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Speech of E.Yurchenko at the II International Black Sea Economic Forum
The presentation of E. Yurchenko within the II International Black Sea Economic Forum is available at the following link: «Priorities for development and growth of the Black Sea regions and countries: the experience of the Autonomous Republic of Crimea»
Text version of the speech Ladies and gentlemen!
In my speech I will focus on the development priorities of the Autonomous Republic of Crimea, on the region that was defined as a priority national Ukrainian project by the President of Ukraine Viktor Yanukovych.
What is Crimea?
It is the only autonomy within Ukraine, which has its own constitution, parliament, government, and where 2 million people, representing 123 ethnic groups, live in peace and ethnic harmony
Favorable natural conditions, strategic location and more than thousand-year history. All of this is about Crimea, which since the days of the Great Silk Road has been a part of the world's transportation corridors.
The map shows that Crimea is surrounded by two seas and 5 neighbor countries of the Eurasian continent.
Yes, indeed, a strategic location contributes to the development of any territory, but it is not sufficient, as my colleague from Singapore noted.
Therefore, on the one hand it was rather simple to determine the development priority of Crimea, but on the other hand – it was quite a difficult task.
We were faced with questions.
What should Crimea be in 10 years?
Which sectors can become growth points of republic’s economy and demand for priority support?
What should the government's program be to develop business and attract investment?
And what challenges are facing us?
We conducted diagnostic of economic development of the autonomy for the past 10 years that identified the main problems of the republic.
They are:
After assessing the potential of our resources, which the republic definitely has, and prospects for development of the peninsula, we have adopted the Strategy for development of Crimea until 2020.
Strategy 2020 – it is a document that was for the first time developed for the region at the national level. It sets out five priorities for development of the republic and the results that we want to achieve by 2020.
Our main goal - achieving sustainable growth and quality of life of Crimeans, dynamic economic development and implementation of the strategic interests of Ukraine in the Black Sea region.
Experts and researchers identified the main priorities of the Strategy:
Funding sources for implementation of the Strategy are laid down in:
Comparing the Strategy of Crimea with the strategies of the Black Sea countries, we can see that the growth points are the same.
In tourism and recreation of the region two tendencies are relevant - attracting international hotel chains and bidding for medical tourism. Turkey and Georgia are the leaders here.
It is also an important direction for Crimea. In the current year it is expected to begin construction of Hyatt and Radisson hotel chains on the peninsula.
In agricultural sector of the Black Sea region the trend of organic farming is increasingly extending. Turkey is a regional leader here. And of course, this is important for Crimea too.
Our overall priorities also include:
The health resort and tourist complex was selected as the first priority of the Strategy - 2020.
What challenges we were faced in here?
Results of diagnosis have shown that under comparable natural resources and tourist flow, Crimea receives considerably less income (in 5-10 times) than the other Black Sea resorts.
High shadowing level of this sector, loss of skilled personnel, non-competitive pricing and branding policy led that health resort complex formed only 7 percent of the gross regional product, and the active season was reduced to two months of the year.
Why this priority has become the first one to us?
A significant recreational potential of the republic helped us make that choice.
After all, the republic concentrates 30% of all recreational resources of Ukraine, and first of all natural resources - 5 climate zones, thousands of kilometers of coastline, 26 deposits of curative mud and about 100 mineral water springs, more than 600 sanatoriums.
In the 80s of last century, 75% of all tourists of the former Soviet Union were receiving treatment services in the peninsula, and it is about 10 million people per year. The active season was 9 months.
The calculations showed that the health resort sector and related industries can create a multiplier effect to the economy and provide 30 percent of the revenues to the consolidated budget of the republic and 20 per cent of Crimeans’ employment. More than 40 percent of the peninsula’s inhabitants have already identified this area as a fundamental for the Crimean economy.
And according to recent experts’ estimates, the potential of tourism just on the Western Coast of Crimea is estimated at additional 1 million people per year, and revenue growth of the economy - almost 1 billion euros.
How do we see the sanatorium – resort complex of the autonomy in 2020? First of all Crimea - is:
To this end, the government of the autonomy have developed a Program for development of sanatorium-resort and tourist complex, which identified measures to ensure achievement of these goals.
