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Baltic Journal of Economic Studies DOI: http://dx.doi.org/10.30525/2256-0742/2017-3-5-6-12
THE INFLUENCE OF INTERNALLY DISPLACED PERSONS ON THE SOCIAL AND ECONOMIC DEVELOPMENT OF REGIONS IN UKRAINE
Inna Arakelova1
Donetsk State University of Management, Ukraine
Abstract. In terms of the issues aggravation concerning internally displaced persons and the disproportions in the social and economic development of regions as a result of the antiterrorist operation in Ukraine, an analysis of social and economic transformations in regional development under the migration processes influence and the search for their overcoming mechanisms becomes relevant. The purpose of the article is to analyse the impact of internally displaced persons flows on the social and economic development of regions in order to improve the regional development mechanisms in Ukraine. The research methodology includes a set of scientific research methods that provide a systematic approach to investigating the impact of internally displaced persons on the social and economic development of Ukrainian regions, theoretical approaches to state regulation of internal migration flows in conditions of decentralization of power and reform of public administration in the country. In the course of investigations, the following methods are used: statistical analysis and synthesis while determining the indicators of the IDPs burden on the regional social and economic systems of Ukraine; analysis while studying the main problems of internally displaced persons and their directions; logical synthesis and synthesis while drawing conclusions. The information base for the study consists of the legislative acts of the Verkhovna Rada of Ukraine, the Decree of the Cabinet of Ministers of Ukraine, statistical and reporting information of the Ministry of Social Policy of Ukraine, development of the UN Agency for Refugees, the UN ReliefWeb Specialized Service for the Coordination of Humanitarian Affairs, Inter-Agency Standing Committee, PROMAN, NGO "Labor and Health Social Initiatives", Ukrainian Helsinki Human Rights Union, research results of domestic and foreign scientists. Results. The article deals with the issues of effective reforming of regional development mechanisms related to solving the internally displaced persons' issues and their impact on social and economic processes in the regions. The internally displaced persons' influence analysis on the regional social and economic systems of Ukraine was conducted. The analysis allowed determining the rating of five regions with a significant load of IDPs and identifying the social and economic system in the region and the acutest elements. Practical implications. The peculiarities of internally displaced persons' migratory flows by regions and their impact analysis on the social and economic development of regions and Ukraine as a whole are to be investigated. Value/originality. The ways of positive social and economic dynamics of regional development enhancement due to the programs and regional development strategies correction, taking into account the resource potential of the IDPs in some areas, are proposed.
Key words: internally displaced persons in Ukraine, social and economic development of regions, regional development strategy, internal migration.
JEL Classification: R23, O15, R28, R12, L50
1. Introduction
The current changes in the social and economic development of individual regions and the country as a whole since 2014 were influenced by the massive internal migration of the population within the country. As a result of the armed conflict in Ukraine, about 4% of Ukraine's population is in the status of "internally displaced persons" (IDPs) and has migrated to other regions of the country.
Corresponding author:
1 Faculty of Economics, Donetsk State University of Management. E-mail: [email protected] https://orcid.org/0000-0001-9582-793X
On the basis thereof, there was an aggravation of problems in the social and economic spheres of the regions that added to the imbalances growth in regional development, especially in the eastern regions of Ukraine (Donetsk, Luhansk, Dnipropetrovsk, Zaporizhzhia, Kharkiv regions). A particular importance is paid to the following negative phenomena of regional development: the destruction of housing stock, social infrastructure and life support systems; the loss of real
and other property by population, the complication with providing the population of the eastern regions with the necessary utilities, medical care, social and educational services; economic decline and rising unemployment due to the enterprises closure, the breakdown of economic ties; the breakdown of the financial, banking, transport infrastructure and communications and communications systems; low level of external and internal demand owing to inhibition of economic growth; decrease in the of purchasing power level of the population as a result of reduction of real incomes; lower quality of life; the population growth in the territorial communities of the eastern regions of Ukraine in connection with internal displacement; a sharp environment deterioration, complication of the environmental situation in the eastern regions; ineffective information policy (Yedynyj Veb-portal orhaniv vykonavchoi vlady «Uriadovyj portal», 2017).
