Potentials of the East Baltic States, Russia and Belarus

Transcription

1 Informationen zur Raumentwicklung Heft 8/ Potentials of the East Baltic States, Russia and Belarus 1 Introduction Despite several years of cooperation that were initiated in the 1990s, there is still a lack of knowledge about the specific features, potentials and deficits of the most Eastern countries and regions in the other parts of the Baltic Sea Region and of Europe as a whole. Therefore, a specific focus will be put on the Baltic States, Northwest Russia and Belarus in order to better highlight their current situation and potential for the development of the Baltic Sea Region. The three Baltic States, Estonia, Latvia and Lithuania, have been forming part of the Baltic Sea Region as members of the European Union since The northwestern areas of Russia take part in many cooperation activities around the Baltic Sea. Thus, they have been actively involved in the implementation of the transnational cooperation programmes since 1996 and in the political cooperation of ministries responsible for spatial planning and development since The same is true for Belarus, which is not a coastal state but in many respects connected with the Baltic Sea Region both by culturally-historical connections and by sharing the common water basin. Historically, all the countries and regions experienced different periods of independence, change of borders in belonging to common state territories or being under the influence of other states. The most important common structures were the Kievan Rus (from the 9th to the 12th century influenced by Scandinavian traders and incorporating mainly parts of today s Russia, Belarus and Ukraine), the Livonian Confederation (from the 13th to the 16th century incorporating Latvia and most of Estonia), the Grand Duchy of Lithuania (from the 12/13th century to the 18th century incorporating almost the whole of today s Lithuania, southeast Latvia, the whole of Belarus and large parts of the Ukraine; from the 16th century after the confederation agreement with Poland also known as Polish-Lithuanian Commonwealth). Moreover, all countries and regions described in the following were part of the Soviet Union for at least 50 years between 1940 and Estonia, Latvia and Lithuania experienced periods of independence from 1918 to 1940 and after 1990/91. Belarus became independent for a short period in 1918/1919 and from 1990 on. The traces of the above-described historical periods including the influence of other states like Austria, Sweden, Denmark, Finland, Poland, Germany and France may today be either regarded as a potential (castles, fortresses, churches, manor houses and other historical buildings or sites, transport networks, juridical, education, forestry and agricultural systems, land cadastre and urban planning, tolerance to religions, various cultural connections and access to innovations) or as a deficit (for example destruction through numerous wars, wide range of unfavourable consequences of colonization for local cultures and population and consequences of the numerous waves of human migration). Many historical sites and structures from earlier periods are still visible such as the consequences of the modernization (abolishment of serfdom) and rapid industrialization between 1860 and 1914 in major industrial cities of tsarist Russia. The 50 years of belonging to the USSR have probably left the most substantial footprints in all territories. Deficits stemming from this period might for instance be seen by the insufficient upgrading and maintenance of technical infrastructure and of the building stock, by a negligence of environmental standards and use of natural resources, lack of entrepreneurial spirit and of product and process innovation versus an extensive use of labour force. But there were also advantages and positive elements which need to be maintained and further developed. After 1960 with the change of social paradigm in the field of spatial development for instance, territorial disparities were often smaller in Soviet regions than in regions of western countries. Settlements were built more compactly both in rural and urban areas. In other fields, a good supply with social and Nerijus Blažauskas Gennady Fedorov Natalia Klimenko Laila Kũle Rivo Noorkõiv Dmitri Semenkevich Dr. Nerijus Blažauskas University of Klaipeda Coastal Research and Planning Institute H. Manto Klaipeda Lithuania nb@geo.lt Prof. Dr. Gennady M. Fedorov Immanuel Kant State University of Russia Ul. A.Nevskogo Kaliningrad Russia fedorov@kantiana.ru, gennady_fedorov@mail.ru Dr. Natalia Klimenko Federal Agency on Education Immanuel Kant State University of Russia Ul. A.Nevskogo Kaliningrad Russia natklim@mail.ru Laila Kũle Faculty of Geography and Earth Sciences University of Latvia Aberta iela Riga Latvia laila.kule@lu.lv Rivo Noorkõiv Consulting and Training Centre GEOMEDIA Rüütli tänav Tartu Estonia rivo@geomedia.ee Dmitri Semenkevich Institute for Regional and Urban Planning of Belarus Masherov av Minsk Belarus dir2@irup.by

2 Nerijus Blažauskas, Gennady Fedorov, Natalia Klimenko, Laila Kule, Rivo Noorkõiv, Dmitri Semenkevich: Potentials of the East Baltic States, Russia and Belarus 570 Basic figures for the Baltic States, Belarus and Kaliningrad region State/ region Population (2007)1 Area Population density (2007)1 Capital Population (01/2008) Capital as % of total population GDP/Head (2008)1 Number km² People/km² Number % Euro Estonia , , Latvia , , Lithuania , , Belarus , , Kalinin grad Region , , , EU 27 Sources: Eurostat (Statistical Office of the European Communities) and National Statistical Offices (Belarus and Kaliningrad and capital population) 1) Population figures and GDP for Kali ningrad = 2006; GDP per head recalculated from rouble to Euro, Population density calculated from population and area cultural infrastructure, health care, recreation, arts and sports facilities, a high female, youth and skilled workers employment, a high level of civil defence and a wide-spread knowledge of the Russian language as common communication tool were achieved. Some features also proved to be competitive under market conditions. The following contributions give deeper insight into the situation of the different countries and regions and are to reveal even unique features. The Baltic States are often considered a homogenous entity. However, the people of the Baltic States use different languages and may draw on differences in historic heritage and in cultural characteristics. The industrial profiles are still similar because of the belonging to the old unified system. However, the three republics had different functions of energy generation within the united energy grid of the western Soviet Union (hydro energy in Latvia, nuclear energy in Lithuania and fossil energy in Estonia). This article will show the profile and specific situation of each country in many respects. The approach follows the principal idea of the Territorial Agenda of the European Union2 which is to make better use of the diversity of territories. This