The proposed measures outlined in the Draft Law on Regional Development, if implemented as currently envisioned, are unlikely to make a meaningful impact on addressing the pronounced regional disparities, particularly the stark decline of the northern region, according to the Action for Social Justice (ASP).

This non-governmental organization has submitted comments on the Draft Law, which has been under public discussion for the past 20 days.

One significant change proposed in the Draft Law is the requirement for the Government to establish an annual regional development incentive program, with funding sourced from one percent to two percent of the current annual budget.

“Even though the legal changes for the annual incentive program would come into effect next year, looking at this year’s Budget Proposal, which estimates a current budget of 1.5 billion euros, this program could amount to just 15 to 30 million euros. This is clearly insufficient to make a meaningful difference in the development of the particularly vulnerable northern region, which faces significant migration and a serious risk of poverty,” the ASP expressed.

The ASP suggested that the allocated amount should be increased beyond the proposed percentage and that the use of “from – to” language should be avoided, as it could lead to minimal funding being allocated in practice, which is counterproductive to addressing the regional disparity in the country.

“The draft law on regional development classifies municipalities into three categories based on their development levels. Up to 85 percent of the average development index will classify municipalities as underdeveloped, up to 100 percent as medium developed, and over 100 percent as developed,” the statement clarified.

Currently, the law divides municipalities into six groups: the first includes those up to 30 percent of the average development index, the second up to 50 percent, and the third up to 75 percent (the first three groups are less developed municipalities), the fourth up to 100 percent, the fifth up to 125 percent, and the sixth over 125 percent of the average development index.

Given that the majority of municipalities fall into the underdeveloped category, the ASP recommended that the highest incentive amounts be allocated to municipalities with the lowest development indices, expressed as a percentage. This approach would ensure that those who need assistance the most receive the most support, thereby helping to reduce the regional gap.

“The Law on Regional Development identifies the northern, central, and coastal regions, with incentives provided as subsidies, interest rate subsidies on loans, soft loans, guarantees, and fiscal incentives,” the statement added.

Additionally, instead of assessing development indices over a three-year period, the Draft Law proposes a two-year interval, while the regional development strategy would now be set for four years instead of seven, which are certainly more appropriate considerations. Given the varying degrees of development across regions, strategic actions in shorter intervals are also essential.

On another note, the ASP raised concerns regarding the removal of a provision stating that regional development policy would be based, among other factors, on employment incentives, now replaced by “utilizing one’s own development potential.”

“Recent census data revealed alarming statistics about the situation in the northern region, which is experiencing significant deterioration compared to the relatively stable central and southern parts of the country. The ASP believes that reversing this trend requires a strong commitment from the state, translating into legal frameworks that provide the most vulnerable local governments with the greatest financial support, moving from mere declarations to tangible actions,” the statement concluded.

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