The costs of peripherality.
Date: 2002-12-02
Institutions: Directorate-General for Parliamentary Research Services
Subjects: EU regional policy, peripheral region, regional aid, regional development

EUROPEAN PARLIAMENT 

Directorate-General for Research 

WORKING PAPER 

THE COSTS OF PERIPHERALITY 

Regional Policy Series 

REGI 111 EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
This publication is available in Portuguese (original) and English (REGI 111 PT / REGI 111 EN).  

A list of publications in the Regional Policy series can be found at the end of this working paper. 

Publisher: 

Authors:  

Editor: 

European Parliament 
L-2929 Luxembourg 

Mário José Amaral Fortuna, Professor at the University of the Azores, 
Director Department of Economics and Business; 
Tomaz Ponce Dentinho and  José António Cabral Vieira 
Azores 

Anna Lucchese 
Division of Agriculture, Transport, Regional Affairs and  Development 
Directorate General for Research 
Tel: (00 352) 4300 22574 / 22792 
Fax: (00 352) 43 40 71 
E-mail: alucchese@europarl.eu.int 

The opinions expressed in this document are the sole responsibility of the authors and do not necessarily represent 
the official position of the European Parliament. 

Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and 
the publisher is given prior notice and is sent a copy. 

Manuscript completed in January 2001. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN PARLIAMENT 

Directorate-General for Research 

WORKING PAPER 

THE COSTS OF PERIPHERALITY 

Regional Policy Series 

REGI 111 EN 

01-2001 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

TABLE OF CONTENTS 

INTRODUCTION ...................................................................................................................................   5 

1.   OBJECTIVES OF THE STUDY .....................................................................................................   7 

2.   REVIEW OF LEGISLATION ........................................................................................................   9 

3.   LITERATURE REVIEW .................................................................................................................13 

4.   REFINEMENT OF THE METHODOLOGY FOR ESTIMATING 

  THE COSTS OF PERIPHERALITY ...........................................................................................21 

5.   CALCULATING THE COSTS OF PERIPHERALITY .............................................................27 

6.   A STATISTICAL REVISION OF THE ULTRA-PERIPHERAL  

  REGIONS ...................................................................................................................................... 29 

7.   REVIEW OF THE POLICIES FOR THE PERIPHERY  .......................................................... 43 

  7.1 The Balance .............................................................................................................................. 43 

  7.2 The Future  ................................................................................................................................ 45 

  7.3 The Calendar  ............................................................................................................................ 50 

  7.4 An Evaluation of the Proposals of the Commission  ............................................................... 51 

8.   ANALYSIS OF POLICY IMPACTS ON THE COSTS OF PERIPHERALITY  ................... 53 

  8.1 Structural Funds from the European Investment Bank   .......................................................... 54 

  8.2 Policies for the Value Chains of Agriculture, Fisheries and Tourism  .................................... 56 

  8.3 Fiscal and Customs policies and also support to SMEs and to energy supply  ...................... 58 

  8.4 Transport and Communication policies  .................................................................................. 60 

  8.5 Policies related to environment, research, information and cooperation................................. 61 

  8.6 Synthesis ................................................................................................................................... 63 

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9.    SOME OPTIONS FOR DEALING WITH THE PROBLEMS OF  

  ULTRA-PERIPHERALITY ..........................................................................................................69 

10.  CONCLUSIONS AND RECOMMENDATIONS ........................................................................73 

BIBLIOGRAPHY ...................................................................................................................................77 

List of further publications in the Regional Policies Series ............................................... 81 

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INTRODUCTION 

The Directorate General for Research of the European Parliament contracted with the 
University of the Azores (Department of Business and Economics) to do a study of the 
costs of peripherality. 

According  to  the  workplan  set,  the  study  involved  development  of  the  following 
sections: 

i) 

Definition  of  the  objectives  of  the  study  (comprising  a  meeting  with  the 
European  Parliament  office  that  contracted  the  study  for  fine  tuning  these 
objectives); 

ii)  Review of relevant legislation (that determines the need for this study permitting 

the clarification of the process of preparation of EC policies); 

iii)  Review  of  relevant  bibliography  (this  review  will  allow  us  to  obtain  a  global 
view  of  the  methodologies  used  in  the  past  to  measure  the  disadvantages  of 
peripheral regions); 

iv)  Refining  a  methodology  for  measuring  the  costs  of  peripherality  (taking  into 

account what was advanced in our proposal); 

v) 

Statistical review of the peripheral regions (identifying statistical sources and the 
socio-economic  situation  of  each  of  the  regions  as  well  as  significant  gaps  in 
statistical information);  

vi)  Estimation of the costs of peripherality; 

vii)  Review of policies (EC, national and regional) for the periphery; 

viii)  Analysis of the policies on the costs of peripherality; 

ix)  Conclusions; 

x)  Recommendations. 

This report is the final work done in response to the terms of the contract.  

In  the  process  of  completing  this  report  the  team  involved  has  consulted  a  wide 
bibliography from academics, governments and laws and regulations emanating from 
parliaments  on the  matters being  analysed and  had various meetings with services of 
the  European  Parliament,  with  representatives  to  the  European  Parliament,  with 
representatives  of  the  governments  of  the  countries  involved,  with  members  of 
regional  governments  and  with  business  associations  of  the  regions  in  visits  to 
Brussels,  the  Azores,  Madeira,  the  Canary  Islands,  La  Reunion,  Martinique, 
Guadeloupe and Guyana. 

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1.  OBJECTIVES OF THE STUDY 

In accordance with the terms of reference, the study should:  

• 

look at the EU's outermost regions mentioned above, and review existing statistical 
material for measuring the disadvantages caused by peripherality1;  

•  analyse the situation and developments at the EU institutional level, including the 
Commission’s  report  on  ultra-peripheral  regions  (COM(2000) 147  final  of 
13.03.2000); 

•  analyse the Member States’ positions on this issue; 
•  analyse the Member States’ reactions to the Commission’s new proposals; 
•  deliver  a  quantification  of  the  costs  arising  from  the  disadvantages  due  to 
peripherality and to what extent the Commission's proposal would possibly remedy 
the situation; 

•  evaluate if today's EU structural funds available to the peripheral regions  together 
with  national  transfers  are  compensating  the  costs  of  peripherality  (is  the  gap 
widening?); 

•  show  the  relative  socio/economic  position  of  peripheral  regions  and  their 

development perspectives with regard to the average position of EU regions; 

•  make  a  presentation  of  policy  options,  with  conclusions  and  proposals,  for 
Parliament,  to  be  considered  in  its  deliberations  on  the  Commission's  report  and 
proposals. 

In  a  meeting  held  on  10  July  2000  with  members  of  the  Directorate-General  for 
Research of the European Parliament, it was further agreed that there are three major 
issues that the work should address: 

• 

• 

the evaluation of the Commission’s report on the impact of the policies in favour of 
the peripheral regions executed up to 1999; 
the  evaluation  of  the  Commission’s  proposal,  for  the  future,  contained  in  the 
report, and; 

•  new proposals to deal with the costs of peripherality. 

1  In  particular  the  studies  produced  by  Eurisles:  "Transport  systems  in  the  islands",  1996;  "Statistical 
indicators  of  regional  disparities  caused  by  insularity  and  ultra-peripherality",  1997;  "The  island 
regions and the price of intra-EU transport of goods", 1999, as well as publications of the CPMR.  

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2.  REVIEW OF LEGISLATION 

The ultra-peripherality concept was first used in the European Union (EU) in the mid 
eighties,  on  suggestion  of  the  Portuguese  government.  Before  this  date,  the  French 
departments already benefited from a special statute without any generalization of the 
concept2. 

With  Portugal’s  and  Spain’s  entry  into  the  EU  the  problem  of  the  territories  at  a 
considerable  distance  from  the  European  continent  became  more  significant  since  it 
now involved three Member States as opposed to one.  The specific problems of these 
regions are then considered as an EU problem and not just of the respective countries. 

The specificities of the French territories had already been recognised in number 2 of 
article 227 of the Treaty of Rome. 

As  of  the  approval  of  the  Maastricht  Treaty,  the  specificities  of  the  UPRs  are 
specifically  referred  to  in  the  declaration  annex  to  that  law.  According  to  this 
declaration: 

“…  while  the  provisions  of  the  Treaty  establishing  the  European 
Community  and  secondary  legislation  apply  automatically  to  outermost 
regions, it is nonetheless possible to adopt specific measures with a view 
to the economic and social development of these regions. Such measures 
should  have  as  their  aim  both  the  completion  of  the  internal  market  and 
recognition  of  the  regional  reality  to  enable  the  outermost  regions  to 
achieve the average economic and social level of the Community3”. 

This was a first step, on the part of the EU, towards recognizing that there are regions 
with peculiar characteristics, different from all others and that, for this reason, specific 
policies are justified. 

On  the  basis  of  this  declaration  and  following  the  programs  for  the  French  Overseas 
Departments (DOM), the POSEI4 program was developed and called Poseidom for the 
DOM, Poseican for the Canary Islands and Poseima for the Portuguese archipelagos of 
Madeira and the Azores. 

The program included a set of temporary measures, some with budget implications and 
others as exceptions to community norms. 

Contrary to what happened relative to other regions, it became  more evident  that  the 
specific  measures  in  favour  of  the  UPRs  should  be  of  a  more  permanent  nature, 
warranting a firmer compromise on the part of the EU. 

This  difference  was  expressed  in  the  Treaty  of  Amsterdam  where  the  concept  of 
ultraperiphery is recognized with the corresponding economic and social implications. 

2  See,  for  example,  Patrick  Guillaumin,  2000,  "La  Dimension  Ultrapériphérique  de  L’Union 
Européenne", Mimeo. 
3 Treaty of the European Union (Maastricht). 
4 Programme d’Options Spécifique à l’Éloignement et l’Insularité. 

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Specific reference to the less developed insular regions was made in article 158 of the 
Treaty as revised in Amsterdam5:  

“In  order  to  promote  its  overall  harmonious  development,  the  Community  shall 
develop  and  pursue  its  actions  leading  to  the  strengthening  of  its  economic  and 
social cohesion. 

In particular, the Community shall aim at reducing disparity between the levels 
of development of the various regions and the backwardness of the less favoured 
regions or islands, including rural areas”. 

Article 159, on the other hand, clarifies which instruments are available for conducting 
economic  and social policy, admitting that the  Council conceive specific  actions if it 
considers them necessary. The article states that:  

“…  The  formulation  and  the  implementation  of  the  policies  and  actions  of  the 
Community’s policies  and actions and the  implementation  of the internal  market 
shall take into account the objectives set out in Article 158 and shall contribute to 
their  achievement.  The  Community  shall  also  support  the  achievement  of  these 
objectives by actions it takes … 

The Commission shall submit a report … every three years on the progress made 
towards achieving economic and social cohesion and on the manner in which the 
various means provided for in this article have contributed to it. This report shall, 
if necessary, be accompanied by appropriate proposals. 

If specific actions prove necessary outside the Funds and without prejudice of 
the  measures  decided  upon  within  the  framework  of  the  other  Community 
policies, such actions may be adopted by the Council …”. 

On the other hand, number 2 of article 299, dedicated to the ultra-peripheral regions, 
states that: 

“2. The provisions of this Treaty shall apply to the French overseas departments, 
the Azores, Madeira and the Canary Islands. 

However,  taking  account  of  the  social  and  economic  situation  of  the  French 
overseas  departments,  the  Azores,  Madeira  and  the  Canary  Islands  which  is 
compounded  by  their  remoteness,  insularity,  small  size,  difficult  topography  and 
climate,  economic  dependence  on  a  few  products, 
the  permanence  and 
combination  of  which  severely  restrain  their  development,  the  Council,  …  shall 
adopt  specific  measures  aimed,  in  particular,  at  laying  down  the  conditions  of 
application of the present Treaty to those regions, including common policies. 

The Council shall, when adopting the relevant measures referred to in the second 
subparagraph,  take  into  account  areas  such  as  customs  and  trade  policies,  fiscal 

5 Official Journal of the European Communities, 97/C340/01. 

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policy, free zones, agriculture and fisheries policies, conditions for supply of raw 
material  and  essential  consumer  goods,  State  aids  and  conditions  for  access  to 
structural funds and to horizontal Community programs. 

The  Council  shall  adopt  the  measures  referred  to  in  the  second  subparagraph 
taking  into  account  the  special  characteristics  and  constraints  of  the  outermost 
regions  without  undermining  the  integrity  and  the  coherence  of  the  Community 
legal order, including the internal market and common policies.” 

This article commits the EU to pursue, with the countries involved, the development of 
these regions through adequate specific measures.  

For  the  purpose  of  the  present  report,  it  is  supposed  that  this  article  implies  an 
unquestionable  will  to  undertake  the  measures  necessary  to reduce  the  disadvantages 
identified  and  to  promote  the  development  convergence  of  these  regions  when 
compared to the EU average, as measured by per capita national income. 

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3.  LITERATURE REVIEW 

The introduction of the concept of ultra-peripherality has led a considerable number of 
researchers to discuss its precise definition. We highlight here three approaches: 

I    -  One  that  identifies  differences  in  the  development  processes  and  integration  to 
justify policies as is explicit in the report COM(2000) 147 final and as is implied in the 
Treaty of Amsterdam; 

II   -  One that seeks to construct indicators that highlight differences in development 
processes that justify specific policies, as happens with the works of Eurisles6; 

III  -  Finally, one that seeks to understand the development and integration processes 
of  the  ultra-peripheral  regions  and  to  specify  instruments  to  promote  sustainable 
development, as is the case of the work  of Tomaz Dentinho7, which is the basis for the 
concept of ultra-peripherality adopted in the present report. 

The Treaty of Amsterdam and the Commission’s Report 

By specifying the regions that fall within its concept of ultra-peripherality, the Treaty 
of Amsterdam limits some aspects of the concept as it intends to use it. 

To  justify  specific  actions  the  Treaty  starts  by  recognizing  that  here  is  a  difficult 
structural  social  and  economic  situation.  On  this  matter  the  report  of  the 
Commission8 states that  six out of the seven regions involved are among the poorest 
in the EU. The Commission further specifies their low per capita income (59% of the 
EU average) and, in most cases, excessively high unemployment rates. 

It  is  this  situation  that  constitutes  the  starting  point  to  justify  specific  economic 
policies.  Various  factors  are  listed  to  explain  the  backwardness  of  these  regions. 
Number  2  of  article  299  explicitly  refers  to    remoteness,  insularity,  small  size, 
difficult  topography  and  climate,  and  the  dependence  on  a  small  number  of 
products. 

The  Commission’s  report  also  states  that  “...  these  regions  are  very  far  from  the 
European  continent  and  at  the  same  time,  in  the  majority  of  the  cases,  near  third 
countries that are less developed”9. 

6 Hache, J.-D., 1997, Statistical Indicators of Regional Disparities Generated by Insularity, Eurisles. 
7  Dentinho,  T.,  1995,  Information  and  Communication  Technologies  and  Regional  Development:  The 
Case of the Azores Dairy Value Chain, PhD dissertation, Centre for Urban and Regional Development 
Studies, University of Newcastle upon Tyne. 
8 COM (2000) 147, pp. 5. 
9 Ibidem, pp. 5. 

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Eurisles 

The  Eurisles  study  tries  to  identify  indicators  that  characterize  restrictions  to 
development specific to the ultra-peripheral regions. Their selection goes to indicators 
of  accessibility  conceived  by  reference  to  a  relevant  economic  center.  The  study 
assumes,  in  its  analysis  of  the  UPRs,  that  the  relevant  center  is  Maastricht.  This 
assumption imposes a strong restriction since for the Azores the center is still mainland 
Portugal which is better represented by Lisbon. For Madeira it can be Lisbon or some 
capital  city  in  the  North  of  Europe  where  its  tourists  come  from.  For  the  Canary 
Islands it will be Madrid or Barcelona. For the DOM it might be Paris. 

Still according to this study, the concept of ultra-periphery, which is not limited to the 
concept  of  island  or  of  insularity,  is  characterized  by  five  factors.  Two  are  of  a 
geographical nature: remoteness from Europe  and climatic conditions.  Two are of an 
institutional  and  political  nature:  European  frontier  and  specific 
institutional 
arrangements.  One is economic: socio-economic weakness10. 

The climate and distance parameters cannot be altered. However, they can be seen as a 
restriction or as a potential. Climate is beneficial for tourism in the Canary Islands and 
to  milk  production  in  the  Azores.  Distance  is  costly  for  exports  but  a  protection  of 
local production. 

The institutional parameter refers to the political solutions that each country has found 
for its internal organization and to the special situations accepted by the EU. 

The  frontier  parameter  refers  to  a  function  which  is  also  political  and  which  may 
legitimise  an  interventionist  strategy  in  these  regions.  It  appeals  to  the  geo-strategic 
interest that might be associated with the fact that these regions are part of the EU11. 

Finally, the socio-economic vulnerability associated to insularity12 is also reflected in 
accessibility, independently of the distance to the central regions because it limits the 
forms  of  transport  of  goods  and  people.  Consequently,  the  access  of  people  is 
invariably to Europe or to nearby geographical areas and is invariably done mostly by 
air  travel.  This  fact  alone  is  a  strong  factor  of  isolation  and,  in  many  cases,  a  strong 

10 According to the study 

• 

• 

• 
• 

ultra-peripherality can be defined as the extreme distance of these territories from the European 
continent;  

ultra-peripherality  is  characterised  by  climatic  constraints  and by  specifically  tropical  or  sub-
tropical productions;  

ultra-peripherality also has an additional role of EU frontier;  

ultra-peripherality  is  an  accumulation  of  constraints,  the  result  of  which  confers  its  specific 
originality; the various variables selected for the Study and by the Treaty clearly show a clear 
difference  of  intensity  in  the  handicap  (unemployment,  income,  dependence,  remoteness, 
GDP...);  

•  ultra-peripherality  is  also  marked  by  a  different  situation  on  the  institutional  level  with 

particular status in internal and community law. 

11  If  this  is  a  function  attributed  to  the  UPRs  then  it  should  be  made  clear  since  it  has  important 
implications on the functioning of these regions. 
12 Even though  French Guyana is not an insular region it has isolation characteristics similar to them. 

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limitation.  The  potential  that  can  be  harnessed  from  this  isolation  requires  measures 
that are generally more difficult to implement and more uncertain in their results. 

The access of merchandise is also limited to transport by air or by sea. These regions 
cannot benefit, for example, from the trans-European network of roads and railways. 

Access  to  information  does  not  have  the  same  technical  limitations  as  in  the  case  of 
goods and people but the necessary initial investments can be a constraint, be it during 
their  construction  or  during  their  operation,  because  of  higher  average  costs  for  the 
users13. 