is even more valid for the whole of Europe if one takes the huge diversity of the Russian territory into account. In the Baltic Sea Region, on the one hand, very heterogeneous areas form part of Northwest Russia agglomerations like St. Petersburg and important traditional centres like Novgorod and Pskov. On the other hand, Murmansk Oblast and the Republic of Karelia are areas with an extremely low population density. However, important industrial and urban functions are concentrated in the city of Murmansk and in cities and towns of Karelia. The area could better benefit from that structure and from potentials such as tourism, cultural and natural heritage, raw material and biomass etc. depending on the upgrading of the related infrastructure. A specific situation applies to Kaliningrad Oblast which now borders on the European Union but not on the main territory of Russia. Finally, Belarus takes part in many cooperation activities around the Baltic Sea and has much in common with that area. It has both, historical and economic ties as well as transport and energy connections. 2 The Baltic States countries with homogeneous or unique profiles? 2.1 Estonia Basic characteristics and economic profile Estonia is the northernmost Baltic state, the land of thousand islands and lakes. It is characterised by relatively flat landscape where low plateau-like areas alternate with lowlands, depressions and valleys. Another specific feature of local topography are extended coastal cliffs along the Gulf of Finland and on Saaremaa island in western Estonia. The Suur Munamägi Hill (318 m), which is the highest point in Estonia as well as in all the three Baltic countries, is located in southern Estonia. Mineral resources in Estonia are rather limited, however there are large mineable reserves of oil shale, carbonate rocks and peat, which hold significant economic value for Estonia. Estonia has a unique history and geopolitical location between Northern and Eastern Europe and Russia. The first human settlements in Estonia trace back to the end of the last glacial period. Before the German invasions in the 13th century, the proto-estonians were pagans. For centuries, Estonia was a battleground where Denmark, Germany, Russia, Sweden and Poland fought wars over controlling the important geographical position of the Estonian land as a gateway between the East and the West. The national awakening of Estonia began in the middle of the 19th century. In the second half of the 19th century, Estonia was

3 Informationen zur Raumentwicklung Heft 8/ characterised by general modernisation: the reorganisation of a static agrarian society into a modern European society, industrialisation, urbanisation, the success of the newly emerged national consciousness and the development of national arts choir music, literature and visual arts. In 1918, the independence of the Republic of Estonia was declared and after the successful War of Independence in , the construction of the nation-state was commenced. The independence enabled the Estonians to decide on how to rule and manage themselves as a unified societal and political entity for the first time. Within 20 years, the Estonian standard of living reached the average in Europe being equal to that of Finland and Poland, although still lagging behind that of Western European countries. In 1940, Estonia was annexed by the Soviet Union and only in 1991, the independence was restored reconstituting the pre-1940 state. The economic profile of Estonia is currently dominated by engineering industry and chemical and oil shale based mining industry, supported by services, food, construction and electronic industries. Enhancing a liberal and flexible economy After discarding socialism in the late 1980s, the difficult but rather successful period of economic transition to a market economy began. In 1994, Estonia adopted a flat rate of income tax, today fixed at 21%. In the second half of the 1990s, Estonia received more foreign investments per capita than any other country in Central and Eastern Europe. During the years , the Estonian economy was one of the fastest growing in Europe with rates exceeding 10% annually. The difference of the Gross Domestic Product (GDP) per capita to the EU15 has decreased: in 1996, the Estonian GDP per capita constituted 34.8% of that of the EU15 reaching 68 % in However, the current economic downturn has brought along a considerable recession in the Estonian economy showing negative growth. According to the prognosis of the Bank of Estonia in spring 2009, the economic decline will reach 12% by the end of the year.3 Estonia is a small country with an open economy and foreign trade constitutes an essential part of its economy. Estonia ist a member of a World Trade Organisa- 571 tion since The main trading partners are countries of the European Union (EU), which make up for more than 75% of the total exports and imports. The range of exported goods is wide. A notable share of the exported goods is locally manufactured in the form of subcontracting. One third of the exports are services. An important role in the transport sector is attached to marine shipping both to the transport of goods (including transit) and of passengers. The transport infrastructure of Estonia supports the economic development of the country. Tallinn International Airport annually serves a number of passengers almost equal to the population of Estonia. There are also several regional airports in bigger islands and cities. The Port of Tallinn has a frequent schedule of ferries between Tallinn, Helsinki and Stockholm and other ports of the Baltic Sea with over 4 million passengers per year. Tallinn cargo port is one of the biggest around the Baltic Sea and there are also several other ports along the Estonian coast in Sillamäe, Paldiski, Kunda, Pärnu and others. The most important international roads include Via Baltica from Tallinn to Riga, the road from Tallinn to St. Petersburg and from Tallinn to Tartu, Pskov and Moscow. The railway connection from Tallinn to Riga and other capital regions via Southern Estonia is still in the stage of reconstruction and expects investments. The Via Baltica project is in the TEN-T4 priority list of the EU. Furthermore, an alternative is considered to build a new railway through Pärnu to Riga. The idea of the underwater tunnel between Tallinn and Helsinki, connecting Finland s railway and road transport directly with the Via Baltica and Rail Baltica, has been launched as well. The reconstruction of the Koidula toll and cargo terminal on the south-eastern border with Russia on the Tallinn-Pskov and Riga-Pskov railways commenced in 2008 in order to facilitate the rail transit from and to Russia. Estonia is the leader in making use of information technologies in Eastern Europe and has an excellent position in the global scene as well: The World Economic Forum s Global Information Technology Report ranked Estonia 18th. The other communication infrastructures are also at a good level. The penetration of the mobile phone is over 100% of the population.

