Modern trends and challenges of the development of adjacent border regions of Ukraine and Poland

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Kh. Prytula, Doctor of Economic Sciences, Senior Researcher

Department of Business Activity and Economic Policy, Poznan University of Economics and Business

Head of Cross-Border Cooperation Sector, IRR NAS of Ukraine

Modern trends and challenges of the development of adjacent border regions of ukraine and poland

E. Laznewska, Doctor of Science, Professor

Abstract

The article examines the peculiarities of the development of the adjacent border regions of Ukraine in the conditions of modern challenges. A peculiarity of the development of border regions is, on the one hand, their proximity to the regions of neighboring countries, and on the other hand, their distance from the central regions of the country, which are usually areas of concentration of investment and economic activity. In the conditions of a full-scale war with russia, which began on February 24, 2022, the border regions have become a kind of humanitarian hubs and a refuge for hundreds of thousands of internally displaced persons, a place for business relocation from regions where active hostilities are taking place.

During 2022 and the first months of 2023, about 1 million refugees arrived in Lvivska, Volynska, and Zakarpatska Oblasts, of which only half were officially registered as internally displaced persons. This has a strong impact on the socio-economic development of the border regions in the conditions of war due to the low level of social security of IDPs, their financial vulnerability, the search for a place of temporary stay and the significant burden on the social infrastructure and economy of communities, etc. At the same time, Poland and especially its border regions became a refuge for about a third of all Ukrainians who went abroad, which is about 1.5 million people.

This became a serious challenge for the development of their labor markets, economy, and social sphere. At the same time, Ukrainian refugees significantly influence the balancing of labor markets in most EU countries in conditions of shortage of their own labor force. The effectiveness of their integration in European labor markets will depend on the system of measures to support them. Increasing transparency of borders, the attractiveness of foreign labor markets and educational services create risks of losing part of the human capital of border regions and Ukraine in general. At the same time, they have additional competitive advantages related to the development of cross-border cooperation and realization of the development potential of logistics and transport infrastructure.

Keywords: border regions, Ukrainian-Polish cross-border region, cross-border cooperation, socio-economic development, Ukraine, Poland.

Анотація

Х. М. Притула, д. е. н., старший науковий співробітник, завідувач сектору транскордонного співробітництва, ІРД НАН України Є. Лазневська,

д. н., професор, професор кафедри підприємницької діяльності та економічної політики, Познанський університет економіки та бізнесу

СУЧАСНІ ТЕНДЕНЦІЇ ТА ВИКЛИКИ РОЗВИТКУ СУМІЖНИХ ПРИКОРДОННИХ РЕГІОНІВ УКРАЇНИ ТА ПОЛЬЩІ

У статті проаналізовано особливості розвитку прикордонних регіонів України, які примикають до кордону з Польщею: Волинської, Львівської та Закарпатської областей. Разом з Люблінським та Підкарпатським воєводствами вони утворюють українсько-польський транскордонний регіон. Їх розвиток у значній мірі визначається близькістю до кордону, сприятливим географічним місцерозташуванням на перетині основних європейських та загальносвітових транспортних артерій. Висока щільність автомобільних доріг та залізничних колій, розвиток мережі освітніх закладів та наукових центрів формують значний логістично-транспортний та науково-освітній потенціали розвитку прикордонних регіонів. Водночас близькість до кордону у свою чергу активізує процеси відтоку кваліфікованої робочої сили та молоді у прикордонні регіони суміжних країн.

Особливістю розвитку прикордонних регіонів є, з одного боку, їхня наближеність до регіонів сусідніх країн, а з іншого - віддаленість від центральних регіонів країни, які зазвичай є районами концентрації інвестицій та економічної діяльності. Підвищення прозорості кордонів, привабливості іноземних ринків праці та освітніх послуг створюють ризики втрати частини людського капіталу прикордонних регіонів та України загалом. Водночас вони мають додаткові конкурентні переваги, пов 'язані з розвитком транскордонного співробітництва.