These  limitations  have  consequences  not  only  in  terms  of  the  costs  of  providing  the 
service  but  also  and  most  importantly  in  terms  of  the  distortions  in  the  markets  for 
these  services.  In  fact,  it  is  common  to  find  monopolies  (State  or  private)  in  the 
transport and communications systems in the ultra-peripheral regions. 

An Interpretation of the Concept of Ultra-peripherality 

There  are  many  and  diverse  studies  that  seek  to  understand  and  explain  the 
development  and  integration  processes  of  the  ultra-peripheral  regions.  This  section 
addresses  some  relevant  issues  trying  to  lay  out  a  model  capable  of  evaluating  the 
impact of development policies for ultra-peripheral regions. 

Ultra-peripherality is an economic and social phenomenon associated to a geographical 
structure characterized by two attributes: size and distance14. The small size means that 
valuable  but  scarce  resources  in  these  regions  can  only  be  fully  utilized  by  outside 
markets15.  The  consequence  of  this  is  the  shortage  of  space  and  of  usable  soil,  the 
reduced  size  of  the  local  market,  the  difficulty  in  mobilizing  venture  capital,  the 
shortage  of  specialized  labour  and  diseconomies  of  scale  in  the  provision  of 
standardized public services.  

From  an  economic  point  of  view,  ultra-peripherality  is  a  technological  peculiarity 
considering that resources are available but limited.  

What  we  find  in  the  ultra-peripheral  regions  are  not  production  functions  with 
declining  economies  of  scale,  but  rather  technological  processes,  unexpectedly 
truncated,  of  resource  mobilisation,  production  and  distribution  of  consumption.  But 
technology,  interfacing  between  Man  and  the  world,  results  from  the  social 
environment  through  the  processes  of  demand,  supply,  adoption,  understanding, 

13  The  Von  Tunen  model  is  also  applicable  to  the  cost  of  access  to  information  -  Ilbery,  B.,  1985, 
"Agriculture Decision Making", Chapter 2 of Agriculture Geography, A Social and Economic Analysis, 
Oxford University Press, UK. 
14 Godenau, D., 1992, The Interaction of Population and the Economy under Conditions of Insularity, 
IV World Congress of RSAI, Palma de Mallorca, 26-29 May. 
15  Without  outside  connections  the  islands  become  fragmented  between  themselves  and  within 
themselves, in Doumenge, F., 1985, "The Viability of Small Intratropical Islands", pp. 70-118 of States, 
Microstates and Islands, Editors: Dommen, E. & Hein, Ph., Croom Helm, London. 

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adaptation, use and innovation16. Thus, the ultra-peripherality, characterised by remote 
demand  and  limited  resources,  changes  not  only  the technological  processes  but  also 
the  organisational  structures  and  cultural  identities  of  the  ultra-peripheral  territories. 
Related  to  the  size  and  access  factors  is  not  only  a  problem  of  limited  resources  but 
also  another  facet  of  ultra-peripherality:  a  compulsory  spatial  identity17.  Truly  the 
importance  of  the  islands  is  also  cultural  -  culture  influenced  by  the  social 
characteristics  and  ambience  of  each  island.  What  would  become  of  the  Canaries 
without tourism and sun? Of the Azores without milk and green fields? Of Guadeloupe 
without sugar cane and white sand beaches?18 

But  if  the  compulsory  spatial  identity  is  a  characteristic  that  results  from  size  and 
isolation  of  the  ultra-peripheral  regions,  what  would  then  be  the  dividing  line  from 
other geographical realities with different patterns of size and access? 

Figure  I  defines  four  types  of  regions  through  crossing  two  determinant  factors  of 
ultra-peripherality,  size  and  access,  and  identifying  other  types  of  situations 
determined by geography: centrality, peripherality and marginality. 

A central region is one that has accessibility and dimension. A peripheral region is one 
that has dimension but not accessibility. A marginal region is accessible but does not 
have size. Finally, the ultra-peripheral region has neither size nor accessibility. 

Note  that,  in  economic  terms,  the  size  normally  associated  with  productive  capacity 
and  accessibility  can  be  defined  in  terms  of  consumption  possibilities.  Since  we  are 
dealing with regions it is not clear that production capacity will result in consumption, 
not  only  because  we  might  have  capacities  that  are  not  totally  explored  but  also 
because  there  are  special  distribution  mechanisms  through  which,  for  example,  some 
richer  regions  finance  less  productive  ones  by  paying  for  public  services  and 
investment. 

16 Unctad, 1985, "Examination of the Particular Needs and Problems of Island Developing Countries", 
pp.  118-151  of  States,  Microstates  and  Islands,  editors:  Dommen,  E.  &  Hein,  Ph.,  Croom  Helm, 
London. 
17  Coddacioni-Meistersheim,  A.,  1990,  L'Ile  Comme  Système:  Quelques  Réflexions  Méthodologiques,  
Meeting SIDAM, Azores 1990, University of the Azores. 
18 Hache , J.-D., 2000, Quel statut pour les îles d'Europe?, CRPE, L'Harmattan, 2000. 

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Figure 1: Typology of Regions 

Peripherality

Centrality

e
z
i
S

Ultraperipherality

Marginality

Access

Three corollaries can be derived from this typology: 

•  First,  significant  differences  exist  between  ultra-peripherality,  peripherality, 

marginality and centrality19; 

•  Second,  alterations  of  accessibility  and  dimension  induce  processes  of  regional 
transformation  through  which  an  ultra-peripheral  region  can,  from  an  economic 
viewpoint, become peripheral, marginal or even central20; 

•  Third, ultra-peripherality has, at the same time, advantages and disadvantages: the 
isolation represents inaccessibility but can also offer protection and an environment 
of innovation; the limited resources represent a technological restriction but also a 
possibility  to  generate  revenues21  when  good  regulation  exists;  the  small  size 

19 These differences are confirmed in works that explain that the ultra-peripheral and insular economies 
are markedly different from peripheral economies, in Camagni, R. & al., 1991, Interregional Disparities 
in  the  European  Community  Structure  and  Performance  of  Objective  1  Regions  in  the  1980s,  Paper 
presented to the North American Regional Science Conference, New Orleans, November 6-9. 
20 It occurs that the same region divides itself into marginal sectors and peripheral sectors generating a 
phenomenon of duality and structural conflict in the definition of policies. In the Azores the dairies are 
peripheral but the public services are marginal. In the Canaries and in Madeira tourism demand attains 
centrality but the public services depend considerably on outside support.  
21  Vernicos,  N.,  1987,  "The  Study  of  Mediterranean  Small  Islands,  Emerging  Theoretical  Issues", 
Ekistics 323/324, March/April, May/June, Athens. 

17 

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The costs of peripherality 

enhances  synergies  but  fosters  the  creation  of  monopolies;  the  specialisation  is  a 
risk22 but also a potential to create competitive advantages23; the diseconomies of 
scale  of  public  services24  can  also  imply  better  quality  and  innovation25  in  their 
provision. 

It is evident that European policies to aid the development of the ultra-periphery have 
not  significantly  decreased  the  relative  underdevelopment  of  these  regions.  It  is  also 
clear  that  it  is  not  enough  to  improve  accessibility  since  it  fosters  processes  of 
marginalisation,  erodes  production  capacity,  diverts 
towards  rigid 
importing activities in a process called “Dutch disease”, increases dependence on the 
outside  and  stimulates  either  unemployment  or  population  decreases.  It  is  because  of 
these facts that it is important to analyse and revise aid policies to the ultra-periphery, 
assuming  that,  even  though  the  geographic  characteristics  of  ultra-peripherality  are 
permanent,  this  does  not  imply  that  the  gap  of    economic  and  social  development  is 
insurmountable. 

investment 

The Management of Ultra-peripherality 

There  are  three  types  of  measures  of  the  management  of  ultra-peripherality  that,  by 
influencing the dimension and accessibility of the socio-economic systems, permit the 
processes  of  sustainable  development  in  ultra-peripheral  regions  to  better  converge 
with the regions of the European community. 

First, to intervene on the communication and transportation systems that influence the 
accessibility of the regions to consumption and supply markets26.  Second, to improve 
the  competitiveness  of  export  value  chains  that  use  endogenous  resources.    Third,  to 
modulate,  through  knowledge  and  technology,  the  information  and  decision  systems 
that influence the mechanisms that control and distribute value. 

In what concerns the first type of measures of management of ultra-peripherality, the 
regulation of the transportation and communications systems ought to be oriented not 
so  much  towards  the  supply  at  monopolistic  prices  (as  happens  in  many  cases  in 
defence of a supposed public service), as to guarantee the commercialisation, internal 
and external, of products and services with competitive transport and communication 
prices.  This  implies  the  stimulation  of  competition  in  transport  and  communication 
between  ultra-peripheral  regions  and  adjacent  regions  and  between  these  regions  and 
the  developed  world  where  the  more  significant  markets  are  located.  It  implies  also 
that  the  research  and  development  of  transport  systems,  in  sync  with  the  systems 

22  Hess, A.,  1990,  Overview.  Sustainable  Development  and  Environmental  Management  of  Small 
Islands, Ed. Beller, W., d'Ayala, P. & Hein, P.,  Unesco, Paris. 
23 Porter, M., 1990, The Competitive Advantage of Nations, Macmillan Press Ltd, London. 
24  Casabianca,  F.,  &  Biggi, M.,  1987,  "Iles  et  Dépendence",  Colloque Espace  et  Péripherie,  Lisbonne, 
Association de Science Régionale de Langue Française. 
25 Murray, D., 1985, "Public Administration in the Microstates of the Pacific", States, Microstates and 
Islands, Ed. Dommen, E. and Hein, P., Croom Helm, London, pp. 185-203. 
26 Cohen, R., 1983, "Introduction", in African Islands and Enclaves, Sage Publications, Beverly Hills. 

18 

PE 297.197 

 
 
 
 
 
 
                                                 
The costs of peripherality 

internal  and  external 
dictated  by  the  market,  would  be  appropriate 
commercialisation  of  products  from  the  ultra-peripheral  regions.  Finally,  this  implies 
the  monitoring  of  price  behaviour  and  service  quality  with  the  intention  of  adopting 
regulatory  measures  that  promote  competition,  and  control  price  and  quality  of 
services provided. 

the 

to 

The  second  vector  of  the  management  of  ultra-peripherality  is  associated  with  the 
dynamics of competitiveness in export value chains27, which implies the existence of 
competitive  supply  markets  and  buyers  and  the  production,  transformation  and 
distribution  of  products  with  increasing  value.  For  this  it  is  important  to  encourage 
research  and  development  of  high  value  products,  to  reduce  the  stake  in  the 
commercialisation  of  non-differentiated  products  and  to  promote  the  factors  that 
transformation  and 
facilitate 
commercialisation sectors. 

the  entry  of  new  businesses 

the  regional 

into 

Finally,  in  reference  to  the  third  vector  of  the  management  of  ultra-peripherality,  in 
order  to  model  information  and  decision  systems,  it  is  fundamental:  i)  to  modernise 
information systems in exporters’ value chains in a way that integrates ultra-peripheral 
regions  into  the  dynamics  of  the  Information  Society;  ii)  to  reorient  information 
gathering  systems  to  aid  in  the  decision  making  of  regional  entities  and  to  increase 
their participation in decisions that are made in the exterior that affect them; and  iii) to 
promote  technological  and  methodological  innovation  in  the  supply  of  local  public 
services. 

With a combination of these measures, ultra-peripheral regions could begin a sustained 
process  of  development.  It  is  fundamental  to  guarantee  the  sustainability  of  the 
measures  implemented  and  to  monitor  their  effects  in  terms  of  the  appropriate 
development indicators. The model is sketched in the figure that follows. 

27  Vellas, F.,  1988,  "Les  Stratégies  d'Ouverture  Internationale  des  Petits  Pays  Insulaires",  L'Enjeu  des 
Petites Économies Insulaires, Ed. Crusol, J., Hein, P. & Vellas, F., Economica, Paris, pp. 33-77. 

19 

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The costs of peripherality 

                      Figure 2: Combined Effect of Measures 

Peripherality

Centrality

e
z
i
S

Competitiveness 
of the Value Chain 

Results from the 
Measures 

Ultraperipherality

Marginality

Access to 
information 

Reduced transport 
costs 

Access

20 

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The costs of peripherality 

4.  REFINEMENT OF THE METHODOLOGY FOR ESTIMATING 
THE COSTS OF PERIPHERALITY  

The Model 

Size 

The  structure  of  the  model  to  analyse size  (Figure  2),  or  supply  performance,  can  be 
represented in three interrelated blocks (Figure 3):  i) the first block explains the effect 
on  the  population  of  driving  activities  in  island  economies:  exports,  external  aid  for 
employment and external subsidies;  ii) the second block establishes the relationships 
between population and activities associated to the provision of goods and services not 
receiving external aid;  iii) the third block estimates the product and the income of the 
region  by  multiplying  the  quantity  of  each type  of activity, measured  in terms  of  the 
number  of  jobs  involved,  by  the  productivity  of  respective  employment  or  by  per 
capita subsidies to workers benefited. 

Figure 3: Model of Analysis of the Size of Ultra-peripheral Economies 

Export  
employment 
B 

Block 1 

g  

Employment 
with outside  
aid  A 

Workers with 
outside aid 
 C 

Population 

s2 

s1 

s3 

Employment in  
services without 
external aid   S2 

Employment in 
the provision of 
goods   S1 

Workers not 
aided from the 
exterior   S3 

Block 2 

Export 
income 
g.g.g.g. B 

Income aided 
from outside 
c. c. A 
c.c.

Block 3 

Income in 
services without 
f S2 
external aid  f

Income from 
the provision 
s S1 
of goods   s

21 

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W
W
W
W
 
W
W
W
W
 
W
W
W
W
 
W
W
W
W
 
g
g
g
s
s
s
s
 
f
f
f
f
 
f
f
s
s
c
c
c
c
 
W
W
W
W
 
W
W
W
W
 
 
 
The costs of peripherality 

The  model  assumes  that  exports  and  external  aid  constitute  the  motors  of  the  ultra-
peripheral economies establishing not only their dimension but also the structure of the 
economy. It also assumes that the active population immigrates to other regions of the 
country  when  it  does  not  have  a  satisfactory  form  of  sustenance.  Finally,  the  model 
does not desegregate the demand for goods and services on the part of the population 
by levels of income and allows that the dependent population per worker is equal in all 
sectors. 

The first two blocks of the model use persons as a unit. The population (P) is given by 
the following expression 

P = 1/W

 (A+B+C) 

where  W

 is the rate of activity (participation rate), 
A is the employment that receives external aid, 
B is the employment in the export sector and 
C is the number of workers on social programs paid by external sources. 

Employment  in  the  supply  of  goods  (S1),  which  includes  employment  in  import 
activities,  employment  in  service  not  receiving  external  aid  (S2)  and  the  workers 
receiving  aid  financed  by  internal  sources  (S3),  is  obtained  by  multiplying  the 
population (P) by coefficients (s1), (s2) and (s3) that indicate the number of workers in 
the  provision  of  services  or  associated  with  each  resident    that  are  not  receiving 
external aid.  

In this model, S2 (employment in service not receiving external aid ) is given by 

S2 = S* - A  

where  S* is equal to employment  in service activities to the resident population that 
the economy would have without external aid. 

As such, 

s2 = s*- A/P 

where  s*  is  the  coefficient  of  service  to  the  population  [s*  =  S*/P]  when  there  is  no 
external aid to employment in services (A). 

Also,  

S3 = S** - C  

where S** is equal to the active beneficiaries associated to the population who do not 
have external aid.  

22 

PE 297.197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

This implies that 

s3 = s**- C/P 

where  s** is the coefficient of active beneficiaries in relation to the population  
[s** = S**/P] when there is no external aid for these workers (C). 

Export employment (B), employment aided through the exterior (A), and the activities 
subsidised  through  the  exterior  (C)  are  exogenous  variables  in  the  model.  The 
population (P), the active population (E), employment in the provision of goods (S1), 
employment  in  services  not  aided  through  the  exterior  (S2)  and  the  active  internal 
financial beneficiaries (S3) are calculated by the formulas: 

(1) 
(2) 
(3) 
(4) 
(5) 

P = (B+A+C) . {W
 / [1-W
E = (B+A+C) . {1 / [1-W
S1 = s1 . (B+A+C) . {W
S2 = s2 . (B+A+C) . {W
S3 = s3 . (B+A+C) . {W

.(s1+s2+s3)]} 
.(s1+s2+s3)]} 
 / [1-W
 / [1-W
 / [1-W

.(s1+s2+s3)]} 
.(s1+s2+s3)]} 
.(s1+s2+s3)]} 

Equation  (6)  represents  the  equilibrium  in  which  total  active  population  (E)  results 
from the sum of export employment (B), plus employment aided externally (A), plus 
the  unemployed  supported  with  outside  financial  resources  (C),  plus  employment  in 
the  provision  of  goods  (S1),  plus  employment  in  services  not  aided  through  the 
exterior (S2), plus the unemployed supported with internal financial resources (S3): 

E = B + A + C + S1 + S2 + S3 

(6) 
The  third  block  of  the  model  explains  per  capita  income  (u )  as  a  function  of  the 
productivity  of  the  various  sectors.  Through  formula  (6),  the  regional  product  (Y)  is 
equal to the multiplication of the product per capita (u ) by number of existing jobs (E) 
and by the inverse of the rate of activity (W
). 

(7) 

 u

 = Y / P  (cid:1) 

 = Y / (E . W

)  

(cid:1) 

Y = u

. (E . W

) 

On  the  other  hand,  the  product  is  equal  to  employment  of  the  various  sectors 
multiplied  by  the  GVA  (Gross  Value  Added)  per  worker.  GVA  per  worker  is 
represented by g  in the case of export employment; c
 for activities aided through the 
exterior;  s
  for 
employment in the provision of goods. Work aided through the exterior is included in 
disposable  income  but  not  in  the  product  (GDP).  They,  however,  have  an  indirect 
influence  on  the  product  through  (S1),  (S2)  and  (S3),  which  depend  on  workers  on 
social programs paid by external sources (C), through equations (3) and (4). 

  for  employment  in  services  not  aided  through  the  exterior  and;  f

(8) 

Y = u

 (E . W

)= g .B + c

.A + s

.S1 + f

.S2 

Substituting (E), (S1) and (S2) with their formulas in (2), (3) and (4), it is possible to 
represent the per capita income u
 as a function of the productivity of each sector and of 
the structure of the economy. 

23 

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u
 
 
 
 
The costs of peripherality 

(9) 

 = g .b

. (1/W

 -s1-s2-s3) + c

.a

.(1/W

 -s1-s2-s3) + s

.s1 + f

.s2 

where  b

 represents the weight of export employment in the driving sectors of the  
economy [b

 = B/(B+A+C)]; 

 represents the weight of services aided through the exterior in the driving 

sectors of the economy [a
(1/W
population [(B+A+C)/P]. 