4 572 Nerijus Blažauskas, Gennady Fedorov, Natalia Klimenko, Laila Kule, Rivo Noorkõiv, Dmitri Semenkevich: Potentials of the East Baltic States, Russia and Belarus Spatial planning and regulation of land use Estonia is a unitary state. According to the Territory of Estonia Administrative Division Act 5, Estonia is administratively divided into counties, rural municipalities and towns. In 2009, there are 194 rural municipalities and 33 cities in Estonia and the land is divided into 15 counties. There are no autonomous regions in Estonia. The dynamic growth of the Estonian economy over the last years has raised the awareness for the necessity of a modern spatial planning system. The Planning Act 6 that came into force in 2003 regulates spatial planning in Estonia. It defines spatial planning as a democratic and functional long-term planning for spatial development, which coordinates and integrates the development plans of various fields and which, in a balanced manner, takes into account the long-term directions of and the needs for the development of the economic, social, cultural and natural environment. The definition is based on that of the European Regional/ Spatial Planning Charter adopted in In addition to the Planning Act, the Environmental Impact Assessment and Environmental Management System Act 7 regulates the assessment of the likely effects of the implementation of plans. There are four types of plans in the Estonian planning system: the national spatial plan8, the county plan, the comprehensive plan (of a rural municipality or a city) and the detailed plan. All Estonian counties have adopted plans, which are specified by thematic plans. The main objectives of county plans are to define the principles of a sustainable and balanced spatial development, to balance state and local interests, to determine the location of main roads and utility network routes. Thematic county plans Environmental conditions directing settlement and land use were prepared for all counties in In 2005, the Government initiated a thematic county plan regulating the development of social infrastructure in rural communities.9 Development challenges and national strategies The key national strategy for developing economic competitiveness is The Strategy of Economic Growth and Employment , as the National Lisbon Strategy is called.10 The Strategy s main goal is to in- crease the productivity to the level of 80% of the EU average, the R&D expenditures to 2% of the Gross National Product (GNP) and the employment rate to 70.5%. The most important aim of the Government in the macro-economic policy is to secure the stability and sustainability of the Estonian economy. The improvement of the economic competitiveness most of all requires the enhancement of the export capabilities, the improvement of the employers skills and a more integral development policy. During the last decade, the growth of the Research and Development sector (R&D) has been the fastest in Europe 23% per year on average. The investments into the R&D sector have increased by 3.5 times between 2000 and The overall share of R&D expenditures has grown from 0.6% in 2000 to 1.2% in Yet, in the European comparison, it is still only in the 15th place. The Government has four priorities: (1) increasing the relations between science and enterprises (2) increasing the quality and quantity of human capital employed in the R&D sector (3) reconstructing and building the R&D infrastructure (4) better targeting R&D public sector finances. Two most important directions in the government s entrepreneurship policy are to support companies which invest in R&D and innovations and to build up motivation mechanisms for companies to better include R&D and innovation in their economic activities. The training of managers and specialists plays a key role in these policies. The Government and its ministries have also developed a number of strategies directing the development activities of state agencies to sub-fields of the public sector.12 An Agenda 21 is prepared and approved to provide a more general framework for the sustainable development of the country.13 Each county, local municipality and many regional and local organisations have their own development strategies and plans as well. Although the business environment in Estonia is flexible and supportive the World Bank analysis ranks the Estonian business

5 Informationen zur Raumentwicklung Heft 8/ environment on the 22nd place compared with 181 countries and on the 8th in the EU a lot could be done to make state regulations more business-friendly, to apply more e-services and to improve transport and communication infrastructures. In terms of energy supply, Estonia is quite independent. Approximately 75% of energy is domestically produced. The main source of energy is oil shale, which is increasingly assisted by wood and peat. One of the most problematic dimensions is the environmental sustainability of the Estonian energy system the use of fossil mines and losses in the transportation of electric energy. The share of renewable sources in energy is 18% and the target for % is realistic. One specific method for reducing energy consumption and increasing sustainability is the development of environmentally friendly transportation. Security in the energy supply should be achieved by Estonia s better integration into the European electric network (a second cable to Finland; investments in the main electric lines), cooperation in the field of nuclear power (Finland or Lithuania), investments into coproduction (heat and electric energy) power plants operating mainly on local mineral resources. The importance of wind energy has grown during the last decade as well. The three dimensions in the Estonian energy policy include the security of energy supply, the competitiveness of energy costs and the environmental impact of energy production, transmission and use. The discussions on the nuclear energy production were initiated: one possible scenario includes the construction of a nuclear power plant in Estonia. Implementing flexicurity principles in the labour market under conditions of a fast unemployment growth during the last year is a big challenge for the Government. Along with regulation changes, the improvement of labour skills and providing timely training possibilities are the key targets. The overall educational level of the Estonian population is good. The share of people aged years with at least a secondary education is 89% compared with 70% of the EU average. Yet, the significant share of workers with low qualifications for their job means additional costs for businesses and it is a serious obstacle for implementing new technologies and increasing productivity. 573 Increasing the share of vocational education, technological specialties in universities and the number of students finalising their studies with PhD degree comprise the main policy line for the upcoming years. One of the challenges of the next few years is to increase the social dimension in the society. Primarily, it is related to ensuring state expenditure in education, health care and social protection. Quality human capital becomes an increasingly important national success factor people s ability to learn, receptiveness to innovation, creativity and care for fellow citizens. In recent years, there has been a great leap towards becoming a civil society that is characterised by the citizens active participation in local and national decision-making. One of the examples for this is a wide usage of eservices and the accessibility of info-communication in daily life. In Estonia s aspirations towards becoming a knowledge-based society it is important to become more open, to re-evaluate the culture and its related factors in the modern context and to offer a quality environment for implementing creative ideas to make Estonia a better place. 2.2 Latvia Basic characteristics and economic profile Latvia is centrally located between the two other Baltic States. The mostly plain landscape is largely covered by forests. Sand beaches (352 km) along the coast and pine forests are some of the natural treasuries of the country. The population is characterised by ethnic and religious diversity. One third of the population is concentrated in the capital of Riga. Latvia has experienced extraordinarily high economic growth rates since 2000 but is heavily affected by the current financial and economic crisis. The economy is dominated by the service sector 74% of gross value added in 2008 and by micro and small industrial enterprises. The processing industry accounts for 11% of the GDP. Wood (23% of total value in 2007), metals (15%), machinery (11%), prepared foodstuffs (8%) products of the chemical industry (7%) and textiles (7%) are the main export goods.

