profession. Theoccupations in demand in the labour market cannot be filled or require applicants to retrain.

141. Degradation of the environment, excessive soil pollution and increasing frequency ofsoil erosion and landslides. While the share of forests in the NDR is higher compared withother regions, in recent years trends in deforestation and the reduction of forest belts,perennial plantations and humid zones have been recorded. These trends contribute toincreased frequency of soil erosion and landslides, and decrease the tourist and spapotential of the region. Infrastructure and solid domestic waste management is poorlydeveloped, both in quality and quantity. In the NDR, high levels of pollution is found in soil,water and other environmental components, caused mainly by the poorly developedinfrastructure for collecting solid and liquid waste, including toxic waste, and by a very limitedlevel of recycling. Excessive soil degradation and pollution, induced by environmentallyunfriendly agricultural practices and improper storage of outdated obsolete agriculturalchemicals, limits the agro-industrial potential of the region and damages the environment.

3.3 Opportunities


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demand. The successful innovation of SMEs translates this combination features into market

development, through introducing new or improved products. There are also improvementsand innovation in organisational and technology processes specific to each company,including the distribution process. From this perspective, creating technology parks andbusiness incubators will make a significant contribution to improving SME capacity to createnew technologies and introduce new products into the market.

3.4 Threats

146. Deepening negative impacts of the world financial crisis and extension of theeconomic recession. Reduction of financial resources may severely affect the productionsectors of the economy (industry, agriculture, and construction), thus generating a continuingeconomic decline and lower incomes for the population, the state, and local budgets.

147. National level political instability, expressed in inconsistency of regional developmentpolicies and/or frequent amendment of the legal framework. The financial and economiccrisis may seriously aggravate the socio-economic condition in the region due to reducedinvestments, limited exports, higher unemployment, and the like. The socio-political instability

in the country, including legal instability, may be a serious barrier to attracting investmentsand competitiveness of the region. Delay in implementing the Law on RegionalDevelopment, and delay with establishing the institutional framework and putting intooperation the funding mechanism could create mistrust in regional actors and foreign donors,and lead to the loss of important funds for development.

148. Limited connection with EU through Romania. Of the three border-crossing points withRomania, only one is operational. There is no direct railway connection with the EU. Thetechnical condition of the railway networks is poor; no electrically driven railway


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153. Balti municipality, the second largest city in the country in terms of size andimportance, serves as a genuine growth pole for communities of the region,economically, educationally and culturally. The relatively high urbanisation and access toa relatively strong educational network favours growth of labour productivity and makes for ahigher human development index in the NDR.

154. Historically, the NDR has inherited a diversified transportation network, includingairports with significant commercial capacities. These systems facilitate the movement ofgoods, services and human resources, and could serve as a solid basis for futurecommercial development. Moreover, the NDR has capacity for energy production, which is

crucial for the continuance if industrial development.155. The economic performance of the region shows that the advantages are not fully

utilised. During the period between 2006 and 2008, the Gross Regional Product (GRP) didnot change significantly, while GRP per capita was a little over 600 (79% of the nationalaverage). Heavy depreciation of fixed assets and use of outdated technologies do not allowfor a positive evolution of the economy, high productivity and competitive quality products. Atthe same time, the high cost of capital and limited access to finance, accompanied byregulatory constraints, do not favour investment in modern equipment and technology, which

limits the expansion of businesses and the creation of new jobs.156. Continuing lack of public investment has resulted in significant degradation of the

network of roads and public utility infrastructure. This situation creates growingtransportation costs, and limits the movement of goods, services and human resources. Itnot only reduces economic activity, but also limits human development. Only about one thirdof the regions population has access to potable water supply networks, while the quality ofwater consumed from artesian wells does not comply with quality standards. There arediscrepancies between livelihoods in the region and in Chisinau, as well as within the region,


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4 Strategic vision

4.1 The vision

160. The strategic vision of the NDR shows a realistic, credible and attractive prospect for theregion. The strategic vision describes a set of basic ideals, priorities, principles and valueson which the development of the region is based, as well as the elements that differentiatethe region from other parts of Moldova.

