Regional Development Strategy

Approved by the Decision of North Regional Development Council No.
__ of ___March 2010
North Development Region
Regional Development Srategy
2010
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.
Regional Development Strategy
Preface
Dear friends and colleagues, We have developed and approved the North Development Region Strategy, which we hope will become a guide for the planning and streamlining of our activities, and will support us in promoting new policies for regional development. The document emphasises the values, abilities, needs, and opportunities that are specific to the 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, improvement of the environment, and increase the level living standards of the regions citizens. Proper use of the National Fund for Regional Development (NFRD) funds and sources granted by regional and international donors; cooperation between the government, first- and second-tier local public administration authorities, companies and the citizens themselves; as well as the implication of the entire society in capitalising on current and future possibilities will 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 all aspects of the social and economic life of the region, while the North Regional Development Agency will contribute all available means to promoting and implementing such projects, creating sustainable and effective partnerships, and providing assistance and qualified advice. We can offer work conditions and support. Further, we will mobilise to give an example of the spirit of initiative and creativity, responsibility and commitment to demonstrate willingness and ability to change the region, and the entire Republic of Moldova, to bring it to the level of developed countries. We look forward to a mutually advantageous collaboration and hope you will join us in the implementation of the selected projects. Yours sincerely,
Name Chairman of the North Regional Development Council
To obtain a copy of the North Development Region Strategy or to comment on any issue discussed in this document, please contact us: Name: Position (title): Address: Telephone: Fax: Email: Web:
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Table of Contents
Preface iii
Table of Contents .....................................................................................................................iv Executive summary.................................................................................................................vii Abbreviations ...........................................................................................................................xi 1 Introduction ....................................................................................................................... 1 1.1 1.2 1.3 1.4 2 The importance of regional development ............................................................... 1 Strategic context .................................................................................................... 1 Process and principles for strategy development ................................................... 2 Principles for supporting regional development ...................................................... 4
Situation analysis.............................................................................................................. 5 2.1 2.2 2.3 2.4 2.5 2.6 2.7 General data .......................................................................................................... 5 Geographic location and spatial development ........................................................ 6 Connectivity, accessibility, and infrastructure ......................................................... 9 Demography .........................................................................................................15 Economic development.........................................................................................20 Social condition.....................................................................................................25 Regional institutional capacities ............................................................................27
SWOT Analysis ................................................................................................................31 3.1 3.2 3.3 3.4 3.5 Strengths ..............................................................................................................32 Weaknesses .........................................................................................................33 Opportunities ........................................................................................................34 Threats .................................................................................................................35 Conclusions ..........................................................................................................35
Strategic vision ................................................................................................................38 4.1 4.2 4.3 The vision .............................................................................................................38 Identification of priorities .......................................................................................38 Regional partnerships ...........................................................................................39
Priorities ...........................................................................................................................40 5.1 5.2 5.3 Priority 1: Rehabilitation of physical infrastructure .................................................40 Priority 2: Support for the development of the private sector and labour market....41 Priority 3: Improvement of the environment and attractiveness to tourists .............42
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6 7
Monitoring, reporting and evaluation .............................................................................44 The framework of resources and financing ...................................................................46 7.1 Existing financing commitments ............................................................................46 Network of communities and distribution of the population by district .................. 49 Natural state protected areas .............................................................................. 50 Network of roads ................................................................................................. 51 Railways and waterways ..................................................................................... 52 Water supply and sewage network and treatment plants..................................... 53 Regional sewage scheme ................................................................................... 54 Gas network scheme .......................................................................................... 55 Energy system .................................................................................................... 56 Scheme of economic sector location ................................................................... 57 Potential of the agro-industrial system................................................................. 58 Main indicators of NDR socio-economic development ......................................... 59
Annex A Annex B Annex C Annex D Annex E Annex F Annex G Annex H Annex I Annex J Annex K Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Figure 12 Figure 13 Figure 14 Figure 15 Figure 16
Density of public roads, km / 100 km2 by district, 2008 Density of public roads, km / 100 km by region, 2008 Density of water supply networks, km / 100 km by district, 2008 Density of water supply networks, km / 100 km2 by region, 2008 Proportion of gas-connected communities, % by district, 2007 Proportion of gas-connected communities by region, %, 2007 Number of telephone lines in 100 inhabitants, by district Number of telephone lines in 100 inhabitants, by region
2 2
11 11 12 12 13 13 15 15
Structure of population by gender, %, 1 January 2008, by development region16 Structure of population by area, %, 1 January 2008, by development region 16 Structure and ratio of the population by age group Structure of absent population by main age groups Demographic deprivation index, by district Structure of employed population, %, 1 January 2008 Evolution of labour productivity and labour remuneration in the industrial sector of NDR, comparable prices, year 2005 = 100% 16 17 18 19 19 Proportion of absent population in total population, population census, 2004 17
Figure 17 Figure 18 Figure 19 Figure 20 Figure 21 Figure 22 Figure 23 Figure 24 Figure 25 Figure 26 Figure 27 Figure 28 Figure 29 Figure 30 Figure 31 Figure 32 Figure 33 Figure 34 Figure 35
Regional GAV per capita, MDL Regional GAV in 2008 as a percentage of national allocable GAV in 2008 Sectoral structure of GAV,% Industrial specialisation indicator by number of personnel, 2007 Structure of agricultural land, % Evolution of enterprises and jobs, 2004 = 100% Number of enterprises in 10,000 inhabitants, 2008 Trend of capital investment in fixed assets and construction works in 2004 prices Share of capital investment in fixed assets FDI per capita (% average for country, 2007) Poverty level by region, 2006 Deprivation level by area Map of educational deprivation Health care deprivation map Sources of income Expenses by category Number of organisations, professional, economic and consultancy associations Average public expenditures by district, 200408 per capita, MDL Average public expenditures by region, 200408 per capita, MDL
20 20 21 21 22 23 23 24 24 24 25 26 26 26 27 27 29 30 30
Tables
Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Summary of development priorities of the North Development Region General data on development regions (2007) Distribution of population by communities Vital statistics of the population in 1,000 inhabitants Regional entrepreneurship sector Features of non-governmental organisations SWOT Analysis of NDR viii 5 6 17 23 29 31
The quantum of the National Fund for Regional Development between 2008 and 2010 (in MDL 000) 46 Revenues and expenditures of the ATU budgets from the North Development Region (in MDL 000) 47
Note: The document operates with 2007 data. When developing the Strategy, the data were updated from recent alternative sources. This can lead to some inconsistencies.
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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 for the region. It is consistent with the main national policy documents related to regional development: The National Development Strategy for the period 200811, which identifies regional development as one of the five national priorities and expresses the responsibility undertaken by the Government of the Republic of Moldova for implementing state policies in the area of regional development; and The National Strategy for Regional Development (NSRD), as a sectoral document for policy planning, under the responsibility of the Ministry for Construction and Regional Development (MCRD). The RDS represents a strategic framework for facilitating and promoting integrated, economic and social development at the regional level, and for contributing to the achievement of regional sustainable development objectives in the medium term.
2.
The RDS is grounded on a thorough economic, social and environmental appraisal of the potential of the North region, based on the findings of numerous background documents, including Economic and Social Background Studies, an Environmental Report, a Private Sector Development Study, a Roads Sector Study, SADI and other statistical data. The principle of active participation of local and regional stakeholders has been embodied throughout the RDS drafting process. Regional working groups have been established, bringing together government and non-government stakeholders, creating sustainable partnerships in establishing regional development priorities, which will be promoted and further applied in regional development projects. The average representation of women in the working groups is 21%. Conferences and working group workshops were organised, to which the mass media and experts from the regions and Chisinau were also invited, to ensure a smooth dissemination and clear understanding by all stakeholders of the main regional development objectives, financial schemes, and the current situation at the regional and intra-regional levels, and to involve all parties in the drafting of strategic documents and in public consultations. The development of the CDR, as with that of the other development regions, is strongly influenced by external factors; in particular, the policies implemented at national level are of great importance. They affect both economic performance and the quality of locally provided public services. The influence of national policy is especially important where local authorities in the region have insufficient revenues, and effective policy implementation depends on transfers from the state budget. Of the CDR development regions, the NDR is the second largest development region by area, after the Centre Development Region. The NDR ranks second in terms of Gross Added Value (GAV) and GAV per capita, exceeded only by Chisinau. This performance is due to use of the existing industrial and agricultural-industrial capacity in the region, both by a growing number of local companies and by foreign investors. The local government centre of Balti, ranked the second city of the country by size and importance, serves as a genuine growth pole for the communities of the region, economically, educationally and culturally. The relatively high level of urbanisation and access to a relatively strong educational network favours labour productivity growth and contributes to a higher human development index in the NDR.
3.
4.
5.
6.
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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, the priorities 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, building materials, energy, machinery and construction, the food industry, human potential, the active growth of private businesses and an increased number of foreign investors expressing interest in doing business in the region, an extended transportation network, and power generation and gas storage capacities. Moreover, the proximity of the EU opens up new opportunities both for companies and for public authorities in the region, which have obtained direct access to EU cross-border cooperation funding programmes. The use of national and external funds for rehabilitation of regional infrastructure, implementation of programmes to support businesses and improvement of the environment will eliminate constraints to economic growth and accelerate development of the NDR.
9.
10. The NDR is expected to become a dynamic and united region, where present and future generations will have a high quality of life, secured by diversified economic activities, an open attitude towards technological innovation, a healthy environment and a distinct regional culture. Everyone will have the opportunity to realise their own potential to the fullest extent.
Table 1
Summary of development priorities of the North Development Region

