The territorial issue is one of the key aspects of EU structural policy, which emphasizes the need for a strategic planning process to take advantage of the location, physical, human and social capital and natural resources. It is also increasingly recognized the need to promote cooperation of different levels of government, organizations and people, as well as dialogue and partnership between local actors, directly linked to the enlargement process.
European Commission Communication - The Green Paper on territorial cohesion - addressed a question to the territorial diversity converting into strength. Territorial cohesion is seen as the promotion of sustainable development of all areas of the EU and as the objective for the inhabitants to make the best use of the local characteristics. In essence, this is a means of converting diversity into an advantage, which is useful for sustainable development across the EU. Especially, given the fact that local competitiveness increasingly depends on its actors' ability to make better use of their local advantages.
Territorial rather than sectoral position on local development is the core principal of the LEADER method, which is defined as an endogenous approach to rural development, allowing the domination of territorial dimension in the rural development policy. The changing role of the rural areas as well as diminishing differences between cultural contexts induce the development and fostering of local identity, which is gaining a special significance as an identifying element, finding and highlighting the local uniqueness and benefits, acting positively on the competitiveness, attractiveness, and quality of life.
In Lithuania 51 local action groups (LAGs) have introduced local development strategies in each rural area. In order to assess their effectiveness and formulate objectives for the LEADER in the future rural policy (after 2014), it is appropriate to investigate whether LEADER method produces any added value in Lithuania by using local identity as a very promising resource for local development.
The study presents a theoretical justification of the interaction of local identity and local development. The concept of local identity was examined in the context of local development and the system, assessing the interaction of local identity and local development, was designed. The study also analyzed the genesis of the LEADER implementation in the EU together with Lithuania's experience in implementing main principles of the LEADER. The implementation of the LEADER in Lithuania during 2007-2013 programming period was assessed applying earlier designed evaluation system to the local development strategies prepared by LAGs.
Key words: local identity, local development, LEADER, local action group, local development strategy, rural development policy, sustainable development.