Issues of IDPs adaptation in the conditions of new cities of residence, their integration into the region's social life and determination of the region's possibilities regarding the use of the IDPs potential for further development are still urgent ones.
The process of regional development and implementation of the regional development strategies of individual regions became complicated due to the difficult financial and economic situation, and the priority task of the regional policy was the creation of an effective and operative system of IDPs social protection and their immediate problems solution. Therefore, the issue of adherence to the IDPs principles in Ukraine as a whole and in certain regions, the definition of the IDPs problems and ways of their solution, as well as the analysis of the IDPs flows' impact on the regional development of Ukraine in the process of reform, is relevant.
The main difficulties of the state and regional policies were researched by the Ukrainian scientists, National Strategic Planning Institute scholars (Vlasiuk, 2016; Horbulin, Vlasiuk, Libanova, Liashenko, 2015; Chechel, Khlobystov, Orlova, 2017; Novikova, 2017), who identified the peculiarities and dynamics of the regions' development, development factors of socioeconomic processes in the regions under the conditions of reform, investigated the risks and resource loss of the occupied territories potential, highlighted the IDPs social and economic problems. Individual scholars (Ryndzak, 2017; Yevdokymov, Shymanska, 2017; Nahorniak, 2016; Dustmann, Vasiljeva, Damm, 2016; Betts, Bloom, Kaplan, Omata, 2014) researched the international experience of internal migration of the population, identified the typical IDPs problems and certain mechanisms of the IDPs right execution and state support in various countries.
Further development is needed for identifying the risks from internally displaced people flows for regions' socio-economic development, for adjusting the state
strategic programs of regional development under the reform conditions, for further IDPs integration to the social life of the region, and for the formation of effective state mechanisms for solving the IDPs problems in Ukraine. The presented unresolved difficulties while implementing the modern state regional policy determine the purpose of the study.
2. The social and economic development of the Ukrainian regions
According to the various indicators levels of socioeconomic development, Ukraine lags far behind most European countries and during 2015-2016 the situation underwent significant changes. The entire social and economic sphere of Ukraine is in the process of reforming in the conditions of European integration processes. Priorities for government decentralization and public administration reform are defined in the main valid documents of a strategic nature, i.e. the Strategy for Sustainable Development "Ukraine 2020", approved by the Decree of the President of Ukraine on January 12th, 2015, and the State Strategy for Regional Development for the period up to 2020, approved by the Cabinet of Ministers of Ukraine dated August 6th, 2014. The conceptual foundations of the reform have been established by the Concept of Reform of Local Self-Government and Territorial Organization of Power of Ukraine (approved by the Decree of the Cabinet of Ministers of Ukraine dated April 1st, 2014). The regional development issues, in terms of the proper responses absence, will grow into threats to regional stability.
Currently, the critical risks for Ukraine's regional development are the inability to develop own potential at the expense of existing tools and sources of resources, the problem of full-fledged attraction of necessary resources, the destruction of economic ties within the country, the change of resource and migration flows that affect the effectiveness of the regional strategy and state social development implementation (Vlasiuk, 2016; Horbulin, Vlasiuk, Libanova, Liashenko, 2015).
The presence of regional stark comparison asymmetries in the regions' development in Ukraine (different quality of economic and social development planning at the regional level, different levels of urbanization, different levels of income per capita, different levels of agricultural land use efficiency, different state of human development indicators) was negatively affected by massive internal population migration in Ukraine since 2014.
The social and economic development of the Ukrainian regions in 2015 - early 2016 showed mixed dynamics. The beginning of 2016 was characterized by more positive tendencies in comparison with 2015. One could observe the gradual restoration of certain development indicators or slowdown oftheir rates, which testified to the regions stabilization tendencies. Positive
trends could be observed in the spheres of industrial production, construction works, capital investment, retail trade. At the same time, the situation in the regions was affected by a number of destabilizing factors (the crisis in the socio-economic sphere, declining incomes, slow steps towards entering EU markets, external aggression that had been going on for a third consecutive year), which had an impact on development indicators. That situation was conditioned by the fact that in early 2016, the socio-economic development of most regions in Ukraine was characterized by a continued reduction of direct foreign investments, reduced agricultural output, risen unemployment, increased social tensions, and significant wage indebtedness. Those indicators are interrelated: the general macroeconomic instability increases the unattractiveness of the investment climate and the outflow of foreign investment, which affects the level of production and the state of the labour market and payment of wages and forms negative trends in the regional economic development (Vlasiuk, 2016; Horbulin, Vlasiuk, Libanova, Liashenko, 2015).
