Transcript Introduction - economic development of border regions

Economic development of
border regions
(course: 5114119)
INTRODUCTION
Dmitry Zimin
[email protected]
Different meanings of
“development”
1. “Development” as a static situation on a
fixed date – as a “level of development”;
2. “Development” as a dynamic process of
change; it has some direction and speed.
What is “economic development”?
• Economic development is an increase in
complexity (labour productivity) in the structure
of production and of employment.
• Economic growth is not the same thing as
economic development.
• Two key parameters of economic life:
– Production /output (GDP = value added) and
– Employment.
Economic development: in whose interest?
What is “a region”?
There are several different meanings:
• Supra-national (Macro-) regions;
• Sub-national regions: regions within the same
state – its constitutive parts;
• Trans-national (or “cross-border”) regions:
associations of sub-national regions belonging to
different nation-states;
• Historical regions: an area characterized by
distinctive historical features (ethnic, political,
cultural, etc.). Example: Karelia
Theoretical background
• Adam Smith (1723-1790) and David Ricardo
(1772-1823): free trade is mutually beneficial
for all participants – ideology of globalization;
• Friedrich List (1789-1846): less developed
coutries can benefit from protectionist
measures (i.e. from economic borders).
• Today: Macro-regional economic blocs
combine internal freedom of trade with
external protectionism (e.g. EU, NAFTA).
Transparency – key characteristic
of border regime
• To what extent do economic borders
constitute a barrier for free movement of
goods, services, money, people and
intellectual property?
• High transparency leads to economic
integration
• Border regimes are often asymmetric in terms
of transparency
Levels of economic bordering:
• Corporate level: borders between enterprises
(e.g. commercial secrets);
• State level: borders between states (e.g.
customs regulations);
• Global level: borders between economic blocs
(e.g. NAFTA, EU, ASEAN)
Elements of economic border regime:
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Foreign exchange controls, currency exchange rates;
Customs duties;
Import and export quotas;
Taxation (e.g. taxes on repatriation of profits);
Technical and other standards;
Immigration control;
Restrictions on residents/non-residents;
Physical border infrastructure (location of border
crossings);
• Cultural barriers (e.g. foreign language).
Border-breaking practices:
• bilateral and multilateral integration
arrangements (e.g. common market);
• special economic / customs zones;
• cross-border subcontracting;
• “teleworking”;
• tax avoidance;
• tax evasion (transfer pricing, double invoicing);
• smuggling.
Cross-border interaction dilemma:
• How to find a right balance between
economic openness (integration) and
economic protectionism (bordering)?
• On-going global economic crisis has
stimulated re-bordering.
Regions are classified:
• In the EU: Nomenclature of territorial units for
statistics (NUTS)
• In Russia: All-Russian Nomenclature of
Administrative-Territorial Units (OKATO)
North Karelia: NUTS 4 and NUTS 5
Russian Karelia: sub-regions & municipalities
This course focuses on
economic development of
sub-national regions situated
along the Finnish-Russian border.
Lectures:
1. Introduction – 21.10. (Dmitry Zimin – DZ)
2. Human capital and social problems in
Russian border regions – 23.10. (DZ)
3. Borders and economy – 28.10. (Heikki
Eskelinen)
4. Cross-border co-operation instruments:
what they are and how they work – 30.10.
(Matti Fritsch)
Lectures:
5. Economic geography of Russian border
regions – 4.11. (DZ)
6. Finnish companies in Russian border regions
– 6.11 (DZ)
7. Can we educate Russians in human resource
management? – 11.11 (Markku Sippola)
in room AU111
8. Russia – a tourist nation? – 13.11 (Antti
Honkanen)
Lectures:
9. The border as a factor influencing the
development of the Finnish forest sector –
18.11 (Jakob Donner-Amnell)
10. Geopolitical aspects of Finnish-Russian
interaction – 20.11. (DZ) in room AU111
* Written exam: 25.11, room M301
* Re-sit exam: 9.12, room M301
Course-paper
(optional, only for Master-degree
students – 2 credits)
• Size: around 5000 words
• You choose the topic: something on economic
development, business, trade, investments,
tourism in Northwest Russia or Eastern Finland
• Deadline: 15 December 2013
• Delivery: in electronic form (PDF or DOC) to:
[email protected]