MINISTRY OF EDUCATION, SCIENCE YOUTH AND SPORTS OF UKRAINE

ODESSA NATIONAL ECONOMIC UNIVERSITY

Department of the international economic relations

Abstract

of master dissertation

on the project:

“The cross-border cooperation situation and development prospects at Ukrainian regions (Odessa region’s case)”

Doer:

The 5-th year student, group 3

International Economic Department

Valeriy Skosarev

The scientific advicer:

Professor Yuriy Kozak, e.d.

Odessa 2012

THE GENERAL DISCRIPTION

The subject urgency. The cross-border cooperation (CBC) is the joint action of local authorities and local communities of the border regions, aimed at establishing and deepening economic, social, scientific, technical, environmental, cultural and other relations within the competence defined by law. CBC promotes the movement of labor, technology, creation of border infrastructure and the development of trade relations between neighboring countries.

Cross-border cooperation has a positive effect on integration of the economies of border areas and as a result of economies of neighboring countries as a whole. CBC promotes a balanced and harmonized development of the economies of border regions, increases employment and enables the efficient implementation of certain projects.

Recently, regions of Ukraine are actively involved in the creation of Euroregions and cross-border cooperation with regions of the Russian Federation, Belarus, Moldova and the European Union. Given the increasing role of modern cross-border units in Europe and particularly in Ukraine urgent task is to find ways of increasing efficiency and finding new forms of cross-border cooperation.

In addition, the urgent task of the authorities at the regional state administrations is to solve the problems of development and overcome the negative factors CBC - factors that are long, but still effective steps to address them is not done. This situation makes it impossible to effectively use the presence of positive factors of cross-border cooperation and to implement new forms of cooperation Euroregional.

The extent of the problem. Cross-border cooperation is the subject of research by many domestic and foreign scientists. Among the first ones are such scholars as: Belenkiy P., Voloshok V., Yermolina V., Kukharskaya N., Silichayeva N., Shylepnytsksy P. and others.

A large number of research publications and forms of cross-border cooperation that exist today, however, did not reveal a systematic list of the problems of cross-border cooperation and, consequently, do not contain the required sequential plan to address them. Also, not developed strategies to improve the efficiency of cross-border cooperation through the use of more modern forms of its implementation and increase the volume of economic cooperation within the framework of cross-border entities.

The purpose and objectives of the study is to develop a coherent plan of action problems and overcome the negative factors of cross-border cooperation in the Odessa region and in finding ways to improve cross-border cooperation region with neighboring border regions of Romania and Moldova in the economic sphere.

The research object. The object of research is the Odessa region and its activities in the field of cross-border cooperation with neighboring areas of Romania and Moldova.

The research subject. The subject of the study is cross-border economic relations between Odessa region and the regions of Romania and Moldova.

Research Methods. The methodological basis of research is scientific positions of modern economic theory, labor domestic and foreign scholars on cross-border cooperation.

So, we used the methods of logical and empirical knowledge, statistical analysis of correlation-regression analysis, synthesis methods, construction of trend lines, comparison, prediction, deductive reasoning, abstraction, applied a systematic approach for description of the present learned and accumulated material.

Scientific novelty of the research includes a systematic evaluation and summary of the data published in scientific works of authors involved in the matter, official statistical data on the economic component of cross-border cooperation, and developing solutions to problems of cross-border cooperation and efficiency of its implementation in Ukraine.

The practical significance of the results. This master thesis has practical significance because the results of research and worked out solutions to urgent problems of cross-border cooperation and efficiency of its implementation can be used by regional administrations and local authorities in implementing the state policy on cross-border cooperation.

Publications. The main results and position of the thesis were published with four articles.

Structure of the degree determined by the sequence of study and consists of introduction, four chapters, the conclusions for each of them, the general conclusions and recommendations and the applications.

The main content

The introduction proved the relevance of the chosen topic, formulate objectives, tasks, object and subject of study and consider the practical significance of the results of the thesis.

The first chapter is called "Theoretical basics of cross-border cooperation of Ukrainian regions". It includes the basic conseption of economic cross-border cooperation and demonstrates the need for such cooperation in border regions. CBC is defined as a specific sphere of foreign economic, political, environmental, cultural, educational and other international activities undertaken at the regional level.

Figure 1. Spatial localization of benefits in border regions..

The need for cross-border cooperation in the border areas is illustrated with a Figure 1.