Measures Output indicators Rate of homes with water supply system in relation to the total number of houses Proportion of reconstructed or new roads in relation to the total length of roads Outcome indicators Number of persons who have access to qualitative drinking water Number of economic activities developed and implemented Impact indicators Production volume (GAV at the regional level) Employment rate Cost [XX ]% of total resources
Priority 1. Rehabilitation of physical infrastructure
Extension and reconstruction of water supply systems and canals Reconstruction and decoration of regional roads, especially those connected to national roads or reconstructed sections Evolution of infrastructure and airport services in Bli and Mrculeti Stimulating cross-border activities by increasing
Extension of the runway at Mrculeti airport
Value of exports
Opening an additional crossing point between Moldova and
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Priority
Measures investment in creating crossing points between Moldova and Romania, located on the NDR
Output indicators Romania
Outcome indicators
Impact indicators
Cost
2. Supporting private sector development and the labour market
Training development Support for qualification and retraining of the employed population in rural areas Stimulating SMEs by developing information and consultancy services (industry, services, tourism, etc.) Support the creation of incubators and the application of innovative technologies (refrigerators, greenhouses, manufacturing, etc.) Support businesses with export potential that implement international quality standards Stimulation of association and cooperation of all stakeholders in the agriculture sector, to ensure fairness in the relationship between raw material
Number of upgraded retraining programmes in cooperation with the private sector
Number of people in the labour market who have received retraining
Production volume (GAV at the regional level)
[XX]% of total resources
Number of SMEs that have benefited from advisory services
Number of jobs created in funded SMEs
Employment rate
Number of companies that have benefited from grants awarded in a transparent selection process
Number of events organised involving all industry players
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Priority
Measures producers, processors and traders
Output indicators
Outcome indicators
Impact indicators
Cost
3. Improvement in the attractiveness of the environment and tourism
Increase access to environmental information and promote environmental education Development of integrated management of solid waste, including separate collection, and recycling, and creating modern polygons for recyclable waste storage. Enhancing environmental security in the region by promoting activities aimed at combating land degradation and developing programmes to anticipate and respond to extreme weather conditions Rehabilitation of buildings and promoting the integration of tourism at the sites of international interest
Develop and implement information campaigns
Number of social or environmental actions developed and implemented Reducing the frequency of erosion and improving soil quality
Volume production (GAV at the regional level)
[XX]% of total resources
The number of new waste storage polygons Number of sewage treatment plants rehabilitated / constructed
Employment rate
Develop a system to anticipate and respond to extreme weather conditions
Number of buildings rehabilitated that are of tourist interest
Abbreviations
ATUGDR CDR CHDR DR EU FDI GAV GRP ILB LPA MCRD MF NBS NDR NDS NFFM NFRD NGO NRDC NSRD PS RDA RDC RDS RM ROP SADI SDR SRD SME SPD TDR UTAGDR Autonomous Territorial Unit Gagauzia Development Region Centre Development Region Chisinau Development Region Development Region European Union Foreign Direct Investments Gross Added Value Gross Regional Product International Labour Bureau Local Public Administration Ministry of Construction and Regional Development Ministry of Finance National Bureau for Statistics North Development Region National Development Strategy National Farmers Federation of Moldova National Fund for Regional Development Non-Government Organisations National Regional Development Council National Strategy for Regional Development Public Sector Regional Development Agency Regional Development Council Regional Development Strategy Republic of Moldova Regional Operational Plan Small Area deprivation Index South Development Region Strategy for Regional Development Small and Medium-sized Enterprises Single Programming Document Transnistria Development Region Gagauzia Territorial Administrative Unit Development Region
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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 for economic and social development; thus, regional development represents a complementary policy to any macroeconomic and structural policies. 12. Globalisation provides a strong argument for a regional approach in finding solutions to social-economic development problems, by operating at the intermediary level between local companies 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, can neither be promoted by the government alone, nor by any individual local authority, without creating partnerships that are necessary to generate the required synergies. Having a deeper perspective on regional needs than the central government, local authorities generate 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 of Moldova, which has confirmed its commitment to the equitable distribution of development opportunities throughout the country. This commitment is confirmed both within the legal framework and at the level of strategic planning. The successful implementation of regional policies will give impetus and will accelerate the development of the country in general, with the ultimate aim of improving quality of life in all areas within the territory of the Republic of Moldova.
1.2
Strategic context
14. The Regional Development Strategy (RDS) is the final output of an extensive process of consultations and debate related to the sustainable and balanced development of the regions. It represents a public policy document aimed at outlining the medium-term development of the region. 15. Policies tend to have spatial impact; thus, it is important that public authorities find solutions for complementing and integrating sectoral policies in order to ensure the coherence of development measures. For these reasons, the RDS is correlated with national-level development policies and strategies. 16. The National Development Strategy (NDS) for 200811 approved by Law No. 295 of 21 December 2007 identifies regional development as one of the five national priorities with the general aim of achieving a balanced and sustainable social-economic development in the entire territory of the Republic of Moldova through correlation of efforts within the development regions. The NDS is an intra-sectoral document, which includes measures in the area of regional development undertaken by a number of central public authorities, and represents the responsibility undertaken by the Government for implementing state policies in the priority area of regional development. 17. Law No. 438-XVI on Regional Development of the Republic of Moldova of 28 December 2006 defines the main objectives and principles, and sets out the institutional framework and planning tools for regional development. Under that Law, the National Strategy for Regional Development (NSRD) is developed at national level, while the Regional Development Strategies are developed at regional level. These documents identify priorities and implementation measures of regional development policy within the development regions. The NDR RDA elaborated this strategy with the major participation of the regional
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 the Ministry of Construction and Regional Development (MCRD). Funding sources for the two documents are different; in the case of the NDS, the source is the entire state budget; in case 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 a framework for management, implementation, funding, monitoring, and evaluation of regional development, without going into detail on the content of the regional development strategies or the ways in which regions will conceive their development. 20. The RDS represents a medium-term policy document at regional level, and a strategic framework for facilitating and promoting integrated spatial, economic, and social development at the level of the development region and for contributing to achieving regional sustainable development objectives. Additionally, it is clear that spatial problems and solutions do not strictly observe the administrative borders, and the process for developing the RDS therefore provides an opportunity for discussing the common problems of all regions, problems that exceed the boundaries of development regions as territorial-statistical and functional units. 21. The RDSs provide a wider horizontal context to development, which should allow a more efficient coordination and concentration of sectoral expenditures by the ministries and donors in the regions. The Strategies will also seek to enhance regional capacity for efficient absorption of investment funds, and the Republic of Moldova, in conformity with European practices, will accede to integrated governance and synergy between national (vertical) and regional (horizontal) programmes. Thus, the RDS becomes an important vehicle for interconnecting actions at national, regional, and local levels. 22. The RDS should help mobilise the development of regional partnerships to develop a viable project pipeline to be included in the regional operational plan (ROP). The ROP governs the implementation of the RDS, and covers a three-year period, comprising programmes, projects, and priority activities. Projects, programmes and specific regional development activities contained in the ROP should be based on the main RDS priorities for that period. In accordance with the RDCs decision, the ROP has to be periodically updated generally, on an annual basis. 23. A nation-wide Single Programming Document (SPD) has to be developed on the basis of these RDSs and ROPs, whereby priorities and areas supported by financial resources will be established, focusing upon regional development. The SPD will be submitted for approval to the National Council and the Government. This will be the legal framework for public funds allotted to support regional development.
1.3
Process and principles for strategy development
24. The RDSs in the Republic of Moldova are developed based on a uniform model, which has allowed for analysis of the specific development features of each region, and for identification of priorities and mechanisms for supporting development of the region. When developing the Centre RDS, six working groups were created focusing on: development of the private sector and small and medium-sized enterprises; industry and tourism; agriculture and the processing industry;
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 of comprehensive studies were made regarding economic development, problems related to environment, social aspects, physical infrastructure, and the infrastructure for supporting business development in the RDS. 26. The format of the groups has ensured an equitable representation of local public authorities from all districts of the Region, the private sector, and civil society - through the presence of non-governmental organisations (NGOs) and business associations. Gender and social groups were equitably represented. Seven sessions of the working groups took place, the average proportion of women represented in the working groups being 21%. The outputs of these sessions were a finalised sectoral SWOT1 analysis, a strategic vision, identified priorities, and development measures for Centre Region. These documents were used as a basis 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, which reflect regional development, especially with the Law on Regional Development, the NDS, and the NSRD. The methodology and processes for reviewing the RDS over the subsequent stages of regional development, as proposed by the RDA, should comply with the guidelines of the MCRD and should be accepted by the RDC. Comprehensive analytical approach. The North RDS is based on a conscientious economic, social and environmental evaluation, which describes the potential of the region. Special attention will be paid to analysing results and experience in the area of regional development and providing equitable opportunities, irrespective of gender or social group. An active participatory process. Consultations were organised both in the area of new methodology approaches and in developing the RDS, thus strengthening the role of civil society and the private sector in regional development through the equitable representation of all stakeholders. This process has allowed a wide range of opinions to be collected, reviewed, and incorporated into the RDS. Local and regional partnerships. Stakeholders from state entities and NGOs were included in the working groups to encourage effective partnerships, both for prioritising measures within the strategies and for subsequent analysis of specific projects. Transparency and publicity. The RDAs will ensure the organisation of extended public consultation by the North RDS at each phase of actualisation. The North Development Agency will have the role of leading the process of developing and amending the Strategies at each stage, according to the methodology and processes accepted by RDC by guiding the various activities to the point of finalisation and approval of the RDS (including the public consultations and presentation of draft Strategies to the RDC for approval).
A SWOT analysis is a strategic planning tool focusing on assessment of Strengths, Weaknesses, Opportunities and Threats of RDS.
1.4
Principles for supporting regional development
28. The basic principles for supporting regional development are outlined in the Law on Regional Development of the Republic of Moldova and the NSRD: Efficiency: efficient use of natural, human, financial and production resources across the entire territory of the Republic of Moldova; Equity: all citizens of the Republic of Moldova will have equal rights and access to economic, social and cultural values, irrespective of their place of residence; Sustainability: all measures, programmes and projects funded with the aim of supporting regional development should be technically, financially and institutionally viable; Planning: all measures, programmes and projects aimed at supporting regional development should be developed and implemented in compliance with national and regional development strategies, and should have clearly defined objectives, priorities and mechanisms; Coordination: all measures, programmes and projects aimed at supporting regional development should be agreed both nationally and regionally; Partnership: planning, development and implementation of measures aimed at supporting regional development should be based on a partnership between central and local public authorities, the public and private sectors, as well as civil society organisations; and Transparency: The process of allocation, distribution, and use of resources aimed at implementing RDSs, programmes and projects should be clear.
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2.1
Situation analysis
General data
29. The situation analysis is a broad chapter designed to provide a comprehensive overview of the CDRs social and economic development trends, and covers the following fields: Geographic location and spatial development that represents the administrative structure and environmental aspects, such as the regions hydrological network, natural protected zones, available mineral resources, climate characteristics and so on; The section on connectivity, accessibility, and infrastructure gives information on the inter- 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 and age, 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 index analysis based on SADI indexes; and Information on the regions institutional capacities provides profiles of all significant regional social partners local public administration (LPA) authorities, RDAs, RDCs, local councils, and mayors offices.
Table 2
General data on development regions (2007)

NDR CDR 1066 29.8 80.9 19.1 10636 34.9 100 7059 20 6899 2684 13 329 SDR 543,5 15.2 75 25 7379 24.2 74 3320 10 6330 2686 8 209 ATUGDR 159,7 4.5 59.7 40.3 1848 6.1 86 1158 3 7442 1724 1 18 CHDR 785,1 22 8.7 91.3 568 1.9 1382 16147 46 21381 10872 2 25 Total 3,573 100 57.8 42.2 30446 100 117 40785 100 9855 4249 36 896
Population,* 000 persons Share, % Rural population, % Urban population, % 2 Area, km Share, % 2 Density, inhabitants/km Gross added value (GAV), 000 MDL (2008) Share, % GVA per capita, MDL,** (2008) Investment per capita, MDL 000 Population, 000 persons First tier local public authorities, units
Source: NBS, Powell 2009.
1018 28.5 65.1 34.9 10015 32.9 102 7221 21 7476 2011 12 315
Notes: * All data regarding the number of population presented in the report consist of data related to population from the right bank of River Nistru. ** Gross Added Value (GAV) and GAV per capita were calculated in 2006 prices. The calculation of GAV per capita was based on 2006 data on the population offered by the National Bureau for Statistics based on the Employment Questionnaire.
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 region borders in the north and east with Ukraine, in the west with Romania, in the southeast with Camenca district (the Transnistria Development Region TDR), and in the south with the districts 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 about 10,014 km (1,001,394 hectares), which is approximately 29.6% of the total area of the Republic 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 total population 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 than 5000 people, 20% of the population lives in towns and villages with populations between 5000 and 20,000 people. The total number of communities in the region amounts to approximately 33.8% of the total number of communities for the country, the proportion of towns being of 32%. More detailed data on the distribution of the population by community and a map of the urban community network is given in Annex A.
Table 3
Inhabitants 0500 5011000 10012000 20015000 500110000 1000115000 15 00120000 20 001200000 200 0011 mil. Total
Distribution of population by communities