 = A/(B+A+C)], and; 

 -s1-s2-s3) represents the relationship between driving activities and the  

Access 

The structure of the model for access (Figure 2), or demand performance, is in a way 
implicit in the model of size through the population indicator. However, the population 
indicator  does  not  clearly  translate  variations  of  accessibility  to  the  region  being 
analysed. 

One way of including accessibility is by estimating the cost of access as is done in the 
Eurisles  study.  This  reference  to  accessibility  is,  however,  at  the  discretion  of  the 
analyst: Will it be the capital city of each country? Will it be Maastricht? Will it be the 
nearest continent? 

The present study uses the demographic potential to arrive at an accessibility indicator 
that uses easily accessible statistical data: the population and the traffic of passengers. 

To  make  the  accessibility  indicator  clear  and  viable  we  assume  that  the  dynamics  of 
the  behaviour  of  merchandise  and  information  traffic,  both  internal  and  external,  for 
each region is reflected in the indicator of accessibility based on the population and on 
the traffic of passengers28. 

This  demographic  potential  assumes  that  the  demographic  strength  of  each  territory 
depends  not  only  on  the  resident  population  but  also  on  residents  headquartered  in 
more easily accessible zones. In other words, the development potential of a region is 
not limited by its geographic territory but is a function of the relationships established 
with  other  territories.  The  mathematical  expression  of  demographic  potential  is  the 
following: 

28 This hypothesis is supported in the literature about transport and communications that refers that the 
complementary  factors  between  passenger,  goods  and  information  transport  are  stronger  than  the 
substitution factor between these types of traffic (Nijkamp, P., Pepping, G. and Banister, D., Telematics 
and Transport Behaviour, Springer, 1996). 

24 

PE 297.197 

 
u
 
  
a
 
 
 
 
 
 
                                                 
The costs of peripherality 

(10)  POTi = S

j Pi Pj. k exp(-b

.Cij). 

Where POTi is the demographic potential of zone i; 

.Cij) is a function that translates the friction b

Pj is the population of each of the j zones in the area of influence of i; 
exp(-b
transport (Cij), and;  
k is a scale factor. 

 associated to the cost of  

Since the traffic between i and j can be explained by the following function29: 

(11)  Tij = k Pi Pj.exp(-b

.Cij) 

we can deduce that the demographic potential POTi, as a measure of accessibility, can 
be estimated by the internal and external passenger traffic given by the expressions (k 
Pi Pi exp(-b

j Tij), respectively. 

.Cii)) and (S

(12)  POTi = S

j Tij  (cid:1) 

POTi = k Pi Pi exp(-b

.Cii) + S

i„ j Tij 

For zones in which the cost of internal transport is low relative to the cost of external 
transport  we  can  assume  that  the  cost  of  transport  inside  each  zone  is  close  to  zero 
(Cii=0).  Then  the  indicator  of  accessibility  is  equal  to  the  sum  of  the  square 
population, weighted by k, plus external traffic. 

(13)  POTi = k Pi 2+ S

i„ j Tij 

Dividing  equation  (13)  by  (k  P*i)  we  obtain  the  weighted  formula  for  demographic 
potential where P*i  is the base population. With this reference population the indicator 
reflects  not  only  the  population  dynamics  but  also  the  evolution  of  external 
accessibility 1/kP*iS

i„ j Tij. 

(14)  PDPi = P*i + (1/(k.P*i)) S

i„ j Tij30. 

Explanation of Development 

The  proposed  model  explains  product  and  accessibility  in  terms  of  production 
competitiveness and of the costs of transport. 

Competitiveness  can  be  gauged  by  the  volume  and  profitability  of  production  and 
explained  by  the  autonomous  functioning  of  the  economy  and  through  the  effect  of 
public policies. 

Accessibility  can  be  tested  by  traffic  and  costs  of  transport  and  explained  by  the 
autonomous functioning of the economy and through the effect of transport policies. 

29 Sen, A. and Smith, T.E., Gravity Models of Spatial Interaction Behaviour, Springer, 1995. 
30 For the present work it is considered that P*i  is the population of each region for the year 1990. 

25 

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„
 
 
 
 
 
 
 
 
 
 
                                                 
The costs of peripherality 

Development  of  ultra-peripheral  regions  can  be  explained  by  an  organised  and 
hierarchical series of indicators that not only reveal conflicts between development and 
dependence  but  that  also  explain  the  costs  of  production,  transformation  and 
distribution normally associated with the conditions of ultra-peripherality. 

Figure 6 synthesises the set of indicators of ultra-peripherality explained above. 

Figure 6: System of Indicators of Ultra-peripherality 

Development Indicators
Per Capita Income
Accessibility
Change in Per Capita Income
Change in Accessibility

Indicators of Size
Production Volume
Production Profitability
Change in the volume of production
Change in the profitability of  production

Indicators of  Access
Traffic Volume
- Transport Costs
Change in traffic volume
- Change in transport costs

Economy

Policy

Economy

Policy

Autonomous
increment (and change
thereof) in value of
products

Fiscal policy,
financing services,
customs policy,...

Autonomous change in
the costs of  traffic

Fiscal policy,
financing services,
customs policy,...

26 

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The costs of peripherality 

5.  CALCULATING THE COSTS OF PERIPHERALITY 

Formula (9), in point 5, explains the performance of the economy in terms of product 
per capita. Formula (14) characterises the economic situation in terms of accessibility. 
These indicators can be used in absolute terms or in terms of their change. 

In absolute terms (Figure 4) it is possible to characterise the situation of each region as 
ultra-peripheral,  marginal,  peripheral or central, as  proposed  and  justified  previously. 
The reference potential we will be using is the potential of the Canary Islands31. 

Figure 4: Absolute Peripherality 

0% of
Reference
Potential

75%  of
Reference
Potential

100% of
Reference
Potential

Peripheral

Central
150%;100%

150% of
EU
GDPpc

60%;40%

d

c
80%;50%

e

Ultraperipheral

Marginal

Demographic Potential

75%  of
EU
GDPpc

0% of
EU
GDPpc

e
m
o
c
n
I

a
t
i
p
a
C
r
e
P

Figure  4  explains  various  indicators  of  the  costs  of  peripherality:  (c)  is  the  distance 
between the situation of each region (Potential=80%, GDPpc=50%) and the objective 
(Potential=100%,  GDPpc=100%);  (d)  is  the  distance  between  the  situation  of  the 
region  without  aid  policies  (Potential=60%,  GDPpc=40%)  and 
the  objective 
(Potential=100%,  GDPpc=100%);  (e)  is  the  effect  of  the  policies  measured  as  the 
difference  between  the  situation  of  the  regions  without  aid  policies  (Potential=60%, 
GDPpc=40%)  and  the  situation  of  the  regions  with  aid  policies  (Potential=80%, 
GDPpc=50%).  

31 The adoption of this Potential that is related to the capacity of resource use in each region translates 
the  idea  that  the  Canaries  already  achieved  this  capacity  in  terms  of  quality.  Another  reference  point 
could have been adopted to indicate  the optimum capacity. 

27 

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The costs of peripherality 

In relative terms (Figure 5), the dynamics of the regions, explained by the variation of 
per capita income and accessibility, reveal several phenomena: 1) of the Vicious Cycle 
of Retrogression, when productivity and accessibility decline; 2) of the Virtuous Cycle 
of  Development,  when  productivity  and  accessibility  increase;  3)  of  Exploitation, 
when  productivity  increases  but  accessibility  declines,  and;  4)  of  Marginalization, 
when productivity declines but access increases. 

Figure  5  also  illustrates  the  evolution  of  the  cost  of  peripherality:  (c)  is  the  distance 
between the evolution of each region (Variation of Potential=5%, Variation of PIBpc=-
2%)  and  the  evolution  sought  (Variation  of  Potential=3%,  PIBpc=3%,  for  example); 
(d)  is  the  distance  between  the  evolution  of  the  region  with  aid  (Variation  of  
Potential=-8%, Variation of PIBpc=-8%) and the objective evolution sought (Variation 
of    Potential=3%,  Variation  of  PIBpc=3%,  for  example);  (e)  is  the  effect  of  aid 
policies,  measured  as  the  difference  between  the  situation  of  the  regions  without  aid 
(Potential=-8%,  PIBpc=-8%)  and  the  situation  of  regions  with  aid  (Potential=5%, 
PIBpc=-2%). 

Figure 5: Regional Development Indicators  

t
c
u
d
o
r
P
e
v
i
t
a
l
e
R
a
t
i
p
a
C
r
e
P

.
r
a
V

-10%

0%

10%

Exploitation

Development

3)

d

2

e

1)

c

4)

Retrogression

Marginalization

10%

0%

-10%

Var. Relative Demographic Potential

The change in per capita income is the indicator that is available to translate the change 
in  size  in  Figure  1.  The  variation  of  accessibility  is  the  indicator  that  reflects  the 
variation of access in Figure 1. 

28 

PE 297.197 

 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

6.    A  STATISTICAL  REVISION  OF  THE  ULTRA-PERIPHERAL 
REGIONS 

This  section  includes  a  statistical  summary  concerning  a  set  of  economic  and 
demographic  variables  for  the  ultra-peripheral  regions,  such  as  employment, 
unemployment,  GDP,  the  evolution  of  labour  productivity  and  other  indicators  of 
development. The data are presented for each region separately.  

6.1. The Azores 

The  archipelago  of  the  Azores  comprises  nine  volcanic  islands  located  in  the  North 
Atlantic Ocean 2,000Km from Lisbon and 4,000Km from New York. Total land area 
is 2,335Km2. Of this area, 51% is used for agriculture. The temperature varies between 
15ºC in the winter and 25ºC in the summer. The weather in these islands is suitable to 
grow grass and therefore for the production of milk and for raising cattle.      

The archipelago was discovered and populated in the XV century by the Portuguese. 
Population  growth  and  decline  has  varied  with  export  cycles  during  more  or  less 
prosperous  periods.  The  production  of  milk,  initiated  in  the  1960s,  marks  the  most 
recent cycle.  

The population has decreased since the end of the 1950s. Had there been no aid from 
the mainland after political autonomy was implemented in 1976, and no aid from the 
European  Union  after  1986,  the  decrease  would  have  continued  and  been  more 
pronounced.  

The regional GDP, in 1995 prices, grew at an average rate of 2.6% between 1990 and 
1997. The GDP per capita reached 51% of the European Union average in 1997. 

The  data  included  in  Table  6.1  suggest  that,  according  to  our  model,  exports  (dairy 
products,  cattle,  tourism  and  transportation  services)  represent  approximately  50% of 
the basic sector of this economy, with dairy products and cattle responsible for 85% of 
the  exports.  The  remaining  basic  sector  is  comprised  of  external  financing  to  the 
administration  and  public  works  (41%)  and  of  social  security  (9%).  Productivity  has 
increased in both sectors (basic and non-basic). However, the development was faster 
in the non-basic activities in the 1990-95 period. To some extent this is due to the fact 
that the productivity of exports decreased during that time. However, a recovery may 
have occurred after the mid-1990s. 

29 

PE 297.197 

 
 
 
 
 
The costs of peripherality 

Figure 6.1. Evolution of the GDP* and of the Population 

)
0
0
1
=
0
9
9
1
(

x
e
d
n

I

150

140

130

120

110

100

90

Population

Regional GDP

0
9
9
1

1
9
9
1

2
9
9
1

3
9
9
1

4
9
9
1

5
9
9
1

6
9
9
1

7
9
9
1

8
9
9
1

* Evolution of the GDP at constant prices. The GDP was estimated for 1998. 

Table 6.1. Active Population and Income* by Occupation 

Active 
Pop. (1) 
Persons 
29918 

1990 
Value 
(2) 

(2)/(1) 

M PTE  

71800 

2.400 

Active 
Pop. (1) 
Persons 
31711 

1995 
Value 
(2) 

(2)/(1) 

M PTE 

77608 

2.447 

Active 
Pop. (1) 
Persons 
31817 

1998 
Value 
(2) 

(2)/(1) 

M PTE 

89393 

2.810 

Basic Sector 

Exports 

15119 

34757 

2.299 

15894 

31401 

1.976 

15958 

36217 

2.270 

Activities supported by 
the exterior 
Inactivity supported by  
the exterior ** 
Non-basic Sector 

Imports  
Activities not supported 
by the exterior 
Inactivity not supported 
by the exterior *** 

Active/Product/ 
Productivity 
Population/ 
Product/GDPpc 

12945 

35130 

2.714 

12983 

44886 

3.457 

13018 

51657 

3.968 

1854 

1913 

1.032 

2834 

1320 

0.466 

2842 

1519 

0.535 

64361 

177012 

2.750 

62647 

194591 

3.106 

62838 

224023 

3.565 

34271 
27065 

82694 
91203 

2.413 
3.370 

32942 
25081 

80314 
112124 

2.438 
4.470 

33043 
25157 

92463 
129081 

2.798 
5.131 

3025 

3115 

1.030 

4624 

2153 

0.466 

4638 

2479 

0.535 

94279 

243784 

2.586 

94358 

268726 

2.848 

94655 

309418 

3.269 

237938 

243784 

1.025 

233262 

268726 

1.152 

233942 

309418 

1.323 

*  The  Product  is  evaluated  at  constant  prices  of  1995  (the  values  for  1998  are  estimated).  For  this 
purpose, we have used the inflation rate. 
** We assume that the subvention of a non-productive activity is the same as the provision of a service 
(e.g. security) to the population and tourists. 

30 

PE 297.197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

6.2.  Madeira 

The archipelago of Madeira comprises two inhabited islands: Madeira and Porto Santo.   

Nearly 98% of the population lives on the island of Madeira. The city of Funchal is the 
main economic center of the archipelago.  

The archipelago was discovered and populated in the XV century by the Portuguese. 
Because  of  the  geomorphologic  features  of  the  islands,  the  agricultural  surface 
represents  only  9%  of  the  total  area.  In  Madeira,  the  area  above  1,000m  of  altitude 
comprises one fourth of the total surface of which only 11% has a slope below 16%.  

This constrains the development of the agricultural sector. This sector, however, has an 
important role in preserving the landscape and the ecological equilibrium. The banana 
is  one  of  the  main  agricultural  products.  Tourism  is  an  important  and  expanding 
activity in the archipelago.   

The regional GDP, in 1995 prices, grew at an average rate of 4.2% between 1990 and 
1995. Per capita GDP reached 56% of the European Union average in 1997. 

The  data  included  in  Table  6.2  suggest  that  exports  (tourism  and  transportation 
services)  represent  approximately  42%  to  50%  of  the  basic  sector  of  this  economy. 
External  financing  to  the  administration,  public  works  and  social  security  forms  the 
remaining  basic  sector.  Productivity  has  increased  in  both  sectors  (basic  and  non-
basic). However, the development was faster in the non-basic activities in the 1990-95 
period. 

31 

PE 297.197 

 
 
 
 
The costs of peripherality 

Figure 6.2. Evolution of the GDP* and of the Population 

Population

Regional GDP

)
0
0
1
=
0
9
9
1
(

x
e
d
n

I

150

140

130

120

110

100

90

0
9
9
1

1
9
9
1

2
9
9
1

3
9
9
1

4
9
9
1

5
9
9
1

6
9
9
1

7
9
9
1

8
9
9
1

  * Evolution of the GDP at constant prices. The GDP was estimated for 1996-1998. 

Table 6.2. Active Population and Income* by Occupation 

Active 
Pop. (1) 
Persons 
33523 

1990 
Value 
(2) 

(2)/(1) 

M PTE 

62546 

1.866 

Active 
Pop. (1) 
Persons 
30358 

1995 
Value 
(2) 

(2)/(1) 

M PTE 

76291 

2.513 

Active 
Pop. (1) 
Persons 
30620 

1998 
Value 
(2) 

(2)/(1) 

M PTE 

85274 

2.785 

Basic Sector 

Exports 

17268 

26036 

1.508 

14159 

30160 

2.130 

14219 

33476 

2.354 

Activities supported by 
the exterior 
Inactivity supported by  
the exterior ** 
Non-basic Sector 

Imports  
Activities not supported 
by the exterior 
Inactivity not supported 
by  the exterior *** 

Active/Product/ 
Productivity 

Population/ 
Product/GDPpc 

13415 

33159 

2.472 

13527 

44268 

3.273 

13694 

49706 

3.630 

2839 

3350 

1.180 

2673 

1863 

0.697 

2706 

2092 

0.773 

88581 

188088 

2.123 

79400 

242728 

3.057 

80268 

272174 

3.391 

62742 
22763 

92030 
92460 

1.467 
4.062 

52432 
24073 

111116 
129593 

2.119 
5.383 

53009 
24334 

124605 
145307 

2.351 
5.971 

3076 

3598 

1.170 

2896 

2018 

0.697 

2925 

2261 

0.773 

122103 

243686 

1.996 

109759 

315138 

2.871 

110888 

353095 

3.184 

253500 

243686 

0.961 

254399 

315138 

1.239 

259850 

353095 

1.359 

* The Product is evaluated at constant prices of 1995 (the values for 1998 are estimated). For this 
purpose, we have used the inflation rate. 
** We assume that the subvention of a non-productive activity is the same as the provision of a 
service (e.g. security) to the population and tourists. 

32 

PE 297.197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

6.3.  The Canary Islands   

This  archipelago  comprises  seven  volcanic  islands  and  is  one  of  the  Spanish 
Autonomous Communities.    

The  geological  features  of  the  islands  constrain  the  development  of  the  agricultural 
sector.  Production  of  banana  and  tomato,  raising  cattle  and  fishing  are  the  main 
activities  in  the  primary  sector.  These  productions  have  an  important  role  in 
maintaining the populations in rural areas and therefore preserving the landscape and 
the environmental equilibrium.    

The service sector is well developed. Tourism plays a crucial role in the economy of 
the archipelago.  

Regional  GDP,  in  1995  prices,  grew  at  an  average  rate  of  1.5%  between  1990  and 
1996. The GDP per capita reached 76% of the European Union average in 1997. 

The data included in Table 6.3 suggest that exports (tourism, banana and transportation 
services)  represent  approximately  47%  to  58%  of  the  basic  sector  of  this  economy. 
External  financing  to  the  administration,  public  works  and  social  security  forms  the 
remaining basic sector. The productivity has increased in both sectors (basic and non-
basic). However, the development was faster in the non-basic activities in the 1990-95 
period. 