The European Union actively supports us in development of this priority within the program "Support to joint cooperation initiatives in Crimea," including through funding of core activities.
The agricultural sector is our second development priority.
Despite of significant challenges in the sector, this choice was obvious on the basis of agricultural potential of the republic.
If you look at the map of Crimea, you will see that two thirds of the peninsula are agricultural areas.
At the moment, the sector generates 10% of the republic’s GRP, provides employment for 8% of the population. 27.2% of Crimeans declared for agrarian specialization of the peninsula.
We have nearly 400 thousand hectares of vacant land that could and should be used for development of traditional industries in Crimea – sheep breeding, growing of vegetable, fruits, berries and grapes.
The evaluation of the Black Sea agricultural potential also shows that Crimea has fairly high effectiveness ratings.
Additional reserve for the growth of the autonomy’s agricultural sector is construction of plants for production of organic food, especially for children.
Thus, the agricultural sector of Crimea in 2020 - is:
In order to achieve these goals, the Program for development of the agricultural sector of the republic was designed. Its main activities you can see on the slide.
And it should be noted that for the first time the program involves financial support for creation of agricultural clusters, wholesale agricultural markets, as well as construction of fruit-and vegetable stores for Crimea.
Industry – is the third direction of the Strategy of Crimea-2020.
The main challenges here are: low level of diversification and high-tech in industries, as well as a high degree of depreciation of fixed assets.
Meanwhile, the industrial sector of the republic has rather large potential, and its share in gross regional product is 16-20%. Crimean industry provides more than a third of all revenues to the budget. 17% of the autonomy’s population is employed here.
Within implementation of the Strategy of Crimea-2020, we plan to achieve a compromise and a harmony between the industry, which is mainly concentrated in the north of the peninsula, and recreational complex of the republic.
Industry of Crimea in 2020 is:
To achieve these objectives we have developed a set of events (99 events in the amount of 2.4 billion euros), which were included into the operating plan for implementation of Phase 1 of the Strategy-2020.
We understand that it is impossible to develop Crimea without a modern infrastructure. That is why the Government of Crimea has developed a separate State program for development of transport sector until 2020, which was approved by the Cabinet of Ministers of Ukraine.
Dear Colleagues,
The Government of Crimea understands that in today's world it is impossible to talk about the development and growth without creating a business environment and attracting investment.
And it concerns of all the priorities of the Strategy of Crimea - 2020.
So all the set of activities undertaken by our government is aimed at achieving these goals.
It is the Agency for Regional Development, which develops investment projects and accompanies their implementation in the country. These projects are presented on the exhibition. It is ordering of land relations, deregulation of business, skills development - all the things we are working hard every day and put our knowledge and skills by all means.
With regard to legislative initiatives, I would like to acknowledge the government's bill about Crimea on the order of investment activity in its territory.
This project is currently under consideration in the Parliament and will become a landmark for investors because it includes tax breaks and incentives for implementation of investment projects in priority sectors for development of Crimea.
And the main task of the Crimean government, our main goal – is to implement our fifth, and perhaps the first priority of the Strategy 2020 - to create an environment conducive to life.
And here I would like to quote the first Prime Minister of Singapore Mr. Lee Kuan Yew, who said that it is people who have been the most valuable asset that led his country from the third world in the first one.
Boris Kolesnikov, Deputy Prime Minister of Ukraine also noted that "employed Crimeans – it is a wealthy family and filled budget".
And the Crimean government aims to ensure high social standards of life for Crimeans, a decent education, quality health care, preservation and development of cultural values.
Dear forum participatns!
Crimea is really willing and able to become a national priority.
This desire brings together the knowledge of many people and continually moves us to the target.
To be a leader - it is always difficult because you need to maintain stability, to be pragmatic and ensure development.
And indeed, we have every chance to win at this competition of countries and regions, because we are strong, courageous, intelligent, hardworking, and finally - we are beautiful!
Welcome to Crimea!
Thank you for your attention.
10.10.2011
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