Administrative territorial units 1 27 134 127 17 4 2 2 1 315 % 0.3 8.6 42.5 40.3 5.4 1.3 0.6 0.6 0.3 100 Population, 000s 500 21900 201400 374400 116000 49200 31700 55000 122700 972800 % 0.0 2.3 20.7 38.5 11.9 5.1 3.3 5.7 12.6 100
Source: Population census data, 2004.
34. Distribution of the urban population is as follows: Under 5,000 inhabitants: 5 towns Ghidesti, Marculesti, Frunze, Costesti, and Biruinta; 5,000 to 15,000 inhabitants: 7 towns Lipcani, Donduseni, Cupcini, Glodeni, Ocnita, Otaci, and Riscani; 15,000 25,000 inhabitants: 5 towns (Drochia, Edinet, Falesti, Floresti, and Singerei); and 143 200: 1 Balti. A map of the urban communities and population distribution by district is given in Annex A.
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 decrease is 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 of Northern Moldova in the centre, the Middle Prut Plain in the west, the Nistru Plateau in the east, and the northern sector of the Central Moldova Plateau in the south. The relief of the region 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 heavily affected by exogenous processes (landslides and soil erosion). There are between 10 and 30 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 a frequency of five gullies in 10 km. The districts of Ocnita and Soroca are the most affected by 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 of precipitation varies between 520mm and 620 mm. The average annual temperature is +8 degrees Centigrade. The absolute minimum temperature recorded was -36 degrees, while the mean temperature for January is -5. The maximum recorded temperature is +38, while the 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, in the southern region this indicator is 180190 days. The North of the region has the shortest frost-free period (between 178 and 188 days). The region boasts favourable agro-climatic conditions for the cultivation of cereals, sugar beet, sunflowers, tobacco and fruit trees. Another feature of the NDR is a high frequency of floods, excessive rain, landslides and increased vulnerability to climatic hazards and increased climate variability. 38. The hydrological network includes the River Prut, which is the natural border to the west, and the River Nistru, which has the greatest water flow in the region, a source of water supply for the cities of the NDR and the natural eastern border. The hydrographical basin of the River Prut includes the effluents Camenca, Ciugur, Racovat, Larga, Vilia, Draghiste, Girla Mare, and Caldarusa. The River Raut rises in the NDR with its effluents the Cainar, Cubolta, Camenca and Ciulucul Mare. Work on the course of the River Prut created the largest reservoir in the region (Costesti-Stinca). The hydrographical complex includes the hydroelectric power station built in 1976. The area of the lake is 59 km, being the second largest artificial lake in the Republic of Moldova, after the Dubasari reservoir on the River Nistru. 39. The main natural resource of the region is the soil, which is highly fertile and provides a good harvest from technical crops. The average fertility score of soils is the NDR is 72 points (out of 100). The most highly fertile soils (74 points) are found in the districts of Edinet, Briceni, and Ocnita. These soil features support high performance in the agriculture sector. Thus, 701,720 ha of the total NDR area (1,001,394 ha) is agricultural land, which account for 70% of the total area of the region. The weather and soil quality in the NDR favourable for cultivating grain and technical crops (sugar beet, sunflower, and tobacco). However, the region has the shortest active growth period and the shortest frost-free period; therefore, the region is unable to support crops that require long growing seasons. On the other hand, excessive soil degradation and pollution caused by the use of certain agricultural practices, erosion, karst and landslides, as well as improper storage of obsolete agricultural chemicals places the environment in the NDR in a critical position. In addition, the NDR also faces the problems of unsustainable management of solid and liquid waste, and a very low proportion of recycled waste and collection of gas emissions.
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 for producing glass is found in Ocnita, gypsum resources are to be found in Briceni, and materials for construction are found in Floresti, Glodeni, Singerei, Ocnita, and Soroca. The clay for brick production and the production of tiles is widespread, and is located in the districts of Floresti, Glodeni, Riscani, Singerei, Drochia, Balti and Ocnita. The only technical chalk deposits are located and extracted in the district of Soroca, together with the extraction of granite and limestone. Tripoli deposits have been found (which are used in the production of detergents and thermal insulation plating), as have synthetic zeolites (used in the manufacture of water softer. However, inefficient and insufficient use of available mineral resources increases the environmental impact of the waste from extraction and building activities. 41. The region has significant mineral water resources. In the northern part of the region, waters containing sulphate, bicarbonate, calcium, or sodium predominate (for example, Soroca, Balti, and Gura Cainarului); in the north-western part of the region, waters containing bicarbonate or sodium are found. Currently, mineral water wells are exploited in Soroca, their water 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 of vehicles, most of them being relatively old, emissions into the atmosphere from mobile sources have increased by almost 30%.
Forests
43. The NDR forests represent about 27% of national total of forests, while the forest areas of Balti signify the smallest share of forest areas. Intensive deforestation; a reduction in biological diversity; shrinking humid areas, forest belts, and state protected areas; and insufficient and unsustainable use of local energy resources adversely affect the wealth of tourist and leisure potential. 44. Among the natural protected zones of the NDR, Padurea Domneasca (Royal Woods), located in the Middle Prut Meadow, is the largest scientific reserve in Moldova. The total area occupied by the reserve is 6,032 ha. The natural forest covers 3,054 ha, 52% of its entire territory. Most forests consist of oak (17.7%), white poplar (17.8%) and white willow trees (6.3%). Over 79 rare plant species are found in the Padurea Domneasca reserve. A map of natural state protected areas is given in Annex B. 45. There are several landscape architecture and dendrological gardens in the NDR: Taul Park is located in the middle of Taul village and has a total area of 46 ha. The botanical collection of the Taul Park comprises about 150 species, about 100 of which are categorised as exotic. The number of animal species to be found in the Park is the same as in the early twentieth century, although the numbers of animals have decreased. Still, as in days of old, deer may be met in the park, and white swans and ducks live on a picturesque lake. RediulMare Park, consisting of four clearings, is close to Rediul Mare village, covers 10 ha. The planting in the park comprises 26 species, of which there are various deciduous species. The trees and bushes include spherical crowned horse chestnut, silvery maple, pedunculated oak, and white poplar.
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 species that are considered rare and valuable in the Republic of Moldova. Overall, it has 15 alleys, 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 Larga villages (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 the district 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 (Criva Mamaliga, LargaKelmenti, OcnitaSokireani, and ValcinetMoghilev-Podolsk); five motor vehicle border-crossing points (CirvaMamaliga, LargaKelmenti, OcnitaSokireani, Otaci Moghilev-Podolsk, and UnguriBronnita); two river crossing points (SorocaTekinovka and CosautiYampil); 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 CostestiStanca border crossing point, although recently two further crossing points were built in Lipcani Radauti Prut and CrivaDarabani. Currently, connection with the EU is difficult since, of the three existing border crossing points, only two are operational. The main reason for this is the political situation, which results in minimal contact; high costs; and limited economic, social and cultural cross-border relations. 49. In the south, the NDR has connections with the Centre Development Region through a multitude of national and local routes. In the southeast, the NDR borders with the TDR on national highway R19 and the SanataucaCamenca bridge over the River Nistru. 50. The distances to the main commercial centres are: Chisinau 100190 km; Botosani, Romania 70200 km; Suceava, Romania 140270 km, Cernauti, Ukraine 50260 km; Jitomir, Ukraine 200-400 km. The distances to the main towns in the country are: Balti Chisinau 131 km; BaltiUngheni 77 km; BaltiTiraspol 202 km; and BaltiCahul 263 km. 51. Except for the district of Drochia, all administrative-territorial units in the region are component parts of two Euro-regions: Higher Prut and SiretPrutNistru.
Accessibility
52. The NDR is accessible by air, road, river, and rail. 53. The NDR is the only region with opportunities for air access through two airports Balti international airport (Ledoveni) and Marculesti international airport. However, both airports are used to low capacity, rarely rendering cargo transportation services, which are mainly internal to Moldova. 54. Balti (Ledoveni) airport is a civil airport, while Marculesti (Floresti district) is both a military and civil airport. These airports have international airport status. Balti airport is certified and
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 and TU-134 planes of the smaller class. 55. Marculesti airport was certified by the State Administration of Civil Aviation and has recently become the largest cargo airport in the region. The airport has a runway, an access road, a platform, a radio navigation system. These facilities permit the use of the airport by different types of plane including the IL-76, TU-154, Boeing, Airbus and heavy cargo aircraft at any time 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 M14 and M2. Other roads of international and national importance that cross NDR are: northwards, to CernautiJitomirLvovWarsaw: the 14 up to the border with Ukraine and further along route E583; north-easterly, to VinnitsyaKiev: the 2 up to the border with Ukraine and further along routes A253 and E95; southerly, to ChisinauCahulGalatiTulcea-ConstantaVarnaIstanbul: the M14 up to the border with Ukraine and European highway E80; south- easterly, to ChisinauOdessaNicolaevHersonYalta: the M2 and R30 up to 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 of Chisinau (routes 14, and M2, and R13, R14, and R17). Connection with the TDR is made through Sanatauca village, along national route R19. The M14 crosses the NDR from north to south. The rate of traffic is between 1200 and 5400 vehicles per day in both directions. The most intensive portions are close to Edinet and Balti, where traffic reaches 5000 vehicles per day. The M2 provides connection to the north-east. Traffic intensity varies from 1180 up to 12,250 vehicles per day. The most congested areas are the entrance to the city of Soroca and the crossroads leading to the cities of Floresti and Balti. Infrastructure 58. Network of intra-regional roads. Distances from extreme points are about 170 km from north to south, and about 130 km from east to west. On average, district centres in the NDR are 55.3 km from Balti.2 59. Connections between NDR cities are made through a dense road network of national roads. The main urban centres have direct connections (BaltiEdinetBriceni; SorocaDrochia RascaniCostesti, and SorocaFlorestiBaltiFalesti) or through the regional centre of Balti, which has connections between the north and the south of the region. International and national routes are satisfactory, although some sections are in need of maintenance. The existing transportation network allows for a sufficient level of interconnection. 60. Local road network. The total length of public roads in the NDR is about 3400 km (36.2% of the total length of countrys roads). Of them, 31% are national roads with a metalled surface. The proportion of local roads is 39.4%, 94% having metalled surfaces. The density of public roads in the NDR is 33.6 km/100 km2, the NDR ranking first in the country on this indicator.
2
A map of communication systems and networks of international, national and local roads, together with detailed data on distances to main commercial centres and traffic intensity, are provided in Annex C.
10
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

33.6
35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0
NDR
CDR
SDR UTA Gagauzia Chisinau
Source: NBS, 2008
61. Railway transportation. The density of the railway network in the NDR is the lowest in the country and amounts to 2.1 km /100 km2, which is less than the national average of 3.3 km/100 km2. The main railway junctions of the NDR are in the city of Balti and the town of Ocnita.3 Through these junctions, the Moldovan railways branch out to serve the following destinations: Russia (Moscow and Saint Petersburg), Belarus (Minsk), Ukraine (for example, Kiev, Cernauti, Ivano-Frankovsk). International railway routes are: ChisinauUngheniBalti Ocnita (border crossing point and border control point). Important regional routes comprise: BaltiRibnita, BaltiGlodeni, BaltiSlobodca and BaltiCupcini. 62. The existence of railways in the region is an advantage, since the intra-regional railway nodes at Balti and Ocnita are also an access route to Ukraine, Russia, Belarus and the EU. The railway network is single-gauge throughout. The passenger train service runs between one and six trains per day and between two and four cargo trains per day. The main problems of organising railway traffic are that unsuitable equipment creates difficulties in managing wagon flow, marshalling wards are only served by one platform, and sector stations are poorly equipped. 63. River transportation. There are two river border-crossing points in the NDR: the floating bridges connecting Soroca with Tekinovka and Cosauti with Yampol; these are used at minimal capacity both for cargo and passenger transportation. Due to the limited depth of the Rivers Nistru and Prut, only light cargo and small passenger vessels circulate on its navigable portions.
Water supply and sewage

64. The water supply in the NDR is provided mainly by captured underground water and by the Rivers Prut and Nistru. Early in 2008, the proportion of communities with potable water supply networks was 35.4%, construction of the networks having slowed in comparison with the rate of progress up to 2006. Artesian wells provide 70% of the water consumed. However, 80% of water resources do not comply with quality standards for potable water.
3
A map of the existing and prospective railway networks is given in Annex D.
11
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/km 2. Only Chisinau ranks higher than the NDR for this indicator and has a higher average rating in Moldova. The communities with the greatest proportion of water supply networks are located in Balti and the districts of Floresti and Glodeni. The districts with the lowest proportion are Falesti, Rascani and Donduseni. A great discrepancy exists in the region with regard to the quality and quantity of water supply in Balti and that of other communities. The condition 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 to fund such projects. Therefore, implementation of different national and international programmes in this area is needed.
Figure 3
Density of water supply networks, km / 100 km2 by district, 2008
Figure 4
Density of water supply networks, km / 100 km2 by region, 2008
350.0 300.0 250.0 200.0 150.0 100.0 50.0
300.0 250.0 200.0 150.0 100.0 50.0 0.0 39.3
0.0 BL FR GL BR SG ED SR OC DR DN RS FL
Chisinau NDR ATU Gagauzia DR S
CDR
Source: National Bureau for Statistics
66. The SorocaBalti water supply system provides potable water to consumers in Balti municipality and communities in the vicinity of the water pipe route. In the future, it is envisaged that five other districts will be connected to the water supply system: Singerei, Floresti, Drochia, Riscani and Telenesti. A map of the water supply networks is given in Annex E. 67. Potable water quality in the region is unsatisfactory. Since no investment has been made in the repair and maintenance of wastewater biologic purification stations and sewage systems, domestic and industrial activity has become a major source of pollution. Currently, less than 20% of the 580 wastewater treatment plants built in the Republic of Moldova before 1990 are operational, only 67% of waste water being treated. The impact of this situation on human development is obvious. The lack of investment in the sewage and treatment infrastructure has direct negative effects on peoples health, especially in rural areas. Improving water quality would lead to improvement of peoples health and a decrease in the spreading of gastro-intestinal diseases. 68. Sewage. Sewage systems are poor in the NDR, as in the entire country. Sewage systems operate mostly in urban communities. The density of sewage networks is approximately 20 km/100 km2, which is less than the national average by 22.6%. In Balti, this indicator is nine times higher, amounting to 185 km/100 km2. Underdevelopment of sewage networks is
12
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 a population of about 40,000 inhabitants, has no water treatment station at all: 2,040 tons of untreated waste is flowing into the river daily. A map of waste water evacuation networks and water treatment stations is given in Annex E. 69. Waste management. In the NDR, the infrastructure and management of solid domestic waste is underdeveloped. At the regional level, soil, water and air are heavily polluted, mainly due to lack of systems for integrated waste management and an underdeveloped system for collection 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 stored in over 350 small warehouses, located, as a rule, at the periphery of communities. Most of these warehouses are unauthorised and are not properly equipped. 70. Efficient and safe measures are required for a radical change in the infrastructure for collecting domestic waste, which would entail collecting waste on large organic ramps, followed by separation, partial recycling, and the collection of biogas produced by the decomposition 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. A map of the regional scheme of warehouses for storage and processing of waste is given in Annex F.
Supply of natural gas