33 

PE 297.197 

 
 
 
Figure 6.3. Evolution of the GDP* and of the Population 

The costs of peripherality 

Population

Regional
GDP

)
0
0
1
=
0
9
9
1
(

x
e
d
n

I

150

140

130

120

110

100

90

0
9
9
1

1
9
9
1

2
9
9
1

3
9
9
1

4
9
9
1

5
9
9
1

6
9
9
1

7
9
9
1

8
9
9
1

  * Evolution of the GDP at constant prices. The GDP was estimated for 1996-1998. 

Table 6.3. Active Population and Income* by Occupation 

Active Pop. 
(1) 
Persons 
173955 

1990 
Value 
(2) 

(2)/(1) 

M ESP 

733524 

4.217 

Active 
Pop. (1) 
Persons 
188257 

1995 
Value 
(2) 

(2)/(1) 

M ESP 

803805 

4.270 

Active 
Pop. (1) 
Persons 
189511 

1998 
Value 
(2) 

(2)/(1) 

M ESP 

862204 

4.550 

77063 

419978 

5.450 

87221 

480153 

5.505 

89065 

521903 

5.860 

53195 

222509 

4.183 

51822 

225222 

4.346 

51519 

238192 

4.623 

43697 

91036 

2.083 

49215 

98429 

2.000 

48927 

102109 

2.087 

382489 

1855603 

4.851 

409334 

2020438 

4.936 

409583 

2146466 

5.241 

242640 
71502 

1349771 
367966 

5.563 
5.146 

256541 
75816 

1451567 
414918 

5.658 
5.473 

256462 
75964 

1543430 
442013 

6.018 
5.819 

68347 

137865 

2.017 

76977 

153953 

2.000 

77157 

161023 

2.087 

556445 

2360225 

4.242 

597591 

2571861 

4.304 

599094 

2745539 

4.583 

1557533 

2360225 

1.515 

1631498 

2571861 

1.576 

1630105 

2745539 

1.684 

Basic Sector 

Exports 

Activities supported by 
the exterior 
Inactivity supported by  
the exterior ** 
Non-basic Sector 

Imports  
Activities not supported 
by the exterior 
Inactivity not supported 
by  the exterior *** 

Active/Product/ 
Productivity 

Population/ 
Product/GDPpc 

* The Product is evaluated at constant prices of 1995 (the values for 1998 are estimated). For 
this purpose, we have used the inflation rate. 
** We assume that the subvention of a non-productive activity is the same as the provision of a 
service (e.g. security) to the population and tourists. 

34 

PE 297.197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

6.4.  Martinique 

Martinique  is  a  volcanic  island  with  a  surface  of  approximately  1,100Km2 
located in the Caribbean, 7,000Km from France, 3,000Km from New York and 
120Km from Guadeloupe. 

The island has a tropical climate and the temperature varies between 21ºC and 
31ºC.  It  is  affected  by  tropical  storms.  The  island  is  divided  through  the 
Lamentain-Trinité  axis  in  two  climates.  While  the  South  is  relatively  dry  it 
rains  frequently  in  the  north  side  of  the  island.  The  annual  average  rainfall 
varies  between  1,500mm  (in  Sainte-Anne)  and  4,000mm  or  more  (in  Morne-
Rouge). The production of banana for export is very important to the island.    

The  population  grew  rapidly  just  after  the  World  War  II.  However,  this 
tendency has been counteracted by immigration, mainly of young people, to the 
mainland. Between 1990 and 1998 the population increased at an average rate 
of 0.6% per year.  

Regional GDP, at 1995 prices, grew at an average rate of 5.8% between 1990 
and 1995. The GDP per capita reached 54% of the European Union average in 
1994. 

The  data  included  in  Table  6.4  indicate  that  external  financing  to  the 
administration, public works and social security correspond to 84% to 87% of 
the  basic  sector  of  the  economy.  Productivity  has  increased  in  both  sectors 
(basic and non-basic). However, development was faster in the basic activities 
in the 1990-95 period. 

35 

PE 297.197 

 
 
 
 
Figure 6.4. Evolution of the GDP* and of the Population 

The costs of peripherality 

População
Population

PIB
Regional GDP
Regional

)
0
0
1
=
0
9
9
1
(

x
e
d
n

I

160

150

140

130

120

110

100

90

0
9
9
1

1
9
9
1

2
9
9
1

3
9
9
1

4
9
9
1

5
9
9
1

6
9
9
1

7
9
9
1

8
9
9
1

             * Evolution of the GDP at constant prices. The GDP was estimated for 1996-1998. 

Table 6.4. Active Population and Income* by Occupation 

Active 
Pop. (1) 
Persons 
54712 

1990 
Value 
(2) 

(2)/(1) 

M. FF 

6670 

0.122 

Active 
Pop. (1) 
Persons 
51157 

1995 
Value 
(2) 

(2)/(1) 

M. FF 

7609 

0.149 

Active 
Pop. (1) 
Persons 
53590 

1998 
Value 
(2) 

(2)/(1) 

M. FF 

9242 

0.172 

6712 

1140 

0.170 

7347 

1120 

0.152 

6207 

1437 

0.232 

22721 

4167 

0.183 

23431 

4778 

0.204 

25635 

6013 

0.235 

25279 

1363 

0.054 

20378 

1711 

0.084 

21748 

1792 

0.082 

107909 

17374 

0.161 

111342 

19761 

0.177 

110463 

24697 

0.224 

33377 
47307 

6331 
9583 

0.190 
0.203 

41842 
47553 

7458 
10460 

0.178 
0.220 

33480 
50733 

9407 
13127 

0.281 
0.259 

27225 

1460 

0.054 

21947 

1843 

0.084 

26250 

2163 

0.082 

162621 

21220 

0.130 

162499 

23816 

0.147 

164053 

29983 

0.183 

359600 

21220 

0.059 

373400 

23816 

0.064 

379000 

29983 

0.079 

Basic Sector 

Exports 

Activities supported by 
the exterior 
Inactivity supported by  
the exterior ** 
Non-basic Sector 

Imports  
Activities not supported 
by the exterior 
Inactivity not supported 
by  the exterior *** 

Active/Product/ 
Productivity 

Population/ 
Product/GDPpc 

* The Product is evaluated at constant prices of 1995 (the values for 1998 are estimated). For 
this purpose, we have used the inflation rate. 
** We assume that the subvention of a non-productive activity is the same as the provision of a 
service (e.g. security) to the population and tourists. 

36 

PE 297.197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

6.5.  Guadeloupe 

Guadeloupe  is  an  archipelago  that  comprises  eight  inhabited  islands.  It  is 
located in the Caribbean and has a surface of 1.705Km2. The two main islands 
are  Basse-Terre  (848Km2)  and  Grande-Terre  (590Km2).  The  former  is 
mountainous and has a large production of banana. The latter is more flat and 
its  soil  is  suitable  for  the  production  of  sugar  cane.  The  archipelago  has  a 
tropical  humid  climate  with  an  average  temperature  of  26ºC.  It  is  affected  by 
tropical  storms.  The  annual  average  rainfall  varies  between  1,500mm  (in 
Pointe-à-Pitre) and 4,000mm or more (in Saint-Claude). 

After  a  long  period  of  stagnation,  the  population  grew  during  the  1980s.  It 
increased at an average rate of 0.96% per year between 1990 and 1998.   

The regional GDP, at 1995 prices, grew at an average rate of 5% between 1990 
and  1995.  Per  capita  GDP  reached  40%  of  the  European  Union  average  in 
1994. 

The  data  included  in  Table  6.5  indicate  that  the  external  financing  to  the 
administration, public works and social security correspond to 83% to 87% of 
the  basic  sector  of 
the  economy.  The  productivity  has  increased  at 
approximately the same pace in the basic and in the non-basic sectors.  

37 

PE 297.197 

 
 
 
The costs of peripherality 

Figure 6.5. Evolution of the GDP* and of the Population 

)
0
0
1
=
0
9
9
1
(

x
e
d
n

I

150

140

130

120

110

100

90

Population

Regional
GDP

0
9
9
1

1
9
9
1

2
9
9
1

3
9
9
1

4
9
9
1

5
9
9
1

6
9
9
1

7
9
9
1

8
9
9
1

   * Evolution of the GDP at constant prices. The GDP was estimated for 1996-1998. 

Table 6.5. Active Population and Income* by Occupation 

Active 
Pop. (1) 
Persons 
64768 

1990 
Value 
(2) 

(2)/(1) 

M FF 

6460 

0.100 

Active 
Pop. (1) 
Persons 
62449 

1995 
Value 
(2) 

(2)/(1) 

M FF 

8618 

0.138 

Active 
Pop. (1) 
Persons 
68502 

1998 
Value 
(2) 

(2)/(1) 

M FF 

10635 

0.155 

8376 

1359 

0.162 

8483 

1121 

0.132 

7045 

1303 

0.185 

24624 

3512 

0.143 

26741 

5291 

0.198 

27534 

6278 

0.228 

31767 

1588 

0.050 

27225 

2205 

0.081 

33923 

3053 

0.090 

105368 

14720 

0.140 

111314 

21281 

0.191 

112410 

24731 

0.220 

35764 
48540 

5347 
8304 

0.149 
0.171 

41280 
51884 

7962 
11849 

0.193 
0.228 

39500 
51221 

9217 
13562 

0.233 
0.265 

21064 

1070 

0.051 

18150 

1470 

0.081 

21689 

1952 

0.090 

170135 

18522 

0.109 

173762 

26223 

0.151 

180912 

30361 

0.168 

384916 

18522 

0.048 

407000 

26223 

0.064 

417900 

30361 

0.073 

Basic Sector 

Exports 

Activities supported by 
the exterior 
Inactivity supported by  
the exterior ** 
Non-basic Sector 

Imports  
Activities not supported 
by the exterior 
Inactivity not supported 
by  the exterior *** 

Active/Product/ 
Productivity 

Population/ 
Product/GDPpc 

* The Product is evaluated at constant prices of 1995 (the values for 1998 are estimated). For 
this purpose, we have used the inflation rate. 
** We assume that the subvention of a non-productive activity is the same as the provision of a 
service (e.g. security) to the population and tourists. 

38 

PE 297.197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

6.6.  Guyana 

French Guyana is located in South America between Suriname and Brazil with 
an  area  of  83,534Km2.  It  has  an  equatorial  climate  and  a  dense  forest  covers 
most  of  its  territory. The  temperature  varies  around  27ºC,  but  the humidity is 
very high (70-90%). The  annual  average rainfall varies between 2,400mm  (in 
Rochambeau) and 2,800mm  (in Saint-Laurent-du-Maroni). 

A  traditional  economy  is  based  on  fishing  and  lumbering,  which  coexist  with 
the  Space  Center.  The  Space  Center  is  located  on  the  coastal  side  of  the 
territory near the cities of Cayenne, Kourou and Saint-Laurent-du-Maroni. 

The population increased at a very fast pace since the early 1990s at an annual 
rate of 3.5% between 1990 and 1998.  

The  regional  GDP,  in  1995  prices,  grew  at  an  average  rate  of  6.7%  between 
1990  and  1995.  The  GDP  per  capita  reached  49%  of  the  European  Union 
average in 1994. 

The  data  included  in  Table  6.6  indicate  that  the  external  financing  to  the 
administration, public works and social security correspond to 86% to 91% of 
the basic sector of the economy. The productivity has increased in both sectors 
(basic  and  non-basic).  However,  the  development  was  faster  in  the  basic 
activities in the 1990-95 period. 

39 

PE 297.197 

 
 
The costs of peripherality 

Figure 6.6. Active Population and Income* by Occupation 

Population

Regional
GDP

)
0
0
1
=
0
9
9
1
(

x
e
d
n

I

160

150

140

130

120

110

100

90

0
9
9
1

1
9
9
1

2
9
9
1

3
9
9
1

4
9
9
1

5
9
9
1

6
9
9
1

7
9
9
1

8
9
9
1

   * Evolution of the GDP at constant prices. The GDP was estimated for 1996-1998. 

Table 6.6. Active Population and Income* by Occupation 

Active 
Pop. (1) 
Persons 
26467 

1990 
Value 
(2) 

(2)/(1) 

M FF 

3077 

0.116 

Active 
Pop. (1) 
Persons 
29153 

1995 
Value 
(2) 

(2)/(1) 

M FF 

4174 

0.143 

Active 
Pop. (1) 
Persons 
26121 

1998 
Value 
(2) 

(2)/(1) 

M FF 

4907 

0.188 

2485 

405 

0.163 

2269 

496 

0.218 

2477 

752 

0.303 

17699 

2263 

0.128 

20231 

3146 

0.156 

14896 

3533 

0.237 

6283 

409 

0.065 

6653 

532 

0.080 

8747 

622 

0.071 

28943 

4413 

0.152 

31993 

7106 

0.222 

44439 

8310 

0.187 

12873 
9015 

2282 
1669 

0.177 
0.185 

14073 
10418 

3892 
2613 

0.277 
0.251 

12892 
21845 

4481 
3140 

0.348 
0.144 

7056 

462 

0.065 

7502 

600 

0.080 

9702 

689 

0.071 

55410 

6619 

0.119 

61146 

10148 

0.166 

70560 

11906 

0.169 

132250 

6619 

0.050 

159045 

10148 

0.064 

174685 

11906 

0.068 

Basic Sector 

Exports 

Activities supported by 
the exterior 
Inactivity supported by  
the exterior ** 
Non-basic Sector 

Imports  
Activities not supported 
by the exterior 
Inactivity not supported 
by  the exterior *** 

Active/Product/ 
Productivity 

Population/ 
Product/GDPpc 

* The Product is evaluated at constant prices of 1995 (the values for 1998 are estimated). For 
this purpose, we have used the inflation rate. 
** We assume that the subvention of a non-productive activity is the same as the provision of a 
service (e.g. security) to the population and tourists. 

40 

PE 297.197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The costs of peripherality 

6.7.  Reunion 

Reunion  is  a  volcanic  island  located  in  the  Indian  Ocean,  700Km  East  of 
Madagascar  and  200Km  West  of  Mauritius.  It  has  a  surface  of  2,512Km2,  of 
which 25% is arable. The average annual rainfall varies between 6,000mm (in 
Píton  des  Neiges)  and  less  than  1,000mm  in  the  West  and  South.  The 
temperature  varies  around  24ºC.  The  island  is  affected  by  tropical  storms 
during the Austral Winter.  

The island  was uninhabited when  Pedro de Mascarenhas first discovered it  in 
1513.  It  was  populated  during  the  second  half  of  the  XVII  century  but  the 
population remained quite small until the end of the XVIII century. It had little 
more  than  200,000  inhabitants  in  1960  but  has  nearly  700,000  today.  The 
origin of the population is very diversified - Europeans, Indians, Africans and 
Chinese.  

Regional GDP, at 1995 prices, grew at an average rate of 2.5% between 1990 
and  1995.  Per  capita  GDP  reached  46%  of  the  European  Union  average  in 
1996. 

The  data  included  in  Table  6.7  indicate  that  external  financing  of  the 
administration,  public  works  and  social  security  are  the  driving  forces  of  the 
economy. They represent nearly 87% of the basic sector. The sugar cane sector, 
with  7%,  together  with  tourism  and  a  portion  of  transportation  and 
communications comprise the remaining 13% of the basic sector.  

The  sectors  not  directly  supported  by  the  government  have  the  best 
performance in terms of productivity. In the basic sector, exports (sugar cane, 
tourism  and  transportation  services)  recorded  a  productivity  growth  of  3.4% 
per year between 1990 and 1995, and 12.3% between 1995 and 1998.  

41 

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Figure 6.7. Evolution of the GDP* and of the Population 

The costs of peripherality 

População
Population

PIB
Regional GDP
Regional

)
0
0
1
=
0
9
9
1
(

x
e
d
n

I

150

140

130

120

110

100

90

0
9
9
1

1
9
9
1

2
9
9
1

3
9
9
1

4
9
9
1

5
9
9
1

6
9
9
1

7
9
9
1

8
9
9
1

     * Evolution of the GDP at constant prices. The GDP was estimated for 1996-1998. 

Table 6.7. Active Population and Income* by Occupation 

Active 
Pop. (1) 
Persons 
82309 

1990 
Value 
(2) 

(2)/(1) 

M. FF 

13907 

0.169 

Active 
Pop. (1) 
Persons 
108008 

1995 
Value 
(2) 

(2)/(1) 

M. FF 

17577 

0.163 

Active 
Pop. (1) 
Persons 
113321 

1998 
Value 
(2) 

(2)/(1) 

M. FF 

23996 

0.212 

Basic Sector 

Exports 

10946 

1469 

0.134 

13061 

2071 

0.159 

14603 

3281 

0.225 

Activities supported by 
the exterior 
Inactivity supported by  
the exterior ** 
Non-basic Sector 

Imports  
Activities not supported 
by the exterior 
Inactivity not supported 
by  the exterior *** 

Active/Product/ 
Productivity 

Population/ 
Product/GDPpc 

44618 

9075 

0.203 

41387 

8437 

0.204 

46360 

12733 

0.275 

26745 

3362 

0.126 

53560 

7069 

0.132 

52358 

7982 

0.152 

150368 

30858 

0.205 

163794 

34218 

0.209 

177836 

49687 

0.279 

53165 
55370 

9846 
15817 

0.185 
0.286 

50618 
69835 

10125 
18372 

0.200 
0.263 

53816 
81635 

14681 
28545 

0.273 
0.350 

41832 

5196 

0.124 

43342 

5720 

0.132 

42384 

6461 

0.152 

232677 

36207 

0.192 

271802 

39006 

0.191 

291156 

59240 

0.253 

596500 

36207 

0.075 

668100 

39006 

0.078 

703900 

59240 

0.105 

* The Product is evaluated at constant prices of 1995 (the values for 1998 are estimated). For 
this purpose, we have used the inflation rate. 
** We assume that the subvention of a non-productive activity is the same as the provision of a 
service (e.g. security) to the population and tourists. 

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7.  REVIEW OF THE POLICIES FOR THE PERIPHERY 

According to the report COM (2000) 147 final, of the Commission, “Its first part (the 
balance) describes the actions undertaken by the Community, to date, and their effects 
on the development of these regions: an efficient action that should be continued due 
to the subsistence of the disadvantages of ultra-periphery. Its second part (the future) 
outlines  the  measures  destined,  thanks  to  number  2  of  article  299,  to  continuing  and 
reinforcing the past action”32. 

Since we are dealing with a report on the specific measures for the ultra-periphery, it 
would  be  expected  that  this  document  would  isolate  only  those  measures  and  their 
impact as a function of the objectives that were sought. This is not, however, what is 
done.  The  first  part  of  the  report  reviews  all  community  policies  to  which  the  UPRs 
had access. 