3. Basic problems of the massive internal migration of the population in Ukraine
The massive internal migration of the population within the country is connected with a number of burdens that arise both within the IDPs themselves and in society as a whole. At this stage, it is important to
study the problems and needs (primary and secondary) of internally displaced persons, as well as the services provided to them, the level of satisfaction with these services, the definition of a trust credit to state and nonstate institutions, services, IDPs organizations, their effectiveness in providing services to these persons. Solving the problem of increasing the effectiveness of the social protection of the population requires an active regional policy implementation by the state (Nahorniak, 2016).
Based on analytical studies by the UN Refugee Agency (United Nations Refugee Agency, 2014), the UN ReliefWeb Specialized Service (ReliefWeb, 2017), Inter Agency Standing Committee (The Global Shelter Cluster, 2016), PROMAN Consortium, (Ministerstvo sotsialnoi polityky Ukrainy, 2017), a social survey conducted by the NGO "Labor and Health Social Initiatives" (MHO «Sotsialni initsiatyvy z okhorony pratsi ta zdorovia», 2015), the research ofthe Ukrainian-Helsinki Human Rights Union (Ukrainska Helsinska spilka z prav liudyny, 2017), it is advisable to identify the problems regarding the work with Ukrainian IDPs at the state level and the directions for their solution (Table 1).
A particular attention ought to be paid to the results of the internally displaced persons' needs and services assessment in Ukraine, which was conducted by the NGO "Labor and Health Social Initiatives". In the study,
Table 1
Issues of IDPs in Ukraine
Issue Direction for solving the issue (2015-2016)
Uncertainty about the legal status of the IDPs and the absence of a nationwide support program The Law of Ukraine "On Guaranteeing of Rights and Freedoms of Internally Displaced Persons" provided the IDPs registration procedure and the creation of a Single Information Database for this population group (Verkhovna Rada of Ukraine, 2017). It ensured IDPs with the right to work, including a simplified system of individuals' registration and entities, obtaining the status of the unemployed, pensions, social insurance, social services, training, voting rights, conditions for temporary or prolonged stay, including the favourable credit facilities for construction and housing, protection against discrimination, the right to voluntarily return to places of residence.
Low level of meeting the IDPs needs The IDPs welfare level was generally lower than that of the local population, but the risk of IDPs poverty was not significantly different from that of the local population, and even for small households it was slightly lower.
Short-term delivery of medical, legal, administrative, psychosocial services 59.6 thousand of internally displaced families, which were raising 55.4 thousand children, received social services and assistance in 2016 (Ministerstvo sotsialnoi polityky Ukrainy, 2017). The Resource Centre, which carried out analytical work and advocacy in order to improve the legal framework, also provided direct humanitarian and counselling assistance to internally displaced persons in places of compact residence. The Resource Centre received support from the United Nations Development Program in Ukraine. Simplified procedures and quotas for children with refugee status or additional protection for compiling Ukrainian state exams (ZNO) were introduced. Together with other international partners, the inclusion of tolerance lessons and educational materials in kindergartens and schools' curriculum was promoted.
Discrimination, administrative and bureaucratic obstacles to the IDPs rights execution Almost 18% of IDPs were discriminated on the territory of Ukraine. Only 6% voted in the local elections in 2015. In October parliamentary elections of 2014, all IDs (about 500,000 as of October 2014) did not have the right to elect a member of the Verkhovna Rada of Ukraine in the majority constituency for a new residence. In October 2015, at the local elections, 1,345,100 displaced persons did not gain their rights (MHO «Sotsialni initsiatyvy z okhorony pratsi ta zdorovia», 2015). In order to inform the IDPs of their rights and needs, various training, roundtables, meetings with representatives of the non-governmental sector supported by international donors were held.