71. It is planned that provision of a natural gas supply to communities in the NDR will be made from high pressure main gas pipelines that come from the Ukraine: AnanievKotovsk FlorestiDrochiaEdinetAlexeevka (Ukraine), and MoghiliovPodolskiOcnita Bogorodceni. In 2007, 27.8% of the regions communities were connected to gas pipelines, which is a lower proportion than the national average of 34.9%. The largest share of communities connected to gas network is in the city of Balti and the districts of Ocnita and Briceni. The districts with the smallest proportion of communities connected to gas networks are Soroca, Singerei, and Falesti. The NDR has opportunities for natural gas storage in underground galleries and mines: these opportunities are not used. A map of existing and projected natural gas networks is given in Annex G.
Figure 5
Proportion of gas-connected communities, % by district, 2007
Figure 6
Proportion of gas-connected communities by region, %, 2007
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% BL OC BR ED DR FR GL RS DN SG FL SR 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Chisinau Gagauzia ATU SDR CDR NDR 27.8%
Source: National Bureau for Statistics.
13
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 are imported. The electricity supply in the NDR is provided by distribution networks provided by the state-owned company North Electricity Networks and the electricity distribution company RED 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 at 57,700,000 kW/hour; however, it services only Balti city itself. In the district of Riscani, there is 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 this problem would to resolve the legal position with regard to the operation of Naslavcea power station (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 Balti receives heat from the North Electricity Networks heat producing station. In the other communities, municipal heat stations are not operational. Thus, the inhabitants of apartment blocks that have been connected to gas networks have built their own boiler houses. Some inhabitants have built stoves in apartments, while others still use electricity for heating during the cold season of the year. According to specialists, this diversity of heating systems in apartment blocks adversely affects the fabric of the walls. The situation is similar in public institutions, which have either built their own heating systems or installed stoves. The owners of individual houses, both in the urban and in the rural areas, make use of stoves, using wood and coal as heating resources. The main problems within the heating sector are lack of funds to secure energy resources and large energy losses due to outdated heat generating systems.
Communication
75. Landlines in the NDR are provided by affiliates of the state-owned Moldtelecom JSC. As at 1 January 2005, there were 22 telephone lines per 100 inhabitants, which is a lower indicator than the average for the country but which exceeds the average for other regions. The greatest frequency of telephone lines is in Balti and in the districts of Glodeni, Soroca, and Rascani. The lowest figures are found in the districts of Falesti, Floresti and Sangerei. The telecommunications network has been steadily developing over recent years, which is shown in both the quantity and the quality indicators. 76. Mobile telephone services are provided by the companies Orange, Moldcell, and Unite, which cover the entire territory of the NDR. While services are expensive, over the last three years there has been steady growth in the number of users, according to the data of mobile telephone operations companies. 77. Access to the Internet is underdeveloped in the NDR. According to a recent study of the Ministry of Informational Technology and Communication, less than 11.8% of the population has a computer connected to the Internet. The proportion of legal entities with a computer connected to the Internet is about 30%, the vast majority of which are in urban areas (the proportion in urban:rural communities is 90:10. Most public institutions are connected to the Internet. In urban communities, there are between two and five Internet-cafes (except in Balti).
14
Figure 7
Number of telephone lines in 100 inhabitants, by district
Figure 8
Number of telephone lines in 100 inhabitants, by region
35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 BL BR DN GL DR SR ED RS OC SG FL FR
45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Chisinau
2005
ATU Gagauzia
2009
NDR
SDR
CDR
RM Average, 2009
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 a generally negative trend in the population during the period between 2004 and 2008 for all communities (except for the district of Ocnita). The population decrease recorded over this period is 21,600, which represents 2.1% of the total population. This decrease is greater than that of the CDR and SDR. The reason for this decrease is negative natural population growth and migration of the population. 79. The average density of the population in the NDR is 101 person/km2, the greatest compared with the other development regions (except for Chisinau). Maximum population density, both in the region and in the entire country, is found in Balti and totals 189 inhabitants/km2. Within the communities of the region, Soroca (97 inhabitants/km2) is ranked first. The lowest population density is registered in the district of Donduseni (71 inhabitants/km2). A map of population distribution by district is given in Annex A. 80. The population structure does not show major gender imbalances: the male/female population is divided 47%/53%. A similar proportion is seen both at the national and at the regional levels. The great majority of the population lives in the rural area (65%). However, the proportion of the urban population in the region is higher than in the CDR and SDR.
Data used only for population of the right bank of Nistru River.
15
Figure 9
Structure of population by gender, %, 1 January 2008, by development region
Figure 10
Structure of population by area, %, 1 January 2008, by development region
100% 80% 60% 40% 20% 0% Chisinau Centre ATU Gagauzia

femal e
100% 80% 60% 40% 20% 0% Chisinau Centre ATU Gagauzia

rural
Source: National Bureau for Statistics, 2008
Structure of population by age

81. The analysis of age groups shares (the age pyramid), shows that the NDR is severely affected by demographic ageing. Current trends show a steady decrease in the size of the youngest age groups due to a reduced birth rate, which means that the demographic ageing process will deepen in the coming years and the trends will become more obvious. 82. The largest age group of population is aged 1519 years (8.4%), a result of the birth rate between 1970 and 1990. Compared with other development regions in the country, the proportion of those aged 014 years is the smallest, and the share of the population aged over 60 years is the greatest.
Figure 11
75 + 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4
Structure and ratio of the population by age group

75 + 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4 40000 20000 0 20000 40000 60000
0%
5.4% 4.1% 4.7% 5.0% 4.5% 6.8% 7.6% 7.6% 6.6% 6.6% 6.8% 7.1% 8.4% 7.8% 6.0% 4.9%
2% 4% 6% 8% 10%
60000
male
female
16
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 acute within the entire country, being affected by the decreasing fertility rate and an ageing population, thus increasing demographic pressure. In 2008, the natural growth of the population in the NDR was -4618 persons. Rascani and Soroca are the most affected districts 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 % 9.6 14.9 -5.3 2006 % 10.0 14.2 -4.2 2007 % 9.8 14.1 -4.3 2008 % 10.0 14.2 -4.2
Birth rate Death rate Natural growth
9.7 14.8 -5.1
Source: National Bureau for Statistics, 2009.
84. Migration processes affect the demographic profile, and play an important role in the economic and social life of the NDR. Although there are no statistical data to provide a rigorous conclusion, there are three main migration processes that show varying intensity: migration from rural to urban communities within the NDR, migration from the wider NDR to Balti and Chisinau (including many students that study at universities in Chisinau and Balti), and emigration beyond the Republic of Moldova. The latter is the strongest migratory flow in the NDR. According to the 2004 general population census, about 86,000 residents of the NDR were temporarily absent, accounting for about 9% of the regions population.
Figure 12
Proportion of absent population in total population, population census, 2004
Figure 13
Structure of absent population by main age groups
R.M. NDR
under 14 yars 35 - 54 years R.M. NDR
15 - 24 years over 55 years
25-34 years unreported
CDR SDR ATU Gagauzia Chisinau 0 2 4 6 8 10 12
CDR SDR ATU Gagauzia Chisinau 0% 20% 40% 60% 80% 100%
17
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 local communities, which is expressed by the small area deprivation index (SADI).5 The calculations for 2007 show that only communities in the district of Edinet are more disadvantaged demographically.
Figure 14
Demographic deprivation index, by district

NDR RM Average
700 600 index of deprivation 500 400 300 200 100 0

SR SG FR DR ED DN BR GL
OC
FL
Source: MET, 2007 SADI-Report on poverty and policy impact.
Labour force
86. The proportion of the total population able to work is about 62% (631,160). Of them, about 55% (347,138) are actively employed; 45% (156,212) of the actively employed population works in agriculture, mostly subsistence agriculture.
SADI is calculated as the sum of the following indicators: (i) proportion of families with three or more children in relation to the total number of families; (ii) proportion of families with invalids in relation to the total number of families; (iii) proportion of people aged 75 years and older in relation to the total population; (iv) proportion of population absent for over one year in the community in relation to the total population, according to local administration authority data. The most deprived is the community with the lowest SADI value, 1.
BL
18
Figure 15
Structure of employed population, %, 1 January 2008

Industry Trade Other
Agriculture Construction Transpt & comms 21.8% 3.5% 14.0% 3.5%
44.8%
12.3%
87. The average monthly salary of an employee in the NDR in 2008 was MDL 2089, which is 82% of the national average. The average monthly salary of a Balti employee is about MDL 2760 (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 industrial sector of NDR, comparable prices, year 2005 = 100%
Labour productivity index Salary index
Source: NBS, 2008, expert calculations.
88. According to NBS data for 2007, 1.6% of the labour force in the NDR was registered as unemployed at employment offices. The unemployment rate in 2007 was lower among women than among men, both in urban and rural areas. The group with the greatest rate of unemployment was aged between15 and 24 years. The International Labour Bureau unemployment rate for the first quarter of 2009 was 7.7%, while the employment rate was 37%.
19
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 national allocated GAV).7 As compared with 2006, GAV has not changed significantly. GAV per capita was slightly less than 500 (76% of the national average).
Figure 17
Regional GAV per capita, MDL
Figure 18
Regional GAV in 2008 as a percentage of national allocable GAV in 2008

250% 200% 150% 100% 50% 0%
25,000 20,000 15,000 10,000 5,000 0 RM allocable Centre North South UTA Gagauzia Chisnau
50% 40% 30% 20% 10% 0% Centre North South UTA Gagauzia Chisnau
2006
2007
2008
GVA per capita
GVA per worker
GVA
Source: Powell, 2009 (Regional Statistics Report).
Sectoral profile
90. Economic sectors contribute to regional GAV in different ways. Over recent years, a trend has been seen in the changing sectoral structure of the regional economy. Thus, in 2008, the share of agriculture in Regional GDP was 25%, having decreased by 611% as compared with previous years. At the same time, the contribution of services has grown by the same amount and reached 47%.
6 7
Data on GAV by region are taken from Matthew Powell [1].
It was not possible to allocate the entire added value registered on national accounts to the region (see Powell 2009, Annex B). Particularly, there is neither an effective method to allocate financial services calculated indirectly to the field, nor the data required to allocate the revenues of state and not-for-profit organisations from services delivered to households. Thus, unallocated VAB represents about 12.5% of VAB for 2006 in 2006 prices and about 14.5% of VAB for 2008 in 2006 prices. The estimations for national VAB and VAB per capita used for comparison in this section represent VAB allocable for all regions and do not include un-allocable VAB.
20
Figure 19
Sectoral structure of GAV,%
Figure 20 Industrial specialisation indicator by number of personnel, 2007