To analyse the impact of a certain policy it is necessary to isolate it from others that 
could  contribute  to  the  same  objective.  If  the  concept  of  ultra-peripherality  were  not 
adopted  and  if  specific  measures  were  not  undertaken  as  a  function  of  the 
understanding  that  the  ultra-periphery  justifies  additional  measures,  the  regions 
involved would still have access to the programs destined for Objective 1 regions and 
would  also  be  eligible  to  receive  aid  from  horizontal  programs  of  the  EU.  In  the 
evaluation  of  impacts  one  cannot  ignore  that  the  national  effort  directed  to  each  of 
these regions is in the form of direct aid from the Member States. 

In this perspective, the analysis of the evolution of per capita GDP cannot ignore the 
cumulative  complement  of  the  various  policies.  As  such,  the  positive  change  in  per 
capita income, referred to in the report of the Commission33 is the result of the sum of 
impacts of all national and community policies as well as the result of private initiative 
that exists independently of public intervention. 

7.1. The Balance 

Even  though,  in  all  cases,  the  evolution  of  per  capita  income  during  the  decade 
analysed  was  positive,  we  should,  nevertheless,  question  if  the  results  are  in  fact 
satisfactory given that, on average, in the most successful case, that of Madeira34, per 
capita  income  grew  1.4  percentage  points  over  the  EU  average.  But,  for  four  of  the 

32 COM (2000) 147, pp. 6-7. 
33 Ibidem, p. 28. 
34 It should be noted, in this case, that the methodology for calculation of the GDP was changed, in the 
period considered, both for Madeira and the Azores. In passing from the previous methodology, of  the 
responsibility  for  regional  statistical  services,  to  the  current  system,  of  the  responsibility  of  national 
service, we can find positive discrepancies in excess of 20%. 

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seven regions the convergence occurred at a pace of less than one percentage point per 
year. Given the magnitude of the initial gap, we are facing very slow processes. 

If  the  objective  of  policies  in  favour  of  these  regions  is  only  that  there  be  some  real 
convergence  in  the  medium  or  long  term,  then  one  can  conclude  that  it  has  been 
reached. It appears, however, that this objective should be set at a target level that is 
considered adequate. Only then can one determine the policy effort that is necessary to 
reach  the  objective.  Without  setting  this  parameter  it  is  not  possible  to  gauge  the 
degree of accomplishment of the objectives  and one can frustrate  the  expectations of 
the populations that are faced with a systematic delay of a significant convergence. 

In the evaluation of the use of EIB loans, the report refers that the levels of utilisation 
are  very  low.  This  fact  can  be  associated  with  the  administrative  regimes  of  each 
region and with the options of central governments of each country. The administrative 
autonomy of the Azores and of Madeira can justify, in part, the higher level of use of 
credit on the part of these regions. The debt limits set for these same regions35 can also 
explain why they didn’t use this source of financing even more. 

The  lower  utilisation  EIB  credit  is  also  due  to  the  fact  that  this  bank  only  finances 
projects  of  a  certain  dimension  excluding,  therefore,  most  of  the  businesses  in  the 
private sector that, in the UPRs, are, invariably, of small and medium size. 

In any of these cases, public and private, one should bear in mind that bank credit is in 
competition with non-refundable funds, with preference on the part of the beneficiaries 
leaning towards this last source of funding. 

If incrementing the use of the financial instruments of the EIB is an objective, then the 
manner  in  which it  intervenes  in  the  market  should be  reviewed in  order  to  make  its 
loans more accessible, maintaining the commercial nature of this institution. 

The high unemployment rates pointed out for the UPRs should not be looked at in an 
isolated  manner.  These  rates  should  be  compared  with  national  rates  since  social 
programs  might  have  a  significant  impact.  They  should  also  be  seen  in  light  of 
migratory movements. 

In the case of the Azores and Madeira, the rates of unemployment have been low in the 
last  decades  with  values  slightly  below  the  national  rates.  These  regions,  for  an 
extended  period  of  time,  exported  (and  still  do  even  if  to  lesser  degree)  their  excess 
labour to various parts of the world. 

In  the  case  of  the  Canaries,  the  unemployment  rates  are  similar  to  the  national.  As 
such,  the  problem  has,  in  this  archipelago,  the  dimension  that  it  has  at  the  national 
level. 

35  These  limits  are  set  in  a  law  that  regulates  the  financing  of    the  autonomous  regions  and  is  fixed 
annually by the national parliament when the budget is approved. 

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It is in the case of the DOM that the rate of unemployment differs significantly from 
national  rates.  This  is  the  result  of  more  than  one  factor.  On  the  one  hand  it  is  the 
scarcity of opportunities for employment for a growing population, on the other, it is 
the application in poor regions of the social security programs of a country with high 
average  incomes  and  a  high  standard  of  living.  This  fact  affects  the  decisions  of 
residents with regard to participation in the labour market and in regard to the number 
of children they have. 

A  general  evaluation  of  the  first  part  of  the  report  leads  us  to  conclude  that  the 
Commission does not have a precise mechanism of evaluation of the impact of each of 
the implemented measures, resorting, instead, to general indicators that incorporate the 
effect  of  diverse  policies,  some  of  the  responsibility  of  Member  States,  others 
imputable  to  community  programs,  but  a  clear  minority  credited  to  the  POSEI 
programs, if we take into account the financial volumes involved. 

We  can  also  conclude  that  the  Commission  does  not  have  or  does  not  present 
information  necessary  to  evaluate  the  impact  of  the  POSEI  programs.  Information  is 
available  on  the  budgetary  impacts  of  measures  that  involved  budget  entries. 
Information on the impact of measures without budget entries does not exist or is not 
presented. It is indispensable to calculate the equivalent impact of this type of measure. 
Only  with  this  information  can  an  objective  statement  be  made  relative  to  the 
effectiveness  of  each  measure  and,  also  very  important,  to  the  relative  efficiency  of 
each measure. 

Finally,  the  positive  interpretation  of  the  growth  of  GDP  in  these  regions  is 
questionable  if  we  take  into  account  the  gap  that  persists  relative  to  the  community 
averages  and  the  time  that,  at  the  pace  of  the  past  ten  years,  would  be  necessary  for 
these measures to be approximated. 

7.2. The Future 

7.2.1. The Strategy 

The  second  part  of  the  report  of  the  Commission  “outlines  the  measures,  thanks  to 
number 2 of article 299, to continuing and reinforcing the actions undertaken”36. Still 
according  to  the  report,  number  2  of  article  299,  “Confirms  and  reinforces  the 
approach  developed  by  the  European  Union,  since  1989,  through  the  POSEI 
programs”37. 

Implicit  in  this  statement  is  an  interpretation  of  article  299  of  the  Treaty.  This 
interpretation is not only that the European Union should act in the UPRs in order to 
compensate their handicaps, which warrants no doubts, but also that  the strategy to be 

36 COM (2000) 147, pp. 7. 
37 Ibidem, pp. 31. 

45 

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The costs of peripherality 

adopted should follow the pattern of the POSEI programs, which is an implicit option 
of  the  Commission  but  not  an  imposition  or  even  an  orientation  derived  from  the 
Treaty. 

The Commission proposes, thus, “A strategy of sustainable development for the ultra-
peripheral regions”. This strategy is based, according to the report, in the appreciation 
of  the  various  measures  of  the  POSEI  programs,  in  the  interpretation  that  the  new 
article  implies  that  “global  strategy  for  the  ultra-periphery”38  should  be  adopted  that 
seeks the sustained development of these regions. 

According to the Commission the strategy should include three main objectives: 
1 - a continuation of aid to the traditional economic activities; 
2 - a re-launching through diversification of economic activity, and 
3 - regional co-operation. 

It  is  under  this  framework  that  the  Commission  proceeds  in  the  presentation  of  its 
perspectives  as  to  the  claims  of  Member  States,  presented  in  various  memoranda.  It 
should be said that, in this report, the Commission closely follows the suggestions of 
the UPRs in what concerns the policies to be implemented. 

It  does  not  appear,  however,  that  this  framework  configures  the  true  strategy  for  the 
UPRs. It is just one way of classifying the various  measures according to the sectors 
affected. 

It  is  necessary,  in  the  first  place,  to  choose  an  operational  objective.  Only  after 
choosing this objective can the strategy be chosen to reach the goals that approach this 
objective and only then can the choice of instruments be made. 

The operational objective is not explicit. 

We can, from various points of the report, conclude that sustainable development39 is 
an objective. There are not, though, references to the criteria of measurement for this 
development. However, no criteria of measurement of development is referred. Will it 
be  the  growth  of  GDP  at  an  annual  positive  rate?  Will  it  be  the  reduction  of 
unemployment? At what level? Will it be the average level of disposable income per 
household?  Will  it  be  the  growth  of  GDP  at  an  annual  rate  above  the  average  of  the 
European Union? How many percentage points above? 

It  appears  natural  that  the  operational  objective  to  follow  be  the  real  convergence  of 
the economies of the UPRs to the EU levels, since it rests on the real economic base 
for each of the economies. 

This objective requires direct action on these economies and can be attained through a 
strategy of promotion of their competitiveness, obtained in a competitive environment 
that varies between being totally open and totally controlled. 

38 COM (2000) 147, p. 31. 
39 Ibidem, p. 37. 

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In  the  past,  the  adopted  strategy  allowed  market  solutions,  resorting,  however,  to 
exceptions,  when  necessary.  This  approach  seems  to  be  correct  but  market  solutions 
should  not  be  relegated  to  a  secondary  position  since  they  are  better  capable  of 
assuring an efficient use of resources. 

In this perspective, we should stress the “orientations” referred to in the report of the 
Commission40  when  it  refers  to  the  instrument  Structural  Foundations,  in  the  section 
the  ultra-peripheral  regions”41.  These 
about  “The  economic  re-launching  of 
orientations, which configure more adequately a development strategy, would be better 
placed in the beginning of the section about “The Future”, since they apply equally to 
all economic sectors, including agriculture and fisheries, are the following: 

- 

- 
- 

- 

- 
- 

to seek a high level of competitiveness, as a necessary condition for growth and 
development; 
to seek sustainable agriculture and rural development; 
to seek a balance between environment conservation and the degree of resource 
utilisation in each region; 
the  adoption  of  a  policy  of  employment  and  human  resources  adjusted  to  the 
needs of each region; 
support of SMEs as fundamental cells of development of these areas; 
the insertion of UPRs in respective geographic zones. 

To act on the competitiveness of an economy it is necessary to know who are its trade 
partners and which factors can be the object of policies in order to maintain or increase 
the competitiveness in the short, medium and long term. 

Stated  in  this  way,  the  problem  can  be  characterised  in  two  dimensions:  the 
geographical  and  the  temporal.  The  geographical  since  it  takes  into  account  the 
economic area with which each economy is related. The temporal because it considers 
not only the short term but also the medium and long term. 

The  geographic  dimension  permits  identification  of  the  regional  positioning  of  the 
competition  and  of  its  relative  competitiveness  at  a  certain  moment.  The  temporal 
dimension permits a dynamic of the path of evolution of the economy. 

It  is  in  this  perspective  that  one  ought  to  look  at  the  structure  of  the  economy  at  a 
determined  point  in  time  and  at  what  will  happen  to  it  in  the  future.  The  traditional 
sectors  represent  the  economy  in  the  present.  The  economy  should  be  projected  into 
the future as a function of the predictable tendencies which might continue to include 
these sectors with a significant weight. 

As  a  horizontal  preoccupation  we  have  the  sustainability  of  development  options 
considering their environmental impacts. 

40 COM(2000) 147 final, pp. 37-38. 
41To be precise, we are not dealing with a re-launching of economies of the UPRs because, in the recent 
past,  these  regions  did  not  register  better  development.  It  is  rather  a  launching  of  these  economies  to 
new and better levels of development. 

47 

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Because  we  are  in  a  European  context,  the  qualification  of  human  resources  and  the 
incorporation  of  technology  (“new”  and  “old”)  in  all  productive  processes,  assumes 
great importance not only in the short term but also in  the  medium  and long term.  It 
will  not  be  possible  that  the  economies  of  the  UPRs  come  close  to  the  development 
averages  of  Europe  if  they  are  not  at  their  level  of  competence  and  incorporation  of 
advanced  technologies.  It  is  important,  in  this  sense,  to  bear  in  mind  that  the  task  of 
improving  human  resources  and  of  incorporating  technological  processes,  has  to  be 
executed in a context of continuous progress in the reference areas, which is why the 
task becomes even more difficult. 

7.2.2. The Instruments 

For the implementation of its strategy, the Commission proposes to use the structural 
funds, EIB loans, state aid, fiscal policy and customs. 

7.2.2.1. Structural Funds 

With  regard  to  structural  funds,  the  Commission  points  out  the  fact  that  all  of  the 
UPRs are included in Objective 1 regions and, as such, have seen a reinforcement of 
the funding destined for them42. In addition, the Commission “proposes to analyse the 
best  way  to  reflect  the  peculiar  situation  of  these  regions  …in  the  eligibility  for 
structural funds”  43. The Commission also proposes to think about the increase, from 
35% to 50%, of participation of the funds in investment of SMEs and about extension 
to the DOMs of the maximum rates of aid to 85%, from the current value of 75%. 

No indication is given that there are plans to reinforce the funds attributed to the UPRs, 
beyond what was already negotiated for Objective 1 regions for the period 2000-2006. 

In fact, the budget for 2000 represents, globally, for agriculture, a decrease relative to 
1999.  There is a projected decrease of four million euros. 

Contrary to what happened in past years, no reference is made to the creation of a new 
budget entry similar to REGIS. 

All of the demands made by Member States, classified under this category, are being 
analysed by the Commission. 

42  Recall  that  the  set  of    Objective  1  regions  includes  continental  regions  with  characteristics  that  are 
different from those of the UPRs. Besides this difference and because of it, it is justified that the specific 
measures be seen as an increment to the programs already approved. If that is not done then there is no 
differentiation.  
43 COM(2000) 147 final, p. 37. 

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7.2.2.2. EBI Loans 

As regards the EBI loans, the Commission only recognises that they had a very low 
utilisation, that two thirds of them were contracted by less favoured regions, that they 
are attributed by request and that, in 1998, the loans to ACP countries of the Caribbean 
region totalled 34 million euros as opposed to zero for the DOMs. 

No  effort  is  made  to  explain  this  situation.  Only  with  an  adequate  explanation  could 
adequate measures be taken to produce the desired results. 

7.2.2.3. State Aid 

The  Commission  distinguished  between  state  aid  for  agriculture,  fisheries,  and 
transport and that destined for other activities. 

In what  concerns state  aid, with a regional purpose, to sectors other than agriculture, 
fisheries  or  transport,  the  Commission  showed  some  willingness  to  authorise  aid  for 
current expenses that is non regressive and without a time limit. 

In  what  concerns  agriculture  and  fisheries,  the  Commission  remits  the  requests  to 
regulations already approved. 

Concerning the transport sector, the Commission alerts to the fact that the construction 
of  some  infrastructures  might  pose  some  problems  due  to  the  presence  of  private 
operators  in  the  sector.  It  is,  nevertheless,  open  to  consider  the  necessary  solutions 
given the impact that investments in this sector might have in reducing supplementary 
costs  of  transport  for  residents  of  the  UPRs.  It  is  recognised  that  “The  permanent 
structural deficiencies of the UPRs require a coherent and global approach to the aids 
for  transport  to,  in  and  within  these  regions…  The  Commission  is  examining  the 
possibility  of  a  specific  approach  for  transport  policy  for  the  ultra-peripheral 
regions”44. 

7.2.2.4. Taxation 

With regard to indirect taxes, the Commission recognises the possibility of utilisation 
of this instrument but requires a case by case analysis. 

The  Commission  also  shows  some  flexibility  in  allowing  for  longer  periods  for 
derogations  but  requires  periodical  reports  and  that  the  Member  States  justify  their 
requests. It shows an open attitude towards the consideration of all proposals submitted 
by the Member States but advances no policy guidelines. 

44 COM(2000) 147 final, p. 41. 

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7.2.2.5. Customs 

In  regards to  customs,  the  Commission  is  open  to  the  solicitations  of  Member  States 
except in reference to permanent tariff exemptions since such measures “would violate 
the  coherence  of  community  law  and  the  internal  market…”45.  As  in  other  cases  the 
Commission requires that Member States justify their requests. 

In response to the difficulties of the DOM in competing with neighbour countries, the 
Commission is open to consider the authorisation of certain measures, for application 
in the DOM, suggesting that these regions create Free Zones. 

7.2.3. Strategic Domains 

The  Commission  considers  strategic  domains  for  its  intervention  aiding  SME, 
handicrafts  and  tourism,  transport,  energy,  the  environment,  the  information  society 
and research and development. 

The actions of the Commission in these domains, however, are limited, in all cases, to 
the  adaptation  of  horizontal  programs  to  consider  the  needs  of  the  UPRs,  and  to  the 
structural  funds  already  distributed  for  the  period  2000-2006.  No  other  more 
significant action in favour of the UPRs is, therefore, foreseen. 

7.2.4. Regional Co-operation 

The strategy proposed by the Commission includes a policy of co-operation with ACP 
and  PTU  countries.  It  is  recognised  that  the  preferred  country  status  given  these 
countries is detrimental for the UPRs since it makes them more vulnerable to outside 
competition aided by the EU. Consequently, the Commission defends not only that the 
UPRs be active agents in the execution of co-operation programs but also that they be 
compensated  for  the  losses  incurred  due  to  the  privileges  given  to  neighbouring 
countries. 

7.3. The Calendar 

The  response  of  the  Commission  to  the  requests  of  policies  in  favour  of  the  UPRs, 
included  in  the  report  COM(2000)  147  final,  did  not  totally  satisfy  the  member 
countries. On request from Portugal the Commission elaborated an indicative timetable 
to  implement  a  “Sustainable  Development  Strategy  for  the  Ultra-peripheral  Regions 
(UPRs)” – SEC(2000)1027/2. 

In  this  document,  the  Commission  enumerated  each  of  the  policies  contained  in  the 
report COM(2000) 147 final and gave an indication of the predicted term for making a 

45 COM(2000) 147 final, p. 45. 

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decision or, in some cases, gave indication that it awaited additional information from 
the member countries. 

This document did not add much to the report except to include an indicative schedule 
and information about the entity, which should take the next step towards approval of 
each measure. 

7.4. An Evaluation of the Proposals of the Commission 

The report of the Commission, COM(2000) 147 final, is a  response to the insistence 
of  the  Member  States  that  have  UPRs,  based  on  individual  memorandums  of  each 
country and on the memorandum of the UPRs, presented in March of 1999 and titled 
“Our Differences are Similarities…They Unite Us”. 

The  memoranda  of  the  Member  States  enumerate  the  measures  intended  for  each 
region. 

