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Amur Region: results - 2015, trends - 2016

East Russia continues the cycle of analytical publications devoted to the results of the past year and the analysis of the situation in the current year in the socio-economic and political spheres of life in the regions of the Far East and Eastern Siberia

The socio-economic development of the Amur Region can now be linked to laying the foundations for future probable growth, while the current state of affairs in the region remains very complex, especially in the fiscal and social spheres. The region is in a situation when its previous resources have been exhausted, and the launch of new projects is urgently required, but their quick implementation is simply impossible. Therefore, while the leadership of the region and its inhabitants have to wait and survive, all the more so since little depends on them: key decisions are made by the FIG and the federal authorities.

Amur Region: results - 2015, trends - 2016

Rostislav Turovsky

Doctor of Political Sciences, Professor of HSE, Scientific Editor East Russia
In the Amur region, the geographic factor worked very well, as the region is not just on the border with China, but even after the ESPO pipeline was launched, it became a key transit point for the transportation of Russian energy resources to the neighboring state. However, if the pipeline "passed by" the regional economy, the new "Siberia Power" gas pipeline, the construction of which has already begun in Yakutia and the Irkutsk region, is able to exert a much more powerful influence on the region and turn it into a point of growth of the Russian fuel and energy complex. We are talking about the creation of a large gas processing and gas chemical complex. In a certain sense, the Amur region was lucky, as several years ago gas processing was planned in the Irkutsk region - in connection with the already prepared Kovykta field development, whose gas contains impurities in the form of helium, etc. However, the inclusion in the export project of two equally large deposits located in different regions of the country, Kovykta and Chayanda, required the creation of processing at a more convenient point where both flows converge, and this point was the Amur Region.

Last year, a number of fundamental decisions were made to launch a gas project in the Amur Region, where Gazprom and SIBUR are the parties concerned. Premier Dmitry Medvedev included this project in the system of objects of the "eastern route" of gas transportation and export. Gazprom signed an agreement with the Ministry of the Interior, and the investments it made amounted to 800 billion rubles. It is assumed that under this project will be created the territory of advanced development (TOR "Svobodnensky"), investments in which can reach 1,3 trillion rubles. It is not surprising that such a large-scale project received direct support from the head of state, who gave it a start last fall, while in the Amur region.

So far, of course, it's only about projects and promises. It's no secret that the project "The Power of Siberia" is experiencing difficulties caused by the fact that the demand for Russian gas from the Chinese side in the volume desired by Russia is not guaranteed. Years before the launch of the gas pipeline (the beginning of supplies is planned from 2019), much can still change, given the growing crisis in the Chinese economy. On the Russian side, there is still no complete clarity with the gas-chemical component of the project, for which SIBUR "answers". So far, more activity is demonstrated by Gazprom, which plans to start processing gas. Noteworthy is the decision to apply the TOR regime to the gas project, which will undoubtedly be profitable for Gazprom and SIBUR. Also this move will allow talking about the success of the TOP project as a whole, as it promises huge investments, probably much larger than in all other TOPs.

Regional TORs and sectoral projects

In the meantime, the Amur Region, even without this project, distinguished itself in the creation of TOPs: last year the government approved two such territories, which indicates a special attention to this region (two TORs, along with it, received only "central" regions of the Far Eastern Federal District last year - Primorsky and Khabarovsk Territories). However, the ease of making decisions on Amur TORs was largely due to the fact that federal budget funding was not known in their projects. TOP "Priamurskaya" will be financed only from extrabudgetary sources. In the TOP "Belogorsk", in addition to business, will invest in the regional and city budgets. And with the regional financing of the TOP, there may still be problems, given the critical situation in the regional finance (see below).

Thus, the already approved TOR of the Amur Region in fact also do not have full guarantees for their implementation. The projects themselves, however, look quite positive. TOR "Belogorsk" is focused on the agro-industrial complex. Here it is planned to create deep processing of soybeans (“Amuragrotsentr”), feed production (“Agrotechnologies”) and a bakery (“Belkhleb”). TOR "Priamurskaya" involves the construction of a small Amur refinery, a plant for the production of cement clinker and a logistics center. As can be seen, the projects of Amur TOR, in contrast to the future gas megaproject, on the contrary, look very local. But for a lagging region, and this is very important.

