Descriptive analysis of the socio-economic situation (trends over the last 10 years)

3.2. Descriptive analysis of the socio-economic situation (trends over the last 10 years):

Below are presented the main factors of the external environment, as well as some factors of the internal environment, which have strong influence on the development of the LAG territory DEVNYA - AKSAKOVO.

The factors, having the greatest influence on the development of the target area are related to Bulgaria's membership in the European Union.

In connection with Bulgaria's membership in the EU with the greatest influence from the LDS viewpoint are the requirements to the local authorities and businesses (including agricultural producers and processors) for the environmental, quality and food safety, animal welfare and others. The compliance with the respective standards imposes increased costs for the respective subjects. At the same time they have access to European funds (even during the pre-joining period), but those require active behavior on their part.

Economic factors

The proximity to the third largest city in Bulgaria and agglomeration area around it and the nearby seaside resorts expand the employment opportunities for the population, but also the educated workforce is drawn outside the target regions and the industries that can be used to build the local identity (such as agriculture and FPI, rural tourism). However, we should also take into account the positive aspects of this proximity - despite the negative natural growth, that proximity encourages the settlement of new people to the area and as a result over the past five years the population grew. The age structure is good as a whole (especially compared to the distant to the agglomeration rural areas).

The number of beds in the nearby seaside resorts is constantly growing in recent years. Although their occupancy has been declining, the tourist flow increases. This represents an opportunity for realization of agricultural products from which small producers fail to benefit. This proximity is also an opportunity to offer attractive packages of travel services for the visitors of the hotels, such as those of short duration. There are positive examples such as organized jeep safaris, presentation of the folklore by community centers³³, but it can be said that the use of this opportunity is far from full at the time.

The proximity to Varna stimulates the demand for properties in some of the villages in the Aksakovo municipality. Construction has experienced significant growth in the municipality of Aksakovo. During the period 2003 - 2007, 130 buildings were introduced into exploitation and the apartments for this period were 161.³⁴ According to experts in spatial planning, this is due to the increased interest in the acquisition of holiday and second homes of those living in Varna.

This stimulates the construction business, but also opens up the possibility of placement of own products from local producers.

The retail distribution of food in the medium and large cities is characterized by the entry of large retail chains (Piccadilly, Kaufland, Billa), whose competition the small providers in the industry find difficult to resist. As a result the small convenience and specialized grocery stores are reduced. By 2004 the site for retail sale increase their number, but since then the trend is to reduce their number. As main reason for that may be indicated the development of large retail chains.

This is an obstacle for the realization of the production of small-scale farmers and FPI enterprises, because major retailers put onerous conditions on the volume, the payment period, payment requirements for retail space, as well as requirements for participation in promotional campaigns.³⁵

Unemployment³⁶ in the target area generally follows the trend in unemployment in the area and seems to be determined by the trend of the national economy. Its peak for the researched period (31.12.2000 - 31.12.2009) was at its beginning. Through the years of growth of the national economy, the level declines and reaches its lowest point in 2008. In 2009 there is an increase in unemployment - possibly due to the global economic crisis and its impact on the national economy.

More than half of the unemployed during the period were women. The data shows that the trend in the proportion of female unemployment is the opposite to that of the total - in a period of prosperity and reducing the number of unemployed, the number of unemployed women also decreases, but at a much lower rate than that of unemployed men. The result is that the share of unemployed women increases in times of boom and decreases in times of stagnation, i.e. it is more difficult for women to find work during progress of the economy, though it is harder to lose their jobs in bad times.

The young people in the target area appear vulnerable in the labor market. During the reviewed period, their share among the unemployed is higher than that of the district. In a period of economic boom, the share of unemployed youth falls, but they are vulnerable during stagnation, when their share is growing.

It is interesting that in the last six years, the share of unemployed with primary or lower education, and the long-term unemployed decreases (even the number of long-term unemployed decreased in the last year, despite the rising unemployment). However, the proportion of the poorly educated unemployed remains high in the target area (higher than that of the district) and this is due largely to the poor educational structure of the population.³⁷

The birth rate is moving in a range between 10,2 and 14,3 ‰ in Devnya municipality for the period 2000 - 2009, while its variance is lower in Aksakovo municipality - between 9,4 and 13,3 ‰. Mortality exceeds birth rate in both municipalities. In Devnya municipality it varies between 13,9 and 16,7 ‰ for the period, with values ​​between 13,6 and 16,7 ‰ for Aksakovo municipality. However, the population in the last five years increased in both municipalities, due to the positive mechanical growth exceeding in absolute value the negative one.