161. The strategic vision of the NDR coincides with the strategic vision of the entire country, setout in the Constitution and the National Development Strategy for 200811, and envisagesestablishment of adequate conditions for the improvement of livelihoods. The approach tolivelihood improvement is seen as having multilateral factors as, in addition to economicdevelopment, it also includes the freedom of the individual and access to educational, healthcare and social services. The RDS also derives from the goals of the National Strategy forRegional Development, which by developing an efficient implementation mechanismpursuing the creation of an attractive environment for a sustainable growth achievement in

the development regions, supports the goals of the National Development Strategy.162. The strategic vision of the NDR reflects the consensus and aspirations formulated by

different stakeholders interested in the development of the region, who are therepresentatives of the public authorities, the private sector and the civil society.

163. The NDR is expected to become a dynamic and united region, where the present and futuregenerations will have a high quality of life, secured by diversified economic activities, anopen attitude towards technological innovation, a healthy environment, and a distinctregional culture. Everyone will have the opportunity to realise their potential to the fullest


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Combining the analysis of the situation at present and the vision for its future, one canidentify certain guidelines that the region is seeking to follow in its development.

167. Identification of priorities, however, should not only respond to the multiple needs of theregion. It is necessary to acknowledge that the public resources are limited compared withthe projects that could be implemented. Therefore, projects need to be focused on activitiescapable of eliminating the most fundamental constraints and achieving the greatest benefitsacross many sectors.

168. The analysis clearly reveals significant disparities between Chisinau and the regions, andbetween the urban and rural settlements inside the region. The poor condition of physical

infrastructure appears to be a fundamental factor, which generates and deepens thisdisparity by increasing transportation costs and limiting the movement of goods and people.At the same time, economic potential is restricted by transportation costs, and also limited byreduced opportunities to initiate other economic activities, particularly in rural regions.Therefore, increasing the efficiency of the agricultural and the agro-industrial sectors,together with encouraging greater diversity of economic activities, appears to be a must.

169. Economic development, however, should not be allowed to damage the environment.Environmental conditions can have a significant effect on livelihoods and the attractivenessof the region, both for the local population and for visitors.

170. Three priorities have been identified for the implementation of the RDS. These are :

rehabilitation of physical infrastructure; support for the development of the private sector and labour market; and improvement of the environmental and attractiveness to tourists.

171. These priorities are inter-connected and their consistent implementation will accelerate the


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5 Priorities

174. The regional working groups have discussed many programmes and measures necessaryfor the dynamic development of the region. However, taking into consideration the financingopportunities and the implementation term of the strategy, only a few areas have beenidentified as priorities. The rationale, the measures, and the expected outcomes for eachpriority are described below.

5.1 Priority 1: Rehabilitation of physical infrastructure

175. Goal. The goal of Priority 1 is to improve the access to qualitative infrastructure both forhouseholds and economic agents.

176. Rationale. Deficiencies of investment in the public infrastructure over recent decades haveled to a significant deterioration of roads, water supply, sewage systems, and gas supplysystems. This fundamentally impacts competitiveness, both at national and regional levels.Rehabilitation of the infrastructure will, on the other hand, boost the attractiveness of the

region to economic activity.177. A good water supply is a definite requirement for the region, where 80% of the water

resources do not meet quality standards. This affects the health of the population, and alsothe agro-industrial sector. The water supply and sewage system are expected to be built,initially, in the districts characterised by the most underdeveloped networks and also in thesettlements that can be connected to the SorocaBalti water supply system.

178. Modernisation of roads is also an important objective, increasing access to national andinternational highways and, subsequently, commercial flows. Development of the airport


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number of persons with access to qualitative drinking water;

number of start-up companies; and value of exports.

182. Impact indicators. Implementation of projects focused on Priority 1 will be evaluated basedon the following impact indicators:

volume of production (regional GAV); and employment ratio.

183. Cost: The tentative percentage of resources used to ensure implementation of this priority is

[XX%].

5.2 Priority 2: Support for the development of the private sectorand labour market

184. Goal. The goal of Priority 2 is to facilitate the creation of jobs and to increase theemployment ratio.

185. Rationale. The analysis of strengths suggests that the economic performance and thehuman development in the region are lower than their potential level, when taking intoconsideration the fact that the NDR is relatively more industrialised compared with otherregions. The main challenge here is the economic activity in the rural areas. More than 60%of the population of the region is located in rural settlements.