Accommodation issues The Government established simplified conditions for the possibility of obtaining shelter for permanent use for war invalids, members of their families and displaced families or victims, which enabled them to be in a housing list. In March 2017, Oschadbank introduced a program of IDPs crediting for the housing purchase within 90% of its value for up to 30 years at 20% per annum. At the same time, lending conditions do not match the IDPs possibilities (Ministerstvo sotsialnoi polityky Ukrainy, 2017).
Lack of employment prospects During 2016, 24.3 thousand unemployed from the IDPs category used the services of the state employment service (Ministerstvo sotsialnoi polityky Ukrainy, 2017). A comprehensive informational and explanatory work was provided to internally displaced persons regarding the conditions for registration, re-registration at the State Employment Service and the provision of social services in employment support.
Dependence on external financial assistance The work and coordination of international organizations took place on the basis of the Strategic Humanitarian Response Plan, which assessed the situation with regard to IDs and the resources to be recruited. The analysis was based on a cluster approach. The obstacle to the provision of humanitarian assistance was regulatory acts, according to which charitable assistance from international organizations was taxed at a 15% tax on personal incomes. The need to abolish that rule was highlighted by most international donors who did not see the logic of taxing humanitarian aid for IDPs. Appropriate changes were adopted by the Ukrainian parliament on March 2nd, 2015.
the IDPs identified the needs that were satisfied at a high or sufficient level: humanitarian - 51.2%, medical -45.8%, residential - 36.6%, psychological - 32.8%, social - 30.5%, cultural - 28.3%, financial - 27.2%, legal - 20.7%, political - 12.4% (MHO «Sotsialni initsiatyvy z okhorony pratsi ta zdorovia», 2015). All these needs should be realized with the support of state, regional, and local programs on IDPs. Therefore, it is advisable to carry out an analysis of the IDPs in a regional context for a more detailed study of the needs and problems and the determination of the IDPs flows' impact on the socio-economic development of regions.
4. Analysis of the IDPs burden on regional socio-economic systems
There are international organizations and think tanks in the world that successfully use different methods for analysing and monitoring social problems, public
opinion, demographic trends, refugee and internally displaced persons (Statista, Pew, International Organization for Migration (IOM)).
The author carried out an analysis of the IDPs burden on regional socio-economic systems of Ukraine according to individual indicators of IOM (Table 2):
1) the number of IDPs per 1000 population;
2) the number of IDPs for 1000 square km of territory;
3) the number of IDPs for 1 UAH of gross regional product (GRP) per capita.
The analysis allowed determining the rating of the five regions with a significant IDPs burden (the largest number of internally displaced persons is registered in the Donetsk, Luhansk, Kharkiv, Zaporizhzhia regions and Kyiv), and five regions with average IDPs load (Kyiv, Dnipropetrovsk, Poltava, Odesa, Sumy regions). Other regions of Ukraine received an insignificant IDPs burden, which had a minimal impact on the socioeconomic indicators of these regions.
Table 2
Burden Indicators influencing the regional social and economic systems in Ukraine (based on (Derzhavnyj komitet statystyky Ukrainy, 2017)
The number of The number of IDPs The number of
rating Region IDPs per 1000 population, persons Region for 1000 square km of territory, thousand people Region IDPs for 1 UAH of GRP per capita of individuals
1 Donetsk 170.74 Kyiv city 151.91 Luhansk 27.01
2 Luhansk 133.65 Donetsk 27.33 Donetsk 26.74
3 Kharkiv 78.71 Luhansk 11.00 Kharkiv 4.60
4 Zaporizhzhia 68.35 Kharkiv 6.77 Zaporizhzhia 2.32
5 Kyiv city 43.41 Zaporizhzhia 4.37 Dnipropetrovsk 1.15
6 Kyiv 28.19 Dnipropetrovsk 2.40 Odesa 0.85
7 Dnipropetrovsk 23.68 Kyiv 1.99 Kyiv city 0.82
8 Poltava 21.52 Odesa 1.07 Kyiv 0.82
9 Odesa 14.96 Poltava 1.07 Kherson 0.47
10 Sumy 13.85 Cherkasy 0.69 Poltava 0.46
The analysis made it possible to determine the impact on different socio-economic systems of the region, which was reflected in internal indicators of development, namely:
• the first indicator (the number of IDPs per 1000 population) is a very significant burden for IDPs in Donetsk, Luhansk, and Kharkiv regions, which means the difficulties with IDPs integration into local communities, the risk of discrimination, violence. From the economic point of view, the IDPs burden on the population of the region means changing the labour market situation, including in the long run, which also means the need for further analysis of IDPs sex-age groups and their propensity to find work;
• according to the second indicator (the number of IDPs per 1000 sq. km of territory), the high loading of IDPs in Kyiv, Donetsk, Luhansk regions, characterized by the load on the territorial systems (institutional components of the region), including the existing transport and telecommunication infrastructure, local natural resources of the region, as well as changes in the urbanization level;
• according to the third indicator (the number of IDPs per 1 UAH ofgross regional product per capita) indicates the burden of IDPs on the economic prosperity of the region. The largest load on this indicator is in Luhansk and Donetsk regions.
