Economics

Makhnonosov D.V. senior teacher, Salamatina V.О.

Donetsk National University of Economics and Trade

named after Mikhail Tugan-Baranovsky

MAIN ASPECTS OF DONETSK CITY`S STRATEGIC DEVELOPMET

Donetsk is one of the most industrially developed cities of Ukraine, where quite high tempos of volume growth of industrial production are provided. The economic potential of the city is represented by: 193 industrial enterprises that have 12 branches of material production, 381 exporting enterprises, 363 building organisations, 11664 thousand of small enterprises.

In the total volume of output, work and provided services the biggest specific weight is occupied by industry. The volume of sold industrial products in 2007 was UAH 20,5 bn, 35% of which correspond to international standards (ISO).

The basic types of production are metallurgical, finished metal goods, machine engineering, coal production, production of foodstuffs, beverages, tobacco products and also production and distribution of electricity, gas and water. Specific weight of these branches in the total city volume of sales makes more than 19%. Metallurgical complex is the basic one in the economy of the city. The complex is represented by more than 30 enterprises of metallurgy and metal processing and by a coke chemical enterprise, in which about 20% of the total number of staff engaged are concentrated in the industry. Transport network of the city is constantly developing. By 2012 it is planned to reequip public transport fleet – 12 modern transport change junctions will be built in Donetsk.

Banks are one of the most important structures of market economy. This structure is represented by two levels: regional administration of the National Bank of Ukraine and commercial banks and their branches, among which there are central board of Prominvestbank, Dongorbank, “Reiffaisen Bank Aval”, “Privatbank”, “Ukrsibbank” and other.

The Strategy of social and economic development of the city till 2020 has been developed and adopted in Donetsk. The general aim of the development of the Strategy of Donetsk is to reach European living standards and standards of quality of life of the population. The general aim is set taking into account the main city problems and competitive advantages of the city. 13 main strategic objectives, instruments of realization and perspective effect of realization were formulated on social and economic development of the city.

The basic strategic targets are:

1. Development of public health services and stabilization of the population of the city.

2. Increase the level of incomes of the population and middle class formation.

3. Development of labour market.

4. Development of education system.

5. Development of Public Utilities and engineering networks of the city.

6. Activization of innovative and investment activity.

7. Development of the city industries.

8. Development of the city infrastructure.

9. Maintenance ecologically safe living conditions and preservation of the environment.

10. The saving of energy and resources, transition to use own resources in a power balance.

11. Development of small business.

12. Development of the humanitarian structure (Physical culture and sport, culture and tourism).

13. Perfection of system of municipal management.

The basic direction of modern cooperation is the development of foreign economic activity. Practically half of participants of foreign economic activity is concentrated in Donetsk. Donetsk accounts for over 23% of all export and 54% of import operations which are carried out by the enterprises of the region. The foreign trade turn of the city in general in 2007 made up about USD 5 billion, export share is more than 50%: export – USD 2,5 billion; import – USD 2,3 billion; balance (+) – USD 138 million.

In 2007 production of city’s enterprises was exported to 96 countries of the world. 381 enterprises are exporting their production and 722 ones are importing.

Export of goods to the countries of the world

An important reserve for increase of foreign economic activity efficiency in the regional level is the work of Donetsk Chamber of Commerce. It assists development of foreign economic activity of enterprises and organizations, attracts investment. Sum of direct foreign investments on 01.01.2008 against volumes of the obtained funds on 01.01.2007 has grow by 30% and made USD 705.9 million which makes up 707.5 USD per person.

Ten arguments in favour of investments in Donetsk are: profitable geographical position of the city; access to the markets of the Eastern Europe and other regions; leading position of the city in Donetsk region in Ukraine; the developed industry on the basis of its own raw-material base; highly skilled labour; the developed infrastructure; international relations; the experience of investment activity; strategic programme of the City development; the status of the city hosting EURO-2012.

So gradual development of the city demands sufficient investments, that is why strategy foresees activation of innovative and investment activity.