Monofunctional Cities: Problems, Support Provision and Development
The paper considers the peculiarities of industry in the monoindustrial cities in Donetsk region. The actions for solving the problems of the social and economic development are proposed here. Key words: monofunctional (monoindustrial) city, development, industry, state management, regional policy.
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irk-123456789-240022022-09-29T21:45:47Z Monofunctional Cities: Problems, Support Provision and Development Kuzmenko, L.M. Soldak, M.O. International and Regional Economics The paper considers the peculiarities of industry in the monoindustrial cities in Donetsk region. The actions for solving the problems of the social and economic development are proposed here. Key words: monofunctional (monoindustrial) city, development, industry, state management, regional policy. У статті розглянуто особливості промисловості моногалузевих міст Донецької області. Запропоновано заходи, що стосуються вирішення проблем їх соціально-економічного розвитку. Ключові слова: монофункціональне (моногалузеве) місто, розвиток, промисловість, державне управління, регіональна політика. В статье рассмотрены особенности промышленности моноотраслевых городов Донецкой области. Предлагаются мероприятия по решению проблем их социально-экономического развития. Ключевые слова: монофункциональный (моноотраслевой) город, развитие, промышленность, государственное управление, региональная политика. 2010 Article Monofunctional Cities: Problems, Support Provision and Development / L.M. Kuzmenko, M.O. Soldak // Економічний вісник Донбасу. — 2010. — № 4(22). — С. 83-88. — Бібліогр.: 4 назв. — англ. 1817-3772 http://dspace.nbuv.gov.ua/handle/123456789/24002 332.14+338.2 en Економічний вісник Донбасу Інститут економіки промисловості НАН України |
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International and Regional Economics International and Regional Economics Kuzmenko, L.M. Soldak, M.O. Monofunctional Cities: Problems, Support Provision and Development Економічний вісник Донбасу |
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The paper considers the peculiarities of industry in the monoindustrial cities in Donetsk region. The actions for solving the problems of the social and economic development are proposed here. Key words: monofunctional (monoindustrial) city, development, industry, state management, regional policy. |
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Kuzmenko, L.M. Soldak, M.O. |
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Kuzmenko, L.M. Soldak, M.O. |
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Kuzmenko, L.M. |
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Monofunctional Cities: Problems, Support Provision and Development |
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Monofunctional Cities: Problems, Support Provision and Development |
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Monofunctional Cities: Problems, Support Provision and Development |
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Monofunctional Cities: Problems, Support Provision and Development |
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Monofunctional Cities: Problems, Support Provision and Development |
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monofunctional cities: problems, support provision and development |
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Інститут економіки промисловості НАН України |
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2010 |
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International and Regional Economics |
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Monofunctional Cities: Problems, Support Provision and Development / L.M. Kuzmenko, M.O. Soldak // Економічний вісник Донбасу. — 2010. — № 4(22). — С. 83-88. — Бібліогр.: 4 назв. — англ. |
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83
Економічний вісник Донбасу № 4 (22), 2010
L. M. Kyzmenko, M. O. Soldak
Introduction
The monofunctional (monoindustrial) cities are an
integral element of industrial and raw materials regions.
Such cities are characterized by the availability of severe
dependence on the possibilities, rates and directions of
development of all elements included into the city system,
on the financial and economic state and stage of the life
cycle of one or two city-forming enterprises that form
the production base of the city. At the same time, the
monocentrism in the city economic structure formation
is characterized both by the low level of the branch
structure diversification and small quantity of enterprises
providing the existence of the given locality.
One should make an emphasis that the city mono-
specialization does not only determine the directions of
the city development, but also modifies the structure of
all city subsystems forming the special integral generality
of the community with the specific type of social
organization connected with implementation of a definite
socially meaningful function.