Regulations governing the CBC and the European practice of regionalism are the following forms of cross-border cooperation.

- Euroregions;

- Bilateral organizations;

- Agreements on cooperation in certain areas between adjacent and non-adjacent territories.

Euroregion is a form of organizational co-operation of administrative units of European countries, carried out under bilateral or multilateral agreements on transboundary cooperation.

The second chapter is "Analysis of cross-border cooperation of the Odessa region". It consists of the analysis of the factors and the effectiveness of the Odessa region’s CBC.

CBC Odessa area is mostly from the border regions of Romania and Moldova in the framework of the "Lower Danube" Euroregion.

Table 1.

The “Lower Danube” Euroregion

The unit	Territory, square km	Population, thousands people
Odessa region	33,3	2394,7
County Galati	4,6	619,55
County Tulcea	8,49	265,34
County Breyila	4,76	373,17
Cahul area	1,5	119,2
Cantemir area	0,9	61,3
Загалом	53,55	3833,260

Foremost among the positive factors of cross-border cooperation is Euroregional geopolitical and geo-economic position of the Odessa region. Odessa region has the longest border of all Ukrainian border regions, it is 1234 km, of which 176 km - border with Romania on the Danube River, 268 km - the Black Sea from Turkey, Romania and Bulgaria, and 790 km - land border with Moldova , of which 386 km - border with unrecognized Transnistrian republic. In the region there are 67 border crossing points, of which 26 are international.

The most important negative factor affecting the status and development of CBC in Euroregion "Lower Danube", a weak economic, especially trade relations with neighboring countries in the region (Table 2).

Table 2.

Odessa region’s foreign trade

Country	Year 2009		Year 2010		January-November of 2011
	In th. USD	In %	In th. USD	In %		In th. USD	In %
Rebulic of Moldova	95824,5	6,63	102767,9	6,09		64623,9	4,70
Romania	5392,5	0,37	8182,5	0,48		8543,2	0,62

As for investment links Odessa area with neighboring countries, then as of October 1, 2011 in the region were registered 64 enterprises from the Moldovan capital. At the same time in the Odessa region was invested 1,677 thousand USD of Romanian origin (4 companies), representing 0.1% of all foreign direct investment in the region.

An important factor that influences the development of cross-border cooperation with neighboring Odessa Oblast region of the Republic of Moldova and Romania, Ukraine has political relations with these countries. In the diplomatic relations of Ukraine with its south-western neighbors there is a certain tension. The reason for this are two territorial conflicts: on site highway Odessa-Reni in the village. Palanka with Moldova and Snake Island to Romania.

Another important factor is the negative inertia of local authorities in implementation euroregional cooperation, the reason why, first of all, is the lack of regional powers necessary for such cooperation. That is exactly the Ukrainian law is a deterrent of European regions in Ukraine.

Another negative factor of CBC - the low level of involvement in cross-border cooperation of business and public sector. This is because Ukrainian Euroregions established administrative method - the founders of these structures is the regional authorities and governing bodies of lower units (counties and town councils) actually removed from the system of cross-border cooperation. The essential problem of Euroregion "Lower Danube" as well as a lack of funding his activities as Ukrainian side, so the part of neighboring countries.

There is also a problem of inconsistency of legislation of Ukraine, Moldova and the EU, presented the Romanian side: differences in customs and tax legislation, lack of financial agencies that specialize in doing calculations in national currency and credit border projects affecting the development of the Euroregion "Lower Danube". Another problem is the fact that the activities of partners is not always sufficiently coordinated, and many plans are "on paper".

The efficiency of cooperation within the Euroregion "Lower Danube" also affects its great size: for example, in Europe Euroregions area is typically 5-10 thousand square kilometers, population - about 1 million people, and the size of Euroregion "Lower Danube" constitute 53 550 km ², its 4 million people inhabit. These dimensions affect the formation efficiency of European regions.

Table. 3.

Odessa Region Gross Regional Product

Year	GRP, millions UAH	GRP, millions USD
2007	33116	6558
2008	46994	6103
2009	48647	6092
2010	50001	6280
2011	51576	6455

Table. 4.

Odessa Region foreign trade, thousands USD

Indicator	2007	2008	2009	2010	2011
Exports	61113,9	171121	101216	107028	79766
Imports	188507	295509	123706	180808	286127
Foreign trade	249621	466629	224922	287836	365893
Trade balance	-127393	-124388	-22490	-73781	-206361

Table 5.