The raw materials industry, which is more familiar to the region, has also earned gold mining federal support. In this case, the number of priority investment projects included gold mining in the remote Selemdzhinsky district in the BAM zone, which the Petropavlovsk group intends to carry out. Electricity infrastructure facilities will be built here at public expense. Recall that the Russo-British Petropavlovsk is already one of the leading players in the region, actively engaged in gold mining. But in the most recent years, the company was on the verge of financial collapse, and only recently it was managed to rectify the situation. The federal support for its new project also played a role here. Although another ambitious project of this group - to create in the Amur region the extraction and processing of iron ore (Garinskoe deposit) is still far from implementation. Last year, even larger projects for the development of coal deposits (the Herbikano-Ogodzhinskoye field) and the construction of perhaps the most powerful thermal power plant in the country with the expectation of export to China did not receive a clear perspective. Rostec showed interest in this project.

Therefore, while the mining industry of the Amur region is limited to gold mining, but it's not bad either. In addition, last year there were attempts to obtain government support for a small copper-nickel deposit Kun-Magnier (British Amur Minerals). But in this case the decision is not made. The region seeks to cooperate with the Development Fund of the Far East and expects, together with the interested business, to attract its funds. Governor Alexander Kozlov himself at the end of last year was included in the government commission on socio-economic development of the Far East and the Baikal region, which includes, incidentally, not all heads of the subjects of the Far Eastern Federal District.

Big projects are big problems ...

Meanwhile, in the Amur Region, another federal megaproject - the "Vostochny" cosmodrome - is being implemented with great difficulty, in the long term to replace Baikonur. However, here the picture was overshadowed by an endless series of scandals caused by financial irregularities, non-fulfillment of contracts, delays in the payment of wages, fraud in the allocation of funds to contractors, etc. A significant part of the funds allocated by the center was not mastered at all. The Accounting Chamber, for its part, considered the cost of many objects too high. In the course of the year, parallel to construction, investigations of the machinations of the former leadership of Dalspetsstroi (the structure of the federal Spetsstroy) and contractors continued.

As a result, as expected, it was not possible to fulfill the deadlines for the delivery of the facility. One of the turning points was the visit of Vladimir Putin to the cosmodrome under construction. At that time, a pending decision was made to move the launches to 2016 year, with the obligatory completion of the construction of the long-suffering cosmodrome, which is the largest recipient of federal funds in the Amur Region. There are, however, some fears that, given the budget cuts and the forthcoming optimization of the Federal Space Program (FCP), not all plans will be implemented. In particular, it is planned to reduce the number of launch sites. Nevertheless, the launch of the cosmodrome is still approaching.

From other large and unfinished projects in the region, the construction of the Nizhne-Bureyskaya HPP, which is part of RusHydro's structure, continues. It is expected that it will also be launched in 2016. Recently, a dispute arose between the company and the authorities of the Amur Region about financing the preparation of the reservoir's lodge (the regional authorities believe that RusHydro should do it at its own expense). We should expect an inflow of investments through the Russian Railways, which is engaged in the modernization of the Baikal-Amur Mainline and the Trans-Siberian Railway, and should receive the funds from the NWF.

Thus, the Amur Region looks like a region with a large number of unfinished, but promising projects. At the regional level, there is also a revival, which can stimulate the growth of small and medium business, so important for the territory. First, since the time of the former governor Oleg Kozhemyako, the authorities' interest in the agro-industrial complex has been evident, given that the Amur Region in the Far East is still one of the most favorable agrarian regions, including. on the cultivation of soy. One of the results of this interest was the TOR project "Belogorsk".

Secondly, attempts are being made to organize and bring tourism potential to a higher level, primarily through cross-border Chinese tourism. Last year, the influx of Chinese tourists into the region has already grown and without any cardinal decisions. Now it is planned to build a cable car through the Amur, over which an agreement has been signed between the Russian and Chinese governments. This can be a simpler and cheaper solution than a bridge, talk of which has been going on for more than 20 years (although a new bridge project is also under development). Tourism is seen as a good way to revitalize business in Blagoveshchensk. Meanwhile, the region, alas, received an assessment of "unsatisfactory" on the results of the implementation on its territory of the federal target program "Development of domestic and incoming tourism in the Russian Federation".