A monofunctional city represents a complex system,
where economic and technological, and social and cultural
relations form a relatively independent mechanism of
reproduction of required production resources (man
power), public goods (social infrastructure) and moral
component determining the social and cultural unity of the
local community. Herewith, the levels of urban population
mono-specialization can be different. The Russian scientists
outline the following forms of mono-specialization:
a monofunctional city, i.e. a city where a limited
number of enterprises form the critical amount of activity
that provides the city existence and development. At the
same time, the usage of the “monofunctional” term
underlines that mono-specialization can occur in the
presence of several enterprises, which refer formally to
different branches. In this case one can speak about
mono-specialization if enterprises are interconnected
within the unique production chain or serve one and the
same market;
a monoindustrial city, i.e. a city where several
enterprises of the leading, urban branch exist;
a monocentric city, where the city-forming branch
is represented by a single enterprise [2].
In Ukraine the category “monofunctional city” is
determined legally by the Resolution of the Cabinet of
Ministers of Ukraine “About Main directions of provision
of complex development of small monofunctional cities”
dated 17.03.2000 No. 521. According to this document
a small monofunctional city is a small city1, in which the
specialization of economically active population work is
determined by enterprises mainly of one-two primary
branches of economy that form the income part of the
city budget, provide functioning of the social
infrastructure and other objects of population life activity.
The city mono-specialization appears as an important
instrument of spatial optimization of production forces’
arrangement and production management. It promotes
minimization of transport costs and increase of
investments’ efficiency. In a monoindustrial city the most
powerful are the effects of localization economy
occurring at the account of an enterprise’s production
costs reduction in proportion to the growth of products
volume manufactured by the branch, and urban economy
due to the enterprise’s production costs reduction in
proportion to the growth of the city economy scales.
Alongside with that, with the loss of public
significance of needs that caused the city formation or
upon termination of social organization activity the mono-
specialized city structure appears to be the most sensitive
to external influences.
It is the availability of deep internal structural
disbalances that becomes the reason for sharp worsening
of the monofunctional city’s social and economic state
at the change of the public development priorities. Such
monofunctionality, brought to some absolute, leads to
isolation of the mono-specialized cities from regional
subsystems, thus blocking the possibility of forming valid
regional nets of cities providing their complementarity
and interaction.
The main feature of the mono-specialization
phenomenon is its objective, historically provided nature.
Occurrence and mass circulation of the mono-
УДК 332.14+338.2
L. M. Kuzmenko,
Dr. of Science (Economics), Prof.,
M. O. Soldak,
PhD (Economics),
Institute of Industrial Economics NAS of Ukraine, Donetsk
MONOFUNCTIONAL CITIES: PROBLEMS, SUPPORT PROVISION AND DEVELOPMENT
1 Small cities — cities with population up to 50 thous. people.
84
Економічний вісник Донбасу № 4 (22), 2010
L. M. Kyzmenko, M. O. Soldak
specialization phenomenon is caused by the set of factors,
which action promotes objectively the growth of the
specific weight of city-forming and reduction of the
specific weight of city-servicing types of activity.
In Ukraine there are 111 monofunctional cities,
among which: of coal extraction — 32 cities, of
production ore and nonmetallic feed — 7, power
engineering — 9, processing industry — 27, chemical
and oil refining industry — 6, agricultural centers — 18,
transport — 9, therapeutic — 2, art field — 1.
The mono-industrial cities in Donetsk region have
got the largest distribution, there are 27 of them here.
Among them there are cities with the following
specialization:
coal-mining industry: Artemovo, Biletskoye,
Belozerskoye, Ugledar, Uglegorsk, Gornyak, Dzerzhinsk,
Dobropolye, Zhdanovka, Kirovskoye, Novogrodovka,
Mospino, Rodinskoye, Ukrainsk, Yuzhnokommunarsk,
Selidovo;
extraction of ore and nonmetallic feed:
Komsomolskoye, Seversk, Soledar, Dokuchayevsk;
power engineering: Svetlodarsk, Zugres,
Kurakhovo, Nikolayevka;
processing industry: Avdeyevka, Chasov Yar,
Krasnogorovka.