Моніторинг обсягу ВРП на особу прикордонних областей за 2011-2021 рр. засвідчує про відставання економічного розвитку прикордонних областей України порівняно з суміжними прикордонними регонами Польщі. Це відповідно впливає і на нижчі рівні загальних доходів мешканців цих областей. Проведено аналіз структури та динаміки виробництва областей. Характерною ознакою розвитку прикордонних областей є вища відносно решти регіонів частка сфери послуг. Активно розвивається сфера ІКТ. Близькість до європейських ринків товарів та послуг, налагодження виробництва продукції на умовах давальницької сировини зробило Закарпатську область найбільш відкритою економікою. В умовах повномасштабної війни з росією, розпочатої 24 лютого 2022 року, прикордонні області стали своєрідними гуманітарними хабами, прихистком для сотень тисяч внутрішньопереміщених осіб, місцем для релокації бізнесу з регіонів, де ведуться активні бойові дії.

Ключові слова: прикордонні регіони, українсько-польський транскордонний регіон, транскордонне співробітництво, соціально-економічний розвиток, Україна, Польща.

Statement of the problem in general and its connection with important scientific orpractical tasks. After the expansion of the European Union (EU) in 2004-2007, Ukraine received a common border with EU member states, and its border regions (primarily its six regions - Volynska, Lvivska, Zakarpatska, Ivano-Frankivska, Chernivetska, and Odeska Oblasts) became objects of the regional policy of this association. This created additional opportunities for border territories to effectively use their development potential, to enter the European markets of goods and services through in-depth interaction through mechanisms of cross-border cooperation and adaptation of European legislation in the field of regional policy, etc. The process of Ukraine's entry into the European integration space and its recognition by European partners requires coordination of efforts to develop cooperation with EU countries and, first of all, with Ukraine's neighbors. Therefore, the development of cross-border regions, within which intensive and multi-level interactions between all subjects and participants of cross-border cooperation are formed, is an important object of modern regional policy [1].

Analysis of recent research and publications. In the scientific works of both domestic and foreign specialists, theoretical and practical issues of the development of the border regions of Ukraine were investigated (P. Belenkyi, V. V. Borshchevskiy, Ye. Kish, K. Kutsab-Bonk, N. Mikula, I. Studenikov, etc.). Considerable attention was paid to issues of convergence in the cross-border space, the development of certain spheres of cross-border cooperation (social, economic, scientific and technical, etc.) [2]. Most researchers consider cross-border cooperation as an important tool of local and regional development in the conditions of European integration [3-4].

At the same time, when researching current trends and prospects for the development of cross-border regions with the participation of the border regions of Ukraine, it is necessary to take into account new challenges, primarily related to russia's military aggression against Ukraine.

Formulation of article goals (statement of the task). The purpose of the article is to analyze the development of the adjacent border regions of Ukraine and Poland in the conditions of modern challenges related to russia's military aggression against Ukraine.

Presentation of the main research material. The cross-border region covers the adjacent border territories of two or more states at different levels of the respective administrative-territorial systems, starting from the NUTS2 level. The development of cross-border cooperation is primarily aimed at ensuring a high quality of life for residents of border areas, infrastructural support of the respective areas, and solving common problems of adjacent areas. The development of cross-border regions is based on cross-border cooperation. The experience of European countries shows that the development of cross-border cooperation directly depends on the state of national legal support for its development, as well as state regional and integration policies.

According to the currently valid Law "On Cross-Border Cooperation" dated June 24, 2004 No. 1861-IV "cross-border cooperation - joint actions aimed at establishing and deepening economic, social, scientific, technological, ecological, cultural and other relations between subjects and participants of such relations in Ukraine and relevant subjects and participants of such relations from neighboring states within the competence defined by their national legislation".

Therefore, at the current stage of European integration, the problem of convergent processes in the cross-border dimension, which is determined by a number of complex socio-economic transformations: geopolitical, socio-psychological, financial-economic, innovative-technological, etc., becomes particularly acute. When studying the phenomenon of cross-border convergence between Ukraine and Poland, it is necessary to note the diversity of this phenomenon. After all, convergent processes unfold in several interconnected planes: financial-economic, socio-demographic, institutional- organizational and structural-sectoral. In addition, the depth of cross-border convergence is determined by a number of factors that manifest themselves differently depending on the current challenges of European integration [2].

