This funding aims to enhance competitive budget financing and support large cities through participation budgeting.
Restoration of the State Regional Development Fund
Vitaly Bezgin, People's Deputy and Chairman of the Subcommittee on Administrative-Territorial Organization and Local Self-Government of the Verkhovna Rada's Committee on the Organization of State Power, announced the restoration of the FDRR during a recent press briefing on November 12, 2024.
"The FDRR is coming back. The Budget-2025 project for the second reading provides for the return of the fund. The allocation is in the amount of ₴1 billion," Bezgin stated on Facebook.
Collaborative Effort for Fund Restoration
The restoration of the FDRR is the result of a joint position, amendments, and advocacy efforts led by the Ministry of Community and Territorial Development, the specialized parliamentary committee, and Oleksandr Kornienko, the first deputy chairman of the Verkhovna Rada.
"We thank the government for listening. The next step will involve appropriate changes to the Budget Code to reinstate the fund as an effective instrument for regional development," Bezgin added.
Strategic Distribution of Funds
Bezgin emphasized the importance of transparent and efficient distribution of the allocated funds to prevent misuse and ensure that financial resources are directed towards meaningful development projects.
"We hope that the people's deputies and heads of the Administrative-Territorial Units (OVA) will not distribute funds manually. Instead, the participation budget will be allocated to large cities, ensuring that everything is managed appropriately," Bezgin assured.
Importance of the FDRR in Regional Development
The State Regional Development Fund is recognized as the largest source of competitive budget financing for implementing regional development projects across Ukraine. The fund plays a crucial role in promoting economic growth, infrastructure development, and improving living standards in various regions.
Addressing Past Challenges
Despite its significant role, the effectiveness of the FDRR has been questioned in the past due to political influences at local, regional, and national levels. The restoration of the fund with clear guidelines and oversight mechanisms aims to mitigate these issues, ensuring that funds are utilized efficiently and transparently.
Government's Commitment to Regional Growth
The inclusion of the FDRR in the 2025 budget underscores the government's commitment to fostering regional development and reducing disparities between different parts of the country. By channeling funds into large cities, the government aims to create hubs of economic activity that can drive broader national growth.
Future Prospects
With the FDRR reinstated, Ukraine is poised to embark on a new phase of regional development. The strategic allocation of ₴1 billion will support various projects that enhance infrastructure, stimulate local economies, and improve public services in targeted areas.
Enhancing Competitive Financing
The restoration of the FDRR will enable regions to compete for funding based on project merit and potential impact, rather than political favoritism. This competitive approach is expected to lead to more innovative and effective development initiatives, contributing to the overall resilience and prosperity of Ukraine.
Conclusion
The restoration of the State Regional Development Fund in the State Budget for 2025 marks a pivotal step towards revitalizing regional economies and promoting sustainable development across Ukraine. With a substantial allocation of ₴1 billion, the fund is set to become a cornerstone of the government's strategy to enhance competitive budget financing and support large cities through transparent and efficient participation budgeting.
As Ukraine continues to navigate its path towards recovery and growth amidst ongoing challenges, the effective utilization of the FDRR will be essential in ensuring balanced and inclusive development across all regions.