The factors that activated the development of the
monoindustrial cities in Donetsk region were a historically
formed orientation of the country economy to expansion
of the extensive operation of natural resources and wide
usage of a monofunctional approach in the period of
planned economy as the instrument of regulation of
national economic space’s territorial proportions. As a
result a special type of a mono-specialized city has been
formed, which social and economic position is almost
completely depends on functionality of a city-forming
enterprise not sufficiently elastic to structural
transformations, which life cycle is strictly limited due
to non-produced resources’ depletion. The formed mono-
specialization is the reason for high sensitiveness of such
cities to unfavorable environment changes. One can
assume that their social and economic position depends
on the state of minerals reserves, degree of their industrial
development and competitiveness of enriched raw
materials extracted by a city-forming enterprise.
In Donetsk region there are 16 small monofunctional
cities, where coal industry is the main branch of economy.
31 mines function in these cities, 9 mines are in the process
of liquidation, at 2 mines the physical liquidation is
completed, 2 inoperative mines are planned to be liquidated.
The main problems of coal-mining enterprises are
chronic budget underfinancing, deficit of own current
assets for technical re-equipment, which led to the
decrease of coal extraction volumes. The situation in small
cities is aggravated by the absence of a complex approach
to solution of problems that accumulated in connection
with the closure of unpromising mines. When
implementing the project of mines’ closure the advancing
financing of actions for their physical liquidation takes
place in the prejudice to solution of social problems.
The process of mass liquidation of unprofitable coal-
mining enterprises is not always accompanied by the
scientific and economic substantiation, forecasting and
tracing of social and economic consequences. The situation
worsens due to insufficient level of centralized financing
of closed enterprises, actions in social protection of
dismissed employees, corresponding social and economic
programs of monofunctional mining cities’ development.
All this reflects negatively on the social and economic
state of the coal-mining regions and preconditions the
depressive state of the significant part of monofunctional
cities, where work at the coal-mining enterprises forms
the basis of the population life activity. The social
consequences of the undeliberate regional policy in the
monofunctional cities are:
low level of wages and availability of wages and
regress payments2 debts;
growth of unemployment;
absence of new working places;
dismissal of employees with no further employment
with the simultaneous weak motivation of miners to re-
qualification and training;
low intrabranch and territorial mobility of manforce;
reduction of population buying ability;
unsolution of questions concerning the transfer of
municipal housing and social and cultural facilities that
belong to the liquidated mines;
severe unfavorable living conditions of miners and
members of their families, abolishment of the therapeutic
system of the branch;
unsatisfactory state of the municipal housing field
and social infrastructure of the cities;
unsatisfactory environmental conditions;
growth of social strain.
Such state preconditions the danger of destruction of
human potential in the small monofunctional mining cities.
Estimation of the Condition and Perspectives of
Economic Development of Monofunctional Cities in
Donetsk Region
Due to the limited statistic information only the values
of development of the monofunctional cities of regional
2 Regress payment — payment made by an employer to an employee as compensation for damage, maim or other injury to health
connected with fulfillment of labor duties.
85
Економічний вісник Донбасу № 4 (22), 2010
L. M. Kyzmenko, M. O. Soldak
subordination were analyzed, in seven of which (Ugledar,
Dzerzhinsk, Dobropolye, Zhdanovka, Kirovskoye,
Novogrodovka, Selidovo) the profile branch is coal
extraction, in one (Avdeyevka) — coke and chemical
production and in one (Dokuchayevsk) — coal mining
represented by flux and dolomite extraction.
The industrial production of the examined
monofunctional cities occupies a small part in the regional
volume of sold industrial products (works, services) (Fig.
1). So, on the whole, the monofunctional cities in 2009 sold
7.9% of the total volume of sold industrial products in
Donetsk region. Among them Avdeyevka is a leader (3.1%).
This is confirmed by the value of the industrial products
sale per capita (Fig. 2). In 2009, in Avdeyevka this value
was 4 times higher for 9 months than on an average in the
region and amounted to 95,485.5 UAH. However, because
of the world financial crisis the volumes of sold industrial
products in Avdeyevka reduced in January-November as
compared with the similar period of 2008. It is explained by
the decline in the demand for metallurgical products which
caused the decline in the demand for coke that is the main
product produced by the city-forming enterprise OJSC
“Avdeyevka by-Product Coke Plant”.
The least specific weight in the total regional volume
of sold industrial products is possessed by Novogrodovka
and Selidovo (0.2% each). Herewith, Selidovo had the least
volume of sale, where the value of industrial products sale
amounted to 4,147.8 UAH per capita in 2009.
