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Europe: Wales Survives And Thrives After Economic Collapse

Wales is a success story. Once one of the most depressed regions of western Europe, Wales has closed its old smokestack industries -- coal mines, steel mills and engineering plants -- and built a modern diverse economy with the creation of thousands of new jobs. Our correspondent talked to one of the men responsible for the Welsh 'economic miracle' and asked: Can Wales offer lessons to the East European nations?

London, 11 December 1996 (RFE/RL) -- Dozens of delegations from Eastern and Central European nations have visited the Welsh capital, Cardiff, to study how Wales tackled its economic problems.

Many of these delegations had talks with Gwyn Griffiths of the Welsh Development Agency (WDA), a government-funded body that has been so successful in luring new industries, new jobs and new inward investment to Wales, a small Celtic nation of three million people which is a constituent part of the United Kingdom.

Griffiths, one of the WDA's land reclamation directors, says Wales had many of the problems faced by the eastern transitional countries: a reliance on dying heavy industries, scores of rundown coal mines and iron works, huge tracts of derelict land, and a poor infrastructure.

Some communities in the steep-sided mining valleys of industrial south Wales had unemployment running as high as 30 to 40 percent.

But now Wales has been reaping the reward of its regeneration efforts. For years now, it has attracted more inward investment than any other area of the European Union.

The WDA's overseas offices in New York, Tokyo, and Seoul have lured scores of U.S., Japanese and Korean firms to Wales. It is seen as a low-cost production base with ready access to adjacent markets. In the past 18 months alone, Wales has attracted $2.7 billion worth of investment from overseas firms with the creation of 20,000 new jobs. The Welsh economy has diversified into many industries, particularly electronics.

How did all this happen? Griffiths says a key moment in the process to regenerate Wales came in 1966 when a huge coal tip towering over the south Wales mining village of Aberfan collapsed, burying a junior school in millions of tons of coal waste. A total of 116 children and 28 adults died.

Aberfan haunted the national conscience and focused attention on the poverty, unemployment and social problem of the mining valleys. It also launched a debate on how to assist these areas.

"Until Aberfan, no one had conceived that the broad dereliction in mineral areas was ever going to be changed," said Griffiths.

The debate on Aberfan persuaded a British Labour government in 1976 to set up the WDA with the task of regenerating the Welsh economy. The WDA is funded by central government in London with a budget of $200 million a year, although the WDA now generates half this money itself.

Griffiths said the WDA set itself three priorities: first, to get rid of industrial hazards such as the dangerous coal tips; second, to encourage new industries to move in with fresh jobs to replace those lost in defunct industries; and third, to improve the general environment.

One lesson of the Welsh experience is that new industry will not be lured to an area that remains disfigured by industrial dereliction. Hence the WDA's preoccupation with cleaning up the landscape.

"No one will come to an area marred by obscene eyesores," said Griffiths.

The WDA has flattened or landscaped scores of coaltips, torn down derelict iron mills, planted trees to hide industrial scars, and removed chemical wastes and toxins from defunct steel mills. It has reclaimed derelict land at the rate of three soccer pitches a day.

Griffiths offers this advice to the eastern countries: if they have not done so already, they should pass environmental legislation that will prevent the creation of more dereliction or pollution.

"The first thing to do, to use an old cliche, that if you are in a hole, stop digging," he said.

Griffiths says the development approach will vary in the Eastern countries, depending on individual circumstances. Those with ample land will likely devote more resources to creating new jobs, possibly on modern "greenfield" factory sites, than on land reclamation programs.

However, that said, all countries face the problem encountered by Wales: how to bring work to long-established communities.

Griffiths advises transitional countries "to look at their resources very carefully because resources are inevitably scarce. It's vital to put the money where it will have the most immediate and telling impact."

He also said that development agencies must set clear priorities, and to look at the problems they face comprehensively.

"You have to create the space, the setting, the environment, the infrastructure alongside the spare workforce that you've got. To attract new industry, you have to put together an attractive package," he said.

Griffiths said the Welsh experience shows that market forces, left to themselves, will not resolve the problem of a degraded environment: it is up to the state, or taxpayer, to meet the cost of clean-up operations.

The approach pioneered by the WDA is judged a success by any standards.

Today, a number of development consultants who built up their expertise in Wales are working in the eastern countries.

"We have gone through the transitional process and the East European countries should be able to learn from some of our lessons," said Griffiths.