6 574 Nerijus Blažauskas, Gennady Fedorov, Natalia Klimenko, Laila Kule, Rivo Noorkõiv, Dmitri Semenkevich: Potentials of the East Baltic States, Russia and Belarus Natural treasures in need of utilisation with higher economical value Drawing on multi-ethnic wealth while maintaining identity Latvia, as other northern countries, is extensively covered with forests (50.4% of the land area in ). The forested areas have more than doubled compared to 1923 as a consequence of the shrinkage of agricultural activities.15 Wood and other natural re sources need to be utilised in accordance with the national development and with sectoral policies producing higher added value and in providing more local jobs. Other natural resources with high economic potential are building materials, peat, mineral water and mud for spa development. Wood is used not only in manufacturing but also as local and household energy resource and accounts for 23.3% of the total energy consumption. The energy balance of the country is, however, negative as there are not enough fossil resources which can be economically used at current prices. 70.9% of the total energy consumed in 2007 were imported from neighbouring countries, mainly the Russian Federation.16 From this volume a half was natural gas of which 80% are used in the Riga region. Hydroelectric power stations produce 4.7% of the total energy consumption. It is widely agreed that the use of water energy resources cannot be extended. In 2007, wind energy gave only billion kwh however, there are plans to increase the production. Most of the natural and landscape values of Latvia are today covered by the protected area system which comprises 32.6% of all land properties registered by the Latvian Land Survey in A strict protection of the sea coast, of other large water bodies, the public ownership of forest lands (approximately one half is state forests) as well as the legal protection of agricultural land ensure sufficient green and open space in Latvia, although no national spatial development plan has been adopted yet. The major problem for the Latvian spatial development is the deficiency of a national level coordination of sectoral plans and programmes, particularly transport and other public investments and the provision of public services. Improvements of the spatial planning system are under preparation, in order to make it more efficient, result-oriented and supportive to the economic development while at the same time being able to preserve nature and cultural values by respective control mechanisms and public involvement.18 The country has been characterised as being multicultural for long time. However, its ethnic structure had changed after fifty years of having formed part of the Soviet Union. Latvian is the official language and the number of people using it is increasing due to the national policy; Russian is still the second mostly spoken language. Education is provided at all levels in Latvian and up to the secondary level in Russian and other minority languages. The largest ethnic groups Latvians (59.2% of the total population in 2008), Russians (28.0%) and other Slavic nations (Belarusians 3.7%, Ukrainians 2.5%, Poles 2.4%) are represented by many political and social groupings including various religious groups. Latvia is a meeting place for Lutheran, Catholic and Orthodox Christians and this ethnic and religious diversity is a cultural and social potential that needs to be explored for development. The history and current social development of Latvia cannot be understood if the traditional minorities of Baltic Germans (0.2% of the total population in 2008), Jewish (0.5%), Roma (0.4%) as well as the presence of neighbouring nations Lithuanians (1.3%) and Estonians (0.1%) are not taken into account. Former Latvian citizens Latvians, Germans and Jewish which went into the diaspora as a consequence of the Second World War and of the Soviet occupation, have influenced the current development through aid, investment and cultural cooperation. After 1991, due to the return of ethnic Russians and military personal and the lower economic and social development in comparison with Western European countries, there were comparably high emigration rates in Latvia.19 Those tendencies have increased the share of the Latvian population but the still decreasing population also leads to inefficiencies of infrastructure and losses of skilled labour. Maintaining a prospective economic development path Since the 1990s, Latvia s economic and social life underwent critical changes as a consequence of the collapse of the Soviet Union, of efforts to re-establish the national independence and to be integrated into the European Union and global organizations. During a short period of time, structural

7 Informationen zur Raumentwicklung Heft 8/ reforms have changed the structure of economic sectors and ownership groups. Today the country s economy is dominated by the service sector (more than 63% of the total employment and 74.2% of the GDP in 2008) and by small and micro-private enterprises. The share of the gross value added has been gradually changed from the dominance of the public sector to the dominance of the private sector (74% in 2007). 56% of land properties in the land register are owned or used by physical persons, 8.8% by juridical persons, 2.6% by local municipalities, 28.1% by the state, 0.2% by mixed public-private ownerships while the rest remains to be defined in the final stage of the land reform. These are only a few results of the reforms undertaken since the 1990s besides other social and economic transformations like privatisation, denationalisation, environmental reforms, restoration of the juridical system, implementation of human rights, democratisation, decolonisation, demilitarization, decentralisation and local mobilisation. The financial crisis of brought new challenges to the Baltic States and particularly to Latvia, which, by rescuing the largest local private bank in the country and among Baltic States, created deficits in the national budget. To rescue the country from unfavourable economic development tendencies characterised by the decrease of the GDP (-4.6% in and expected to further decrease in 2009), the Latvian national government is currently working on new institutional reforms. Optimism for success is based on the country s recent history. The economic collapse (characterized for instance in 1995 by a fall of the GDP to 49% of the 1990 level) was followed by a high economic growth of the GDP by 226.7% between 1995 and 2008 as a result of the structural reforms and the mobilisation of the society and of administrations at all levels. This time, institutional changes are directed towards more efficient public services, anti-corruption measures and a more targeted support for export