The main share of products manufactured in the
monoindustrial cities in Donetsk region is occupied by
raw materials, what is preconditioned by their branch
specific character (fig. 3). In Ugledar raw materials
comprise the whole volume of sold products, in
Zhdanovka and Kirovskoye — 99.9%, in
Dokuchayevsk — 99.7%, Avdeyevka — 99.4%,
Dobropolye — 98.5%, Dzerzhinsk — 96.0%. The most
diversified production is in Novogrodovka and Selidovo,
where the share of raw materials is the least — 90.6 and
81.4% correspondingly. In Novogrodovka 9.4% of the
total volume of sold products are occupied by the group
of durable goods usage, and in Selidovo 9.8% —
investment products and 8.8% — consumer goods. Thus,
CJSC “Mashzavod” functions in Novogrodovka; it
specializes in production of domestic gas appliances.
Orienting itself to the modern requirements to
consumption and strengthening of competition in the
market, the plant introduces into production new models
of appliances, renews and updates large turnout. The
availability of investment products and consumer goods
in Selidovo production structure is connected with the
activity of CJSC “Donetsk-Kurakhovo Machine-Building
Plant”, which is specialized in the release of products for
such leading branches of industry as coal-mining,
metallurgical, coke-chemical and electric power
engineering. Moreover, production of construction
materials and polygraphic industry are also developed in
this city. The dependence of the major part of monocities
in Donetsk region on coal mining connects closely the
perspectives of their development with the life cycle of
specific fields. To reduce the dependence of the cities’
economy on the coal mining industry, it is necessary to
develop enterprises of other branches located in the cities.
Notwithstanding that in 2001-2008 in Ukraine one
observed the growth of investments in the economy, the
Fig. 1. Share of Monofunctional Cities in the Total Volume of Sold Industrial Products (Works, Services)
in Donetsk Region, % [3,48].
3,1
0,5
0,4
1,2
0,7
0,4
1,1
0,3 0,2
Avdeyevka
Ugledar
Dzerzhinsk
Dobropolye
Dokuchayevsk
Zhdanovka
Kirovskoe
Novogrodovka
Selidovo
86
Економічний вісник Донбасу № 4 (22), 2010
0
50000
100000
150000
200000
250000
Done
tsk
re
gio
n
Avd
eye
vk
a
Ugled
ar
Dze
rzh
ins
k
Dobro
poly
e
Doku
ch
ay
ev
sk
Zhd
ano
vk
a
Kiro
vs
ko
e
Novo
grod
ovk
a
Seli
do
vo
%
Jenuary-
November
2006
Jenuary-
November
2007
Jenuary-
November
2008
Jenuary-
November
2009
L. M. Kyzmenko, M. O. Soldak
investment climate in small cities remains unsatisfactory.
The wear-and-tear of fixed assets, deficit of own current
assets at enterprises, growth of accounts receivable and
accounts payable, including arrears, wages arrears and as
a result the growth of population debts in community
charges, problems of ecological nature connected in general
with the consequences of the mines’ closure and current
ecologically dangerous productions, have a negative impact
on the investment image of the monoindustrial cities. Such
cities as Dzerzhinsk, Dobropolye, Kirovskoye, Selidovo
have the status of territory of priority development, but
foreign investment came only to Kirovskoye. Among other
monoindustrial cities the foreign investments were attracted
only to Avdeyevka.
Fig. 2. Volume of Sold Industrial Products per Capita in Monoindustrial Cities in Donetsk region [3, 49].
0
20
40
60
80
100
120
Don
ets
k r
egi
on
Avd
ey
evk
a
Ugle
da
r
Dzer
zh
ins
k
Dob
rop
oly
e
Dok
uc
ha
ye
vsk
Zhd
an
ov
ka
Kiro
vsk
oe
Nov
og
rod
ov
ka
Seli
do
vo
%
raw materials investment products consumer goods durable goods usage
Fig. 3.Distribution of the Volume of Sold Products of Mining and Processing Industries in Monoindustrial Cities by
Groups in 2008 [3, 51].
