State regional policy is a topic that remains difficult and even unknown for many. Although the goal of regional policy can be formulated relatively briefly, the specific tasks and mechanisms of cooperation of numerous departments, necessary for its implementation, require thorough approaches and the formation of practical understanding among managers at the state and municipal levels.
European regional policy (cohesion policy) is the EU’s main tool for reducing regional disparities and investing in sustainable and inclusive socio-economic growth.
The goal of the Ukrainian state regional policy, defined by the Law in 2015, is:
- creation of conditions for dynamic, balanced development of Ukraine and its regions,
- ensuring their social and economic unity,
- raising the standard of living of the population,
- creation of safe conditions,
- compliance with state-guaranteed social standards,
for every citizen regardless of his place of residence.
So let’s start to understand – let’s go back to the beginning, in the 90s, to review step by step the key agreements, concepts and laws that led us to the current approach in the formation and implementation of state regional policy.
Ukraine chose the path of European integration. Its legal basis was the Partnership and Cooperation Agreement between Ukraine and the European Communities and their member states, signed on June 14, 1994 in Luxembourg and ratified by the Verkhovna Rada on November 10, 1994. (Law of Ukraine No. 237/94-VR). The agreement entered into force on March 1, 1998.
In the context of this Agreement, the European Union and individual programs/projects of international technical assistance contributed to Ukrainian communities and regions in the field of regional development. Despite the certain successful implementation of certain European standards into national legislation, state regional policy was in a state of formation for a long time and was formed with great difficulties in political, economic and time dimensions.
To change the situation, on May 25, 2001, the Concept of State Regional Policy was approved as an alternative to the Soviet regional policy, the object of which was Ukraine for a long time. In the end, it was necessary to solve the problems of increasing territorial disparities in economic development and opportunities for social security of citizens.
At that time, a significant part of public relations in the field of regional development was regulated by the Law of Ukraine “On State Forecasting and Development of Economic and Social Development Programs of Ukraine” dated March 23, 2000. No. 1602-III, and later by the Law of Ukraine “On Stimulating the Development of Regions“ of September 8, 2005 No. 2850-IV. The latter has already expired, but has remained a part of the history of state regional policy.
In 2007, a decision was made to create a ministry in the system of central executive bodies that would ensure the formation and implementation of state regional policy. Therefore, by the resolution of the Cabinet of Ministers of Ukraine dated March 1, 2007 No. 323, the Ministry of Regional Development and Construction of Ukraine and the Ministry of Housing and Communal Affairs of Ukraine were formed. Already in 2010, by the Decree of the President of Ukraine No. 1085/2010, the two Ministries were reorganized into a single Ministry of Regional Development, Construction and Housing and Communal Services of Ukraine, which has been repeatedly changed since then. Nevertheless, this very Ministry, which is now the Ministry of Development of Communities, Territories and Infrastructure of Ukraine, with the support of the EU, joined the process of developing legislative and normative legal acts to improve legislation in this area.
Support for regional development with state funds was introduced only in 2012. The Law of Ukraine “On Amendments to the Budget Code of Ukraine and Some Other Legislative Acts of Ukraine” dated January 12, 2012 No. 4318-VI supplemented the Budget Code of Ukraine with Article 24-1: The State Fund for Regional Development. The fund was intended to be at least 1% of the projected revenue of the general fund of the State Budget of Ukraine for the corresponding budget period. The meanss of the Fund are intended for the implementation of the state regional development strategy and regional development strategies, as well as state target programs and investment programs (projects) in the implementation of regional development measures.
Despite such positive steps to stimulate regional development, the legislation remained fragmented and the state policy unsystematic, which had a significant impact on the uneven development of the regions. For example, according to data from the Monitoring of Social and Economic Development of the Regions of Ukraine (available in the archives of the Ministry of Economy), in 2012, out of 263.7 bln. UAH of capital investments in the economy of Ukraine, almost a quarter – 24.5% – was invested in the city of Kyiv. Donetsk region (11.4% of all capital investments), Dnipropetrovsk (7.7%), Autonomous Republic of Crimea and Sevastopol (7.4%). That is, m. Kyiv, m. Sevastopol and 3 regions in 2012 received 51% of all capital investments in the country. This left only 49% for the remaining 22 regions of Ukraine.
The impetus for building a clear legislative system of state regional policy in Ukraine was the updated version of the Agenda of the Ukraine-EU Association, approved on June 24, 2013 at the Sixteenth Meeting of the Ukraine-EU Cooperation Council in Luxembourg. In the block “Regional development” of this Procedure, it is stated that in order to prepare and facilitate the implementation of the Association Agreement, “the determination of the framework of regional development by adopting the Law on the principles of state regional policy or making changes to the legislation on regional development” should take place.