and high value added industries. Paying attention to the unbalanced settlement structure The Latvian settlement structure poses particular challenges to the further development. One third of the population is concentrated in the capital city of Riga and a half in the capital region, which is an ad- 575 vantage for global competition but also an obstacle to the full exploitation of resources. A high level of economic growth (8.8% of the GDP per year on average in ) in the country was achieved by supremacy of the Riga capital region, whilst the nonmetropolitan regions Kurzeme, Vidzeme, Zemgale and Latgale are not able to compete with that in economic, social and cultural respect. The functional region of Riga which comprises Jurmala, Jelgava and Ogre cities and other smaller satellite towns and urban villages has a high development potential as transport hub (port, airport and railway and road junction), multi-cultural, education and science centre of the country. This is supplemented by beaches of the Baltic Sea, lakes, the estuaries of three large rivers, protected pine forests of high recreation value, two national parks and other protected areas including wetlands and even highmoors in close proximity to the city border. Other areas in Latvian periphery might need both assistance and a better use of untapped potentials. For instance the Latgale region with Daugavpils as the second largest Latvian city might better draw on its potentials as a multinational cross-cultural centre. Parts of Zemgale und Vidzeme regions are in the daily commuting area of Riga city, thus benefiting from additional jobs for its inhabitants. Other areas could make a better use of the sea coast (Kurzeme planning region) and other tourist potentials (Vidzeme and Latgale planning region). Kurzeme in addition could also gain from advancing the functions of Liepaja and Ventspils as large port cites beside Riga. The Latgale and Zemgale regions have railway line junctions relevant for goods transit from the east to the west. Moreover, peripheral regions beside the capital region could profit from the diversification of agriculture, the development of more value added industry functions, of creative industries and other services. Further challenges Analogous to other new Member States, Latvia has the ambition to reach the EU average level of social and economic wealth. This is indicated in the Latvian National Development Plan which determines the main development directions and was influenced by notions of the ESDP and of the EU Territorial Agenda. The National Development Plan focuses on human

8 576 Nerijus Blažauskas, Gennady Fedorov, Natalia Klimenko, Laila Kule, Rivo Noorkõiv, Dmitri Semenkevich: Potentials of the East Baltic States, Russia and Belarus resources, quality of life, social integration, education, science and technological improvements and on the flexibility of industries in Latvia irrespective of their regional distribution. The plan foresees to create a favourable environment for entrepreneurship and human life by regional development measures, infrastructure and service improvements. The latter is focused on energy supply, ITC, public utilities and multimodal, integrated, accessible and safe transportation systems. The polycentric development, Riga as a metropolis and the competitiveness of regions are three interconnected directions for supporting regional development in Latvia in accordance with the National Development Plan. The polycentric development is understood as a network of cities and towns, a rural-urban partnership, a strengthening of regional capacities and local administrations, the usage of distinctive features and values of localities and regions and the support of least developed areas. For Riga City especially the functions for the Baltic Sea Region will be strengthened. 2.3 Lithuania Basic characteristics and economic profile Lithuania is a Baltic state, once the largest European medieval state22 with an exclusive history and geopolitical situation. The earliest known mention of the name Lithuania is found in the German (Teutonic) chronicles of The country did not adopt Christianity until 1387 and was the last pagan country in Europe. Due to the historically determined ambitions of an independent and powerful country, Lithuania was the bastion for eastern invasions to the west as well as a trade node between eastern and western markets. The economic structure is nowadays dominated by the service sector. The main sectors of the processing industry are machine building, food, textile, chemical and electrical industry with a growing share of biotechnology, mechatronics and information technology branches. Other important branches are transport, building and financial services as well as tourism. The ethnic composition is determined by Lithuanians (more than 80%) with main Polish and Russian minorities. The settlement structure is well balanced and polycentric with 5 cities above 100,000 inhabit- ants (including the capital of Vilnius with more than 500,000). Although there are no mountains or great forests, the country s beauty is made up by the diversity of its landscape. Well known for its sandy beaches and amber coast if the Curonian Spit. Lithuania was the first republic to break away from the Soviet Union at the time of its collapse in Besides the natural heritage, the rich historic and cultural heritage represents an extraordinary development potential. Economic progress notwithstanding difficult starting conditions After the collapse of the Soviet Union, a big group of countries emerged with a new category of economies in transition. Very fast and extensive changes in the social and administrative structure as well as in the economy were the main features of these countries including Lithuania. Lithuania, as other former Soviet countries, has inherited an economy sector with a particularly inefficient and irrational consumption of energy and other natural resources. After having joined the EU, Lithuania was one of the fastest developing countries among the Member States with an annual GDP growth rate of more than 7% having reached the peak in 2007 (8.7% of the yearly GDP growth and a GDP per capita of 11,308 USD). Recently, the world financial crisis has dramatically affected the economic development, especially the building trade rates. As a consequence, the GDP has only grown by 5.3% in 2008 and the prognosis for 2009 is only a growth of 2%. Nowadays, the main trade is oriented towards the EU markets and only 1/3 of the trade share is related to the former Soviet countries, especially Ukraine, Georgia, Moldova. Exports to the western countries mainly included textile yarn, fabrics and articles of apparel and clothing accessories, telecommunications and power generating machinery. Energy supply dominated by nuclear power Lithuania s energy consumption is determined by a relict of the former Soviet infrastructure the old block type houses with a very poor thermal behaviour of most buildings and a physically outdated heat supply is the reason why in Lithuania the energy