87
Економічний вісник Донбасу № 4 (22), 2010
L. M. Kyzmenko, M. O. Soldak
One of the values that characterize the investment
potential of the territory is the volume of investment in
the capital stock. The analysis of the corresponding data
showed that this value is influenced mainly by the branch
factor, in particular capital-output ratio of the main city-
forming enterprise in the locality. The growth of
investment volumes in the 2008 in comparison with the
2007 in monoindustrial cities in Donetsk region was
preconditioned by different reasons (Table 1).
Thus, in Ugledar this value increased due to
construction of the second turn of the mine
“Yuzhnodonbasskaya No. 3”, in Dobropolye SOJSC
“Mine Belozerskaya” and mine of SE “Dobropolyeugol”
continue the reconstruction and construction of new
objects. The significant growth of this value in Dzerzhinsk
is connected with the implementation of the innovation
development plan approved by the resolution of the City
Council session. According to the plan the introduction
of the investment and innovation project of gas methane
extraction from coal fields by SE “Dzerzhinskugol” will
be implemented (the project is accepted in 2006).
A significant growth of investments in OJSC
“Dokuchayevsk Flux-Dolomite Plant” (Dokuchaevsk) in
2008 is explained by introduction of the management
system on the basis of the industrial decision for mining
companies SAP for Mining [4]. In 2008, in CJSC “CE
“Mine “Zhdanovskaya” (Zhdanovka) there was a
reequipment of one of the faces with a mechanized high-
technology complex. In 2010, a new face having high-
technology equipment was put into operation in one of
the largest mines in Ukraine “DTEK Komsomolets
Donbassa” (Kirovskoye) as a result of investment
projects carried out in 2008-2009.
The crisis has worsened greatly the investment
climate and conditions for fulfiling technical reequipment
programs started by the enterprises. The programs have
been corrected in the time of performance, and their
implementation depends on the rates in overcoming
economic crisis situations and financial abilities of
investors as well.
Thus, the amount of the investment volumes to the
capital stock and their dynamics depend on
competitiveness of an enterprise located on the city
territory, its investment attractiveness or availability of
own assets for investment.
Provision of Support and Development of
Monofunctional Cities
The directivity of the monoindustrial cities in Donetsk
region to the release of raw materials leads to the situation in
which their social and economic condition in a long-term
period will be determined by the condition of raw material
base of the city-forming enterprise. In the short-term period
the market relations in foreign and domestic markets will be
topside; their formation takes place under the significant
influence of state macroeconomic (money-credit, currency,
foreign economic) policy. Sudden changes, herewith, of
environment can both increase significantly and decrease
significantly the competitiveness of the city-forming
enterprise’s products and by this determine the vector of
the city development on the whole. This requires the review
of approaches to planning the social and economic
development of monindustrial cities. It is efficient to make
Table 1
Investment in the Capital Stock in Monoindustrial Cities in Donetsk Region
[According to the Data of Central Administration of Statistics in Donetsk Region]
(in actual prices, thous. UAH)
Places 2006 2007 in % till
2006 2008 in % till 2007 2009 in % till
2008
Avdeyevka 81081 120970 149,20 157287 130,02 100158 63,68
Ugledar 77586 95439 123,01 101659 106,52 15970 15,71
Dzerzhinsk 35423 54095 152,71 72729 134,45 35728 49,12
Dobropolye 118904 123087 103,52 151064 122,73 123177 81,54
Dokuchayevsk 34537 28415 82,27 294939 10 - fold. 8860 3,00
Zhdanovka 11570 11056 95,56 20639 186,68 2910 14,10
Kirovskoye 57981 109549 188,94 211562 193,12 312965 147,93
Novogrodovka 31257 71144 2,3 - fold. 64280 90,35 44571 69,34
Selidovo 114093 93229 81,71 97891 105,00 32369 33,07
88
Економічний вісник Донбасу № 4 (22), 2010
L. M. Kyzmenko, M. O. Soldak
several scenarios of the plan, which will provide for an
estimate of possible direction of the city development
depending on the demand for extracted raw materials and
manufactured products in the domestic and foreign markets,
with the development of actions as to the possible unfavorable
situation stabilization. Experience of such plans’ preparation
exists just in Donetsk region — i.e. the Strategy of Donetsk
development till 2020. The social and economic development
of monofunctional cities also assumes the increase of the
specific weight of such cities’ production in the region
economy.