-1.55E-150.3 0.6 0.9 1.2 1.5
20 08 20 07 20 06 0%
29%
26%
45%
Extracting Industry Manufacture of footwear, processing and dyeing of fur Production and distribution of electricity and gas and hot Industry of food and beverages
24%
28%
49%
35%
26%
39%
50% Agriculture Industry & Construction Services
100%
Production of medical, precision and optical devices
Source: Powell, 2009 (Regional Statistics Report). Note: Calculations made within ASEM study. 91. The region has relatively well-developed industrial potential. The main industrial agglomerations are: (a) the extractive industry; (b) production of clothing, processing and dyeing furs; (c) production and distribution of electricity and heat, gas and hot water; (d) the food and beverages industry; and (e) production of medical, precision and optical devices and 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, EdinetCupcini, FlorestiSoroca, OcnitaOtaci. A map showing the location of the economic sectors is given in Annex I. The greatest problems facing industrial enterprises are physically fatigued equipment, and installation and use of outdated technologies. At the same time, enterprises have unused production capacities and relatively well-developed infrastructure, which could serve as basis for establishing industrial or technology parks. 92. Of the total territory of the NDR, 70% comprises agricultural lands, this region contributing about 40% to the total agricultural production of the country. The main agricultural products are cereals, technical and horticultural crops. Agriculture is still the main employment sector and accounts for about 45% of the total employable population of the region. There is a large livestock sector of cattle and swine (3045%), and the breeding of goats and sheep (28.2%). The proportion of agricultural farms producing losses was about 33% in 2007, which is less than the national average (41%) and the average of other regions. At the same time, the agricultural sector shows low productivity caused by the impact of a number of factors limited investment and excessive division of land plots, which makes it difficult to use agricultural equipment and advanced technology. The existing infrastructure for collecting agricultural products is not operational, while local agricultural production cannot compete with imported goods.
21
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 registered as individual companies. The location of production capacities is shown in Annex J. The entire sugar industry of the country (five sugar factories) is located in the region, together with four high-capacity enterprises for processing fruit and vegetables, five factories for processing animal produce, three poultry enterprises, and other companies specialised in processing activities. However, the production capacities of these companies are very limited and 180 agricultural companies generated losses in 2007. The main problems in the sector are lack of capital investment in agriculture, degenerating land plots, and use of outdated technologies, which together bring about low productivity. The existing infrastructure for harvesting agricultural products is not operational and local agricultural production is not competitive with imported products. 94. The services sector is growing steadily, both in absolute terms and as a proportion of the total at regional and national levels. The greatest contribution is made by trade, telecommunications and financial services. The regional hotel industry comprises 18 hotels and accommodation facilities with a total capacity of 2415 beds. The tourist sector of the NDR comprises 102 state protected areas with a total area of about 16,600 ha, two beaches of national-level quality (at Soroca and Costesti), 20 museums, five monasteries and four hermitages, and 178 ecclesiastical buildings of national and regional importance. An efficient way of using the regions tourist resources is to establish zones with national- and local-level tourist resorts, which could diversify the tourist destinations in the NDR. However, these places are currently unattractive to foreign and local tourists due to the underdeveloped infrastructure, and they are also insufficiently promoted.
Entrepreneurship
95. Entrepreneurial development is an important part of regional development. During the period between 2004 and 2008, the number of enterprises has increased by 30%. Together with this growth, the number of jobs has decreased by 16%. The number of enterprises has grown, mainly due to establishment of micro-enterprises and small enterprises, while the decrease in jobs occurred within medium-sized and large enterprises.
22
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, the spatial distribution of enterprise sales is not uniform. The most active economic areas are Balti, 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% of the total number of employed and account for 5% of the total revenues.
Table 5
Type of enterprise
Regional entrepreneurship sector

Employees 2004 2008 No. % No. 8379 7 11019 18282 14 21642 41413 32 29257 68074 53 61918 60208 47 46243 128,282 100 108,161 Turnover, MDL million 2004 2008 Mln % Mln % 550 5 1143 5 2013 19 4481 19 1692 16 3352 14 4255 41 8976 39 6153 59 14265 61 10,408 100 23,241 100
Enterprises 2004 2008 No. % No. % Micro 2693 65 3668 68 Small 931 22 1252 23 Medium 397 10 327 6 Total SMEs 4021 97 5247 97 Large 137 3 142 3 Total 4,158 100 5,389 100 Source: National Bureau for Statistics, 2009.
% 10 20 27 57 43 100
98. Lack of market information especially for industrial production, limited access to financial resources, and the complexity of bureaucratic procedures are believed to be the main barriers to the establishment and development of businesses.
Investment and investment process

99. During the period between 2004 and 2006, capital investment in fixed assets, calculated at constant prices, had a negative trend. While investments grew by 30%in 2007, the NDRs proportion of total investment decreased to 1516%.
23
Figure 24
Trend of capital investment in Figure 25 fixed assets and construction works in 2004 prices
2007 2006 2005 2004 0%
North
Share of capital investment in fixed assets
16% 15% 9%2% 15% 16% 10%4% 17% 14% 11%3% 21% 13% 10%4% 40%
South
58% 55% 55% 52% 60% 80% 100%
20%
Centre
UTA Gagauzia
Chisinau
100. Investments are funded mainly from private sources. The budgets of central and local government account for only 814% of investment. In addition, investment in construction works across the region is not uniform, with discrepancies in investment per capita of up to five times. 101. Foreign investment has declined in the region. Foreign direct investment in the NDR accounts for only $48 per capita, 20% of the average for the country. This is largely due to the fact that foreign companies prefer to register in the capital city, even though a significant part of their activities is carried out in the general region.
Figure 26
FDI per capita (% average for country, 2007)
24
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 for production 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 the population in the areas surrounding the city of Chisinau stands out, being twice as high as that of the regions.
Figure 27
40
Poverty level by region, 2006
32.7 30
33.5
34.1
20
20.9 17.6 17.3
19.7 10.7
10 4.9 0 Nord
6.1
3.5 South
2.7 Chisinau
Extreme poverty
Centre
Absolute poverty
Source: MET, 2007; SADI.
Relative poverty
104. Deprivation levels, by area, show that access to education in NDR communities is higher than in the CDR and SDR. However, the level of economic deprivation is smaller than in the SDR and higher than in the CDR, and the NDR has the lowest indicator of the three regions in terms of health care.
Absolute poverty is represented by a lack of minimal conditions for life: food, clothing, and accommodation needed for simple survival in the conditions of the relevant society. From a long-term perspective, absolute poverty generates irreversible biological degradation. Relative poverty is defined as the inexistence of a minimal level of resources to insure the normal functioning of a person in the relevant socio-cultural context. One may be under the relative poverty threshold with no long-term change of capacities for normal social operation, but only for a limited period. Lack of income leads to extension of poverty in all areas of life. This final state in the poverty chain is what is called Extreme poverty.
25
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 health care is in Balti, Glodeni and Drochia, while access to education is greatest for Donduseni and Ocnita. Further lowest indicators are found in Donduseni and Floresti (for health care), and in Floresti and Balti (for education).
Figure 29
Map of educational deprivation
Figure 30
Health care deprivation map
Source: MET 2007; SADI, Report on poverty and policy impact.
106. In the NDR, the greatest part of the populations income comes from salaries (30.5%). A considerable portion comes from remittances (23.2%) and revenues from agriculture (18.3%). It is worth mentioning that the average salary of men exceeds that of women by over 27%.
26
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 expenditure is incurred on health care (4%) and, especially, for education only MDL 4 per month, which is 2.5 times less than in the capital city.
2.7
Regional institutional capacities
108. The NDR provides a format for regional cooperation between local public authorities and significant regional stakeholders for: (i) achieving a balanced and sustainable socialeconomic development throughout the territory of the region; (ii) reducing discrepancies in internal levels of socio-economic development; (iii) strengthening financial, institutional and human opportunities for socio-economic development; and (iv) supporting efforts of local authorities and local entities focused on socio-economic development. 109. The NDR comprises 11 districts, the city of Balti (at the second-tier level), and 315 territorial administrative units at the first-tier level. The NDR complies with EU criteria for regional classification, being in category NUTS III, with a population between 800,000 and 3,000,000 inhabitants. Based on socio-economic data, the NDR has optimal conditions and high potential for development. 110. The institutional framework for coordinating development processes consists of a Regional Development Council (RDC) assisted by the Regional Development Agency (RDA), district councils, local councils and mayors offices, as well as the non-governmental sector being represented by civil society organisations and representatives of the private sector. 111. Based on the Law on Regional Development, the RDC has no status as a legal entity, consisting of district chairmen, mayors, and representatives of the private sector and civil society. The RDC operates according to an approved regulation and has the following competences: (i) approve the Strategy for Regional Development (SRD) and the Regional Operational Plan (ROP) developed by the RDA; (ii) approve and promote regional development projects; (iii) represent the region and its interests in the NRDC; (iv) identify disadvantaged zones; (v) monitor the use of funds allocated by the NFRD for the region;
27
(vi) evaluate the impact of regional project and programme implementation and the achieving of regional development objectives; (vii) promote inter-regional and intra-regional cooperation with public institutions and private organisations. 112. The RDC is assisted by the RDA, a public non-commercial institution with legal status that operates in compliance with a regulatory framework approved by the government. The RDA has the following competences: (i) to carry out analysis of social-economic development, develop Regional Development Strategies (RDSs), plans, programmes and projects; (ii) to coordinate the processes for implementing RDSs, plans, programmes and projects; (iii) to monitor and evaluate the implementation of RDSs, plans, programmes and projects; (iv) submit annual reports on the implementation of RDSs to the RDC, line ministry and NRDC; (v) to attract non-budget funds from the implementation of RDSs, plans, programmes and projects; (vi) provide informational, methodological and consultancy assistance to the RDC and local public authorities with regard to the balanced and sustainable development of the region and; (vii) to provide clerical services to the RDC. 113. The District Public Administration comprises the district council, the staff of the Chairman, and operational services. The main tasks of the district councils as administration forums of associated territories and communities are: (i) management of district budgets; (ii) management of district public and private property; (iii) coordination of local councils of included communities; (iv) coordination of district public services; (v) establishment of general guidelines on urban organisation and development in the district; (vi) the institution and imposition of district-level taxes and dues; and (vii) managing construction, management and upgrading of district level physical infrastructure. 114. Local councils and mayors offices are basic administrative units that coordinate development processes at the local level. The main competences of local councils and mayors offices as regional development stakeholders are: (i) planning and managing local budgets; (ii) managing local public and private property; (iii) planning territory development and organisation; (iv) coordinating local public services; (v) establishing and imposing locallevel taxes and dues; and (vi) organising construction, management and upgrading of local physical infrastructure. 115. In order to carry out the competences and tasks allocated to them, first- and second-tier local public authorities may develop partnerships with other public or/and private institutions, either local or foreign. Among the most important problems within the regional development processes mentioned by local public authorities are insufficient financial resources for funding investment and a lack of qualified staff. An important opportunity in regional development is the allocation by the EU and other international financial institution funds for encouraging investment in the regions and programmes for regional development. Bearing in mind the low capacities of local public authorities, most of the funding is provided to various development projects through NGOs.
28
Figure 33
Number of organisations, professional, economic and consultancy associations
116. Early in 2008, 265 economic, employer and professional structures and organisations were operating in the NDR. The main focus of their activity was the provision of consultancy and assistance services in the development and implementation of programmes and projects development, research and development (R&D), and other associated activities. While during the period between 2006 and 2008 the number of these organisations has not changed significantly, the NDR is third in respect of this indicator, behind the CRD and Chisinau. 117. In 2008, 1440 people were working within these structures and organisations, the growth of the number of organisations having improved employment prospects. It is worth mentioning that over 10% of employees work in R&D.
Table 6
Features of non-governmental organisations