9 Informationen zur Raumentwicklung Heft 8/ consumption efficiency for household purposes is 1.8 times lower than in most of the EU countries. The intensive land reclamation during the period of collective farming has destroyed large areas of natural vegetation and seedlings at homesteads have caused severe damage to the Lithuanian landscape and biodiversity. Large quantities of radioactive waste and spent nuclear fuel are accumulated at the Ignalina Nuclear Power Plant. No financial resources are allocated for their safe underground disposal so far. In Lithuania, approximately 90% of the primary energy is imported from a single supplier. There is a strong dependence on primary energy resources mainly imported from international energy markets. These are only a few examples of the Soviet heritage system. New technologies and standards had to be introduced and applied after the restoration of independence in March 1990, in order to turn the development of the country towards efficient economy and social prosperity. As a consequence, the National Strategy of Sustainable Development23 was approved by the Government of the Republic of Lithuania on 11th September The Strategy has to be implemented via the adoption of main principles of sustainable development in the regional development plans. Favourable preconditions for the systematic protection of landscape and biodiversity were also created. Thus, a Biodiversity and Conservation and Action Plan24 was approved in The energy supply and traffic systems have been modernized and as a result the emission of environmental pollutants during the first decade of independence has decreased. However, at the same time the economic and social differentiation of the regions has increased. The reduction of the difference of living standards and simultaneously the preservation of the regional identity are among the priorities for the sustainable development of Lithuania. Transport and roads - an important asset The strategic importance of Lithuania within the Baltic Sea Region is confirmed by a range of historically determined functions in transport (connecting Eastern and Western European markets), by culture and knowledge transfer. 577 Lithuania has always been known for its well developed road network in the Soviet Union. Today, following traditions, several international priority corridors of the Trans-European Transport Network (adopted in Crete, 1994, and Helsinki, 1997) cross Lithuania. These are: Crete I multimodal motorway Via Baltica (Helsinki Tallinn Riga Kaunas-Warsaw) and Crete I A multimodal motorway Via Hanseatica (Riga-Kaliningrad-Gdansk), road and rail corridor IX (Helsinki Kiev Bucharest Alexandrou polis) with the IXB and IXD arms. More then 50% of the total amount of cargo and almost 98% of the passenger traffic is roadbased. Klaipeda Seaport is one of the most important water transport hubs in the south-eastern Baltic. It is the northernmost ice-free port on the eastern coast of the Baltic Sea. Due to the favourable geopolitical situation, Klaipeda Seaport has become a very important economic centre and produces 4-5% of Lithuanian s GDP. Employing the natural and cultural heritage The coastal zone of Lithuania takes an important role in the overall development. The huge environmental/recreational capacity (the unique Curonian Spit UNESCO World Heritage Site; coastal dunes, lagoon, sandy beaches; the Nemunas delta area with authentic settlements and water channels, parks and wetlands), the big economic potential (Klaipeda State Seaport, offshore wind energy development, recreational and commercial fishing and sailing) as well as the cultural and historical peculiarity should be properly employed. The same is true for important sites of cultural heritage in other parts of the country, such as Trakai Historical National Park and the World Heritage Site of Vilnius Historic Centre. Further challenges The main ambition of the Lithuanian development remains unchanged to reach the average EU level in the fields of social and economic development, efficiency of usage of natural, human and cultural resources by The Lithuanian transport and communications sector, which is being rapidly integrated into the EU transport network, does not only face new opportunities but also growing competition. A further mod-

10 578 Nerijus Blažauskas, Gennady Fedorov, Natalia Klimenko, Laila Kule, Rivo Noorkõiv, Dmitri Semenkevich: Potentials of the East Baltic States, Russia and Belarus ernisation of the transport infrastructure, the promotion of multimodal transport, the establishment of logistics centres and of new transport links of Klaipeda Seaport with neighbouring countries via pan-european traffic corridors will be necessary. The European track railway project Rail Baltica is vital for further development. It will link Poland, Lithuania, Latvia, Estonia and Finland, create conditions for modern cargo and passenger carriage and strengthen the integration of this region into the railway network of all EU member states. The further Klaipeda Seaport modernization and building of a new, deep, island-based seaport (avant-port) should foster and satisfy the growing demand of the passenger and cargo traffic through Klaipeda. Additionally, recognizing that the Lithuanian household sector consumes more than one third of the final energy production, the modernization of the household sector should considerably improve the energy consumption as well as the efficiency of the use of natural resources. As a consequence, this will also reduce negative environmental impacts. The considerably growing use of renewable energy sources together with optimised energy consumption is also a political challenge. Even though a range of strategies, programmes and plans, such as the National Waste Management Strategy, the National Energy Efficiency Programme, the Biodiversity Conservation Strategy and Action Plan, the Agricultural Development Strategy and others have been prepared, their quality and implementation efficiency still needs to be improved. The main sustainable development provisions of Lithuania should not only be legitimized in the Sustainable Development Strategy but also integrated into special sectoral plans, programmes, regional and municipal planning documents and other relevant legal acts. The Law on Regional Development25 adopted by Seimas of the Republic of Lithuania on July 20, 2000 and the Master Plan of the Republic of Lithuania provide a good background for the implementation of a territorially differentiated regional policy, the improvement of economic