The  joint  memorandum  of  the  UPRs  emphasises  the  specificities  of  these  regions, 
makes  a  positive  balance  of  the  POSEI  programs  and  suggests  a  coherent  global 
policy46.  

The  report  COM(2000)  147  final  seems  to  be  inspired  by  the  memorandum  of  the 
UPRs and responds to each individual request  of the Member States. It, however, does 
not seem to respond to the need for a new push of community policy, suggested in the 
memorandum, in comparison with the initial POSEI initiative, designed in the last part 
of  the  80’s  and  the  first  part  of  the  90’s.  The  report,  in  what  pertains  to  the  future, 
omits explicit reference to the objectives to follow and goals to pursue, outlines, in an 
unclear way, the strategy for action and enumerates the instruments it proposes to use 
when  addressing  the  requests  of  the  Member  States.  In  referring  to  each  request,  the 
Commission limits itself to state the phase of analysis of each request, not advancing 
an explicit global strategy with pre-announced objectives and goals. 

Implicit  in  the  report  is  the  strategy,  especially  policies  other  than  agriculture  or 
fisheries, of leading the UPRs to seek financing in the horizontal programs that exist 
for each sector. 

Comparing  the  POSEI  programs  before  the  Treaty  of  Amsterdam  and  what  is 
contained in COM(2000) 147 final, we can conclude that the Commission is prepared 
only  to  continue  programs  conforming  to  past  configurations.  There  is  no  indication 
that  new  budget  sources  will  be  mobilised  or  that  there  will  be  a  reinforcement  of 
existing  ones  (agriculture  and  fisheries)  or  reinforcement  of  the  services  responsible 
for  the  implementation  of  these  policies  (Interservices  Group),  as  suggested  in  the 
memorandum of the UPRs. 

46 “Our Differences Unite Us ...”, p. 31. 

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The new lines of action (information society, research and development, SME’s, etc.) 
are,  according  to  the  report,  conducted  through  horizontal  programs  that  the 
Commission  proposes  to  adapt  to  encourage  the  involvement  of  the  UPRs.  This 
approach  will  have  uncertain  results  since  these  programs  are  designed  for  a  Europe 
that is a lot more developed and presupposes competitive access at the European level. 
It  should  be  noted  that  the  UPRs  are  also  characterised  by  the  scarcity  of  qualified 
human  resources  and  have,  because  of  this,  significant  handicaps  when  entering  into 
competitive  processes.  Only  after  an  effective  process  of  elevation  to  the  level  of 
competence will  it be possible  to believe that  the UPRs  might  take full advantage of 
policies open to the entire EU. 

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8.  ANALYSIS  OF  POLICY  IMPACTS  ON  THE  COSTS  OF 
PERIPHERALITY 

This section presents the results from the application of the methodology proposed in 
section  6,  which  was  designed  to  appraise  the  effect  of  the  policies  in  favour  of  the 
UPRs. The chosen  indicators cover the impact of past policies, the  analysis of future 
measures  proposed  by  the  European  Commission,  and  the  evaluation  of  alternative 
actions advanced by the team responsible for this report. 

Five different types of ultra-peripheral policies produce effects on four main vectors of 
each regional economy.  

The four impact vectors are: 

- 
- 

- 

- 

the Public Vector, which includes all the public services;  
the Autonomous Basic Vector, which involves all the activities oriented toward 
external markets;  
the  Non  Basic  Vector,  which  comprehends  the  activities  connected  to  the 
internal market; and 
the Vector of Accessibility, assessed by the dynamics of population and external 
traffic.  

The types of ultra-peripheral policies are: 

- 

- 

- 

- 

- 

Structural  Funds  and  Loans  from  the  European  Investment  Bank,  which 
produce  effects  essentially  in  the  evolution  of  external  public  transferences  to 
each region; 
Policies  for  Value  Chains  of  Agriculture,  Fisheries  and  Tourism  which 
result  in  changes  in  the  dimension,  productivity  and  profitability  of  export 
activities; 
Fiscal  and  Customs  Policies,  and  also  support  to  PMEs  and  to  energy 
supply,  which  affect  the  dimension,  productivity  and  profitability  of  the  non 
basic sector; 
Transport  and  Communication  Policies,  which  have  impact  on  the  access 
and productivity of export activities, namely on tourism; and, finally 
Policies related to Environmental, Research, Information and Cooperation 
issues,  which  produce  effects  upon  all  the  vectors  although  the  impact  on 
productivity could be more uncertain and long term. 

Table  8  relates  each  impact  vector  to  the  various  types  of  ultra-peripheral  support 
measures.  The  evaluation  of  the  impact  is  made,  according  to  the  methodology 
proposed in points 6 and 7, for each one of the UPRs.  It is then possible to present the 
evaluation of past policies, for the period 1990-1998, the analysis of future  measures 
proposed  by  the  European  Commission,  and  the  evaluation  of  alternative  actions 

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advanced by the team responsible for this report.  The impact indicators are the Costs 
of Periphery and its components: the Product Per Capita and the Accessibility. 

Table 8. Relation Between Policies and Impact Vectors of the Economies 

Vector 
Policies 

Vector of the 
Public Sector  

Vector of the 
Basic Sector  

Vector of the 
Non Basic 
Sector  

Vector of the 
Accessibility 

Structural Funds and 
Loans from the EIB 

Support measures for  
Agriculture, Fisheries 
and Tourism Value 
Chains 

Fiscal and Customs 
Policies, and also 
support to SMEs and 
to energy supply 

Transport and 
Communication 
Policies 

Policies related to 
Environment, 
Research, 
Information and  
Co-operation 

on 

the 
Effects 
and 
dimension 
"profitability" 
of 
the public services 

Qualification 
some 
servants 

of 
public 

the 
and 

Effects  on 
dimension 
competitiveness 
of the Basic 
Sector 
Effects  on 
dimension 
competitiveness 
of 
Sector 
Effects  on 
dimension 
competitiveness 
of 
Sector 
Exploitation 
new markets 

the 
and 

the 
and 

the  Basic 

the  Basic 

of 

Effects  on  the 
dimension  and  
profitability  of 
the  Non  Basic 
Sector 

Restructuring of 
the 
Accessibilities 

Modernisation 
of 
Basic Sector 

the  Non 

Restructuring of 
the 
Accessibilities 

The following sections present comments on the results of model simulations for each 
type of policy and for past, proposed and alternative scenarios. 

Results are measured in terms of percentage points. Therefore a policy impact of 1.0 
indicates that such policy induced a process that reduces the gap of the region related 
to the centre by 1.0 percentage points, either in terms of Product per Capita or in terms 
of Potential (measure of accessibility). 

8.1. Structural Funds and Loans from the European Investment Bank 

8.1.1. Evaluation of Past Policies 

Past  Policies  related  to  Structural  Funds  and  Loans  from  the  European  Investment 
Bank had different effects in the UPRs’ economies depending on the importance of the 
external public support for the various regions. 

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For  the  Azores,  Madeira  and  the  Canary  Islands,  for  which  external  public  support 
represents about 50% of the basic sector, Structural Funds and Loans from the EIB had 
an impact of 2 to 4 percentage points in terms of Product per Capita. 

For Reunion, Martinique and Guadeloupe, for which external public support represents 
about 90% of the basic sector, Structural Funds and Loans from the EIB had an impact 
of 1.0 percentage points in terms of Product per Capita. 

For  French  Guyana,  although  external  public  support  represents  about  90%  of  the 
basic sector, the impact of Structural Funds and EIB loans is bigger than in the other 
DOMs.  This  is  due  not  only  to  a  higher  support  per  capita  but  also  because  it  has  a 
greater multiplier effect from external support. 

8.1.2. Evaluation of Proposed Policies 

The European Commission Proposals for 2000-2006 Structural Funds and EIB Loans 
involve  the  duplication  of  the  support  and  a  major  orientation  towards  productive 
sectors.  The  financing  of  routine  operation  costs,  beyond  the  investment  support 
previously contemplated, is also admitted as a possibility. 

Because the support is targeted to the productive sector one can expect that, contrary to 
what was assumed in 8.1.1, the support will not generate major changes in the relation 
between  non-basic  employment  and  population.  Thus  the  marginal  effect  from  the 
duplication  of  the  structural  funds  will  not  be  much  different  from  one  region  to  the 
other. 

8.1.3. Evaluation of Alternative Policies 

The  expected  effects  from  the  European  Commission  Proposals  for  2000-2006 
Structural  Funds  and  EIB  Loans  are  modest  taking  into  account  the  convergence 
objective.  Alternatively  it  is  advocated  the  creation  of  a  new  program  REGIS 
specifically targeted to the UPRs. 

An important question is the application framework of this new support. Actually, the 
multiplier effect of the exports and even of the external public support will be reduced 
if  that  extra  support  is  channelled  to  the  provision  of  public  services.  On  the  other 
hand,  non-basic  activities  tend  to  become  overgrown  if  the  new  support  directly 
supports  them.  In  fact  the  use  of  those  new  support  tools  should  be  applied  in  the 
promotion of export competitiveness, in technological adaptation and innovation, and 
in regional co-operation. 

The next table synthesises the impacts of the Past, Proposed and Alternative Policies 
on Structural Funds and EIB Loans. 

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The costs of peripherality 

Past Policies 

Proposed Policies 

Alternative Policies 

Product  Potential 

Cost 

Product  Potential 

Cost 

Product  Potential 

Cost 

AZORES 

MADEIRA 

4.1% 

0.7% 

4.1% 

0.7% 

1.3% 

1.5% 

0.8% 

1.6% 

1.8% 

2.2% 

0.1% 

2.2% 

0.5% 

1.6% 

1.7% 

0.6% 

1.9% 

2.0% 

CANARY IS. 

2.4% 

0.1% 

2.4% 

0.3% 

1.0% 

1.1% 

0.3% 

1.2% 

1.2% 

GUADELOUPE 

1.0% 

0.1% 

1.0% 

1.0% 

0.0% 

1.0% 

0.5% 

0.4% 

0.7% 

MARTINIQUE 

1.1% 

0.1% 

1.1% 

1.1% 

0.0% 

1.1% 

0.4% 

0.5% 

0.7% 

FR. GUYANA 

2.1% 

1.1% 

2.4% 

1.2% 

2.7% 

2.9% 

1.4% 

3.2% 

3.5% 

REUNION 

0.6% 

0.6% 

0.9% 

0.4% 

0.4% 

0.6% 

0.5% 

0.5% 

0.7% 

8.2. Policies for the Value Chains of Agriculture, Fisheries and Tourism 

8.2.1. Evaluation of Past Policies  

Past  Policies  on  Basic  Sector  Support  had  different  effects  in  the  UPRs’  economies 
depending  on  the  export  sector  of  each  region  and  on  the  importance  of  the  external 
public support. 

In Madeira, the Canary Islands and the Azores, where the non-public basic sector has 
some importance, the Special Supply Regime, the investment support schemes and the 
improvements of port and airport infrastructures had a positive impact on the size and 
productivity of tourism (in Madeira and the Canary Islands) and of the dairy industry 
(in the Azores). 

For Guadeloupe, Martinique, French Guyana and Reunion, the State supports allowed 
by  the  Banana  and  Sugar  CMOs  improved  the  profitability  and  dimension  of  those 
value chains. Nevertheless the impact of those supports in each economy was minimal 
due to the reduced importance of those value chains in a basic sector overwhelmingly 
dominated by external public support. 

8.2.2. Evaluation of Proposed Policies  

Proposed  Policies  for  the  Value  Chains  of  Agriculture,  Fisheries  and  Tourism  are 
connected  to  the  expected  changes  in  the  Common  Agriculture  Policy  (namely 
concerning the CMOs for sugar, bananas and milk), to the Special Stock Regime, and 
to  the  support  to  internal  and  external  marketing  of  regional  products.  The 
Commission's  report  clarifies  that  it  will  be  necessary  to  create  new  measures  to 
regulate the competition between the UPRs and third countries. 

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For tourist regions such as Madeira and the Canary Islands the Special Supply Regime 
will have less effects because the difference between European prices and international 
prices  is  diminishing.  On  the  other  hand  the  capacity  of  those  regions  seems  to  be 
almost  achieved  and  the  imposition  of  environmental  rules  could  reduce  the 
profitability of the existing structures. 

In  the  other  regions, where  the  nonpublic  basic  sector  is  occupied by Milk, Sugar  or 
Banana Value Chains the expectation is that the old and new rules of the CMOs will 
lead  to  negative  effects  in  those  value  chains  and  in  the  economies  where  they  are 
rooted. 

8.2.3. Evaluation of Alternative Policies 

Regional  development  depends  on  the  competitiveness  of  export  value  chains. 
Therefore it is crucial to advance an alternative strategy for the export value chains that 
is different from the one proposed by the European Commission for the regions where 
the  basic  sector  is  more  dependent  on  agricultural  products.  The  alternative  strategy 
advocates the adaptation of the CMO rules to the specificities of the UPRs. If this is 
not  undertaken  the  main  objectives  of  the  Common  Agricultural  Policies  are  not 
fulfilled because the reduced dimension of the regions distorts the application of CMO 
rules.  The  proposal  is  to  eliminate  quotas  and  production  limits  for  milk,  sugar  and 
bananas.  It  is  also  advocated  that  CMO  market  interventions  should  be  done  at  the 
producer  level  in  order  to  avoid  monosponistic  behaviour  on  the  part  of  industry. 
Finally, support is suggested for the export of technology (namely related to agro-food 
production), since it could be an important way to promote regional co-operation. 

On  the  other  hand,  because  most  of  these  economies  depend  on  external  public 
support, a crucial factor for development could be the modernisation of public service. 
Actually, its creative adaptation to the specificities of the UPRs and the promotion of 
its productivity, eventually through the reduction of the public sector, seems to be of 
overwhelming importance not only to make good use of external resources but also to 
diminish the restrictions induced in the productive sectors. 

A  concerted  policy  along  these  lines  would  tend  to reduce  the  population  in  most  of 
the French DOMs (for instance, through the migration of public servants if there were 
a  relative  or  absolute  reduction  in  their  wages)  but  also  could  lead  to  self-sustained 
development processes in all ultra-peripheral regions. Above all it would be possible to 
avoid the negative effect of the policies proposed by the Commission towards most of 
the basic sectors in those economies. 

The next table synthesises the impacts of the Past, Proposed and Alternative Policies 
for Value Chains of Agriculture, Fisheries and Tourism. 

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Table 8.2.4. Synthesis for Policies for Value Chains of  
Agriculture, Fisheries and Tourism 

Past Policies 

Proposed Policies 

Alternative Policies 

Product  Potential 

Cost 

Product  Potential 

Cost 

Product  Potential 

Cost 

AZORES 

MADEIRA 

1.1% 

0.6% 

1.3% 

-0.8% 

-0.6% 

-1.0% 

1.7% 

0.0% 

1.7% 

1.1% 

0.0% 

1.1% 

-0.6% 

0.0% 

-0.6% 

0.1% 

0.1% 

0.2% 

CANARY IS. 

3.2% 

0.0% 

3.2% 

-1.6% 

0.0% 

-1.6% 

0.0% 

0.0% 

0.1% 

GUADELOUPE 

0.6% 

0.0% 

0.6% 

-0.5% 

-0.1% 

-0.5% 

0.3% 

0.4% 

0.5% 

MARTINIQUE 

0.8% 

0.0% 

0.8% 

-0.6% 

-0.1% 

-0.6% 

0.4% 

0.4% 

0.6% 

FR. GUYANA 

0.7% 

0.0% 

0.7% 

-0.3% 

0.0% 

-0.3% 

0.4% 

0.1% 

0.4% 

REUNION 

0.8% 

0.0% 

0.8% 

-0.6% 

-0.2% 

-0.6% 

0.3% 

0.6% 

0.7% 

8.3. Fiscal and Customs Policies, and also Support to SMEs and to Energy Supply 

8.3.1. Evaluation of Past Policies 

The  French  DOMs  and  the  Canary  Islands  have  important  reductions  on  direct  and 
indirect  taxation  and  do  have  the  secular  right  to  tax  imports  that  arm  the  existent 
productive activities in those regions. The Azores and Madeira have the possibility to 
reduce direct taxation and benefit from a reduced Value Added Tax. 

The  effects  of  those  measures  in  the  regional  economies  are  important  but 
contradictory.  The  so  called  "sea  rights"  applied  to  the  Canary  Islands  and  in  the 
French DOMs, tend to enlarge the non-basic sector, increasing the multiplier effect of 
the  basic  sector  but  reducing  the  overall  productivity  of  the  regional  economies. 
Notwithstanding  this,  the  reduction  of  taxes  increases  the  multiplier  effect  and 
improves the exports' competitiveness. These effects seem to be more important in less 
developed economies. 

8.3.2. Evaluation of Proposed Policies 

The  Commission  accepts  the  “sea  rights”  concept.  Nevertheless,  regarding  taxation, 
the document produced by the Commission is cautious. In the end there are not major 
changes in these domains and, therefore, the marginal effect of the measures proposed 
can be assumed as negligible. 

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8.3.3. Evaluation of Alternative Policies 

Fiscal and customs policies are important but their effect is different from one region 
to  another.  The  alternative  policy  proposed  here  is  based  on  the  idea  that  fiscal  and 
customs  policies  for  the  UPRs  should  be  the  same  as  in  continental  Europe  but 
moulded and adapted for each region. 

Assuming  this  it  seems  important  to  study  the  elimination  of  the  "sea  rights"  in  the 
Canary  Islands,  Martinique,  Guadeloupe  and  French  Guyana,  where  its  continuation 
arms the development of those economies and imposes serious restrictions on regional 
co-operation. 

It is also fundamental to change the "sea rights" in Reunion. The aim is to allow some 
protection  to  local  activities,  but  without  restricting  the  security  of  old  and  new 
investors,  through  the  clarification  of  the  rules  and  with  a  greater  stability  on  the 
effects of the "sea rights". 

The next table synthesises the impacts of the Past, Proposed and Alternative Policies 
for Fiscal and Customs Policies, and support to SMEs and Energy. 