The Ukrainian-Polish cross-border region covers the territory of three border regions of Ukraine (Volhynska, Lvivska and Zakarpatska Oblasts) and two voivodeships of the Republic of Poland (Lubelskie and Podkarpackie). The total area of its territory is 97,678 km2, where the Ukrainian part is 54,720 km2, and the Polish part is 42,968 km2. The length of the common Ukrainian-Polish section of the state border is ~ 535 km (including ~ 228 km on the territory of Volynska Oblast, ~ 278 km of Lvivska Oblast, and ~ 33 km of Zakarpatska Oblast). These border regions are characterized by developed social, transport and engineering infrastructure, landscape diversity and rich natural and recreational resources, developed human potential. Favorable geographical position and developed foreign economic relations contribute to the integration of regions into the world economy, the expansion of geography and the involvement of various forms of international cooperation. The general characteristics of the regions are given in Table 1.

Table 1. Socio-economic characteristics of the development of border regions, which form the Ukrainian-Polish cross-border region

* Data as of 2021

** Data as of December 31, 2020

Source: formed on the basis of [5-8].

Among the three border regions of Ukraine, Lvivska Oblast is the largest in terms of area. As of January 1, 2022, twice as many people lived in it as in the Volynska and Zakarpatska Oblasts. It is characterized by a high population density (113.5 people per km2). According to this indicator, it is also ahead of the average indicator for Ukraine. In Lvivska and Volynska Oblasts, the majority of the population lives in urban settlements, while in Zakarpatska Oblast 63% of the population lives in rural areas.

Among the five border regions that are part of the Ukrainian-Polish cross-border region, Lubelskie Voivodeship is the largest in terms of area, Lvivska Oblast - in terms of population, and Podkarpackie Voivodeship - in terms of population density. logistical transport scientific

Modern trends in labor market development in border regions. The average monthly gross wages in the Polish border regions is almost three times higher than in the border regions of Ukraine. During 2010-2020, the gap between the average monthly gross wages in Ukrainian border regions and the border Voivodships of Poland increased from 500-550 euros in 2010 to almost 700 euros. The increase in the gap was influenced by the sharp devaluation of the hryvnia, starting in 2014. During the studied period, the euro exchange rate increased from 10.5 hryvnias for 1 euro to 32.31 hryvnias in 2021. The level the average monthly gross wages in Lvivska Oblast fluctuated at the level of 85-90% of its average level in the country, in the Lubelskie Voivodeship - at the level of 90%, in the Podkarpackie Voivodeship - at 85.4-86.5%.

The dynamics of the number of the employed persons is also characterized by changing trends both in Ukraine and in Poland. Till 2022 the labor markets of Ukraine and Poland were practically comparable in terms of the number of employed persons, while Ukraine has a higher employment rate, which was 56.2% in 2020. In Lvivska Oblast, the employed persons is approximately 200,000 more than in Lubelskie or Podkarpackie Voivodships.

In 2022, the development of Ukraine and its regions underwent drastic changes. russia's large-scale invasion of Ukraine triggered one of the biggest humanitarian crises in Europe since World War II. As a result of the war, there was a large-scale forced migration of tens of millions of Ukrainians who changed their place of residence, of which about five million left through the western border, where they received temporary shelter. According to the data of the UN Refugee Agency, since the beginning of the war in Ukraine, as of February 19-21, 2023, almost 16 million refugees crossed the border with neighboring countries. At the same time, about 10.5 million people returned back to Ukraine (see Fig. 1).

Figure 1. Border crossings from (to) Ukraine, in thous.

Source: formed on the basis of [9].

The REACH survey at the Polish border showed that the main factors influencing the choice of destination country were: family or friends at the place of arrival (39%), proximity to Ukraine (31%) and advice received at reception centers (17%). However, macroeconomic and labor market conditions are likely to play a more important role in migrants' choice of countries over time [10].

As of February 21, 2023, according to the UN, more than 8 million Ukrainian citizens were abroad due to the war. About 3 million of them are in Belarus and Russia, including due to forced deportation to the latter. As of 20 Feb 2023, 4,863,513 The figure "Refugees from Ukraine registered for Temporary Protection or similar national protection schemes in Europe” may include multiple registrations of the same individual in two or more EU+ countries; registrations that remain incomplete for various reasons; or registrations of refugees who have moved onward, including beyond Europe. Refugees from Ukraine registered for Temporary Protection or similar national protection schemes in Europe.