Employees Total 1416 1524 1439 Associations 575 628 554 R&D 156 153 154 Turnover, MDL million Total 49.9 62.6 77.0 Associations 1.6 3.5 1.4 R&D 12.2 18.6 17.5
Number of institutions Total 2006 2007 2008 258 280 265 Associations 111 115 105 R&D 4 3 4
118. The turnover of NGOs and associations in 2008 was over MDL 77 million, which is equivalent to about 5 million, including over MDL 17.5used for R&D (about1 million). These funds are comparable with the total funds allocated according to the Law on Budget to the National Fund for Regional Development, of about MDL 1 million. This shows that, at the NDR level, there is sufficient institutional capacity to absorb resources aimed at implementing wide-scale regional development projects. 119. There are important deficiencies in the financial capacity of local public authorities. During the period between 2004 and 2008, average public expenditure per capita in the NDR was
29
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, public expenditure 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 1000 per capita.
Figure 34
Average public expenditures by district, 200408 per capita, MDL
Figure 35
Average public expenditures by region, 200408 per capita, MDL
1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 BL BR SR FR OC GL DN RS ED FL DR SG
2000.0 1800.0 1600.0 1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 Chisinau GagauziaCDR ATU SDR
1102.5
NDR
Source: Ministry of Finance, 2008.
These expenditures do not include grant funding and other funds obtained through projects or grants provided by international financial institutions.
30
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 projects and programmes. The main purpose of the SWOT analysis is to identify and assign each factor, either positive or negative, in order to develop a structured comprehensive understanding of all the factors that determine the development of the North Region.
Table 7
SWOT Analysis of NDR

WEAKNESSES Use of outdated technologies and equipment in the production process High cost of capital and limited access to funds for businesses Weak representation of businesses Limited own local public authorities revenues and dependence on transfers from national bodies Degradation of small towns and of public utility infrastructure Low quality of roads and railways
STRENGTHS Relatively diversified industrial potential Growth of the number of private enterprises and existence of renowned foreign investors Role of Balti municipality as regional growth pole with relatively 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 costs Relatively developed network of educational institutions Favourable weather conditions for agriculture
Reduced connection of communities to gas Low quality of potable water Negative demographic trends and population ageing Qualified labour force deficit
Relatively rich and diverse natural resources, including ores of useful minerals and high-quality water resources OPPORTUNITIES European Union neighbourhood Proximity with to two operational Euro-regions and eligibility for EU cross-border cooperation programmes (MoldovaUkraineRomania, 200713; Black Sea Cooperation, Eastern Partnership) High priority allocated by the government to regional development reforms and decentralisation Establishment of clusters, industrial parks and technological incubators
Degradation of the environment, excessive soil pollution and increased frequency of soil erosion and landslides THREATS Deepening of negative effects of the world financial crisis and extended economic recession Political instability at national level expressed through inconsistent regional development policies and/or frequent amendment of legal framework Limited connections with EU through Romania Dependence on energy resources and fluctuating energy prices Continuing migration of the labour force More frequent natural hazards and extreme weather events as a consequence of climate change
31
3.1
Strengths
121. Relatively diversified industrial potential. The Region has natural resources/raw materials for 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 foreign investors. During the period between 2004 and 2008, the number of private enterprises has grown 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 highest degree of urbanisation after Chisinau, with the urban population of the region representing 32%. The advantages of urbanisation allow the population to have increased access to social services and provide greater opportunities for employment or the creation of businesses. 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 of an international highway, two railway nodes and two airports integrates the region in international traffic flows. 125. Capacity and potential of Balti and Marculesti airports. Both Balti and Marculesti airports have 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 airport will soon obtain the status of a free economic zone (FEZ), which could encourage the use of the airport as a transit and logistical centre. 126. Capacities for generating electricity and heat, opportunities for gas storage. As opposed to other regions, the NDR has important capacities for the generation of electricity (in Balti, Costesti-Stinca, and Naslavcea), which, if developed, could ensure regional energy security. The main gas high-pressure pipeline through the node at SoldanestiRezina, connection to gas route BogorodoceniMogilevPodolisc (Ukraine), as well as BaltiFalesti Iasi could contribute to a secure gas supply, while regional mines (at Criva) could be adapted for the storage of natural gas. 127. Growth of labour productivity and relatively low labour costs. The average salary in the economy of the region in 2007 was 100, which is 20% lower than the average wage for the country and two to three times lower than the average salary in the neighbouring regions of Ukraine and Romania. This increases competitiveness and encourages foreign and local investment. 128. Relatively well-developed network of educational institutions. In 2007, three universities; 494 primary schools, secondary schools and colleges; and 28 vocational schools were operating in the region. This ensures increased access to education and support for development. 129. Favourable agricultural-climatic conditions. The NDR features optimal moisture conditions and the shortest active growth period. The agricultural-climatic conditions are favourable for the cultivation of cereals, sugar beet, sunflower, tobacco and fruit trees and, thus, also for the processing of these crops. 130. Relatively rich and diverse natural resources, including ores of useful minerals and high-quality water resources. The region has solid mineral resources used in construction,
32
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 certain types of illness.
3.2
Weaknesses
131. Use of outdated technologies and equipment in production process. The technologies used in production, especially in the production and sale of agricultural produce, are outdated and are no longer efficient. The high cost of capital makes it difficult to invest in new technologies, while the use of old technologies reduces companies productivity. 132. High cost of capital and limited access to funds for companies. According to the National Bank of Moldova, in September 2009 the average weighted interest rate on loans to businesses was 19.04% for loans in MDL and 11.89% for loans in foreign currency. The real interest rates are even higher, as there was a 2.9% decrease of the consumer price index during the period between January and September 2009. The high interest rates reduce the access of enterprises, especially SMEs, to financial resources and also obstruct private sector development. 133. Limited localisation of companies. While the number of enterprises is steadily growing, the spatial distribution of production and sales is not uniform, differences between districts being of the order of ten times. The number of enterprises is somewhat limited and amounted to 53 enterprises 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 transfers from national authorities. This is due to the fact that a great number of enterprises that operate in the region are registered and pay taxes in Chisinau, as well as the deficient system for allocating tax revenues between the central government and the regions. In 2008, in the case of each district in the region, the revenues raised by local public administrations were less than 50% of the budget received from central government. The only exception to this was Balti, where revenues raised amounted to 54% of the national budget. Aside from own revenues, the remaining expenditure of the regions public authorities is funded by state budget transfers. This reduces the flexibility of local and regional authorities to channel resources towards local priorities and to fund costly infrastructure projects. 135. Degradation of small towns and public utility infrastructure. Small towns are becoming depopulated, their labour force is emigrating and the urban economy is declining. The communal-residential zones show continuing degradation. In 70% of the communities, water is sourced from artesian wells, while 80% of the water resources do not comply with quality standards for potable water. The sewage systems and treatment plants operate in urban communities only. Heating systems are fatigued. 136. Low quality of roads and railways. While the density of public roads, at 33.6km/100km3, is the highest, compared with the CDR and SDR, the state of the roads is poor, many roads being in need of considerable repair work. Moreover, there are communities with no access to metalled roads. 137. Reduced connection of communities to gas. In 2007, the 27.8% of the regions communities were connected to the gas pipeline, the lowest indicator for the country. Lack of connection to the natural gas network not only affects the livelihoods of the population, but also limits opportunities for economic activity. 138. Low quality of potable water. Pollution of wells and springs in the region is very high. Ecologically unsustainable practices are in place, many rural water supply systems being incomplete and having no sewage and no treatment plants. The networks for potable water supply, treatment plants and sewage networks for waste water are old, incomplete and
33
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 water supply systems. 139. Negative demographic trends and population ageing. The region has the lowest natural growth (-4.2 per 1000 inhabitants), the trend being maintained over at least the last five years. 140. Deficit of qualified labour force. Labour force emigration is negatively affecting the labour market. Those that have emigrated frequently obtain jobs abroad as unqualified labourers, subsequently losing their qualification and typically never returning to their profession. The occupations 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 of soil erosion and landslides. While the share of forests in the NDR is higher compared with other regions, in recent years trends in deforestation and the reduction of forest belts, perennial plantations and humid zones have been recorded. These trends contribute to increased frequency of soil erosion and landslides, and decrease the tourist and spa potential of the region. Infrastructure and solid domestic waste management is poorly developed, 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 developed infrastructure for collecting solid and liquid waste, including toxic waste, and by a very limited level of recycling. Excessive soil degradation and pollution, induced by environmentally unfriendly agricultural practices and improper storage of outdated obsolete agricultural chemicals, limits the agro-industrial potential of the region and damages the environment.
3.3
Opportunities
142. Proximity of the EU. Geographical proximity to Romania, an EU member state, may bring important commercial, economic and social benefits. Moreover, over the last few years, new opportunities have been found for cross-border cooperation. There are three border crossing points with Romania in the NDR; however, currently, only one (CostestiStanca) is operational. 143. Pertinence to two operational Euro-regions and eligibility for EU cross-border cooperation programmes (MoldovaUkraineRomania, 200713; Black Sea Cooperation, Eastern Partnership). Local administrations of the region are members of two Euro-regions the Upper Prut (established in 2000) and the SiretPrutNistru (2002). This permits participation in certain joint projects and the attraction of investments in different areas social, economic, environmental and infrastructure. Opportunities for funding some projects, including infrastructure projects, are provided by two large programmes: the Joint Operational Programme RomaniaUkraineMoldova, 200713 (126 million) and Black Sea Basin Program (17 million). 144. High-level priority is given by the central government to regional development reforms and decentralisation. The new government acknowledges the importance of prioritising regional development reforms and decentralisation; these subjects are prominent in the government programme for 200913. Moreover, the government is reforming the institutional framework responsible for decentralisation, by transferring authority to the State Chancellery. If properly implemented, decentralisation especially the decentralisation of public finance could significantly strengthen the capacity of the regions to allocate resources to local development priorities. 145. Creation of clusters, industrial parks and technology incubators. One of the main SME features is capacity for innovation, together with flexibility and orientation towards market
34
demand. The successful innovation of SMEs translates this combination features into market development, through introducing new or improved products. There are also improvements and innovation in organisational and technology processes specific to each company, including the distribution process. From this perspective, creating technology parks and business incubators will make a significant contribution to improving SME capacity to create new technologies and introduce new products into the market.
3.4
Threats
146. Deepening negative impacts of the world financial crisis and extension of the economic recession. Reduction of financial resources may severely affect the production sectors of the economy (industry, agriculture, and construction), thus generating a continuing economic decline and lower incomes for the population, the state, and local budgets. 147. National level political instability, expressed in inconsistency of regional development policies and/or frequent amendment of the legal framework. The financial and economic crisis may seriously aggravate the socio-economic condition in the region due to reduced investments, limited exports, higher unemployment, and the like. The socio-political instability in the country, including legal instability, may be a serious barrier to attracting investments and competitiveness of the region. Delay in implementing the Law on Regional Development, and delay with establishing the institutional framework and putting into operation 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 with Romania, only one is operational. There is no direct railway connection with the EU. The technical condition of the railway networks is poor; no electrically driven railway transportation exists and the train speed is limited. 149. Dependence on energy resources and fluctuating energy prices. As 98% of energy resources are imported, there is total dependence on external energy resources. Energy price variation accounts for an important part of production costs and affects the competitiveness of local products. 150. Continuing migration of the labour force. Migration is still a major problem and affects the development of the region. A lack of new jobs and a decrease in the number of pre-existing jobs limit the employment opportunities of the labour force. The lack of work experience of the young members of the labour force reduces their chances of finding employment, which causes their migration to other countries in search of better-paid jobs. 151. Greater frequency of natural hazards and extreme weather events resulting from climate change processes. Changes in climate may create natural disasters and extreme weather events which may endanger the livelihoods of the population, the agricultural sector and, to some degree, the industrial sector in the region.
3.5
Conclusions
152. The socio-economic and SWOT analyses of the NDR reveal the existence of some fundamental internal and external factors that affect the development of the region. The NDR is the second largest development region. The NDR also ranks second in terms of GAV and GAV per capita, giving precedence only to Chisinau. This performance is due to use of existing industrial and agro-industrial capacities in the region, both by a growing number of local companies and by recognised foreign investors.
35
153. Balti municipality, the second largest city in the country in terms of size and importance, serves as a genuine growth pole for communities of the region, economically, educationally and culturally. The relatively high urbanisation and access to a relatively strong educational network favours growth of labour productivity and makes for a higher human development index in the NDR. 154. Historically, the NDR has inherited a diversified transportation network, including airports with significant commercial capacities. These systems facilitate the movement of goods, services and human resources, and could serve as a solid basis for future commercial 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) did not change significantly, while GRP per capita was a little over 600 (79% of the national average). Heavy depreciation of fixed assets and use of outdated technologies do not allow for a positive evolution of the economy, high productivity and competitive quality products. At the same time, the high cost of capital and limited access to finance, accompanied by regulatory 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 growing transportation costs, and limits the movement of goods, services and human resources. It not only reduces economic activity, but also limits human development. Only about one third of the regions population has access to potable water supply networks, while the quality of water consumed from artesian wells does not comply with quality standards. There are discrepancies between livelihoods in the region and in Chisinau, as well as within the region, especially between urban and rural areas. As a result, migration flows have increased, which, in combination with a negative demographic growth and population ageing, reduces the size of the qualified labour force. 157. Development of the NDR, as with that of the other development regions, is strongly affected by external factors. Policies implemented at the national level are especially important. They affect both economic performance (many companies of the region are registered in Chisinau), and the quality of public services provided at the local level. The influence of national-level policies is especially important in conditions where the revenues raised by local authorities in the region are insufficient to cover the necessary expenditure. Efficient policy management at the local level depends on transfers from the state budget. Thus, political instability and economic decline at the national level endanger development in the NDR. 158. Greater frequency of natural hazards and extreme weather events resulting from climate change. Climate change incurs damage to economic activity, especially in the agricultural and agro-industrial sectors, and occasionally incapacitates operation of some communities for a certain period. Due to a lack of measures for adaptation, such events could slow the growth of the region. 159. Promotion of regional development policy and the renewed focus of the government on decentralisation could result in more regional-level projects. Proximity to the EU opens new opportunities, both for companies in the region and for public authorities, which have obtained direct access to cross-border cooperation programmes funded by the EU. The use of national and external funds for regeneration of regional infrastructure, implementation of business support programmes, and improvement of the environment will eliminate constraints to economic growth and will accelerate the NDRs development.
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37
4
4.1
Strategic vision
The vision
160. The strategic vision of the NDR shows a realistic, credible and attractive prospect for the region. The strategic vision describes a set of basic ideals, priorities, principles and values on which the development of the region is based, as well as the elements that differentiate the region from other parts of Moldova. 161. The strategic vision of the NDR coincides with the strategic vision of the entire country, set out in the Constitution and the National Development Strategy for 200811, and envisages establishment of adequate conditions for the improvement of livelihoods. The approach to livelihood improvement is seen as having multilateral factors as, in addition to economic development, it also includes the freedom of the individual and access to educational, health care and social services. The RDS also derives from the goals of the National Strategy for Regional Development, which by developing an efficient implementation mechanism pursuing 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 the representatives 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 future generations will have a high quality of life, secured by diversified economic activities, an open attitude towards technological innovation, a healthy environment, and a distinct regional culture. Everyone will have the opportunity to realise their potential to the fullest extent. 164. In this context, the objectives set out below have been formulated to support the realisation of the vision: The Region will become competitive, with a dynamic and diversified economy; The Region will become attractive for investment and, subsequently, opportunities will arise for creation of new jobs; The spirit of entrepreneurship will be encouraged and supported; The industrial potential of the Region will be optimally utilise; All means and resources will be oriented to ensuring a high quality of life; The combination of diversified intercultural values will ensure a harmonious social climate; and Economic development will not damage the environment, making the Region a healthy place for life and recreation.
165. All the objectives listed above will be realised by local authorities, in close cooperation with civil society, the private sector and ordinary citizens.
4.2
Identification of priorities
166. The economic analysis of the region, as well as the SWOT analysis, indicates a number of factors that influence the development of the region. These factors either act as constraints to growth or point to certain advantages for the NDR compared with other development regions, both inside the country and in the immediate neighbourhood. The strategic vision, on the other hand, offers a long-term perspective for the development of the region.
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Combining the analysis of the situation at present and the vision for its future, one can identify 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 the region. It is necessary to acknowledge that the public resources are limited compared with the projects that could be implemented. Therefore, projects need to be focused on activities capable of eliminating the most fundamental constraints and achieving the greatest benefits across many sectors. 168. The analysis clearly reveals significant disparities between Chisinau and the regions, and between the urban and rural settlements inside the region. The poor condition of physical infrastructure appears to be a fundamental factor, which generates and deepens this disparity 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 by reduced 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 attractiveness of 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 development of the region.
4.3
Regional partnerships
172. Achievement of the strategic vision of the NDR and implementation of these priorities will not be possible without active participation by the entire society in the implementation of the RDS. The RDS has been developed in a participatory way, with substantial participation by private enterprises, NGOs, different levels of public authority and ordinary interested persons. This needs to be followed by a transparent, equitable and efficient implementation of the programmes agreed in the RDS. 173. The culture of cooperation among different regional actors needs to be promoted at all levels. The RDC is composed of local elected officials representing different parties, business people, social workers, and experts in various areas. It is anticipated that such regional partnerships will be also created during implementation of the RDS. The achievement of the vision laid out in the RDS can only be attained through a combination of efforts working within regional partnerships.
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Priorities
174. The regional working groups have discussed many programmes and measures necessary for the dynamic development of the region. However, taking into consideration the financing opportunities and the implementation term of the strategy, only a few areas have been identified as priorities. The rationale, the measures, and the expected outcomes for each priority 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 for households and economic agents. 176. Rationale. Deficiencies of investment in the public infrastructure over recent decades have led to a significant deterioration of roads, water supply, sewage systems, and gas supply systems. 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 also the 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 the settlements that can be connected to the SorocaBalti water supply system. 178. Modernisation of roads is also an important objective, increasing access to national and international highways and, subsequently, commercial flows. Development of the airport infrastructure and creation of access points will facilitate the attraction of foreign investors, and also increase tourism potential in the region. 179. Measures. Measures with the maximum impact on the rehabilitation and development of physical infrastructure are: extension and rehabilitation of the water supply and sewage systems; reconstruction, rehabilitation and development of regional highways, in particular roads that connect with the national highways and other renovated roads; development of the Balti and Marculesti airport infrastructure and the services provided by them; and encouragement of cross-border activities through increased investment in the creation of border-crossing points in the NDR between Moldova and Romania.
180. Output indicators. Implementation of projects focused on Priority 1 will be monitored based on the following output indicators: proportion of houses that do not benefit from piped water in relation to the total number of houses. proportion of reconstructed or newly constructed roads in relation to the total number of roads; extension of the runway at Marculesti airport; and setting up an additional border-crossing point between Moldova and Romania.
181. Outcome indicators. Implementation of projects focused on Priority 1 will be monitored based on the following outcome indicators:
40
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 based on 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 sector and labour market
184. Goal. The goal of Priority 2 is to facilitate the creation of jobs and to increase the employment ratio. 185. Rationale. The analysis of strengths suggests that the economic performance and the human development in the region are lower than their potential level, when taking into consideration the fact that the NDR is relatively more industrialised compared with other regions. 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 in search of jobs. However, in the short and medium term, there will only be modest levels of migration. In this context, it is necessary to increase the efficiency of agricultural performance and to achieve economic diversity. Development of the private sector becomes imperative for the dynamic growth of the region and the creation of employment. 187. Measures. Measures with the maximum impact on the private sector development are: development of continuous training; support for vocational training and retraining those employed in the rural areas; incentives for SMEs through development of information and consulting services for SMEs; support for the creation of technology incubators and the application of innovative technologies (for example, refrigerators, greenhouses, processing industry); support to enterprises with the potential for export, provided they observe the international quality standards; and encouragement of the association and cooperation of all actors in the agroindustrial sector with the aim of ensuring equity in the relations among producers of raw material, processing entities, and tradesmen.
188. Output indicators. Implementation of projects focused on Priority 2 will be monitored based on the following output indicators: number of vocational retraining programmes brought up to date in collaboration with private sector; number of SMEs that benefit from consultancy services; number of companies that benefit from grants offered during a transparent process of selection; and number of events organised with participation of all stakeholders.
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189. Outcome indicators. Implementation of projects focused on Priority 2 will be monitored based 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 based on the following impact indicators: volume of production (regional GAV); and employment ratio.
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 attractiveness to tourists

