CROATIAN DEVELOPMENT INDEX AND REGIONAL DISPARITIES IN SPATIAL DISTRIBUTION OF EU FUNDS FOR RURAL DEVELOPMENT

Abstract

The EU funds are an important factor in the development process of any new member state of the European Union. As such, EU funds support modernization and help facilitate further economic development in a member state, including its rural regions. The Republic of Croatia, based on NUTS3 classification, is predominantly rural with 79.01% of its territory being rural and 56.07% of population living in rural areas. Therefore, rural development is an integral part of overall economic development of the country. In order to improve competitiveness of Croatian agriculture sector, especially its small family farms, it is crucial to invest in their means of production and modernization of their assets. Funds awarded within the EAFRD framework in The Republic of Croatia tend to facilitate this process and further aid rural development. Croatian Development Index has a very important role in allocation of before mentioned funds. Its values are taken as criteria for state-aided areas, scoring projects (including EAFRD and other EU funds applications) and other aspects of public development policies. As one of the primary goals of Rural Development Programme in the Republic of Croatia, it is especially important to achieve a more balanced territorial development of rural areas given the fact that Croatian rural regions (counties and municipalities) are not equally developed, ensuring job creation and job retention in the process. The existence of disparities in the level of development is not a characteristic that can be found only in the Republic of Croatia, but it is an issue that should be taken into account when devising or reconsidering criteria for allocation of future EU funds in the Republic of Croatia, in order to further reduce regional disparities in the level of development. The aim of this paper is to provide empirical evidence on associations between the indicators of Croatian Development Index and spatial distribution of EU funds awarded within the Rural Development programme in The Republic of Croatia based on available data for the most recent invitation to tender for EAFRD funds.