So, there is a situation when the authorities of all levels and interested business create conditions for the future development of the Amur region, which is able to become one of the economic leaders of the Far Eastern Federal District. This is shown by the corresponding statistics. Last year (according to data for January-November), the Amur Region showed an increase in investments in fixed assets by 38,6%, becoming one of the leaders of the DFO in terms of investment dynamics (the second highest growth rate after the Magadan Region). There was a huge increase in the volume of construction work - by 66,4% for the year (the leader in the DFO in terms of growth dynamics). Although such a successful dynamic is associated with several projects, the work on which in 2016 may be completed (the same cosmodrome and hydroelectric power station). Therefore, in order to maintain the level and dynamics of the region, it is necessary to launch new projects as soon as possible in the same TOPs, gold mining, etc. Otherwise, the takeoff may change to a recession, and further dynamics will be undulating, if not spasmodic.

The current economic base of the region, on the contrary, is too weak, and it is not necessary to count on it. The industry of the Amur region last year fell heavily - by 9%. In the agrarian and industrial complex, one can speak of a maximum of stagnation (a decline of 2%). Do not lead new or planned projects and to improve the social situation. Real money income of the population declined over the past year by 4,9%. Even more tangible was the decline in retail trade - by 6,2% (one of the worst results of the DFO, along with the Magadan region). The absence of positive changes in trade indicates, by the way, that Chinese tourism does not contribute to the development of the trade sector in the Amur Region, which, however, is not surprising.

The budget crisis

In these circumstances, of course, the budget crisis, of course, without any reservations, can also be said about the Amur Region. Moreover, the worsening of the financial situation in this case is also explained by the reduction of federal aid, which hit the region hard. The revenues of the consolidated regional budget in the past year fell in absolute terms - by 3%. The decrease in revenues was due to a sharp reduction in federal transfers - by 27,7%. And the decrease in subsidies was 41%, i.е. They are almost two times less. Earlier, large-scale subsidization of the region was associated with overcoming the consequences of the disastrous flood of 2013, and since then it has been steadily declining. The subsidies were cut too - by 13,25%, incl. To equalize the budget provision - by 6,8%. Only by subventions, the center even increased its assistance to the region - by 9,1%. But the overall situation is not saved.

Thus, a rather strange situation arose when the center began to treat the Amur Region as a region where the financial situation is improving, considering it the basis for refusing support. In part, this position was correct, as the region's revenues increased, indicating a stable and even improving position of business structures. Own income increased by 9,85%, incl. For income tax - by 12,3%. The only major tax, where there was a stagnation, was, as expected, income (growth of 0,6%). For all other significant taxes and fees, the situation was very good: the growth in excise taxes by 8,3%, for taxes on total income - by 7,9%, on the tax on mining operations - by 21%, and on corporate property tax - even on 31,9%. However, as already mentioned, this did not help to compensate for the reduction of federal transfers.

As a result, the authorities of the Amur region chose a path of austerity, although this could have negative consequences on the eve of the gubernatorial elections. However, they had no other options, since the debt load on the region was already enormous, and the center for some reason or other poured into the region. The Amur Region reduced its budget expenditures by 13,8%, becoming one of the Russian leaders in terms of their reduction (it was worse only in Sevastopol). And she very rigidly went exactly on socially significant expenses, capable to affect the state of health of the population. One of the main "victims" was housing and communal services - a decrease in expenses for 34,9% (the largest in the DFO). Education (minus 12,8%, the sharpest decline not only in the Far Eastern Federal District, but also in Russia as a whole) did not escape the common fate (-13,7%, the sharpest decline in the Far Eastern Federal District), social policy (-15,7%), culture (- 13,35%). Interestingly, spending on physical education and sports grew (by 6,9%), but in the total mass they are small. "Economic" articles were also reduced, but to a lesser extent: road economy - by 6,5%, agriculture and fishing - by 8,8%. Expenditures on national issues, however, remained at the same level (minus 0,8%). Some of the savings were spent on debt servicing (an increase of 40,1%, and their share reached 3,7% in the expenditure side of the budget). At the same time, despite the reduction in spending, the budget at the end of the year was still reduced to a significant deficit - 17,8%, and the largest for the regions of Russia. It is noteworthy that the budget adopted in the region for 2016 provides for a further reduction in costs.