Table 8.3.4. Synthesis for Fiscal and Customs Policies,  

and Support to SMEs and Energy 

Past Policies 

Proposed Policies 

Alternative Policies 

Product  Potential 

Cost 

Product  Potential 

Cost 

Product  Potential 

Cost 

AZORES 

MADEIRA 

1.8% 

1.9% 

2.6% 

0.0% 

0.0% 

0.0% 

0.9% 

1.2% 

1.5% 

1.6% 

2.5% 

3.0% 

0.0% 

0.0% 

0.0% 

0.7% 

1.8% 

1.9% 

CANARY IS 

0.0% 

1.6% 

1.6% 

0.0% 

0.0% 

0.0% 

2.6% 

-0.8% 

2.8% 

GUADELOUPE 

2.2% 

1.6% 

2.7% 

0.0% 

0.0% 

0.0% 

0.2% 

0.1% 

0.2% 

MARTINIQUE 

2.0% 

1.7% 

2.6% 

0.0% 

0.0% 

0.0% 

0.2% 

0.1% 

0.2% 

FR. GUYANA 

1.3% 

2.0% 

2.4% 

0.0% 

0.0% 

0.0% 

0.6% 

1.2% 

1.4% 

REUNION 

2.0% 

1.5% 

2.5% 

0.0% 

0.0% 

0.0% 

0.2% 

0.1% 

0.2% 

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8.4. Transport and Communication Policies 

8.4.1. Evaluation of Past Policies 

Transport liberalisation contributed largely to an improvement in accessibility in most 
of  the  UPRs.  For  those  regions  where  that  liberalisation  was  not  achieved  the  effect 
was more modest. 

Furthermore  the  existing  transport  policies  promote  more  the  accessibility  of  the 
inhabitants  of  the  UPRs  vis-à-vis  their  country  capitals,  rather  than  stimulating  the 
accessibility for visitors from neighbour countries and tourists from source markets.  

The result is an improvement in accessibility but without correspondence in regards to 
the dynamics of the Product per Capita. 

8.4.2. Evaluation of Proposed Policies 

The Commission's proposal concerning transport and communications policies leads to 
small  modifications  in  the  status  quo.  Only  the  elimination  of  the  derogation  on  free 
traffic in the Azores and the construction of a highway connecting Brazil with French 
Guyana  and  Surinam  could  significantly  change  the  accessibilities  in  those  two 
regions. 

8.4.3. Evaluation of Alternative Policies 

It  is  important  to  promote  the  accessibility  for  everybody  (inhabitants,  visitors  and 
tourists) and to everywhere (neighbour countries, European countries) and not only for 
inhabitants of the UPRs vis-à-vis their country capitals. 

With  such  policies  the  accessibility of the  Azores,  Guadeloupe,  Martinique  and  even 
Reunion could easily reach the same level as registered in Guyana, the Canary Islands 
and Madeira. Notice that accessibility is measured in per capita terms. 

The next table synthesises the impacts of the Past, Proposed and Alternative Policies 
for Transport and Communication Policies. 

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Table 8.4.4. Synthesis for Transport and Communication Policies 

Past Policies 

Proposed Policies 

Alternative Policies 

Product  Potential 

Cost 

Product  Potential 

Cost 

Product  Potential 

Cost 

AZORES 

MADEIRA 

0.1% 

2.7% 

2.7% 

0.0% 

3.2% 

3.2% 

0.1% 

12.1% 

12.1% 

0.1% 

7.8% 

7.8% 

0.0% 

1.9% 

1.9% 

0.1% 

1.9% 

1.9% 

CANARY IS. 

0.3% 

6.1% 

6.1% 

0.3% 

1.6% 

1.6% 

0.3% 

1.6% 

1.6% 

GUADELOUPE 

0.1% 

3.5% 

3.5% 

0.0% 

0.0% 

0.0% 

0.1% 

3.6% 

3.6% 

MARTINIQUE 

0.1% 

3.7% 

3.7% 

0.0% 

0.0% 

0.0% 

0.1% 

3.8% 

3.8% 

FR.GUYANA 

0.1% 

5.4% 

5.4% 

0.2% 

11.4% 

11.4% 

0.2% 

1.2% 

1.2% 

REUNION 

0.1% 

0.9% 

0.9% 

0.1% 

1.2% 

1.2% 

0.2% 

4.7% 

4.7% 

8.5. Policies Related to Environment, Research, Information and Co-operation 

8.5.1. Evaluation of Past Policies 

Environmental,  Research,  Information  and  Co-operation  Policies  are  justifiably 
important for the economic development but it is difficult to foresee any effect of those 
policies.  

Environmental  policies  could  improve  the  quality  of  life  but,  for  reasonable 
environmental  conditions,  the  short-term  economic  effect  of  those  policies  could  be 
negative. 

Research policies seem to have reduced effects in the UPRs. On the one hand Regional 
Universities, with some  exceptions,  are oriented towards teaching and far away from 
research problems that are related to the development of the respective region. On the 
other hand the research agenda for the UPRs tends to be more related to questions of 
interest of the European centres (the space program in French Guyana, meteorology in 
the  Azores,  astrology  in  the  Canary  Islands  and  Reunion)  rather  than  with  problems 
that  constrain  the  development  of  the  regions  (food  technology  in  the  Azores, 
management and conservation of Natural Resources in French Guyana, etc.). 

The  development  of  the  Information  Society  is  a  process  that  could  have  positive 
and/or  negative  effects  for  UPRs.  Until  now  it  stimulated  the  modification  of 
information  and  the  set  up  of  new  activities,  the  structuring  and  restructuring  of 
institutions,  the  flexibility  of  production  and  the  relocation of control.  In  the  Azores, 
new information and communication technologies allowed the transference of control 
in  dairy  value  chains  from  the  Azores  to  Lisbon  and  Paris.  In  Martinique  and 
Guadeloupe those pervasive technologies strengthened the control of major sectors of 

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the  economy  by  alien  entities.  In  the  Canary  Islands  and  in  Madeira  the  big  tour 
operators  control the tourist circuits. The conclusion is that the policies towards UPRs 
didn't know how to anticipate the phenomenon. 

Finally, related to regional co-operation, there are more good intentions than facts. To 
cross  from  French  Guyana  to  Brazil  a  special  authorisation  from  the  Regional 
Government  and  a  term  of  responsibility  by  the  company  that  owns  the  boat  are 
required.  It  is  not  easy  to  discover  flights  through  in  the  Internet  from  Reunion  to 
Madagascar  or  to  Johannesburg.  The  connections  between  the  Canary  Islands  and 
North of Africa are quite difficult. There are no regular flights connecting the Azores 
with  the United States  and the same happens  in  the link between Madeira and South 
Africa.  There  are  mixed  feelings  as  to  the possibility  of  development  of  a  Caribbean 
market. 

8.5.2. Evaluation of Proposed Policies 

The  proposals  from  the  Commission  are  interesting.  Nevertheless,  without  political 
will  from  the  various  countries  (France,  Spain  and  Portugal),  namely  concerning  co-
operation policies, it will not be possible to make them work. 

There  are  also  important  regional  restrictions.  Actually,  both  co-operation  and 
environmental policies involve changes in the distribution of income and wealth and it 
is  not  foreseeable  that  the  various  regions  will  assume  the  risks  underneath  the 
Commission proposals on environment and co-operation. 

Similar things happen with research. Major results could not be expected when there is 
an embedded distrust in some regions between society and the University. Moreover, 
the  support  for  the  brain  drain  and  the  import  of  visiting  lecturers  seems  to  create 
serious difficulties for the establishment of productive and effective research groups in 
most of the regions. 

8.5.3 Evaluation of Alternative Policies 

It  is  not  impossible  to  reduce  the  influence  of  the  difficulties  presented  above. 
Furthermore, most of the hope to develop UPRs rests on the Environmental, Research, 
Information and Co-operation Policies. The next table synthesises the impacts of these 
policies in the UPRs. 

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Table 8.5.4.Synthesis for Environmental, Research,  

Information and Co-operation Policies 

Past Policies 

Proposed Policies 

Alternative Policies 

Product  Potential 

Cost 

Product  Potential 

Cost 

Product  Potential 

Cost 

AZORES 

MADEIRA 

0.1% 

0.6% 

0.6% 

2.0% 

2.5% 

3.2% 

2.4% 

5.4% 

5.9% 

0.0% 

0.0% 

0.0% 

1.7% 

7.9% 

8.1% 

2.9% 

7.1% 

7.7% 

CANARY IS 

0.0% 

0.0% 

0.0% 

1.7% 

5.5% 

5.7% 

4.8% 

5.5% 

7.3% 

GUADELOUPE 

0.0% 

0.0% 

0.0% 

3.2% 

-0.7% 

3.2% 

2.2% 

5.7% 

6.1% 

MARTINIQUE 

0.0% 

0.0% 

0.0% 

3.4% 

-0.6% 

3.4% 

2.8% 

6.0% 

6.7% 

FR. GUYANA 

0.0% 

0.0% 

0.0% 

2.5% 

5.2% 

5.8% 

2.7% 

4.0% 

4.8% 

REUNION 

0.0% 

0.0% 

0.0% 

3.2% 

0.3% 

3.2% 

2.5% 

0.2% 

2.5% 

8.6. Synthesis 

8.6.1. Structural Funds and Loans from the European Investment Bank 

The sensible effect of the structural funds is the multiplier income effect. Development 
effects  are  registered  in  the  medium  and  long  term.  Hence,  public  investments  allow 
development but do not stimulate it. From this perspective the expected effects of the 
Structural Funds are modest related to the convergence objective.  

Actually,  there  is  still  lack  of  public  investments  adapted  to  the  UPRs:  urban 
qualifications  and  environmental  modernization,  city  structures  and  connections  with 
neighbour countries (for French Guyana), waste treatment and water supply. It appears 
necessary  that  a  new  REGIS  type  programme  be  specifically  oriented  towards  the 
UPRs. 

8.6.2. Policies for Value Chains of Agriculture, Fisheries and Tourism 

The proposals of the Commission towards the Value Chains of Agriculture, Fisheries 
and  Tourism  rooted  in  the  UPRs  are,  in  round  numbers,  unfavourable  for  the 
development  of  those  regions.  For  the  regions  or  islands  specialised  in  banana  and 
sugar  production  there  are  clear  signals  that  proposed  solutions  to  revise  the  CMOs 
would hinder regional competitiveness. For tourist regions there are no new solutions 
to improve the accessibility towards the source markets and new restrictions have been 
announced  that  are  related  to  the  environment.  Finally,  when  horticulture  or  dairy 
constitute the main exports, there are strong impositions blocking the development of 
these competitive value chains. 

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8.6.3. Fiscal and Customs Policies, Support to PMEs and to Energy Supply 

The Fiscal and Customs' Policies towards the UPRs must be similar to the one applied 
in Continental Europe but moulded and adapted for each region. The restructuring of 
the "sea rights" is proposed. The aim is to allow some protection to the local activities, 
but without restricting the security of old and new investors, through the clarification 
of the rules and with a greater stability on the effects of the "sea rights". 

8.6.4. Transport and Communication Policies 

It  is  important  to  promote  accessibility  for  everybody  (inhabitants,  visitors  and 
tourists)  and  to  everywhere  (neighbour  and  European  countries)  and  not  only  for 
inhabitants of the UPRs vis-à-vis their country capitals. 

8.6.5. Policies Related to Environment, Research, Information and Co-operation 

The  proposals  from  the  Commission  are  superb.  Nevertheless,  without  political  will 
from  the  various  countries  (France,  Spain  and  Portugal),  namely  concerning 
co-operation policies, it will not be possible to grant effectiveness to those proposals. 
To  secure  the  success  of  those  policies  their  projects  should  respond  more  to  the 
regional agendas and not to the detached agendas coming from continental Europe. 

8.6.6. General Synthesis 

The results from the simulations are presented synthetically in Table 8.6.6 and Figures 
8.1 and 8.2 . Notice that the period of analysis is 1990-1998. 

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Table 8.6.6. Synthesis (Indicator of per capita Product) 

STRUCTURAL 
FUNDS AND 
LOANS FROM EIB 

POLICIES FOR THE 
VALUE CHAINS OF 
AGRICULTURE, 
FISHEIRES AND 
TOURISM 

FISCAL AND 
CUSTOMS POLICIES. 
PMES AND ENERGY 
SUPPORT SCHEMES 

TRANSPORT AND 
COMMUNICATION 
POLICIES  

ENVIRONMENT, 
RESEARCH, 
INFORMATION AND 
CO-OPERATION  

COMBINATION OF 
POLICIES 

PROP  ALT 

PASS  PROP  ALT 

PASS  PROP  ALT 

PASS  PROP  ALT 

PASS  PROP  ALT 

PASS  PROP  ALT 

PA
SS 

% points 

AZORES 

MADEIRA 

4.1  0.7  0.8  1.1 

-0.8  1.7  1.8  0.0  0.9  0.1  0.0  0.1  0.1  2.0  2.4 

8.2 

1.5 

5.7 

2.2  0.5  0.6  1.1 

-0.6  0.1  1.6  0.0  0.7  0.1  0.0  0.1  0.0  1.7  2.9  5.3  1.8  4.6 

CANARY IS. 

2.4  0.3  0.3  3.2 

-1.6  0.0  0.0  0.0  2.6  0.3  0.3  0.3  0.0  1.7  4.8  6.7  0.8  8.8 

GUADELOUPE 

1.0  1.0  0.5  0.6 

-0.5  0.3  2.2  0.0  0.2  0.1  0.0  0.1  0.0  3.2  2.2  4.0  3.8  3.7 

MARTINIQUE 

1.1  1.1  0.4  0.8 

-0.6  0.4  2.0  0.0  0.2  0.1  0.0  0.1  0.0  3.4  2.8  4.0  4.0  4.4 

FR. GUYANA 

2.1  1.2  1.4  0.7 

-0.3  0.4  1.3  0.0  0.6  0.1  0.2  0.2  0.0  2.5  2.7  4.0  3.6  4.7 

REUNION 

0.6  0.4  0.5  0.8 

-0.6  0.3  2.0  0.0  0.2  0.1  0.1  0.2  0.0  3.2  2.5  3.6  3.2  4.3 

The  first  five  columns  reproduce  the  partial  impacts  presented  above,  but  only 
concerning  the  Product  per  Capita  indicator.  The  last  column  presents  the  estimated 
impact from the combination of policies - past, proposed and alternative. Reunion and 
the Azores are the regions with the highest Costs of Periphery. The Canary Islands is 
the  more  central  region.  The  evolution  of  French  Guyana  traffic  explains  why  the 
Potential of that region decreased from 1990 to 1995. Nevertheless, comparatively, this 
indicator  remains  at  a  reasonable  level  for  Guyana.  Martinique  and  Guadeloupe 
progress  in  a  similar  way.  Finally,  tourist  regions  such  as  Madeira  and  the  Canary 
Islands registered strong increases in Potential from 1990 to 1998. 

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Figure 8.1. Evolution of the Costs of Peripherality from 1990 - 1998 

Costs of Periphery 1990-1995-1998

U
E
c
p
P
D
G

/

R
P
U
c
p
P
D
G

1998

1995

1990

150%

125%

100%

75%

Reunion

50%

25%

0%

Canary Is

Azores

Martinique

Madeira

Guadelupe

Guyane

0% 25% 50% 75% 100% 125% 150% 175% 200%

Potential

The impact on the costs of peripherality that result from the combination of the 
various  policies  is  shown  in  Table  8.2  from  which  it  is  possible  to  conclude 
that: 

- 

- 

- 

the  impact  of  those  policies  are  weaker  in  the  regions  more  dependent  on 
external  public  transferences  since  public  transferences  are  subject  to 
decreasing marginal effects; 

for  French  Guyana  the  connection  with  neighbour  countries  can  produce 
important effects in the economy mainly because it enlarges the market for 
products and resources at more competitive prices; 

the  elimination  of  the  "sea  rights"  in  the  Canary  Islands,  Martinique  and 
Guadeloupe could generate important impacts in the respective development 
process because it enables more co-operation with neighbour countries and 
increases the security for foreign investment; 

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Figure 8.2. Future Scenarios for the Costs of Peripherality  

The costs of peripherality 

Costs of Periphery
Past - Proposal -Alternative

Alternative
Proposal

1998
Without Policy UPR

Martinique

Guadalupe

Canary Is

Reunion

Azores

Guyane

Madeira

U
E
c
p
P
D
G

/

R
P
U
c
p
P
D
G

150%

125%

100%

75%

50%

25%

0%

0% 25% 50% 75% 100% 125% 150% 175% 200%

Potential

- 

- 

- 

the effective liberalisation of air transportation in the Azores will lead to a 
strong  increase  in  the  accessibility  measured  by  the  Potential  and  the 
elimination  of  the  milk  quota  will  accelerate  the  reduction  of  the  Costs  of 
Periphery in terms of Product per Capita; 

the support of the development process in Madeira, namely targeted to  the 
tourist  sector,  can  continue  to  generate  positive  effects  in  the  reduction  of 
the Costs of Peripherality; 

for  Reunion  the  development  process  based  on  import  substitution  and 
external  public  transferences  led  to  a  big  increase  in  the  population  and 
created  a  great  dependence  on  the  "sea  rights".  European  policies  will  not 
have a great effect if the national and regional development policy does not 
change to a more export oriented development strategy. 

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9.  SOME OPTIONS FOR DEALING WITH THE PROBLEMS OF 
ULTRA-PERIPHERALITY 

The  disadvantages  resulting  from  the  ultra-peripherality  of  some  regions  of  the  EU 
were  the  object  of  specific  actions  undertaken  in  addition  to  those  intended  for 
Objective 1 regions. They assumed the form of exceptions to various community laws 
and of differentiated budgets in the case of agriculture and fisheries and, at times, for 
other measures such as aid for the transport of fuels and the REGIS program for which 
there were two editions. 

The  measures,  whatever  the  form  they  have  assumed,  have  been  implemented, 
following requests on the part of each UPR, with the Commission assuming a reactive 
rather than a proactive posture. The isolated responses have also led to the absence of 
an  explicit  and  previously  announced  logic  for  the  intervention  in  these  regions  –  a 
global and common policy for the UPRs.  

In  most  cases  measures  have  been  adopted  on  an  individual  basis  without  a  general 
policy respecting principles and objectives to be applied in all cases. 

In what pertains to the principles, the need to adapt policies to the specificities of these 
regions  has  always  been  accepted.  It  however  is  constantly  in  conflict  with  the 
principle  of  free  competition  and  has  in  many  instances  limited  the  set  of  acceptable 
solutions. 

As far as the objectives are concerned, specification has been vague and has, in most 
cases, settled in qualitative goals without any attempt at quantification. 

In  order  to  obtain  better  results  from  future  policies  in  favour  of  the  UPRs  it  is 
important, in the first place, to establish which objective the EU intends to pursue. It 
seems  safe  to  say  that  the  objective  is  that  these  regions  converge  to  the  per  capita 
average income of the EU. This indicator reflects, in a condensed form, the evolution 
of the economy. 

Given  the  general  objective  it  is  important  to  establish  goals.  It  is  not  enough  that 
economies  of  the  UPRs  converge  as  they  did  in  the  past.  It  is  necessary  that  they 
converge  at  an  adequate  pace.  The  adequate  pace  is  a  matter  to  be  dealt  with  by  the 
community  authorities  and  should  have  implications  in  the  intensity  with  which  the 
objective is pursued. 