192. Goal. The goal of Priority 3 is to generate environmental protection initiatives and increase the regions attractiveness to the population and to visitors. 193. Rationale. The state of the environment has a direct influence on the living standards of the population and the attractiveness of the region. At present, solid and liquid waste are managed in a non-sustainable way, which leads to the degradation of resources and the worsening health of the population. Only the urban settlements in the region are equipped with purification stations for processing waste water. However, even in the areas where they exist, their operation is inefficient. The problem is chronic in Soroca, where there is no purification station at all. Thus, daily, 2040 tons of untreated waste is discharged into the River Nistru. Chronic problems of this kind will be the first to be addressed under this priority. 194. The increase in the frequency of extreme weather events demands the development of a programme facilitating the adaptation of people and organisations to climate change. Forecasting and prompt reaction to these events acquires a special significance. 195. Measures. Measures with a maximum impact on improvement of the environment are as follows: greater access to information on the environment and the promotion of ecological education; development of integrated management systems for solid waste processing, including the separate collection of waste, and the recycling and creation of modern dump sites for the storage of non-recyclable waste; higher ecological security for the region through the promotion of actions aimed at stopping soil degradation, and the development of early warning and response systems to extreme weather events; and rehabilitation of tourist sites and the promotion of actions ensuring the integration of these locations in the international tourist circuit.
196. Output indicators. Implementation of projects focused on Priority 3 will be monitored based on the following output indicators: development and implementation of awareness campaigns; number of new polygons for waste storage; number of waste water treatment stations rehabilitated/constructed; development of the forecasting of extreme weather events, and development of an early warning and response system; and
42
number of touristic sites rehabilitated.
197. Outcome Indicators. Implementation of projects focused on Priority 3 will be monitored based 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 based on the following impact indicators: volume of production (regional GAV); and employment ratio.
199. Cost: The tentative percentage of resources used to ensure implementation of this priority is [XX%.]
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Monitoring, reporting and evaluation
200. Monitoring and evaluation will be carried out at the level of individual projects, and at the level of the strategy as a whole. 201. The NDR RDA will report on the projects funded through the NFRD to both the Regional Council and the MCRD. The Quarterly Reports will contain information on project implementation. Six-monthly reports to the Regional Councils will also address progress in the implementation of the RDS. An annual report on implementation of the ROP will be prepared by the RDA at the end of each financial year. In exceptional cases of regressive projects, the RDA team will report ad hoc on the pro-active measures to competent bodies. 202. Each project funded by the NFRD, and included in the Single Programming Document, will contain in the project documentation: the overall objectives of the project, in terms of national objectives for regional development as contained in the NDS; the contribution of the project to the goals of the Strategy and the priorities of the RDS; the immediate outputs of the project; the activities to be carried out to achieve those outputs; and the inputs required.
203. This information will form the basis for identification of relevant indicators for monitoring and evaluation. 204. The RDA will track the progress of projects on a monthly basis. A quarterly report on each project will be submitted to the RDA on overall implementation and agreed output, outcome and impact indicators. The aggregation of these reports will form the basis for the sixmonthly and annual reports to both the Regional Councils and to the MCRD. 205. The RDA is responsible for reporting in the ROP of this Strategy. The ROP contains both qualitative and quantitative indicators. Qualitative indicators, which are largely process indicators, (that is, whether an action has been carried out or not) will be monitored by the RDA. Quantitative indicators tracking progress in the implementation of the ROP will be developed from the information on projects collated by the RDA. The MCRD will report information on trends in economic conditions in the region, based on data provided by the National Bureau of Statistics. This information will be passed on to the RDA for inclusion in the six-monthly reports made by the RDA. 206. In addition to regular reporting on progress, every project should submit a detailed end-ofproject report; this assesses the overall success of the project, reports on specific outcome and impact indicators, and identifies the longer-term impact of the project once implementation is completed. Evaluation studies will be carried out for larger projects and could include a range of appropriate methodologies, including participatory surveys of beneficiaries on the value of project outcomes. For a proportion of large projects, particularly where benefits are anticipated to be both long-lasting and widespread, the RDA will organise impact assessments at an appropriate period after the project is completed. Funds to do this will be incorporated into the budget of the project. 207. The RDA will also carry out periodic perception surveys for the Regional Council, to assess how the local population perceive the activities of the Council, and the progress in the RDS. At the same time, the questionnaires will assess the populations perception of the impact. The results of these surveys will be reported both as part of the quarterly reports, and as a stand-alone report to the Regional Council.
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208. Reporting on the RDS is part of an overall monitoring and evaluation system that includes the NSRD and the NDS. The M&E system will be developed in a way that is consistent with government reporting on the NDS. As the national monitoring and evaluation system evolves, 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, the monitoring and evaluation system will be updated in accordance with the Operational Plan.
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7
7.1
The framework of resources and financing