and social conditions in least developed regions, the protection of nature and cultural values, a rational use of local resources. The strategic planning implemented via spatial planning documents seems to be the only way of efficiently implementing the main principles of sustainable development.26 The planning procedure of the Republic of Lithuania is regulated by the Law of Territory Planning issued in 1995 and by post-statutory legal acts. According to the Law of Territory Planning27, the general plans for the whole territory of Lithuania, for counties, municipalities and their parts are obligatory planning documents in order to ensure the long-term sustainable development and well-founded use of area, finances and other resources. The General Plan of the Territory of the Republic of Lithuania28 was approved by Seimas of the Lithuania in Based on that, all kinds of (general, special and detailed) territorial planning documents on all levels of administration need to be prepared or existing ones revised. This is especially valid for least developed municipalities, cities and urbanized zones. New plans and development projects also need to be initiated for the frontier regions Lithuania-Poland, Lithuania-Latvia-Belarus and LithuaniaRussia (Kaliningrad region). The above mentioned description is valid mainly on terrestrial planning. Today, when the pressure on the Baltic Sea increases due to the growing shipping intensity, cargo and passenger traffic, the offshore infrastructure and wind energy development, maritime planning should be introduced. Lithuania has not yet adopted a formal procedure for maritime spatial planning for territorial waters. This will, however, be triggered through projects of the Baltic Sea Region programme where Lithuania is involved. 2.4 Belarus neighbour and partner of the Baltic Sea Region Basic characteristics and economic profile The Republic of Belarus has an open type of economy. The country experienced a considerable economic growth between 2000 and 2007, leading to an increase of GDP per capita of 90,8 % in this period. At present, the shares of export and import in the GDP are higher than 50% and further growing. They show the considerable influence of foreign trade on the country. Belarus is a country with a specific profile in industry, transport, agriculture and culture. In general, the specialization of the Bela-

11 Informationen zur Raumentwicklung Heft 8/ rusian industry is on chemical production, track production and machinery, medical and optical equipment production. One of the cultural priorities is the development of agro-ecotourism. Belarus will specialize on the energy export in nearby regions after a nuclear energy station will have been constructed. The trade volumes of the Republic of Belarus with different European countries vary largely. The main partners of Belarus are the Russian Federation, Germany and Ukraine. For instance, the rate of Belarusian exports to EU countries is 44.2% (of the total export volume), 32.1% to Russia. Baltic Sea countries, except for Russia and Germany, have low trade flows with Belarus. Linking east and west and connecting Baltic Sea and Eastern European markets On the global scale, countries of all continents have economic relationships with Belarus. A considerable share of goods on the Eurasian continent passes Belarus. Therefore, transport links including highways and railways play an important role for the spatial development of the Republic of Belarus. In other words, there is a huge potential for the development of transport links. At present, only the E30 highway meets European technical standards; the other roads of trans-european transport corridors 9 and 9B have to be developed. The railways of the trans-european transport corridors network on the territory of the Republic of Belarus are not properly used, which in particular bears on the passenger links. So far, it is planned to build a high-speed railway line that would link large EU cities with Belarus and Russia. In the territorial plans for regional development of the Republic of Belarus, the territories for the high-speed railway line as well as for the establishment of modern passenger terminals in cities such as Brest, Baranovichi, Minsk, Orsha and at the national airport Minsk are reserved. An important role for external trade operations between the Republic of Belarus and, in particular, Scandinavian countries, is played by the seaports of Lithuania, Latvia, Poland and the Kaliningrad region of Russia. They have different levels of development and, accordingly, different levels of competitiveness. Belarus is interested in extending its 579 potential as it will expand the options for the transit of goods and raw materials. In the structure of goods export, the prevalent type is labour-intensive industrial production. The labour force potential is concentrated in large and medium-sized urban settlements of the country. Most of them have good access to the transport infrastructure. A number of joint enterprises with an international capital stock, among them firms from Baltic Sea countries, are established in the free economic zones of Minsk, Brest, Grodno and Vitebsk. Many medium-sized and small urban settlements, which are located at well-developed transport links, have a further potential for the development of joint industrial enterprises within the Baltic Sea Region (see Figure). An important energy supplier and energy transit country The Republic of Belarus has energetic potential and plays an important role in producing energy in the Baltic Sea Region. Thus, Belarus proved to be a reliable partner for the Russian gas transport to the European Union. According to official statistics, the average annual volume of gas transport across the territory of Belarus accounts for 50 billion m³. The monthly export of electrical energy from the Republic of Belarus to Poland from the Bereza Water-Power Plant consists of approximately 70 million kwh. The Belarusian export of electrical power to Poland could reach 800 million to one billion kwh. After the shutdown of the first unit of the Ignalina Nuclear Power Station in Lithuania in 2004, the need for electrical energy imports arose in the Baltic Sea Region. In the Ostrovets district in Belarus it is planned to build a new nuclear power station that could open new perspectives for enlarging the volume of energy export to Poland and other Baltic countries. The economic expediency of constructing a separate electric line of 330 kv to export electricity to Latvia is now being considered. Unique cultural heritage a source for enhanced tourism In 1991, Belarus gained state independence. However, the history of Belarus is centuriesold. During the wars, in particular in the period of World War II, large shares of the cultural heritage were lost % of the

