Success or failure? The economic crisis and its influence on Pécs 2010 Andrea Schmidt PhD University of Pécs Dept. of Political Studies Hungary [email protected].

Success or failure? The economic crisis and its influence

on Pécs 2010

Andrea Schmidt PhDUniversity of Pécs

Dept. of Political StudiesHungary

[email protected]

Success or failure?

• Search: the influence of ECOC to the economy – part of a three year long programme on the process of decision making, civil participation, economic and political effects, etc.

• Findings: too short time, only calculations

As it began….

• 1985, Melina Mercouri and Jack Lang: the idea of designating an annual Capital of Culture.

• Aim: to bring Europeans closer together by highlighting the richness and diversity of European cultures and raising awareness of their common history and values.

• Decision No 1419/1999/EC of the European Parliament and of the Council: Community action for the European Capital of Culture event for the years 2005 to 2019. Decision No 1622/2006 EC of the European parliament and of the council of 24 2006 establishing a Community action for the European Capital of Culture event for the 2007 to 2019 lays out

Why to candidate?• ‘We would like to use this event to gather money for the cultural

infrastructure, which will attract more toursits and have a positive impact on economy’

• According to 2004 Palmer Report: attracting visitors has been one of the main objectives of almost every ECOC host city.

• Reasons:1. The economic impacts generated by tourism2. The image of impacts which can be obtained through national and

international campaignes – this tendency strengthened in recent years as many of the ECOC have been non traditional tourist destinations previously, suffering either from a poor image or a shortage of tourism infrastructure, or both.

Tourism

• How much the tourism growth is due to the ECOC programme itself?

• Does the ECOC host become more attractive to tourists simply because of the ‘buzz’ associated with the event?

• Are the tourism impact long-term or just temporary?

• What are the best strategies for maximising tourism impacts?

• One of the most important indicators of tourism impact is the growth of number of nights spent in accomodation in the city.

• In case of ECOCs the growth of overnight staying is ~11% more stays. (In Pécs 12-13%)

• But! If a city is relatively small, the growth can be higher!

Does tourism affect?

Number of tourists. (It increased 12%)

Total number of nights

However it was calculated, that in 2010 the number of guests can reach 1,000,000!

Does tourism affect?

Share of foreign guests Spent night / capita

Does tourism affect?

• Growth rate (foreign gusets): Europe: 3%, CEEC: 4.2% Hu: 4.8%, Pécs 12%!Pécs became the 12th most popular destination in Hungary (in 2009: 22th) – however we don’t have aquapark!

• New hotels were constructed and plans were interrupted thanks to the economic crisi and the lack of bank sources.

Does infrastructure affect?• How to reach Pécs?• 2006. opening of the Pogany – Pécs airport (only for charter flights)• 2010. opening of the Budapest – Pécs motorway (M6/ M60) • However the length of M6 is the 15.5 % of total, the share of income

is only 5.3 % (8000 car/day)• Investment in fast train lines: still under negotiation (2009!)

Economic crisis 2008

• Consequences: • Many projects were cancelled (in Ruhr from

80 million € only 62.5 remained)• Major projects have remained incomplete• Limitation of sponsorship for cultural events

and infrastructure. However in Pécs the lack of sponsors was a warning issue even till 2009, too.

The effects of global economic crisis

Major challenges were created for the cities everywhere – „city authorities find themselves caught between decreasing budget income and increased demand for expenditure” (Palmer, 2011)

Why? • In most countries (61%) own-source tax revenues have significantly

decreased. The impact seemes to be greatest in terms of capital expenditure, and for countries in the ECOC, with suffering intense financial problems with their programmes. (Especially in CEEC)

• In Pécs – the crisis caused funds to dry up, which delayed construction work supposed to be ready before the event. However, because of the crisis and the decline of building industry there were more firms which concentrated to state finaced projects instead of looking for private orders.

The effects of global economic crisis

• Belated investments (buildings) - Regional Library and Knowledge Center

• Opened: by the summer of 2010

Kodály Conference and Concert Centre(Opened december, 2010)

Other investments: Pécs 2010

Expected outcomes1. New possibilities of Pécs (and Southern Transdanubia) in

creative industry2. Change in the minds of the participants of local institutions,

population3. To help the young generation to settle down in Pécs (there is a

decline in the number of population of Baranya county and Pécs – in particular among young and skilled generation)

4. To strengthen the process of decentralisation and the multipolarism in culture

5. To make Pécs an international city, to improve the model of decentralisation in European dimension

Expected outcomes1. The new investments (cafes, museums,

cultural centres) will have positive effects to life circumstances

2. The cultural events will bring the „fame” of Pécs into several directions

3. Hope of bottom-up development instead of top-down development – that would serve the participation of the local population, NGOs, etc.

Difficulties in calculation

1. Time limit - too short time since 2010 to have the direct effects.2. The basis year is 2009 (just one year after the 2008 crisis!) –

difficult to compare the data.3. The pay off rate can not be calculated in the case of

investments. We can have only hope…4. No information about the future.

Effects (that can be)

• new public transport in the cities)• development of the thinking of project management• development of services and the „cultural industry”long-term projects – congress tourism (not just for ECOCsome elements

from which the success/ failure can be concluded. • success in projects concentrated in infrastructure and public places

(increase of number of parking places!) – the most difficult is the T + 1 year!

• positive externalities • the change in the mentality of the local polulationt

What we missed…

• The fate of the project management team• The strengthening of the local building industry – they participated only as

subcontractors or in smaller projects• The failure of the development of products of cultural industry – like the unified

entrance tickets, the local souvenirs• The participation of the University of Pécs• The development of services for tourists (opening hours!)• The consumption of the local polulation (if they don’t have to pay, they

participate)• Undercalculated costs of programmes• Political debates – the problems about the appearance of different levels

(Europe, state, regional, local) + lack of NGOs• Lack of identification with the project – lot of ‘fans against’

Conclusion• Need more time to get more data.• Most of the investments was belated – the effects can be

visible in some years.• Rethink the future of the investments (buildings and their

role)• Rethink the decision making process – decentralisation/

deconcentration.• Rethink the role of partnership• Rethink the long lasting debate of Budapest dominance

Thank you!