186. Rehabilitation of the infrastructure is expected to encourage migration to urban areas insearch of jobs. However, in the short and medium term, there will only be modest levels ofmigration. In this context, it is necessary to increase the efficiency of agricultural


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189. Outcome indicators. Implementation of projects focused on Priority 2 will be monitoredbased on the following outcome indicators:

number of people who found employment after retraining; and number of jobs created in SMEs.

190. Impact indicators. Implementation of projects focused on Priority 2 will be monitored basedon the following impact indicators:


191. Cost: The tentative percentage of resources used to ensure implementation of this priority is[XX%]

5.3 Priority 3: Improvement of the environment and attractivenessto tourists

192. Goal. The goal of Priority 3 is to generate environmental protection initiatives and increasethe regions attractiveness to the population and to visitors.

193. Rationale. The state of the environment has a direct influence on the living standards of thepopulation and the attractiveness of the region. At present, solid and liquid waste aremanaged in a non-sustainable way, which leads to the degradation of resources and theworsening health of the population. Only the urban settlements in the region are equippedwith purification stations for processing waste water. However, even in the areas where theyexist, their operation is inefficient. The problem is chronic in Soroca, where there is nopurification station at all. Thus, daily, 2040 tons of untreated waste is discharged into the


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number of touristic sites rehabilitated.

197. Outcome Indicators. Implementation of projects focused on Priority 3 will be monitoredbased on the following outcome indicators:

number of social initiatives developed and implemented; and decrease of erosion and the improvement of soil fertility.

198. Impact indicators. Implementation of projects focused on Priority 3 will be evaluated basedon the following impact indicators:


199. Cost: The tentative percentage of resources used to ensure implementation of this priority is[XX%.]


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208. Reporting on the RDS is part of an overall monitoring and evaluation system that includesthe NSRD and the NDS. The M&E system will be developed in a way that is consistent withgovernment reporting on the NDS. As the national monitoring and evaluation systemevolves, the elements of the monitoring system for the RDS will evolve with it.

209. The ROP covers a three-year period. As the Operational Plan evolves over time, themonitoring and evaluation system will be updated in accordance with the Operational Plan.


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7 The framework of resources and financing

7.1 Existing financing commitments

The financing needs

210. The financing needs of all potential development projects are enormous, and yet the publicresources available for the implementation of such projects are limited. The NRD RDS hasrestricted itself to three priorities with the largest impact on the social and economicdevelopment of the region. However, the measures included in the RDS can be implementedon different scales, depending on the volume of resources that can be directed towards theimplementation of regional projects and the capacity to capitalise on the available funds. Inthis context, the financing needs for each priority should be calculated, together with theavailable funding. Specific projects will be identified and incorporated into the ROP. Theannual financing application and prioritised financing needs will be presented in the ROP.

Sources of financing

The National Fund of Regional Development (NFRD)

211. According to the Law on Regional Development in the Republic of Moldova, the main sourceof financing for programmes and projects focused on the achievement of the regionaldevelopment objectives is the National Fund for Regional Development (NFRD). The NFRDcomprises the annual regional development allocations from the state budget. There are alsofunds from other sources, in particular from the resources offered by external partners. TheNFRD amounts to at least 1% of state budget revenues. The NFRD can attract other


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Other public sources

214. In order to finance the priorities in the RDS, other public sources can are also available. Thebudgetary revenues and expenditures of the administrative-territorial units (ATUs) in theNDR are presented in Table 9. However, as the resources raised in the NDR cover only 50%of basic expenditure and the local authorities depend on transfers from the state budget, theATUs cannot serve as a significant source of funding for regional development projects.

Table 9 Revenues and expenditures of the ATU budgets from the

North Development Region (in MDL 000)