12 580 Nerijus Blažauskas, Gennady Fedorov, Natalia Klimenko, Laila Kule, Rivo Noorkõiv, Dmitri Semenkevich: Potentials of the East Baltic States, Russia and Belarus Settlements-network in Belarus bonds with western traditions, i.e. the medieval art as well as with eastern traditions. Architects, engineers, artists of different nations such as Italians, Flemings, the French, Belgians, the Irish, the Polish, Lithuanians and Russians have been working in Belarus during history. Some impressive cathedrals, castles and fortresses were saved in a varying degree. For instance, the cathedrals of the 15 16th century and lots of wooden churches and other places have remained until nowadays. The magnificent Cathedral of St. Sophia was built in Polotsk in the 11th century. The Belarusian Baroque is represented by palace ensembles in Nesvizh, Ruzhani, Golshani, by cathedrals and cloisters in Grodno, by the Nikolsky abbey and the Borisoglebskaya church in Mogilev, by the St. Andrew Catholic church, by the Cathedral of Bernardines in Slonim, etc. Remarkable monuments of Classicism such as the palaces in Gomel, Zhilichi, Snov, the Catholic church of St. Stanislav in Mogilev, the Peter and Paul Cathedral in Gomel have remained. urban settlements were destroyed. Nevertheless, many urban ensembles, ancient fortresses and castles, town halls and cathedrals and authentic buildings remained demonstrating the development history of the country. In the Belarusian culture, Roman and Gothic, Baroque and Classicism, Modern and Eclectic styles fused together. Since the 14th century, the territory of Belarus had a central place in the Grand Duchy of Lithuania and since the 16th century the territory of the country was included into the Polish-Lithuanian Commonwealth. In the same century, Catholicism was disseminated from the territory of Belarus. Since the end of the 18th century, the territory of Belarus belonged to the Russian Empire. In the 20th century, the Belarusian Soviet Socialist Republic formed part of the USSR. All these factors have influenced the Belarusian architecture and culture. They have close The cultural heritage of historic towns therefore has a potential for international tourism development as well as for tourist routes within the Baltic Sea Region. In order to make better use of this potential, it is necessary to develop the infrastructure of those towns: hotels, transport, restaurants, bank service, engineering systems, etc. Natural heritage an excellent environment for business and recreation The Republic of Belarus has a high nature potential. Belarus is considered to be a green country. The share of forests consists of 40% of the country s territory. About 10% of the territory are intact natural areas. These territories have a high recreational potential. The creation of ecological network is a pan-european activity and Belarus is an active partner there. Two settlements (Naroch and Braslav) are centres of national nature parks. Those areas are intensively used for recreation by Belarusians as well as by foreign tourists. Another example of using ecological structures for tourism development is the project of renovation of the Avgustovsky channel which is both a nature element and a mon-

13 Informationen zur Raumentwicklung Heft 8/ ument of engineering art. Its general length is 102 km including 22 km which cross the territory of Belarus. The length of the Avgustovsky channel on the territory of Poland is 80 km. At present, the channel renovation is nearly finished. It is also planned to create tourist and recreational centres around the channel. Drawing on a well-balanced settlement system Beside the centrally located capital and metropolis of Minsk, a number of other potentially high-capacity cities and towns exists in all parts of the country. Those settlements, which are located at the main transport links of the country (transport corridor II) and in the Minsk City zone together with the group of urban settlements of national importance, form the backbone of the settlement system of the country (see map). Those settlements with highest industrial, tourist and natural potentials might act as engines especially for developing the internal functions in Belarus. Further challenges Although Belarus is not a coastal state of the Baltic Sea Region, it is a close neighbour. Belarus has been interested and participated in transnational cooperation on spatial development in the Baltic Sea Region from the very beginning. The involvement in the VASAB cooperation from the outset in the early 1990s later on also led to a participation in the EU-funded transnational cooperation programme in the Baltic Sea Region. The reasons for such activities were not only strong historic and cultural ties (see introduction to this article) but also obvious economic interests in transport, industry, energy supply and tourism. At the same time, countries around the Baltic Sea have recognised the potential for political and economic cooperation with Belarus and the strategic importance of the country to expand cooperation eastward within the Eurasian continent. This potential might also be better explored and exploited through common transnational spatial development projects, where a more intensive participation of partners from Belarus is envisaged Northwest Russia the case of Kaliningrad region Basic characteristics and economic profile The Kaliningrad region is inferior in comparison with the integration opportunities of another Russian region at the Baltic Sea St. Petersburg with the adjacent area of Leningrad oblast (6 million people in total, significant industrial and research potential). The Kaliningrad region does not have such a potential, however, a more advantageous location near potential foreign partners fosters the development of transboundary cooperation. The gross regional product (GRP)29 of Kaliningrad region accounted for 0.4% of the GRP of the Russian Federation) in Compared to 2005, the GRP increased to 126.6%. The largest shares in the GRP of the Kaliningrad region represent wholesale and retail trade, repair of vehicles, motor cycles, domestic articles of personal use (together 19.3%), manufacturing industries (14.1%) and the extraction of minerals (12.7%).30 Despite a considerable growth of the manu facturing industry over the last years, its share in the GRP is decreasing. Among the mineral resources, a specific potential of the region is amber (90% of the estimated world deposits). Other potentials are transport infrastructure (including the only icefree harbour of Russia in the area), fishery as well as the natural heritage of the coastline (including parts of the Curonian Spit) and forests. Given the eventful history, the ongoing restoration of parts of the cultural Settlement and transport system of Kaliningrad region