Competitiveness of border regions. The Lithuanian case

Abstract

The formation in the last decade on the European space of two large integrated economic associations of the EU and the Customs Union of the CIS drew lines of economic division between blocks and other states. One of the goals of the European Economic Association – improving the safety of the whole region by aligning the different levels of the development of territories on an integrated economic space. It is typicaly, that regions of one economic association bordering with the regions of other economic associations have different internal and external constraints that impede the movement of goods, capital and labor force within the sense of of integrated economic space. The most acutely susceptible to the negative effects of such influence are border regions to the EU’s eastern frontiers. Unfortunately the presence of economic borders negate the benefits that could be obtained from trade in the border regions in the adjacent territory of the neighboring country. Especially such a situation affects productions of low value added. In Lithuania, such areas include the regions bordering with Russia (Kaliningrad region) and with Belarus. The restriction of economic activity caused by the geographical factor reduces the competitiveness of these regions. So for example, in Lithuania according to the results of 2011, boundary regions with Russia and Belarus had the lowest GDP per capita compared to average in comparison with other regions. (Taurage county 56,3 %, Marijampole county 62,5 % and Alytus county 65,2 %). The purpose of the work to show how it is possible to increase the competitiveness of border regions subject to objective constraints of the economic activities in connection with the geographical position.