Over 1.5 million individuals registered for Temporary Protection in Poland as of 21th of February 2023, the highest number among the EU countries. This makes up a third of all refugees from Ukraine. At the same time, half of all refugees from Ukraine were registered in two countries: Poland and Germany (see Table 2).

Table 2. Registration of refugees from Ukraine by country

Source: formed on the basis of [9].

The demographic composition of refugees from Ukraine differs from other refugee inflows. The enforcement of martial law prevents most men of conscription age (18 to 60 years) from leaving the country. As a result, in virtually all host countries, at least 70% of the adults are women and over a third of all refugees are children. In some countries, the figures are even higher. In Poland, for instance, 84% of all adults are female and children account for 41% of refugees. In addition, people aged 65 and above make up a non-negligible share of the refugee population. In countries with available data, about 4-6% belong to this group [11].

According to the OECD projections, the inflow of Ukrainian refugees might increase the European labour force by 0.5% by the end of 2022, an impact that is twice as large as that of the 2015-17 arrivals. Poland, the Czech Republic and Estonia, which are home to the highest number of Ukrainian refugees relative to population size, are expected to record the strongest increases, of around 2%. Tight labour markets and a shortage of workers in many host countries provide good prerequisites for a successful labour market integration of the refugees concerned, but much will depend on accompanying support measures. Taking stock of the existing evidence on the socioeconomic profiles of the new arrivals provides an indication of the skill potentials and labour market inclusion prospects [12].

In 2021, Poland was the leading country in the EU in terms of the number of permits issued to Ukrainians for education, employment and other reasons. And the second country in terms of the number of permits issued for the family reason. During 2014-2021, in general, an upward trend was observed regarding the number of permits issued to Ukrainians in Poland. In 2021, permits were issued to 730,470 Ukrainians. In the structure of issued permits, permits issued for employment reasons prevail and account for -90%.

The start of active hostilities after February 24, 2022, the introduction of martial law in Ukraine caused mass displacement - citizens left their homes in search of safety and protection. About 8 million Ukrainians left abroad [13], some moved to safer regions. Currently, the number of officially registered internally displaced persons (IDPs) in the country reaches 4.9 million people [14]. At the same time, according to unofficial data of the Ministry of Reintegration of the Temporarily Occupied Territories of Ukraine, the real number of IDPs as of 2023 is about 7 million people.

As of May 1, 2023, Volynska Oblast sheltered 77,462 people who, due to the large-scale invasion of the Russian Federation into Ukraine, were forced to evacuate from the areas of hostilities. About 245,000 people registered as IDPs in Lvivska Oblast. However, resettled people often do not register in a new place and rent housing on their own, so in fact, Lvivska Oblast sheltered twice as many people as registered with state authorities. That is, about 500 thousand. Approximately 50-100 people arrive in Lviv every day by evacuation trains. Some of them go abroad, others seek refuge within the region. There are more than 400,000 IDPs in Zakarpatska Oblast, and more than 200,000 people are officially registered as IDPs.

Therefore, today in Zakarpatska Oblast every fourth inhabitant of the region is an IDP, in Lvivska Oblast - every 6th inhabitant, and in Volynska Oblast - every 14th inhabitant. This has a strong impact on the socio-economic development of the border regions in the conditions of war due to the low level of social security of IDPs, their financial vulnerability, the search for a place of temporary stay and the significant burden on the social infrastructure and economy of communities, etc.

Economic development of border regions. During 2011-2020, the GRP of the border voivodeships of Poland was 2.5-4 times higher than the GRP of Ukrainian border regions. The economic crisis in Ukraine in 2014-2015, provoked by russian aggression, affected the sharp devaluation of the hryvnia and the decline of the country's economy. Therefore, the gap in the level of GRP per person in Ukraine and Poland during the studied period mostly grew (see Fig. 2).

Figure 2. Dynamics of GRP per person in Ukraine and Poland, in euro Source: formed on the basis of [5-8].