Having established the objectives and the goals it is necessary to identify the strategy 
and the instruments to use. 

Concerning the strategy, one can simply apply in the UPRs the policies that apply to 
the rest of the EU. It is consensual that such a strategy will only result in a divergence 
from  the  main  objective  of  convergence  since  it  would  be  ignoring  the  handicaps  of 
these  regions  and  placing  them  at  the  mercy  of  the  market  forces  which,  naturally, 
favour the continental areas with greater economic dimensions. One can, on the other 

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extreme, undertake a posture that is highly protective of these regions. This approach 
can also be highly criticised since it creates exceptions that tend to become permanent 
and prevent the working of positive innovation forces. It would also lead to a structural 
dependence of these economies on external aid. Between these extremes there will be 
an  adequate  equilibrium  that  admits  some  protection  but  evolves  to  a  more  self-
sustained outcome. 

In  the  first  versions  of  the  POSEI  programs  the  EU  adopted  a  set  of  measures,  on 
request from the Member States, without an apparent global logic. 

In the future, the strategy should be based on two main ideas: 

-  Acting on the key factors for the competitiveness of the economies of the UPRs in 

- 

order to eliminate shortfalls; 
Improvement  of  the  current  productive  sectors  and  promotion  of  new  emerging 
sectors. 

Viewed in this way the strategy would demand an audit of the state of competitiveness 
of each region and, for each measure proposed, a justification of its expected impact on 
the competitiveness (necessarily global) of the sectors affected. 

This  approach  is  applicable  both  to  the  current  economic  base  and  to  new  activities 
that one might want to encourage. 

The  competitiveness  approach  requires  that  for  each  sector,  including  the  traditional, 
one  looks  for  the  synergies  that  result  from  complementary  activities  (clusters).  As 
such it is natural that one look at the complements of sugar cane/sugar/rum/energy in 
the  case  of  La  Reunion  and  grass/corn/milk/dairy  in  the  case  of  the  Azores  or  the 
tourism cluster in the case of Madeira and the Canary Islands. For some or all UPRs 
one should also look at the cluster composed of higher education/research/services. 

In regions where economic diversification is very low one cannot stop supporting the 
activities that through the years have guaranteed the maintenance of the landscape and 
provided  the  necessary  income  for  many  families  that  would  otherwise  only  thicken 
the unemployment lists. It is not logical that in the Azores milk production be limited 
by  a  quota  that  constitutes  an  effective  restriction  and  cancels  a  production  potential 
that  has  naturally  developed  with  the  introduction of  better  technology  on  the  farms. 
The  maintenance  of  this  restriction  in  the  case  of  the  Azores  will  constitute  a  very 
important  setback  in  a  growth  process  where  the  alternatives  are  scarce  and  have 
impacts that can only be expected in a more distant future. It is not equally logical that 
the sugar beet/sugar/alcohol/liquor cluster not be supported, given the multiple positive 
impacts it might have on the economy of this region. 

The pursuit of competitiveness should be done not only taking into consideration the 
complements  of  various  activities  but  also  the  promotion  of  factors  such  as 
education/training  and  research.  The  UPRs  are  not  very  attractive  for  some 
professional categories, which  makes it  more difficult to settle some levels of human 
resources. Improving regional human resources through a regional system of advanced 
education has many advantages. On the one hand it attracts educators who, because of 
their academic careers are also researchers. On the other hand, it takes total advantage 

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of local human resources that otherwise would not go to the mainland to continue their 
education  or  that  would  have  stayed  in  the  mainland  after  their  education  was 
completed.  The  presence  in  these  regions  of  highly  qualified  human  resources 
facilitates  not  only  research  but  also  the  transfer  of  technology  in  all  areas,  as  is  the 
case  with  information  technologies.  Given  their  involvement  or  their  contacts  with 
more developed economic areas, the presence of highly qualified human resources can 
lead to the development of export services both in the form of higher education and in 
the form of consulting in various areas. The DOMs are particularly well positioned in 
this respect  given that they are located in  areas  where there is some potential for the 
attraction of university students and for the export of high value added services. 

Sustainability of development processes requires that resources be used in a way that 
does not compromise future use. The respect for the environment therefore becomes a 
horizontal  concern  that  is  present  not  only  when  it  comes  to  agriculture  or  industrial 
activities  but  also  when  it  comes  to  the  provision  of  services  of  all  sorts,  including 
tourism.  Environmental  conservation  should be  a  permanent  constraint  in all  policies 
implemented. 

The instruments to use in the conduct of policies for the ultra-periphery can be grouped 
in two categories: exceptions and expenditures. 

The  exceptions  include  the  alterations  to  rules  and  regulations,  including  those 
applicable  to  horizontal  community  initiatives.  Expenditures  involve  the  funds 
specifically allocated for spending in the UPRs. 

The  application  of  these  instruments  should,  in  order  for  them  to  make  sense,  be 
always  considered  in  addition  to  other  policies  not  included  in  the  ultra-periphery 
envelope. That is, they should add to those that already exist for Objective 1 regions. 
They  should  also  be  conceived  to  have  an  impact  that  is  significant  and  not  merely 
cosmetic.  It  is  important  to  see  not  only  if  the  policy  is  adequate  to  solve  a  certain 
problem but also if it is being applied with the right intensity. 

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10. CONCLUSIONS AND RECOMMENDATIONS  

From the analyses described in the above sections we can arrive at a set of conclusions 
and advance with a set of recommendations. 

We will start with the conclusions from the analysis of the Commission’s report. 

In  what  concerns  the  balance  of  the  impact  of  past  policies  in  favour  of  the  UPRs, 
advanced by the Commission, we can arrive at the following conclusions: 

•  between 1986 and 1996, per capita income grew in all UPRs at a higher rate than 
the  average  of  the  EU,  even  though  in  some  cases  the  difference  was  less  than  a 
percentage point; 

• 

•  credit  for  the  registered  convergence  cannot  be  attributed  only  to  measures 
undertaken in favour of the UPRs or to EU policy in general, since there is a major 
component that should be credited to national and regional policies; 
the Commission’s report does not present the data necessary for a detailed analysis 
of  the  impact  of  the  measures  in  favour  of  the  UPRs,  given  that  it  omits 
information  on  the  impact  of  exceptions  that  do  not  have  direct  budget 
implications; 
the report points to the low utilisation of loans from the EBI but makes no attempt 
to explain this fact; 
in  referring  to  the  high  unemployment  rates  in  the  UPRs,  the  report  omits  the 
corresponding  rates  of  the  Member  States  and  attempts  no  explanation  of  the 
phenomenon; 
the rate of convergence in the period under analysis can be considered inadequate 
given  the  gap  that  still  persists  between  the  development  levels  of  the  UPRs  and 
the EU; 

• 

• 

• 

•  even  though  the  impact  of  the  POSEI  measures  in  favour  of  the  UPRs  had  a 
positive  impact,  the  final  results  can  only  lead  to  the  conclusion  that  they  were, 
nevertheless, insufficient. 

With  respect  to  the  part  of  the  report  dealing  with  the  future,  we  can  conclude  the 
following: 

• 

• 

• 

the Commission’s report followed closely the joint memorandum of the UPRs and 
responded, one by one, to all requests on the part of the Member States; 
the report does not seem, however, to respond to the need to re-launch Community 
action, pointed out in the joint memorandum of the UPRs, by comparison with the 
first POSEI initiative;  
the  report  makes  no  explicit  reference  to  the  objectives  and  goals  it  will  seek  to 
attain,  and  sketches  the  strategy for action  in  a  somewhat  confusing  way  when  it 
lists  the  instruments  it  proposes  to  use  as  it  reviews  the  requests  of  the  Member 
States; 

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•  when it addresses each of the requests of the Member States, the Commission  only 
refers to the status of the analysis of each case without advancing an explicit global 
approach with objectives and targets; 

•  comparing  the  POSEI  program  before  the  approval  of  the  Treaty  of  Amsterdam 
and  what  is  foreseen  in  report  COM(2000)  147  final,  one  can  conclude  that  the 
Commission  only  intends  to  continue  the  program  as  it  was  designed  in  the  past 
without  any  perspective  for  new  funds  specifically  for  the  UPRs  or  the 
reinforcement of the existing funds (agriculture and fisheries); 

•  no  plan  is  mentioned  for  the  reinforcement  of  the  capacity  of  the  services 
responsible  for  the  policies  in  favour  of  the  UPRs  (Inter-Services  Group),  as 
suggested in their joint memorandum; 

•  action  on  the  new  policy  areas  (information  society,  research  and  development, 
SMEs,  etc.)  will  be,  in  accordance  with  the  report,  undertaken  through  the 
horizontal  programs,  which  the  Commission  proposes  to  adapt  to  encourage 
involvement of the UPRs.  

From the conclusions that can be drawn from the application of the  model proposed, 
we highlight the following: 

• 

• 

• 

the  impact  of  structural  funds  on  development  tend  to  occur  in  the  medium  and 
long  term  and  as  such  public  investments  tend  to  create  the  conditions  for 
development but do not stimulate it;  
the expected impact of Structural Funds for the period 2000-2006 are modest given 
the convergence objective;  
the policies admitted by the Commission for the basic sectors of the economies of 
the UPRs will tend, in general, to be detrimental to the longer term development of 
these regions given that: in those that export sugar and bananas suggested policies 
(revision of COM’s) will erode the competitiveness of these regions; in those that 
export tourism services there are no solutions to improve the accessibility of non-
residents  and  these  are  hints  that  environmental  constraints  might  be  imposed;  in 
those that produce vegetables and dairy products (as in the case of milk production 
in  the  Azores)  quotas  are  imposed  that  strongly  restrict  development  of  these 
activities. 

From the conclusions highlighted above and from the analyses described in this report 
we feel it is recommendable that: 

• 

real  per  capita  income  convergence  to  the  EU  average  be  adopted  as  the 
operational objective of  the policies in favour of the UPRs; 

•  a  medium  term goal  for  convergence  be  established  (for  example  two  percentage 

• 

points above the EU average, per year, evaluated in four year periods); 
the strategy adopted imply: a) acting on the key factors for the competitiveness of 
the economies of the UPRs’ in order to eliminate shortfalls and; b) improvement of 
the current productive sectors and promotion of new emerging sectors; 

•  all  policies  in  favour  of  the  ultra-periphery  be  evaluated  as  a  function  of  their 

contribution to the competitiveness of each region; 

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• 

the principle of significant additional contribution be adopted for all policies to be 
undertaken  (they  should  all  have  a  positive  and  significant  contribution  beyond 
what already exists for Objective 1 regions); 

•  a  new  program  be  created,  with  its  own  financial  resources  (like  REGIS),  to 

finance initiatives besides agriculture and fishing; 

•  more financial resources be allocated for the agriculture and fisheries programs; 
• 

the  criteria  for  the  concession  of  loans  on  the  part  of  the  EBI  be  reviewed  or 
mechanisms be created to facilitate access on the part of SMEs; 

•  aid  be  provided  to  encourage  the  complemen  tary  activities  involving  higher 

education/ research/ services;  

•  an  observatory  be  created  (it  might  function  in  one  or  more  universities  or  in 
similar  institutions)  to  follow  the  development  progress  of  the  UPRs  to  promote 
cooperation among these regions and the elaboration of studies of their realities; 
•  a forum be created to debate and analyse the issues pertinent to the ultra-periphery, 

to meet regularly, at least once a year.  

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List of further publications in the Regional Policy Series 

REGI 110:  The means of increasing the efficiency of the Structural Funds 

February 2001 – EN 

 This  report  was  drawn  up  after  the  launch  of  the  Structural  Funds 
Programming  Period  2000-2006  with  the  aim  of  exploring  the 
the  past  period  1994-1999  and 
performance  of 
investigating  the  means  to  increase  the  efficiency  of  the  Funds  in  the 
future. 

the  Funds 

in 

REGI 109:  Regional development for less densely populated regions in the EU 

Avril 2000 – EN 

 Low  population  density  can  be  viewed  as  a  symptom  of  underlying 
disadvantage,  but  can  become  a  regional  problem  in  its  own  right  and 
exacerbate  existing  regional  difficulties.  The  focus  of  this  report  is  on 
population  density,  demographic  change  and 
the  design  and 
implementation of policies targeting less-populated areas. 

REGI 108:  La régionalisation en Europe 

Janvier 2000 – FR/EN 

Analyse de la tendance à la régionalisation et une définition des divers  
types de ce phénomène sur la base de concepts politiques, économiques  
et institutionnels. 

REGI 107:  Les districts industriels italiens – Un défi ou une opportunité  

pour l'Union européenne 
Juin 1999 – FR  

L'expérience des districts en Italie peut constituer un important exemple  
d'agglomération pour les MPE dans l'Union. 

REGI 106:  The compatibility of regional and competition policies 

Mars 1999 – EN (summary EN/FR) 

Cette étude examine le rôle des indicateurs pour les zones couvertes par 
le  FEDER.  Par  ailleurs,  afin  de  mieux  cibler  à  l'avenir  les  crédits  des 
fonds  structurels,  des  zones  d'intervention  du  FEDER  ainsi  que  des 
niveaux d'éligibilité à l'aide sont définis, puis accompagnés du contrôle 
de ces interventions. 

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REGI 105:  Cohésion et élargissement: les PECO et la politique régionale 

Septembre 1998 – EN/FR 

L'objectif de cette étude est d'analyser dans les grandes lignes l'esquisse  
du lien entre la cohésion et l'élargissement, l'accent étant  
particulièrement placé sur la politique régionale 

REGI 104:  Politique structurelle de l'UE: indicateurs pour l'identification des  

régions en difficulté 
Septembre 1998 – EN/FR 

Cette étude constitue un document de travail concernant le débat actuel 
de  la  réforme  de  la  politique  structurelle  sur  la  compatibilité  entre  les 
politiques régionales nationales et européennes. 

REGI 103:  Sustainable development: a key principle for European regional  

development 
Avril 1998 - EN 

il  constitue 

Le développement durable est un élément déterminant de toutes les  
politiques communautaires de l'an 2000. En ce qui concerne la politique  
régionale, 
la  condition  du  développement  et  de 
l'aménagement  du  territoire.  Les  acteurs  aux  niveaux  local,  régional, 
national et communautaire devront tenir compte de ce principe. L'étude 
présente  un  choix  d'indicateurs  dont  ils  pourront  s'inspirer  dans  leur 
processus de décision. 

REGI 102:  Cohésion: le défi pour l'avenir – Contribution au débat sur la  

réforme de la politique structurelle 
Juillet 1997 – EN/ES/FR 

Cette étude analyse les positions des différents Ètats membres sur la  
réforme des Fonds structurels. Elle examine le bien-fondé d'une réforme  
de la politique structurelle fondée sur des arguments nationaux. 

REGI 101:  Cohésion et élargissement: la position du Parlement européen 

Janvier 1999 – FR 

Débats et rapports sur la réforme des fonds structurels. 

REGI 100:  European spatial development policy 

Janvier 1998 – EN (Résumé 100A toutes langues) 

La politique du développement spatial inscrite dans la législation  
communautaire est devenue un aspect important de la politique  
régionale européenne. Cette étude englobe tous les évenements récents  
et permet de suivre en détail les premiers pas de la politique européenne  
du développement spatial. 

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W24:   

Factors influencing the spending of Structural Funds money 
Juin 1997 – DE/EN (Résumé DE/EN/ES/FR) 

Ce document tient compte des statistiques les plus récentes concernant  
les dépenses du Fonds régional. 

W23:   

Local and Regional Authorities and the Structural Funds: the role  
of information 
Mai 1997 - EN 

Ce document, qui décrit les exigences en matière d'information, la mise  
en oeuvre de la politique ainsi que le contrôle et l'évaluation des Fonds  
structurels, contient des exemples pratiques concernant l'information au 
niveau  local et régional  et l'établissement de réseaux qui  contribuent  à 
l'échange d'expériences entre les collectivités locales dans l'ensemble de 
l'UE. 

W22:   

The European Parliament and the participation of sub-national  
levels of Government in the European Union 
Mai 1997 - EN 

Un document de référence qui décrit la position du Parlement en ce qui  
concerne la participation des collectivités locales et régionales de l'UE.  
Il  prend  pour  point  de  départ  le  projet  de  traité  sur  l'UE  et  retrace 
l'évolution des douze années qui ont conduit à l'adaptation de celui-ci. 

W21 

EU and SME's 
Mai 1997 – EN/ES/IT (résumé W21A – EN/ES/FI) 

L'internationalisation des PME est une question importante pour la  
Comission. Ce document examine sa faisabilité. 

W20:   

Information and Technology Research in the regions of Europe 
Janvier 1997 – DA/EN/ES 

Étude sur l'état actuel de la recherche en Europe et l'existence d'une  
coopération entre les régions. 

W19:   

La coopération transfrontalière et interrégionale au sein de l'Union  
européenne 
Octobre 1996 – DE/FR 

Une étude exhaustive sur la coopération interrégionale et  
transfrontalière étayée par des exemples institutionnels et pragmatiques  
(rédigée par l'ARFE). 

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W18:   

Évaluation des dépenses structurelles dans l'Union européenne.  
Volume I – dépenses de la politique régionale 
Juillet 1996 – DE/EN/FR 

Il s'agit de la première partie d'une étude exhaustive (en trois volumes)  
sur l'efficacité des fonds structurels (les chapitres concernant les  
secteurs agricole et socal existent déjà, ainsi qu'une introduction). 

W17: 

 Les régions côtières et insulaires de l'Union européenne 

Avril 1996 – EN/FR 

Définition  et  évaluation  des  problèmes  économiques  et  techniques 
résultant de l'insularité. 

W16: 

L'impact régional des politiques communautaires 

Juin 1996 - EN/FR (Résumé toutes langues) 

Cette  actualisation  d'une  étude  antérieure  évalue  l'efficacité  des  fonds 
structurels  et  de  cohésion,  l'impact  économique  et  social  des  réseaux 
européens  et  la  coordination  des  politiques  régionales  au  niveau 
national, local et communautaire. 

W15:  

Contribution du FEDER et de la "mission commune d'amélioration 
des 
structures  économiques  régionales"  au  développement 
économique en Saxe 

Mars 1996 - DE/EN/FR 

Il s'agit de la synthèse d'une étude approfondie sur la politique régionale 
allemande et ses rapports avec la politique régionale mise en oeuvre par 
l'UE. 

W14:  

L'impact  des  dépenses  nationales  sur  les  disparités  régionales  en 
Europe 

Janvier 1996 - EN/FR 

Cette étude a pour objet l'analyse des rapports entre les efforts de l'UE 
visant  à  promouvoir  la  cohésion  économique  et  sociale  (en  particulier 
les fonds structurels) et les efforts au niveau national, régional ou local. 

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