Regional development in the Jiu Valley, Hunedoara County
Empowering local actors and mobilising local resources
- EC Delegation, Bucharest
Hunedoara county is located in Transylvania, western Romania. At the time of the study, its main industrial sectors were coal mining and metallurgy, both facing serious difficulties. Population was already in significant decline. Jobs were being created in SMEs, but only few in manufacturing activities. Agriculture was largely subsistence-based. Forests constitute an important resource if sustainably managed, and the tourism potential is substantial. The unemployment rate in the county, 13.5% in 1998, mainly stemmed from lay-offs in the mines. Further mine closures, as well as job losses in steel mills, were expected.
A ”West Economic Region Development Concept” had recently been elaborated. This focused on the development of SMEs, rural areas, tourism, services and industry along with the relevant infrastructure and strengthened administrative capacities. A number of suggested projects would impact on the Jiu Valley.
Aiming at the effective use of EU pre-accession funds, the “Green Paper”, published jointly by the Romanian Government and the European Commission in 1997, outlined the directions and priorities which Romanian regional development policy should follow. In this Paper, the Jiu Valley is defined as one characterised by industrial decline. Its geography, history, demography, economy, and social problems are unique in Romania (in 1996, two-thirds of the approximately 63,000 employees worked in the mines). As with all levels of administration in Romania, the financial situation of the municipalities and local administrations was weak. Those funds which are available were channelled primarily towards education, health care and communal services; high subsidies were paid out for heating and electricity.
However, the future needed not be bleak if concerted action was taken by all concerned to
- define a strategy for regional development,
- translate the strategy into realistic and funded individual programmes and projects,
- lobby for support through the regional institutions and with Central Government.
Unemployment was the major problem in the Valley (at the time exceeding 20% and rising fast). This could only be mitigated by a strategy focusing on light industries (for example tool-making) and service-oriented SME (data-processing, mountain tourism). Such enterprises could benefit from the University of Petroşani’s technological expertise and its re-orientation to such fields as business administration and information technology. Appropriate market-oriented support structures and technology-transfer arrangements needed to be put into place. Tourism development requires private and public investments, and marketing strategies.
The relatively favourable location of the Valley, combined with the Law on Unfavourable Zones, was already resulting in numerous Romanian firms from various sectors expressing an interest in investing there. One of the first activities in regional development therefore needed to be a serious, sustained effort to actually get these companies to locate in the Valley. Kienbaum Development Services, Düsseldorf (Germany); with West Midlands Enterprise, Birmingham (UK)