An analysis of local economic development program in Ivano-Frankivsk, Ukraine.

• Author: Lazarowich, Michael

Abstract

The experiences and adaptation of a western market economy, local economic development process are examined in a small business and economic development pilot project in Ivano-Frankivsk, western Ukraine. The following aspects are discussed: continuing education training: team building; community participation; data gathering; and strategic economic development and planning. The form and content of an emerging Ukrainian version of a local economic development process in presented: bottom-up, local economic development complementing top-down economic development planning; differentiation of local economic development functions between levels of government and establishing working relationships between different government departments responsible for economic management.

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Problem

Ukraine became independent in 1991, after the collapse of the Soviet Union. Ukraine had to create a viable economy and chose the market economy route in economic development.

The problem that is examined in this paper is: "What form and content could a modified, market economy, local economic development process have, to be useful and operational in Ivano-Frankivsk Oblast in western Ukraine?" A definition of some terms is in order. The term oblast means province or region in Ukraine. An oblast is made up of rayons (counties).

The assumptions and approach used in local economic development reflect the Waterloo model (Bryant and Preston, 1987). These assumptions are that local resources are unique and need to be recognized, analyzed, and developed. This does not negate the usefulness of outside resources and investment in local economic development (LED). The second assumption that is made is that grassroots, bottom-up LED planning can and should complement top-down LED. The last assumption and approach is that locals should take ownership/responsibilities right from the start of the LED program--they decide, make final decisions on what to do or not to do (Coffey and Polles, 1985; Higgins and Savoi, 1996). Outside consultant's role is to advise and facilitate the human resources development in the strategic economic planning (SEP) process, and to provide up-to-date technology and resource materials.

In this paper, an examination is made of the form or structure, content and the procedures and methods that have been tried, modified and operationalized in (1) human resources, and (2) the SEP process. In the human resources area, an analysis is made of: the economic development officers (EDO's), the professionals, practitioners in the field doing LED; the local economic development teams, a representative cross-section of local community leaders who have volunteered to act as advisors to the EDO in their communities LED; and participation and involvement by the local community in assisting in the LED process. In the SEP planning area, an examination is made of: the working relationships between government (oblast and rayon) departments involved in LED and the coordination of LED efforts between the public and private sector; pilot rayon SEP planning: local economic data collection and analysis.

Background

The first Ukrainian president, President Krawchuk, was noted for his nation-building efforts and not for his economic reform. President Kuchma, elected in 1994, initiated market reforms including the freeing of prices of many goods, tighter budget and privatization programs while Ukraine was, at the same time, becoming a democracy.

Ukraine has many unique local resources that need to be identified, organized and mobilized, businesses started to produce goods and services for local use and export. Such local economic development creates local jobs and provides local tax revenue that increases the quality of life.

Canada is supporting private sector development with Canadian technical assistance to Ukraine. In early 1996, a Canadian Consortium (composed of Confederation College, University of Waterloo, University of Saskatchewan and Parkland Community Futures in Manitoba), with Ukrainian partners of the City and Oblast of Ivano-Frankivsk, in western Ukraine began a five-year, small business and economic development pilot project in Ivano-Frankivsk (SBEDIF). SBEDIF was funded by the Canadian International Development Agency (CIDA).

The SBEDIF project goal was to assist Ukraine in its transition to a market economy through encouraging small business and sustainable economic development at the local level.

The project objectives were:

* To create a sustainable structure of support systems for the start- up and growth of small business in the Ivano-Frankivsk Oblast, including the implementation of:

1. entrepreneurial training program

2. business English language training program

3. business center/incubator

4. business consultants

5. small business loan fund

   * To assist the City and Oblast of Ivano-Frankivsk to stimulate the overall economic development in the region through local inst9itution and capacity building by developing the following:

1. economic development commissions

2. economic development offices

   * To establish and promote trade linkages between Ivano-Frankivsk and Canada trough:

1. local Chamber of Commerce

   * To promote entrepreneurial culture and attitude in the City and Oblast of Ivano-Frankivsk.

   The LED program goals were:

   * Increase economic development in Ivano-Frankivsk. Increased economic development means more business start-ups, more jobs, and more tax revenue.

   * Build a new economic development institution. The aim is to change government departments of management of the economy to economic development departments. This will give local municipalities the responsibility for their economic development.

   * Have inclusiveness in local economic development process. This means all stakeholders actively participate in decision-making and taking responsibility for the inputs and outputs of economic development in their community.

   * Proactive approach to LED rather than passively waiting for economic development to happen or have another level of government do LED in the community.

   Research Procedure

   The following data sources were used in the conduct of the research: (1) personal field notes and in-the-field observations from monthly strategic planning session visits to rayons and weekly contacts with Oblast; (2) continuing education course evaluations from economic development officers; (3) minutes of rayon economic development team meetings; (4) monthly reports and debriefing of Ukrainian economic development associates and consultants; (5) transcribed tape recordings of rayon meetings; and, (6) photographs of events, rayon meetings and continuing education (professional development) seminars.

   Results

   The results of each economic development program component studied are presented next.

   Human Resources

1. Ukrainian EDOs':

   The Ukrainian EDO's are highly educated, competent and motivated practitioners. They required and requested upgrading in practical aspects of market economic LED techniques and skills. Background papers on the basic principles of requested topics were developed by Canadians. Topics were delivered in Ukraine by local experts in these topics, adding their Ukrainian...