The population under the legal working age in Devnya municipality decreased from 20,2% in 2000 to 18,2% in 2007 but in 2008 increased by 0.1% and maintains this level for the next year. The trends are similar in Aksakovo municipality - where the population under the working age reduces from 20,7% in 2000 to 16.2% in 2007 and increased by 0.2% during the last year.

During the period, the portion of the population in working age increases (from 56,3% to 62,3% for Devnya municipality and from 52,9% to 59,6% for Aksakovo municipality), while the one in over the working age decreases. The main factors include the changes in the retirement age.

The coefficient of age dependency for Devnya municipality decreased from 51,7 in 2001 to 48,3 in 2006 and increased to 49,2 in 2007, without a clear trend. The coefficient of demographic replacement is over 130 for the period and, although declining, shows potential to increase the workforce in the municipality. The coefficient of age dependency for Aksakovo municipality during this period decreased from 53,5 to 50,8, indicating a reduction in the dependent ages. In addition, the coefficient of demographic replacement has a clear downward trend in Aksakovo municipality (from 116,8 in 2002 to 89 in 2007). and therefore we can talk about a danger of reducing the workforce in the municipality.

Changes in consumer behavior

Modern customers are becoming more aware³⁹ and are seeking environmentally responsible consumption⁴⁰. This is a prerequisite for the adoption of sustainable farming and tourism practices. The modern domestic market for organic products is estimated as small, but with a potential for development⁴¹, while in Europe and worldwide it has increased⁴². On the other hand the development of ecological, cultural and rural tourism products brings value for the protection of the environment and biodiversity, the employment opportunities and quality of life - these products are considered sustainable.

At the same time, the European Commission also stimulates the creation and supply of sustainable touristic products.⁴³ These activities are supported by demand initiatives to stimulate its sustainability.⁴⁴ In order for local communities to manage to benefit from these opportunities joint planning is necessary (including public-private partnership) to create a tourist product with local identity and to create supply in the necessary proportions.

Roma ethnic communities. Within the territory of LIG DEVNYA - AKSAKOVO no ethnic conflicts are present, but it should be noted that the majority of the Roma minority are not integrated. The problem with these surfaced during the discussions of the forum sessions. Representatives of these communities are accused of theft of agricultural production from the gardens and fields. According to experts of the municipal administrations, unemployment among them is particularly large⁴⁵. Although the integration of the Roma falls outside the scope of the LDS, their standard of living is important from the viewpoint of creation of product-territory. Visitors to the target area (which are the users of the product) evaluate the interaction with the local people and the latter are a factor in determining customer satisfaction. LIG DEVNYA - AKSAKOVO in its capacity of a legal person should be involved in the consultation process for the integration of Roma. It should be noted that the area has some resources for their integration - presence of multiple uninhabited buildings in Himik residential quarter in Devnya, which can be developed with funds under the Operational Programme Regional Development.

Technological factors

Communication technologies. The widespread communication technologies (especially the Internet) among households and business bring many benefits associated with the convenience of purchasing and contracts and reducing transaction costs. Unfortunately, most of the settlements in the target area are not attractive to the Internet ISPs as of today. This would appear as an obstacle to the business - business relationships (agricultural producers and businesses from FPI) and the market business-households (for the offerors of tourist services).

Air transport. Following the development of the airline industry and competition in the sector, in the recent years, low-cost and charter carriers appeared, providing services at rates many times lower than those of the official carriers. Given the existence of an airport in the LIG DEVNYA - AKSAKOVO we should take into account this factor as an opportunity for the development of the tourism industry of the target area.

Not in the last place we should mark the innovations in fuel. Limiting the use of leaded petrol has a favorable ecological effect on the environmental situation around the roads, especially the terrains surrounding highway "Trakia".

The manufacturing enterprises from the agglomeration area were privatized over the past 13 years. The implementation of the investment programs of the new owners led to the modernization of those enterprises, that has a positive impact on the reduction of environmental pollution. Also acting in this aspect, are the increased investment in technologies for protecting the environment. This will reduce air and soil pollution, reduce risks and water pollution. The cost of protecting and restoring the environment are increased as a whole. This is expected to lead to an improvement of the environmental situation of the target area. Generally the harmful emissions are reduced, but this does not apply to all pollutants. Further initiatives at district or regional level are necessary to improve the ecological environment and the preservation of the environment components.

