Role and potential small and medium-sized urban areas Latvia’s case ALLEGATO N° 2 Role and potential small and medium-sized urban areas Latvia’s case Indra Ciuksa The Ministry of Environmental Protection and Regional Development 04.12.2014.

ALLEGATO N° 2 Definition of SMUAs No common definition at EU level - multiple definitions are in use: New OECD-EC definition is 50-100 thousand inhabitants for small cities, 100-250 thousand - for medium sized cities; ESPON TOWN project – below 50 thousand inhabitants for small and medium sized urban areas Different situation in Member States depends from size, administrative division, historical and cultural context

Urban areas in Latvia 77 cities and towns, including: ALLEGATO N° 2 Urban areas in Latvia 77 cities and towns, including: 9 republican cities – more than 20 thousand inhabitants 5 cities – more than 50 thousand inhabitants 21 regional centres – 5 to 20 thousand inhabitants Largest city – Riga more than 640 thousand inhabitants Smallest town – Durbe 527 inhabitants Urban areas cover 11% of all the country Degree of urbanisation – 68 %

Monocentric development tendencies ALLEGATO N° 2 Income tax per inhabitant in local municipalities budget

Balanced network of centres – potential for polycentric development Concentration of jobs (flow of personal income tax) Concentration of services (flow of customers)

Remarkable regional development disparities ALLEGATO N° 2 Remarkable regional development disparities 5th largest regional disparities in EU-28 (dispersion of regional GDP per inhabitant in NUTS 3 regions) BUT One of the fastest growing economies in EU Since 2000 Latvia has a highest GDP growth rate (5,6%)

Republican cities demonstrates higher growth potential Indicator Republican cities Municipalities containing regional centres Other municipalities (without Riga agglomeration) Unemployment level (%) 7,27% 10,35% 9,60% Income tax per one inhabitant in municipalities budget (EUR) 503,38 381,16 358,08 Number of enterprises per 1000 of inhabitants 29,82 20,04 16,21

Challenges of Latvia’s development centres Economical and social: high unemployment, increasing poverty rate insufficient business environment and infrastructure, need for new jobs lack of skilled labour that could meet the labour market needs Demographic: population decline, including children and young people, brain drain ageing population, need to review the service network of local governments, etc. Environmental and climate: deprived and contaminated territories in former industrial areas, low energy efficiency of buildings, poor condition of heating networks that causes high heat losses incomplete use of centralized water supply services, in some cases outdated infrastructure networks 8

Regional policy in Latvia Development planning and policy documents: Sustainable Development Strategy 2030 National Development plan 2014 - 2020 Regional Policy Guidelines 2013- 2020 Oriented on unlocking the potential of different areas Urban development issues – part of national regional policy Proposes polycentric development as a precondition for sustainable and balanced development

National spatial development perspective Settlement structure Development directions: enhancement of the potential and competitiveness of the development centres mutual co-operation and interaction of urban and rural areas establishing of functional networks of development centres 10

Spaces of national interest Development directions: Rural development space Baltic Sea coastal area Riga metropolis area Eastern border (EU external border) Outstanding areas of nature, landscape and cultural history 11

Role and potential of urban areas (I) ALLEGATO N° 2 Role and potential of urban areas (I) International development centre (1) Capital Riga, largest city among the Baltic states scientific and entrepreneurial potential significant business, science, culture and tourism centre of Northern Europe with a global development perspective National development centres (8) largest cities with developed industry, transport, public services and social infrastructure centres of economic growth and knowledge creation, the driving forces of economic development in co-operation and interaction with the nearest urban and rural areas can create the critical mass for growth

Role and potential of urban areas (II) ALLEGATO N° 2 Role and potential of urban areas (II) Regional development centres (21) significant production and/ or culture centres with developed social infrastructure and various services the potential considerably exceeding the potential of the rest of small towns should continue specialization, developing mutually supplementing co-operation, thus achieving the attraction of human resources and economic activity equal to development centres of national significance Tukums, Ogre, Sigulda, Kuldīga, Saldus, Talsi, Dobele, Bauska, Aizkraukle, Cēsis, Smiltene, Valka, Gulbene, Alūksne, Madona, Limbaži, Līvāni, Preiļi, Krāslava, Ludza, Balvi

Role and potential of urban areas (III) Local centres – small towns, in some cases larger rural centres, identified by planning regions provide basic public services and working places, also for surrounding areas ensure attractive living environment

Policy approach in strengthening urban areas Investment concentration in development centres within the regional development support measures Integrated local development strategies - basis for allocation of investments Place based and integrated solutions «Basket» of services for each level of development centres - one of the criteria for allocation of investments (entrepreneurship, education, health, culture, social care, sport) Thematic focus of investments: business infrastructure, quality and availability of public services, mobility, administrative capacity

ALLEGATO N° 2 Thank you!