Rural Areas in Recession and the Recovery Finnish Perspective

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1 Rural Areas in Recession and the Recovery Finnish Perspective Ministerial Adviser Sirpa Karjalainen MAF, Finland

2 Setting the scene Regressions 90 and 09 we have been there Three cases: metal, fur, bioenergy The recovery in rural areas lessons to be learned 2

3 Rural Finland in Figures Population of 5,2 million Average population density 15 inhabitants / km2 (EU-25 = 117 inhabitants / km2 ) Built area ~3%. Agricultural land 6%. More than 90% of the area is classified as rural Over 40% of the population living in rural areas with population density of 0-5 inhabitants/km 2 Rovaniemi 1,5 million broadband connections Availability of ADSL or cable connection for 96% of the population. Strengths: high education level ambition to equality good administration culture interest to electronic services Library-institution Municipalities Red: urban Yellow: urban-adjacent Green: rural heartland Blue: sparsely populated rural area Maarianhamina Vaasa Pori Rauma Uusikaupunki Kokkola Pietarsaari Tornio Kemi Oulu Raahe Kajaani Iisalmi Kuopio Seinäjoki Äänekoski Joensuu Jyväskylä Tampere Jämsä Mikkeli Varkaus Savonlinna Valkeakoski Hämeenlinna Lahti Riihimäki Kuusankoski Kouvola Imatra Lappeenranta Turku Hyvinkää Järvenpää Salo Kerava Kotka 0 Lohja Porvoo Vantaa kilometriä Espoo Helsinki Kajaanin yliopistokeskus, Oulun yliopisto Suomen Aluetutkimus FAR Kauniainen

4 FORESTS OF EUROPE 4

5 Finland northernmost agricultural country in the world Geographical location is the greatest limiting factor Growing period days Temperature sum Cdays - Germany Cdays - Spain Cdays Natural conditions reflected in yield levels only half of the yield levels in Central Europe 5

6 Finland, The Most Rural MS in the EU Late urbanisation, long tradition of decentralized solutions and pluriactivity 19% of the rural working places in agriculture. 30% of the farms are pluriactive. Fast economic growth, relatively balanced development across the country untill.. Strong regional policy strategy to enhange the competitiveness of regions High level of education also in rural areas 6

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8 Recessions in Finland, we have been there 8

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10 Annual change in population in , Whole country Urban municipalities Urban-adjacent rural municipalities Core rural municipalities Sparsely populated rural municipalities

11 Development of number of jobs in , 1988= Whole country Urban municipalities Urban-adjacent rural municipalities Core rural municipalities Sparsely populated rural municipalities

12 Development of number of jobs in : PRIVATE SERVICES, 1988= Whole country Urban municipalities Urban-adjacent rural municipalities Core rural municipalities Sparsely populated rural municipalities 12

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14 Recession 2009 Foreign trade change in volume, % 2007* 2008* 2009** 2010** Exports of goods and services Imports of goods and services Banking sector is in shape Dept ratios tolerable Low interest rate Strong euro (?) -based problems 14

15 Metal and machinery Investment industry Small suppliers (under contractors) in rural area Turnover fell quickly some ~ %!! Future: Investments start slowly. China can show some positive growing figures 15

16 milj. small sector in fi long tradition 1200 producers sertified production September 2009 Auction: 1 million mink, fox etc. Fur sector Strong demand of Blue fox in China, Hong Kong Fox fur production Kiina Muut Norja Suomi 16

17 Indeksi 2005=100 Bioenergy Turnover in bioenergy / / / / / / / / / /2009 Alkuperäinen Kausitasoitettu Trendi Lähde: Tilastok esk us, Asiak ask ohtainen suhdannepalvelu 17

18 Revitalisation Relief on taxation Direct aid aid for SME:s aid for employment Big infrastructure projects R&D projects No cut back s -yet Volume alltogether 2,5-4% of the GDB Possible effects: Better control. Lower unemployment. Better start. Challence: Timing 18

19 100 Mb/s for all in 2015! State / EU aid for the last 5 % of the population (in rural area) HAJA-ASUTUSALUE (viimeisen 5 % väestöpeitto) TAAJAMA Center KAUPALLINEN Potential LAAJENTUMISALUE commercial area Farms, SME s households Julkisen tuen piirissä olevia valokuituhankkeita 19

20 Region of Southern Savo 20

21 Challenges in the Rural Area Finances in municipalities heavily dependent on corporate taxes and central government transfers. small communities are recovering slowly (amalgamation?) Unemployment is rising still after economical growth. (risk of permanent exclusion of the workforce) > Degreasing net income, social security Poor age structure difficulties in social services Need for long lasting recovery measures! 21

22 Thank you for your attention! 22