UAT Capital 2005 2006 2007 2008 2009

mun. Bli Revenues 135,669.63 165,854.31 178,490.32 294,541.79 230,876.37

Expenditures 150,647.12 175,204.01 192,146.55 301,950.62 247,252.31

Briceni Revenues 66,936.27 87,888.28 120,004.15 121,163.60 134,976.74

Expenditures 63,816.39 88,357.21 117,901.23 129,090.71 141,288.43

Dondiueni Revenues 36,952.85 50,753.66 63,718.99 65,056.58 83,126.99

Expenditures 37,666.98 56,162.00 61,573.38 66,752.59 85,920.74

Drochia Revenues 70,358.52 88,446.18 124,408.37 128,720.83 149,021.02

Expenditures 69,296.72 95,871.26 117,996.68 131,691.01 155,407.62

Edine Revenues 59,940.64 85,702.04 105,918.90 123,216.36 138,717.46

Expenditures 60,518.34 83,581.78 107,384.19 124,721.82 147,471.05


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215. There are, however, certain transfers available from the state budget; these transfersrepresent about 15% of the total transfers and are normally directed to the implementation ofconstruction/capital investment projects. These transfers could be focused on financingregional development projects. Under existing conditions, the allocation of these transfershas been based on projects identified at the central level. Therefore, using these resourcesto support regional development projects will require a certain degree of decentralisation bythe central authorities.

216. Additionally, the local authorities could direct resources from the ATU budgets to the co-financing of projects. In particular, this could apply to external assistance projects where

such co-financing is compulsory, or to supporting the preparation of priority projects (forexample, performance of feasibility studies, and the employment of certain consultants).

External assistance

217. An important source of financing for regional development projects can be the assistanceprovided by external donors, both through cooperation programmes with the Government ofthe Republic of Moldova and by means of programmes available to regional and localauthorities. Together with the creation of the institutional and strategic regional developmentframework, and the practical implementation of regional development policies, the external

donors could contribute by providing assistance in the form of direct budget support to theNFRD. The mobilisation of additional resources directly into the NFRD will depend on theefficiency and effectiveness of the NRFDs implementation and the quality of the identifiedregional development projects.

218. Additionally, many of the external assistance programmes and projects implemented incooperation with the Government of the Republic of Moldova and central authorities have aspatial regional or local dimension. The projects focused on the rehabilitation of the socialinfrastructure water and sanitation systems roads and the like are implemented in many


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Annex A Network of communities and distribution of thepopulation by district


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Annex C Network of roads


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Annex D Railways and waterways


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Annex F Regional sewage scheme


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Annex G Gas network scheme


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Annex H Energy system


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Annex I Scheme of economic sector location


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Annex J Potential of the agro-industrial system



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59

Annex K Main indicators of NDR socio-economic development

INDICATORS NDR Districts Moldova

BL BR DN DR ED FL FR GL OC R SG SR

GENERAL DEMOGRAPHIC DATANumber of stable population as at 1January 2009

1013.7 148.1 76.2 45.9 20.3 83.6 93.1 91.0 62.5 56.5 70.9 93.8 101.1 3567.5

Average population density indistricts as at 1 January 2009(inhabitants / km

2)

101.2 1898.5 93.6 71.3 91.0 89.6 86.8 82.1 82.9 94.6 75.7 90.7 96.9 117.2

Female population(1 January 2008) (%)

52.4 54.1 52.4 53.3 52.4 52.7 51.6 52.0 52.0 52.8 52.1 51.2 51.5 51.9

Urban population (1 January 2008)(%)

35.7 96.7 20.2 23.3 22.3 35.2 18.9 21.1 19.2 34.5 26.5 20.8 36.8 41.4

Natural growth of the population in

the region in 1,000 inhabitants(1 January 2008)

-4.2 -0.6 -5.7 -9.1 -4.4 -4.1 -3.3 -4.7 -4.1 -5.8 -4.8 0.0 -3.5 -0.6

LABOUR FORCE

Labour force in relation to the totalpopulation, as at year end, 2007(%)

62.0 70.0 58.9 57.0 59.1 59.8 61.4 61.9 61.1 62.8 59.2 61.7 62.7 65.9

Population employed in industry,2007 (%)

12.3 12.9

Population employed in agriculture,2007 (%)

44.8 32.2

Population employed in services,2007 (%)

39.4 48.8

SOCIAL INDICATORS

Number of hospital beds in 2008per 10,000 inhabitants

41.0 74.6 27.6 29.1 38.3 41.1 29.9 38.6 30.2 36.1 37.1 29.8 35.5 61.3



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60

Number of doctors in 2008 per10,000 inhabitants

19.8 35.0 20.4 23.3 18.3 23.4 12.0 17.7 17.3 20.0 20.3 14.3 19.4 35.6

Day schools, gymnasiums andlyceums, 2008

494 30 34 27 41 44 51 56 28 30 41 51 61 1534

Pre-school institutions, 2008 428 35 34 21 40 43 47 31 29 15 40 41 52 1334

Colleges, 2008 15 6 1 1 1 1 1 4 49Number of college graduates, 2008 1341 713 75 63 31 39 98 322 6433