Existing financing commitments
The financing needs

210. The financing needs of all potential development projects are enormous, and yet the public resources available for the implementation of such projects are limited. The NRD RDS has restricted itself to three priorities with the largest impact on the social and economic development of the region. However, the measures included in the RDS can be implemented on different scales, depending on the volume of resources that can be directed towards the implementation of regional projects and the capacity to capitalise on the available funds. In this context, the financing needs for each priority should be calculated, together with the available funding. Specific projects will be identified and incorporated into the ROP. The annual 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 source of financing for programmes and projects focused on the achievement of the regional development objectives is the National Fund for Regional Development (NFRD). The NFRD comprises the annual regional development allocations from the state budget. There are also funds from other sources, in particular from the resources offered by external partners. The NFRD amounts to at least 1% of state budget revenues. The NFRD can attract other financial resources from both the public and private sectors at local, regional, national and international levels, as well as the means offered through EU assistance programmes. 212. The NFRD stipulates funds for all development regions. According to the Law, the distribution of the funds by region will be based on the principle of priority allocation to the disadvantaged areas from the development regions. At the same time, the allocation of resources will also depend on the conformity and quality of the submitted projects. 213. As from 2008, the state budget will provide annual allocations for regional development. The allocations to the NFRD for the years 2008 to 2010 are presented in Table 8. However, as yet it has not been possible to utilise the available funds due to delays in the creation of the institutional and strategic framework for regional development. Once the RDAs are created and the RDSN approved, projects requiring finance can be presented, and resources can be allotted.
Table 8
The quantum of the National Fund for Regional Development between 2008 and 2010 (in MDL 000)
2008 130,000.00 0 2009 156,000.00 0 2010 (draft) 135,000.00 0
Planned Executed
Source: Ministry of Finance.
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Other public sources 214. In order to finance the priorities in the RDS, other public sources can are also available. The budgetary revenues and expenditures of the administrative-territorial units (ATUs) in the NDR 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, the ATUs 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)
2005 135,669.63 150,647.12 66,936.27 63,816.39 36,952.85 37,666.98 70,358.52 69,296.72 59,940.64 60,518.34 63,950.68 63,733.13 75,268.37 80,788.85 45,392.71 47,131.06 48,276.59 46,877.12 55,825.62 60,539.17 65,578.53 68,760.25 106,121.34 110,233.97 830271.75 860009.09 2006 165,854.31 175,204.01 87,888.28 88,357.21 50,753.66 56,162.00 88,446.18 95,871.26 85,702.04 83,581.78 103,307.13 105,921.03 100,707.94 103,846.61 79,354.30 77,795.25 68,497.56 66,139.73 81,176.06 76,849.25 94,900.39 94,675.91 91,642.16 93,963.97 1098230.02 1118368.03 2007 178,490.32 192,146.55 120,004.15 117,901.23 63,718.99 61,573.38 124,408.37 117,996.68 105,918.90 107,384.19 116,699.29 115,036.88 135,282.24 134,911.40 82,356.33 84,161.75 93,110.17 93,471.66 94,566.13 95,185.50 121,443.22 116,776.64 140,358.19 134,807.86 1376356.29 1371353.71 2008 294,541.79 301,950.62 121,163.60 129,090.71 65,056.58 66,752.59 128,720.83 131,691.01 123,216.36 124,721.82 138,888.34 136,846.77 136,636.02 142,142.25 92,884.99 98,576.45 78,925.71 82,016.00 105,597.87 106,916.65 135,765.50 135,351.82 164,161.44 177,967.72 1585559.01 1634024.42 2009 230,876.37 247,252.31 134,976.74 141,288.43 83,126.99 85,920.74 149,021.02 155,407.62 138,717.46 147,471.05 160,658.17 169,323.25 155,148.30 160,683.86 105,921.85 111,367.61 102,525.54 108,281.29 124,694.65 129,249.70 159,180.25 169,166.27 177,497.52 185,749.02 1722344.83 1811161.17
UAT mun. Bli Briceni Dondiueni Drochia Edine Fleti Floreti Glodeni Ocnia Rcani Sngerei Soroca Total
Capital Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures Revenues Expenditures
Source: Ministry of Finance, experts calculations.
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215. There are, however, certain transfers available from the state budget; these transfers represent about 15% of the total transfers and are normally directed to the implementation of construction/capital investment projects. These transfers could be focused on financing regional development projects. Under existing conditions, the allocation of these transfers has been based on projects identified at the central level. Therefore, using these resources to support regional development projects will require a certain degree of decentralisation by the central authorities. 216. Additionally, the local authorities could direct resources from the ATU budgets to the cofinancing 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 (for example, 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 assistance provided by external donors, both through cooperation programmes with the Government of the Republic of Moldova and by means of programmes available to regional and local authorities. Together with the creation of the institutional and strategic regional development framework, and the practical implementation of regional development policies, the external donors could contribute by providing assistance in the form of direct budget support to the NFRD. The mobilisation of additional resources directly into the NFRD will depend on the efficiency and effectiveness of the NRFDs implementation and the quality of the identified regional development projects. 218. Additionally, many of the external assistance programmes and projects implemented in cooperation with the Government of the Republic of Moldova and central authorities have a spatial regional or local dimension. The projects focused on the rehabilitation of the social infrastructure, water and sanitation systems, roads, and the like are implemented in many localities and regions. The RDAs can play an important role in mapping the external assistance projects, and identifying the sectors and localities into which the external funds can be directed in future, according to the priorities stipulated in the NDR RDS. 219. The regional authorities can also directly access funds from the cross-border cooperation programmes. Two major programmes can be accessed at the moment: the Joint Operational Programme RomaniaUkraineMoldova, 200713 (with a budget of 127 million, EU contribution)10; and the Black Sea Basin Programme (17 million).11
220. The cross-border cooperation programmes envisage the establishment of a partnership with stakeholders in Romania, as well as co-financing 10% of the cost of the selected project. Other sources 221. The regional and local authorities will undertake efforts for the mobilisation of other sources, including private resources for the financing of regional development projects.
10
Joint Operational Programme Romania-Ukraine-Moldova md.net/index.php?option=com_content&view=article&id=1&Itemid=57

11
2007-2013,
http://www.ro-ua-
Black Sea Basin Programme, http://www.blacksea-cbc.net/index.php?page=PROGRAMME_OVERVIEW
48
Annex 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 plants
Water supply and sewage network and treatment
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
INDICATORS
Main indicators of NDR socio-economic development

NDR BL BR 76.2 93.6 DN 45.9 71.3 DR 20.3 91.0 ED 83.6 89.6 Districts FL 93.1 86.8 FR 91.0 82.1 GL 62.5 82.9 OC 56.5 94.6 R 70.9 75.7 SG 93.8 90.7 SR 101.1 96.9 3567.5 117.2 Moldova
GENERAL DEMOGRAPHIC DATA Number of stable population as at 1 January 2009 Average population density in districts as at 1 January 2009 2 (inhabitants / km ) Female population (1 January 2008) (%) Urban population (1 January 2008) (%) Natural growth of the population in the region in 1,000 inhabitants (1 January 2008) LABOUR FORCE Labour force in relation to the total population, as at year end, 2007 (%) Population employed in industry, 2007 (%) Population employed in agriculture, 2007 (%) Population employed in services, 2007 (%) SOCIAL INDICATORS Number of hospital beds in 2008 per 10,000 inhabitants
1013.7 101.2
148.1 1898.5
52.4 35.7 -4.2
54.1 96.7 -0.6
52.4 20.2 -5.7
53.3 23.3 -9.1
52.4 22.3 -4.4
52.7 35.2 -4.1
51.6 18.9 -3.3
52.0 21.1 -4.7
52.0 19.2 -4.1
52.8 34.5 -5.8
52.1 26.5 -4.8
51.2 20.8 0.0
51.5 36.8 -3.5
51.9 41.4 -0.6
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
12.3 44.8 39.4
12.9 32.2 48.8
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
59
Number of doctors in 2008 per 10,000 inhabitants Day schools, gymnasiums and lyceums, 2008 Pre-school institutions, 2008 Colleges, 2008 Number of college graduates, 2008 Universities, 2008 Number of university graduates, 2008 UNEMPLOYMENT Unemployment rate, 2007 (%) INFRASTRUCTURE Density of public roads, km / 100 2 km , 2009 Density of public roads with 2 metalled surfaces, km / 100 km , 2009 Paved roads in relation to total public roads, 2009 (%) Density of potable water supply 2 networks, km / 100 km , 2008 Density of sewage networks, km / 2 100 km , 2008 Communities connected to gas, 2008 (%) Number of telephone lines in 100 inhabitants, 2009
19.8 494 428 15 1341 3 1820
35.0 30 35 6 713 3 1820
20.4 34 34 1 75
23.3 27 21 1 63
18.3 41 40
23.4 44 43 1 31
12.0 51 47
17.7 56 31
17.3 28 29
20.0 30 15 1 39
20.3 41 40 1 98
14.3 51 41
19.4 61 52 4 322
35.6 1534 1334 49 6433 31 19972
0.88 33.6 32.4
0.72 30.9 30.9
0.44 39.2 37.4
0.63 32.7 30.5
1.04 26.8 26.8
1.17 35.0 34.2
0.72 33.7 33.2
0.62 32.8 30.5
0.89 31.2 28.8
0.74 35.4 35.3
1.04 34.5 33.9
0.65 33.5 30.1
1.71 37.4 37.2
0.80 26.9 25.3
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
39.3 19.1 27.8 26.5
320.5 184.5 66.7 32.5
17.5 3.9 41.0 31.1
8.3 4.5 13.3 29.8
10.3 6.1 27.5 26.8
14.7 5.8 32.7 26.0
4.4 2.5 12.0 22.9
25.4 3.4 21.6 22.8
21.7 4.3 20.0 26.9
12.0 2.6 66.7 23.9
7.6 4.0 18.2 25.0
16.8 3.0 12.9 23.0
12.8 5.1 1.5 26.6
23.3 8.4 28.4 28.7
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SECTOR RESTRUCTURING Evolution of the number of employees in industry in 2007 (2004 = 100) (%) Evolution of the number of industrial enterprises in 2007 (2004 = 100) (%) Evolution of the number of service providing enterprises in 2007 (2004 = 100) (%) Evolution of the number of enterprises in agriculture in 2007 (2004 = 100) (%) Proportion of enterprises in agriculture that bore losses in 2007 (%)
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
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
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
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
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 51.76 Number of SMEs per 10,000 121.54 48.29 49.46 40.44 inhabitants, 2008 69.91 Micro-enterprises (09 employees) 73.39 72.01 77.53 71.74 (%) 23.86 Small enterprises 23.28 23.64 18.50 20.38 (1049 employees) (%) 6.23 Medium-sized enterprises 3.33 4.35 3.96 7.88 (50249 employees) (%) ASSOCIATIONS AND RESEARCH AND DEVELOPMENT ORGANISATIONS 265 Number of organisations, 124 9 9 31 associations 1439 Number of employees in 792 51 29 117 organisations, associations Budget expenditures per inhabitant, 1102.5 1,269.1 1187.0 1082.9 1013.4 MDL
Source: NBS, Powell 2009, SADI, 2007.
40.07 64.48 27.76 7.76
28.25 56.27 30.80 12.93
24.51 58.29 31.83 9.87
39.04 69.67 20.08 10.25
50.80 71.78 21.25 6.97
49.51 72.36 20.80 6.84
29.10 58.24 29.30 12.45
50.25 70.67 23.82 5.51
115.23 75.64 20.26 4.10
14 107 1033.6
11 44 1013.9
7 36 1124.5
13 48 1094.4
6 28 1123.2
8 27 1069.9
7 28 987.75
26 132 1126.2
5134 37071 1330.8
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Regional Development Strategy

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Regional Development Strategy

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Approved by the Decision of North Regional Development Council No.

North Development Region

Regional Development Srategy