Baltic Sea Region Territorial Monitoring System

Cross-border analyses - Visualization

During the three last years of the past decade, border regions taken as a group accounted for only 8.7 % of all BSR Gross Domestic Product. They nevertheless at the same time also accounted for some 19.4 % of all jobs in the BSR, hence implying an economic productivity (per employed) far below the rest of the BSR. However, in the one year period 2009-2010 for example, border region’s share of the total GDP growth of the entire BSR was as much as 13.2 %, i.e. far beyond their relative share. BSR border regions can thus be said to represent a growing but currently still underutilised development potential in the region. When analysing all 45 BSR external border regions in the BSR and comparing them to the rest of the BSR, it appears as the socioeconomic status and development of the border regions is to a large extent worse than that of their non-border peer regions. Net migration in border regions is on average lower than that in non-border ones. Such is also the case regarding creation of new jobs. The relatively measured faster real economic growth rate of border regions (3.0 % on average per year 2005-2010, as opposed to 2.2 for non-border regions) is explained by the rapid growth in economic output in particularly BSR Russia, Belarus and Poland, as well as northern Sweden and Norway. This, and out-migration from many border areas, also explains the faster development of GDP/capita vis-à-vis non-border areas, albeit the gap between border and non-border areas is still substantial (35 points to EU average). A similarly large gap still exists also in terms of multimodal accessibility.

Examining external border regions in relation to their respective countries, it is apparent that border regions perform particularly badly. Net migration in external border areas is down to less than half that of their respective country on average, employment change some 11 % worse, the unemployment rate some 5 %-units higher, GDP/capita 12 % below, and accessibility some 18 % below. Such numbers disclose parts of the predicaments facing external border areas. That the real economic growth rate in external border areas has on average been on a par with the rest of the nations is once more to a large extent due to the exceptionally high economic growth rate in NW Russia as well as Belarus as well as northern Norway and Sweden.

Border areas appear to have taken a worse beating than other areas in the financial crisis of 2008. As is evident in the figure, followed by a more modest employment growth throughout the latter half of the last decade, also the decline after the economic downturn has been steeper in border areas than in the remains of the BSR. A similar but even steeper downturn in net migration is also discernible in border regions, for which the average BSR rate fell from -0.02 % in 2008 to -0.18 % in 2010, as opposed to +0.20 % for non-border areas. External border regions account for some 19.4 % of all jobs in the BSR. However, during the period of employment growth (2005-2008), border regions share of the total job increase of the BSR was only 17.5 % and their share in the subsequent total loss (2008-2009) was as much as a third (33.5 %). As a consequence of this, the border regions as a group display substantial difficulties in reaching the overall employment targets of the EU2020 strategy. More generally it appears that the precarious and often more peripheral geographic location of border regions, in many cases also combined with their dependency on cross-border trade and traffic, are more vulnerable to external economic shocks than non-border regions of the BSR.

In contrast to the former, the relative differences across the Finnish-Russo border have however decreased substantially in only five years owing to the relatively stable economic growth on the Russian side of the border.  The same can be said about the Norwegian-Russian border between Norwegian Finnmark and Murmansk oblast. Albeit the levels are quite different, a welfare gap of roughly similar proportions exist also between Denmark and Sweden, where the affluence of Copenhagen vis-à-vis the relatively average GDP/capita levels of southern Sweden (i.e. Skåne county incl. Malmö) imply a statistically large discrepancy. As mentioned above, the largest decreases in cross-border differences in this respect have occurred between Finland and Russia, where the discrepancy is nearly halved in merely five years. Also on the Norwegian-Russian border in the north, disparities have decrease by nearly 25 percentage units. Apart from these two border stretches, most major decreases in cross-border differences in the BSR have occurred in eastern BSR. The seemingly dramatic reduction in cross-border disparities between Belarus and BSR Russia is a statistical anomaly. Within the BSR area, the countries share only one stretch of border, namely that between Pskov oblast in Russia and Vitebsk ditto in Belarus. At the beginning of the period the ratio in GDP/capita between the two regions was 20/27. Largely owing to the dramatic population decline in Pskov combined with a stable economic growth rate, this ratio had by the year 2010 decreased to 30/30, i.e. a zero percent disparity.
Looking at the current status in 2010, we see that the highest welfare gap across any land border stretch within the BSR exists between Belarus and Lithuania, where differences in GDP/capita particularly between Vilniaus apskritis (w. GDP/capita 89 % of the EU average) on the one hand and Vitebsk (29 %) and Grodno (30 %) oblasts on the other imply a huge relative difference across this border stretch. The average disparity on the Lithuanian-Belarusian border of 117.4 % is however the result of substantially smaller differences between e.g. Utenos or Alytaus apskritises and Vitebsk and Grodno oblasts respectively In comparison to the Lithuanian-Belarusian border, disparities on the Finnish-Russian border appear actually quite modest.

(C) ESPON BSR-TeMo, RRG, 2013