The study by the International Labour Organization, the UN ReliefWeb Specialized Service for the Coordination of Humanitarian Affairs, the analysis of the international technical assistance project "Partnership for Urban Development" («Partnerstvo dlia rozvytku mist» Proekt PROMIS, 2016), the research of Yasno Research & Consulting Group (Yasno Research & Consulting Group, 2017), the regional target programs of the regional state administrations of Ukraine (Luhanska oblasna derzhavna administratsiia, 2017; Zaporizka oblasna derzhavna administratsiia, 2016) made it possible to conclude that the work issues solving with the IDPs at the regional level is for the short-term period, and the actions of regional and local authorities are aimed at meeting the immediate needs (material assistance, temporary housing, employment) and do not foresee the integration of internally displaces persons in the socio-economic life of the region. However, at the state level, adoption of new regulatory documents is taken place, new organizations are created to help and support internally displaced persons, create new jobs, retraining staff (both people seeking employment and those who provide new services), volunteer movement and charitable help are being developed. That is, in fact, the institutionalization of social rehabilitation of internally displaced persons in Ukraine is carried out.
Internally displaced persons have a high potential, which puts forward the task of their attraction and use as a resource for the region and the country development.
The economic, labour, and entrepreneurial activity of IDPs must be maintained, consolidated and used in the process of their integration. The positive effects of the IDPs integration at the regional level are manifested in the revitalization of entrepreneurial activity, the stimulation of community development through the assistance of international organizations, the growth of quality and quantity of labour potential, the strengthening of social activity at the expense of social activists among the IDPs, increase in revenues to the local budget at the expense of taxes and fees from IDPs, development of the consumer market (Novikova, 2017).
5. Conclusions
In the context of social and economic processes reforming in Ukraine, the promising direction of state policy is to strengthen the competitiveness of the regional economy, as well as the intensive development of interregional cooperation within the country. The negative consequences of the antiterrorist operation were reflected not only in the regional development indicators, where most of the IDPs moved but also all indicators of socially-economic development of Ukraine. The regions that have undergone major social and economic changes and that faced with the resolution of the most acute problems of IDPs (Donetsk, Luhansk, Kharkiv, Zaporizhzhia regions, Kyiv city) have not established the effective mechanisms of regional governance for solving the issues of internally displaced persons in various spheres of their social life.
On the principle that the main objective of the regional policy is to minimize regional disproportions and prevent the emergence of depressed territories, its priority is to restore the positive socio-economic dynamics of regional development by adjusting programs and strategies for regional development taking into account the IDPs resource potential in the following areas:
• activation of IDPs economic involvement in regional development (systematization of data collection on needs, IDPs qualifications with further employment monitoring; quality retraining programs provision for IDPs; extension of the benefits list for employers hiring IDPs);
• intensification of cooperation with international donors (targeted assistance to cover urgent needs, financial assistance for the deployment of infrastructure projects);
• strengthening the human capital of the region on the basis of social dialogue and constructive interaction of authorities, public organizations, and IDPs, strengthening the social ties and communications, overcoming the social and cultural contradictions;
• provision of social assistance to IDPs on the basis of differentiation, for the provision of assistance depending on the health state, welfare level and social status of IDPs;
• the integration ofthe IDPs into the decentralization reform implementation aimed at strengthening the institutional capacity of the regions, the formation and introduction of new mechanisms for stimulating regional and local development, budget
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