The deadlock situation in which the Amur Region finds itself in terms of its financial position is largely due to the region’s debt burden, the further growth of which would be extremely dangerous. As of 1 in January, 2016, the Amur Region, had the third largest public debt in the DFO (more than 30 billion rubles), slightly less than the Khabarovsk Territory (and seriously yielding only to Yakutia). The ratio of state and municipal debt to own revenues of the region was 79,6% by the end of last year. At the same time, the Amur Region authorities clearly do not want to remain in debt bondage: over the year, the national debt increased only by 8%, which by Russian standards is very good, and below the average. The region remained with the same level of budget loans (an increase of 0,8%), but nevertheless increased the debt to banks (by 12,8%). At the same time, in the public sphere it is said that in the future the regional authorities, on the contrary, will repay debts to banks, which may lead to an increase in the volume of budget loans that are attracted for on-lending. In the meantime, the municipalities even reduced their debts slightly (by 1,1%).

Thus, the Amur Region began to "tighten the belt", seeking to survive the unfavorable period. Again, we emphasize that the center, when taking and considering various "large" decisions, did not take into account the current needs of the region, which may have been due to the weakening of the lobbying resource after the change of the governor.

Change of power and political situation

In such difficult socio-economic conditions, gubernatorial elections took place, caused by the transition of Oleg Kozhemyako to Sakhalin and the appointment of the provisional governor Alexander Kozlov, who took up the post of Mayor of Blagoveshchensk from the year before last. On the one hand, the continuity of power was ensured in the region. Young manager Alexander Kozlov, who took over the post of regional leader in 34, worked in the same team with Oleg Kozhemyako and was elected as the head of the regional capital with his support. On the other hand, the new head of the region got a heavy financial "legacy", he allowed the imbalance of relations in the elites and, moreover, did not enjoy high popularity (in the election of the mayor of Blagoveshchensk in 2014, 38,7% of votes were collected). The center also did not actively support Alexander Kozlov, in particular. Finances (except that before the elections the region was given a budget loan, and in summer they restructured the debt, transferring payments from 2016 to 2019 year).

As a result, the elections in the Amur region were among the most competitive in the country.

Moreover, in conditions when Alexander Kozlov barely overcame 50 percent the bar in the first round, the LDPR has initiated speeches and rallies for the abolition of the results of the first round, claiming fraud. Although there were still no real violations, the party did not continue the tough conflict with the governor. The factual alliance with “Fair Russia” helped Alexander Kozlov, who refused to participate in the elections, which ensured the governor's victory in the first round. It is noteworthy that the previous replacement of the head of the regional party organization "Social Revolutionaries" with a more loyal authorities caused sharp internal conflicts there, but they did not succeed in turning the party into opposition.

Alexander Kozlov's relations with United Russia were also developing, as he decided to replace the senator from the executive power, which was the secretary of the regional political council of the party Nikolai Saveliev. This led to a decrease in the activity of party work on the head of the region. Although, in the end, Alexander Kozlov did not lose anything, having passed into the senate an experienced public figure politician Alexander Suvorov, while the party was led by the speaker of the regional legislative assembly Konstantin Dyakonov. Quite smoothly passed and the change of power in Blagoveshchensk, where, as might be expected, refused direct elections of the mayor. The administration of the city in the status of the head of the municipal formation is now headed by Valentina Kalita, who worked as deputy and first deputy mayor in 2004-08 years. (then worked in business structures), and the city duma - an experienced deputy, a native of physicians Stepan Popov.

Nevertheless, it is not necessary to talk about stabilizing the administrative situation in the region until now. One of the reasons was the flow of some personnel to Sakhalin, following Oleg Kozhemyako. As a result, the reorganization of the regional government and personnel replacements became a permanent process. To date, the executive branch has stabilized. Alexander Kozlov strives to strengthen his position in power and take it under his control. In addition, he is engaged in constant checks of the budgetary sphere, being understandably concerned with the problem of the effectiveness of budget expenditures.

As a result, the situation in the Amur Region can hardly be called otherwise turbulent and contradictory. Large and promising projects are combined with very complex realities. The regional leadership has not yet gained sufficient hardware weight and influence at the federal level to effectively promote regional interests. The New Year does not promise any breakthroughs, therefore the "survival regime" will still characterize the current situation.
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