There is also a significant differentiation in the value of the level of GRP per person at the level of the border regions of both countries. During the studied period, the difference between the values of these indicators in Lvivska Oblast, Lubelskie and Podkarpackie Voivodeships fluctuated within 3-5 times. At the country level, the border regions of Poland show larger deviations from their average value in terms of the level of GRP per capita: as of 2020, the level of GRP per capita of the border voivodships was 68-69% of their average level in the country. At the same time, in Lvivska Oblast, this indicator was 93.3% of its average value in Ukraine.

The share of agriculture, forestry and fishing in Ukraine and Lvivska Oblast, in particular, significantly exceeds its value in Poland and border regions. At the same time, the shares of industry and construction are significantly lower compared to the neighboring country and its border regions. Shares of the service sector are almost the same.

The development of the economy largely depends on the number of economic entities. As of 2020, 2.5 times more business entities were operating in Poland than in Ukraine. Including in Lvivska Oblast, the number of business entities is 1.5 times smaller, compared to the Lubelskie and Podkarpackie Voivodships.

Development of logistics and transport infrastructure of border regions. In the conditions of war, the transport and logistics system plays a decisive role in ensuring the humanitarian, social, food, energy and, above all, military security of Ukraine. In this context, the border regions have a significant potential to increase international and transit cargo transportation.

The high density of highways and railway tracks due to the proximity to the state border, a favorable geographical location at the intersection of the main European and world transport arteries determine the formation of a powerful transit potential of the border regions of Ukraine. Its effective implementation based on the development of logistics and transport infrastructure will accelerate regional development and increase the competitiveness of regions on national and global markets.

The length of railway tracks in Ukraine and Poland is practically the same and equal to ~20 thousand km. At the same time, the length of paved roads in Poland is almost twice as long as compared to Ukraine.

The loss of part of the transit potential and the closed borders in the East and North of the country are changing the priorities of planning and restoring the transport infrastructure, forming new transport corridors. Logistics routes have also undergone significant changes. In order to replace the existing international transport corridors (ITCs) in the conditions of geopolitical reformatting, new initiatives to form new ITCs are already being actively developed. One of the few alternatives to transit traffic along the main route of the New Silk Road, which transits through the Russian Federation, is currently the Middle Corridor (through Kazakhstan, Azerbaijan and Georgia). Last year, the volume of railway cargo that passed through this corridor increased by 52% [15]. This surge is expected to be even higher this year due to increased interest in the corridor as an alternative multimodal route between Europe and China.

Therefore, Ukraine should not only actively participate in new initiatives regarding the development of ITC, but also itself initiate the creation of new partnerships on the important trade route Europe-Caucasus-Asia. The development of ITC, the efficiency of their functioning has a direct impact on the surrounding territories.

The reorientation of the main international and transit cargo transportation in the direction of the western border of Ukraine increased the load on the border infrastructure of the border regions. This affected the periodic formation of huge queues of trucks and wagons in front of checkpoints. At the border with the EU, 21 international checkpoints for cargo transportation currently operate, of which 11 are for road traffic and 10 are for rail traffic.

In Volynska Oblast, there are 3 checkpoints for cargo transportation: 1 - road, 2 - for rail. There are 6 checkpoints for cargo transportation in Lvivska Oblast: 4 by road and 2 by rail. In Zakarpatska Oblast, there are 9 operating checkpoints for freight transportation, of which 5 are railway checkpoints.

All automobile checkpoints on the border with Poland are characterized by a significant overload of the actual throughput compared to their design capacity. The checkpoints on the border with Slovakia, Hungary and Romania are operating at the limit of their design capacity. Some of them are characterized by lower indicators of the passage of vehicles relative to their design capacity.

In terms of regions, Zakarpatska Oblast has the largest design capacity of checkpoints (33.5% - for road traffic, 72.4% - for rail traffic). At the same time, as of 2021, 38% of trucks and 38.6% of all cargo passed through automobile checkpoints in Lvivska Oblast. The development of the network of checkpoints for cargo transportation in Lvivska Oblast should take into account the peculiarities of the functioning of the entire network of checkpoints on the Ukraine-EU border.