One should note that in the monofunctional cities in
Donetsk region, where one observes the highest growth
of industrial production and the best financial result
among such cities, the city-forming enterprises belong
to SKM Group. One can assume that their development
is determined not only by the business climate in the
foreign and domestic markets, but also by SKM Group
position. This makes necessary to optimize the
organizational structure of productions functioning in the
monoindustrial cities, create their associations and
clusters, and also cooperate with enterprises in other cities,
including the large ones. Activation of the diversification
processes in the monoindustrial cities’ economy can
promote arrangement of medium and small highly-skilled
and technically equipped enterprises of different branches
of industry, as well as intensification of production on
the basis of technical re-equipment and reconstruction
of operating enterprises. One of the efficient directions
for production diversification in conditions of this group
of cities can be considered the development of raw
materials of technogenous origin, for example, industrial
dumps, i.e. increase of the level of original raw material
processing complexity. To implement such direction of
the economic base development, different associative
structures can be formed; they solve, along with the
production problems, the problems of the cities’ ecology.
Conclusion.
The modern problems of economic development of
the monofunctional cities in Donetsk region are conditioned
by their branch specialization. Reduction of production
volumes in the metallurgical branch caused the worsening
of the condition almost at all enterprises of main branches
of industry in the region. Such tendency is confirmed by
the investigations of the production volume dynamics and
products, services sale in the monofunctional cities. The
process of overcoming the crisis for these cities is
complicated by the raw material orientation of products.
In some monoindustrial cities such products comprise the
whole or almost the whole production volume. That is
why, when solving complex problems of stabilization and
development of the cities’ economy, renewal and usage of
their industrial potential is of great importance; for this
purpose production diversification and intensification are
required, as well as coordinated actions in small cities’
support at the level of state, regional and city management.
References
1. Resolution of the Cabinet of Ministers of Ukraine
“About Main directions of provision of complex
development of small monofunctional cities” dated
17.03.2000 // Oficyinyi vicnyk Ukrainy. — 2002. — №12.
— P. 471. 2. Turgel I. D. Phenomenon of city mono-
specialization // Chynovnyk. — 2003. — № 103 (23).
[Electronic resource]. — Режим доступу :
http://ch.uapa.ru/modern/article.php?id=351]. 3. Social
and economic state of Donetsk region for 2008 // Central
Administration of Statistics in Donetsk region. —
Donetsk, 2009. — 144 p. 4. Оfficial site of SKM Group
// [Electronic resource]. — Режим доступу :
http:/www.scm.com.ua/ru/publish/qrticle/64127.
Kuzmenko L. M., Soldak M. O. Monofunctional
Cities: Problems, Support Provision and
Development
The paper considers the peculiarities of industry in
the monoindustrial cities in Donetsk region. The actions
for solving the problems of the social and economic
development are proposed here.
Key words: monofunctional (monoindustrial) city,
development, industry, state management, regional policy.
Кузьменко Л. М., Солдак М. О. Монофунк-
циональні міста: проблеми, забезпечення
підтримки та розвиток
У статті розглянуто особливості промисловості
моногалузевих міст Донецької області. Запропонова-
но заходи, що стосуються вирішення проблем їх со-
ціально-економічного розвитку.
Ключові слова: монофункціональне (моногалу-
зеве) місто, розвиток, промисловість, державне уп-
равління, регіональна політика.
Кузьменко Л. М., Солдак М. А. Монофунк-
циональные города: проблемы, обеспечение под-
держки и развитие
В статье рассмотрены особенности промышлен-
ности моноотраслевых городов Донецкой области.
Предлагаются мероприятия по решению проблем их
социально-экономического развития.
Ключевые слова: монофункциональный (моно-
отраслевой) город, развитие, промышленность, госу-
дарственное управление, региональная политика.
Received by the editors: 19.10.2010
and final form in 01.12.2010
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