In the last 5-6 years water consumption increased, without being connected to the same rates of population growth and production. Municipalities should take measures to repair the plumbing network, because increased consumption is a result of increased losses in the water supply network. The issue of the construction of the sewerage network and the capacity of the treatment plants in the settlements is not resolved. Access to funding under the Operational Programme Environment and the Development Programme for rural areas can at least partially solve these problems.

In recent years, all settlements within the territory of LIG DEVNYA - AKSAKOVO were covered by municipal waste collection systems and disposal of solid waste. The municipal landfills for waste storage do not meet EU requirements. The construction of a regional landfill for solid waste near the village of Vaglen is upcoming, where the waste from Aksakovo municipality will be stored. The solution of Devnya's waste problem, however, is the starting position, because the design of municipal solid waste landfill near Provadia (which had to receive the waste from Devnya) will not obtain a building permit because it is designed in a protected area Provadiysko-Royaksko plateau.

In connection with the development of the manufacturing and transport infrastructure of Varna agglomeration appear risks for the worsening of the quality of the environment. For example, in Devnya municipality are submitted applications for the change of use of regulated land into such for warehouse and logistics functions in the southern industrial zone of Devnya, but also of areas of insulation landscaping in Povelyanovo neigbourhood, and also for the change and reassignment of agricultural land for the purposes of construction of photovoltaic parks⁴⁷. Investment activity for territorial development of settlements (to increase the share of urban areas) and/or urbanization of out-of-settlement areas in Aksakovo municipality is found mainly:

• In the southern part of the area around the municipal center, mainly for sites for production and warehouse uses and commercial storage purposes.

• In the eastern part, in connection with the concentrated tourist resource and proximity to the regional center. The interest here is mainly targeted at the development of occupation ("second home") and recreation.

Changes in the territories occupied by transport infrastructure will result in the implementation of project assumptions related to the construction of highway "Black Sea", respectively resulting changes in the existing road network as well as the implementation of new road links within the municipality and with neighboring municipalities in the first place - Varna and Balchik. The development of Varna International Airport and particularly - service of cargo flights will stimulate the investment interest in the infrastructure of intermodal transport services.⁴⁸

The elimination of these risks is beyond the scope of the LDS and relates to the powers in relation to the planning of local authorities.

As it turns out, the proximity to the market is not sufficient prerequisite for the realization of the production. Despite its proximity to the resorts on the north coast and the agglomeration area of ​​Varna, agricultural producers within the territory of LIG DEVNYA - AKSAKOVO have difficulties in realization of their production and achieving a better return on investment in production, as shared in group discussions. At the same time, they have to deal with contemporary models of distribution in retail - increase of the share of large retail chains. A solution to this is for them to become market-oriented and in their planning they should use the modern marketing concept, i.e. they must take into account the requirements of the market and not to think that manufacturing a product, it would automatically find its buyer. Along with that, the marketing costs (design, promotion and distribution) are rarely within the reach of independent small producers, which requires exercising joint planning and sharing of costs for planning and reaching the market. This indicates that the producers of the target territory should plan joint action to benefit from adjacent markets.

A good possibility of reaching the market for them is the concept of competing chains (also called network marketing) - including raw material suppliers, processors and traders. The planning of joint actions delivers value to the chain participants, improving their competitiveness against single market participants. In today's economy the competition is not between the companies, but between chains (networks).⁴⁹

To look at the rural territory only as a source of agricultural production means, means not using modern possibilities for its development. The share of tourism in today's economy grows, helping growth and other sectors (including agriculture). While tourists are not identical, customers look for different benefits from their holiday. Therefore, the tourist products that can be offered within the territory of LIG DEVNYA - AKSAKOVO will have a market, of course if properly planned, and the service is at the required level. Combining the unique features of the territory, can be created with different products with distinctive image. For this purpose, however, the efforts of individual market participants would not be sufficient. The concept of competing chains can find a place in this case.

In conclusion, adding value to the territory will increase the number of jobs, which would be of utmost importance for the vulnerable groups in the labor market - the young people and the unemployed.

We should note that in order for the territory to succeed in taking advantage of trends in the macro environment, the state of the environment is crucial. Environmental protection in rural areas is relatively with higher added value than in urban areas. This is due to the fact that the environment is an important factor in the quality of life, but in rural areas, its quality is crucial to the quality of food products, as well as for the opportunities to be used for recreation, not only by local population, but also visitors to the territory. As noted above, the industrial enterprises increase the investments in environmental protection. In addition to their efforts, the projects in the implementation of the LDS of LIG DEVNYA - AKSAKOVO will be designed to complement these efforts.