Universities, 2008 3 3 31

Number of university graduates,2008

1820 1820 19972

UNEMPLOYMENT

Unemployment rate, 2007 (%) 0.88 0.72 0.44 0.63 1.04 1.17 0.72 0.62 0.89 0.74 1.04 0.65 1.71 0.80

INFRASTRUCTURE

Density of public roads, km / 100km

2, 2009

33.6 30.9 39.2 32.7 26.8 35.0 33.7 32.8 31.2 35.4 34.5 33.5 37.4 26.9

Density of public roads withmetalled surfaces, km / 100 km2,2009

32.4 30.9 37.4 30.5 26.8 34.2 33.2 30.5 28.8 35.3 33.9 30.1 37.2 25.3

Paved roads in relation to totalpublic roads, 2009 (%)

96.5 100 95.3 93.5 100 97.6 98.8 92.8 92.4 99.7 98.3 90.0 99.5 93.9

Density of potable water supplynetworks, km / 100 km2, 2008

39.3 320.5 17.5 8.3 10.3 14.7 4.4 25.4 21.7 12.0 7.6 16.8 12.8 23.3

Density of sewage networks, km /100 km2, 2008

19.1 184.5 3.9 4.5 6.1 5.8 2.5 3.4 4.3 2.6 4.0 3.0 5.1 8.4

Communities connected to gas,2008 (%)

27.8 66.7 41.0 13.3 27.5 32.7 12.0 21.6 20.0 66.7 18.2 12.9 1.5 28.4

Number of telephone lines in 100inhabitants, 2009

26.5 32.5 31.1 29.8 26.8 26.0 22.9 22.8 26.9 23.9 25.0 23.0 26.6 28.7



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SECTOR RESTRUCTURING

Evolution of the number ofemployees in industry in 2007(2004 = 100) (%)

101.41 104.00 100.00 100.00 73.33 114.29 120.00 83.87 144.44 100.00 87.50 109.09 97.14 95.02

Evolution of the number ofindustrial enterprises in 2007(2004 = 100) (%)

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Evolution of the number of serviceproviding enterprises in 2007(2004 = 100) (%)

133.63 151.37 108.95 147.15 153.69 106.79 105.26 120.32 132.45 103.04 155.11 133.33 134.47 133.90

Evolution of the number ofenterprises in agriculture in 2007(2004 = 100) (%)

96.42 114.29 114.29 114.29 104.08 100.00 109.80 90.70 104.35 115.38 87.88 98.44 42.86 104.73

Proportion of enterprises inagriculture that bore losses in 2007(%)

33.46 41.84 6.25 30.00 45.10 17.81 60.71 43.59 22.92 30.00 24.14 47.62 37.50 41.49

SME SECTOR

Number of SMEs per 10,000inhabitants, 2008

51.76 121.54 48.29 49.46 40.44 40.07 28.25 24.51 39.04 50.80 49.51 29.10 50.25 115.23

Micro-enterprises (09 employees)(%)

69.91 73.39 72.01 77.53 71.74 64.48 56.27 58.29 69.67 71.78 72.36 58.24 70.67 75.64

Small enterprises(1049 employees) (%)

23.86 23.28 23.64 18.50 20.38 27.76 30.80 31.83 20.08 21.25 20.80 29.30 23.82 20.26

Medium-sized enterprises(50249 employees) (%)

6.23 3.33 4.35 3.96 7.88 7.76 12.93 9.87 10.25 6.97 6.84 12.45 5.51 4.10

ASSOCIATIONS AND RESEARCH AND DEVELOPMENT ORGANISATIONS

Number of organisations,associations

265 124 9 9 31 14 11 7 13 6 8 7 26 5134

Number of employees inorganisations, associations 1439 792 51 29 117 107 44 36 48 28 27 28 132 37071

Budget expenditures per inhabitant,MDL

1102.5 1,269.1 1187.0 1082.9 1013.4 1033.6 1013.9 1124.5 1094.4 1123.2 1069.9 987.75 1126.2 1330.8

Source: NBS, Powell 2009, SADI, 2007.

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