Among the border regions of the Western region of Ukraine, Lvivska Oblast is characterized by the highest level of development of transport networks. The rest of the regions are above the average level in Ukraine. In the post-war period, the reconstruction and development of transport communications and transport infrastructure (interchanges, bridges, etc.) must take into account the needs of domestic and foreign markets regarding the volume and logistics of freight transportation and provide for the active implementation of smart and energy-efficient transport technologies.

Conclusions and prospects for further investigations in this area. According to preliminary estimates, the GDP of Ukraine in 2022 fell by 30%. The war has narrowed the Ukrainian labor market: about 8 million Ukrainians have left abroad, about 7 million are IDPs, and hundreds of thousands of Ukrainians are taking part in hostilities. The border regions of Ukraine have become a refuge for hundreds of thousands of internally displaced persons and a place of business relocation, primarily from the eastern and southern regions of the country. The economy of all regions is developing taking into account the provision of primary military needs.

The war intensified the negative trends of the outflow of Ukrainians abroad: in this case, the security factor was decisive. This also affected the functioning of the labor market, the development of the economy and the demographic situation in the regions. The narrowing of the human capital is currently on the agenda after the security factor.

At the same time the border regions have a significant potential to increase international and transit cargo transportation. The development of the logistics and transport infrastructure of the border regions of Ukraine will act as a catalyst for economic, social and environmental development in the regional and national dimensions.

In addition, the restoration and development of the border regions of Ukraine will also be facilitated by their active participation in cross-border cooperation. In particular, for 2021-2027, almost €665 million will be granted to six Interreg programmes, to support cross-border and transnational cooperation activities between Member States and Ukraine and the Republic of Moldova. The Interreg NEXT Poland- Ukraine programme (€187 million for cross-border cooperation between Poland and Ukraine for nature preservation, health care and border management) will invest in climate change adaptation, sustainable water management (including development of sewage infrastructure) and protection of nature and biodiversity. It will strengthen the regional health care facilities, improve access to specialist and emergency medicine, and support long-term health care. The programme will also support cooperation between public authorities to improve local governance, including in the area of border management [16].

Prospects for further research are further monitoring of the development of the adjacent border regions of Ukraine and Poland and the development of effective tools and mechanisms for increasing the competitiveness of the border regions of Ukraine.

Література

1. Розвиток транскордонного співробітництва: науково-аналітична доповідь / наук. ред. В.С. Кравців. Львів, 2016. 125 с.

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7. Statistical Yearbook of Podkarpackie Voivodship 2021.

8. Narodowy Bank Polski. Ukraine Refugee Situation.

9. Вплив українських мігрантів на економіки країн реципієнтів (2022).

10. OECD (2023). What we know about the skills and early labour market outcomes of refugees from Ukraine.

11. OECD (2022). The potential contribution of Ukrainian refugees to the labour force in European host countries.

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13. Внутрішньо переміщені особи. Міністерство соціальної політики України

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15. EU Cohesion Policy: over 530 Euro million for territorial cooperation including Ukraine and Moldova 2021-2027.

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8. The official site of National Bank of Poland (2023), “Rates”

9. The official site of UNHCR (The UN Refugee Agency) (2023), “Ukraine Refugee Situation”

10. The official site of National Bank of Ukraine (2022), “The influence of Ukrainian migrants on the economies of the recipient countries”, available at: https://bank.gov.ua/admin_uploads/article/Migration_impact_2022-12-15.pdf (Accessed 17 April 2023).

11. The official site of OECD (2023), “What we know about the skills and early labour market outcomes of refugees from Ukraine”

12. The official site of OECD (2022), “The potential contribution of Ukrainian refugees to the labour force in European host countries”

13. The official site of IOM (2023), “Ukraine Crisis 2022-2023: 1 Year of Response”

14. The official site of the Ministry of Social policy of Ukraine (2023), “Internally displaced persons”

15. The official site of Logist.Today (2022), “Transportation through the Middle Corridor bypassing the russian federation is on the rise”

16. The official site of European Commission (2022), “EU Cohesion Policy: over 530 Euro million for territorial cooperation including Ukraine and Moldova 20212027”

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