At that time, the Association Agenda (AA) was a practical mechanism – a benchmark for conducting reforms in Ukraine, developed to replace the Ukraine-EU Action Plan. The AA was approved by the Council on Cooperation between Ukraine and the EU on June 16, 2009. in accordance with the agreements reached during the Ukraine-EU Paris Summit.
Accordingly, in order to facilitate the implementation of the Ukraine-EU Association Agreement, as a result of complex internal political and professional discussions during 2013-2015, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On the Principles of State Regional Policy” dated February 5, 2015 No. 156-VIII.
For Ukraine, it was a breakthrough in the formation of a coherent state regional policy. Although many provisions of this Law have been significantly changed and updated since then, it established key and necessary definitions of the goals, principles, priorities of state regional policy, powers of its subjects, as well as its financing and monitoring.
At the same time, the policy of decentralization of power and the reform of local self-government and territorial organization of power took an important place in the internal politics of the country. The process of decentralization in Ukraine began in 2014, and at its center were communities – now united territorial communities, UTC.
Such united territorial communities, formed as part of the reform, have become a pillar of the country’s economic and social development. Based on them, the new local self-government bodies of the basic level were empowered to independently form local budgets and powers in the spheres of management of education, primary health care, housing and communal services, as well as in social, cultural and other spheres. At the same time, financial decentralization provided communities with budgets that finally allowed communities to decide for themselves which projects to implement as a priority – whether to repair social infrastructure, or build roads, or create jobs, or all of these together.
Already in 2016, the first 159 united territorial communities were active. For the first time since the restoration of Ukraine’s independence, thanks to the conditions created within the framework of the reform, real, effective, responsible local self-government, which is the basis of democracy, began to emerge.
In total, 1,439 communities were formed in Ukraine. But due to the beginning of the Russian-Ukrainian war in 2014, not all the territory of Ukraine could use the tools of local self-government reform and territorial organization of power. At the same time, the horrors of the war demonstrated the exceptional ability of the newly united Ukrainian communities to resist the enemy and make locally relevant decisions in support of their residents, displaced persons, territorial defense and the Armed Forces, and moreover – to continue providing services – administrative, educational, medical, social, communal , develop the economy and support international inter-municipal partnerships.
So, based on strengthened local self-government, successes and challenges of the decentralization process, as well as the experience of implementing state regional policy after 2015, it is time to “move to a new level” of forming and implementing effective state regional policy. In 2022, amendments to Law No. 156-VIII were prepared in order to comprehensively improve the mechanisms for the implementation of state regional policy and increase its effectiveness.
The Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Regarding the Basics of State Regional Policy and the Policy of Reconstruction of Regions and Territories” dated July 9, 2022 No. 2389-IX made significant changes to Law No. 156-VIII, which, among other things:
- a three-level (instead of a two-level) system of state regional policy documents was established: state strategy, regional strategy, territorial community development strategy;
- four functional types of territories of recovery territory, regional poles of growth, territories with special conditions for development, territories of sustainable development were introduced;
- the activities of Regional Development Agencies (RDAs) have been restarted, in particular, RDA founders may include regional branches of associations of local self-government bodies, which include 100% of the region’s communities;
- a new strategic planning document, the recovery and development plan, was introduced for the territories affected by Russian aggression;
- it was established that local self-government bodies must ensure the approval of strategies for the development of territorial communities within 18 months from the date of entry into force of the Law.
These changes make the activity of subjects of state regional policy clearer, preparing the ground for the European integration of Ukraine. In addition, at the end of June 2024, the new Law “On International Territorial Cooperation of Communities” No. 3668-IX entered into force, which expanded the powers:
- village, settlement, city councils regarding the approval of bilateral or multilateral agreements on cross-border cooperation to create a Euroregion;
- district and regional councils regarding the conclusion and approval of bilateral or multilateral agreements on the creation of a Euroregion, decision-making on the formation of a Euroregion, on joining or leaving such an association, approving the Euroregion statute and making changes to it;
- local state administrations regarding the implementation of state regional policy and the development of cross-border cooperation, as well as regarding the conclusion of agreements with foreign partners on cooperation, agreements on cross-border cooperation within the competence defined by legislation;
- цof the central body of executive power, which ensures the formation and implementation of state regional policy, in the field of international territorial cooperation and subjects of subjects of international territorial cooperation.
Also, the new Law introduced provisions on the development of regional programs for the development of cross-border cooperation and on the coordination of state and regional strategic priorities in the field of cross-border cooperation.
And Ukraine does not stop there. Regional politics is a complex and dynamic sphere, which is extremely relevant in the times of Russia’s unjust and brutal war against Ukraine, as well as in the framework of Ukraine’s active movement in the EU.
The material was prepared by experts of the international technical assistance project “Ukraine’s Cohesion and Regional Development”, UCORD in cooperation with the “Decentralization” portal