Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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Amur Region: results of the year

Between problems and perspectives

Amur Region: results of the year

The past year was very controversial for the Amur region: it combined successes with difficulties and problems. For the time being, one can not say that the region's economy is in a stable position, but there are certain sectors for which it can be unambiguously counted - agriculture, energy, and mining of natural resources.

The situation is under control

Let us recall that in previous years, development trends in the Amur Region were multidirectional. Evaluating the effectiveness of the regional authorities in 2013, the federal government put the Amur Region in 46th place, which allows us to consider it a "middle peasant". The region was pulled back by the social sphere, and in terms of economic development, it took 26th place. In agriculture, on the contrary, some of the targets have not been achieved: the events of 2013, when the agricultural complex was badly damaged by a catastrophic flood, were to blame. During 2014 the industry in the Amur region Showed growth: only the GRP of agriculture reached 28 billion rubles, a record crop area was sown and an unprecedented crop was harvested.

Liquidation of the consequences of flooding remained one of the main problems of the region and was in the center of constant attention of its authorities. In general, the solution to this problem was successful. The Amur Region, unlike some other regions of the Far Eastern Federal District (DFO), did not cause any complaints from the federal authorities. The delivery of housing, the repair of social facilities, and the restoration of infrastructure were carried out without meeting the deadlines. The governor of the region, Oleg Kozhemyako, kept the situation under control, constantly demanded accountability from municipal leaders, and his approach to business turned out to be quite effective.

One of the undoubted competitive advantages of the Amur Region during the governorship of Oleg Kozhemyako was good relations with the federal authorities. The head of the Amur Region is always very active in promoting the interests of the region at the federal level. During the year, a number of issues were identified that were in the focus of attention of both the federal authorities and the regional leadership: overcoming the consequences of the 2013 flood, construction of the Vostochny cosmodrome, continuation of previous and start of new projects in the power industry, as well as the development of the agro-industrial complex. All these issues were in the center of attention of Russian President Vladimir Putin, who twice visited the Amur Region during his Far Eastern visits. Vladimir Putin's trips to the Amur Region had a positive informational and political background, were directly related to issues important for the territory. In particular, the head of state visited the Volkovo village of the Blagoveshchensk region, which suffered from floods; on his other visit to the region, he met with local farmers.

The good positions of the authorities of the Amur Region at the federal level could not keep the region from growing financial problems. It will not be an exaggeration to say that a tense budget situation has developed in the Amur Region. The regional budget cannot boast of large revenues, in terms of which it surpasses only the lowest-income regions - Magadan Oblast, Chukotka Autonomous District and Jewish Autonomous District. The region does not have enough funds to solve all its many problems, which leads to an increase in the budget deficit and debt burden. Last year, the center's attention to the Amur Region, unfortunately, was not accompanied by such active funding. The region received large funds in 2013 due to the flooding; in 2014, the volume of federal transfers fell more than twice. The sharpest decline occurred in subsidies - by about three times, which is directly related to the financing of specific regional projects from the federal budget. Only subventions remained at the same level. Subsidies to the region have also decreased - by almost 40%. In particular, in spite of obvious budgetary problems, the center reduced subsidies to the Amur Region for equalizing budgetary provision, which fell by more than 20%. The Amur Region, of course, was not able to compensate for such large losses by increasing its own income. At the same time, she could not significantly reduce the level of expenses.

Speaking about the structure of the budget revenues of the Amur Region, it should be noted that it does not depend so much on federal transfers, which, however, is hardly pleasing to it. Own tax and non-tax revenues in January-October 2014 amounted to 73,7% of the budget revenues of the Amur Region. At the same time, the share of income from income tax in the Amur Region is lower than the average for Russia and the Far Eastern Federal District - 20,9%. Most of all - 38,4% of the region's own income is formed at the expense of personal income tax. At the same time, the Amur Region is the leader of the Far Eastern Federal District in terms of the share of revenues from the property tax of organizations, which plays a significant role in filling its budget (14,7%). It works well for the regional budget and small business: taxes on total income give 6,5% of the region's own budget revenues. The Amur Region is also distinguished by noticeable budget revenues from the mineral extraction tax (4,8%). Thus, the structure of budget revenues reflects both the significant role of the mining industry and the development of small business. But at the same time, there is a shortage of large taxpayers in the region who would be able to sustainably form the basis of its budget. Large taxpayers in the Amur Region are such companies as Transneft (2,8 billion rubles pays taxes to the budget), Russian Railways (4,6 billion rubles), GC Petropalovsk (3,5 billion rubles), Bureyskaya and Zeyskaya HPPs - ( almost 2 billion rubles).

As already noted, the donation of the region is not so great, but in the case of the Amur Region, this means its interest in increasing federal aid, which began to decrease after the recent maximum. Stable in the Amur region come federal subventions, the share of which in the budget, it is the leader of the DFO (6,2%). But subsidies have become much less (6,8%), not so many subsidies (8,2%, including 5,2% - subsidies to equalize fiscal security).

Considering the drastic reduction in federal aid, it is not surprising that the Amur Region became the leader in the FEFD in reducing budget revenues (they amounted to 2014% from the same period 78 in January-October). The main hopes had to be pinned on the growth of own revenues, but it amounted to only 2013%. Moreover, the income tax showed a decrease in revenues of 4,3%, which again indicates problems with large taxpayers. To improve the situation, revenues from corporate property tax (an increase of more than 7%), as well as a more modest increase in income tax revenues and taxes on total income, worked.

At the same time, as the analysis of regional budget expenditures shows, the Amur Region is in dire need of funds. In terms of debt load for 2013 year (86%), the region lagged behind in DFO only from Chukotka. The budget deficit in October 2014 of the year was 26,3%. The region has reduced costs by more than 4%, but still their volume is higher than in Kamchatka, which has a better financial situation due to significant federal support.

Social accents

Under these conditions, the regional authorities began to change the budget structure and pay more attention to health care and social policy, while following the guidelines of the federal government. Expenditures on health care in 2014 increased by more than 12,9%, and the Amur Region became one of the leaders of the Far Eastern Federal District in terms of the share of these expenditures (they amount to 13%) in the structure of its budget. The financing of social policy, which accounts for more than 80% of budget expenditures, has grown sharply - by almost 20%. All these expenses were absolutely necessary, since salaries in the healthcare sector remained low in the Amur Region for a long time (at the end of 2013, they amounted to 78% of the average salary in the region). The Amur Region is also characterized by a low provision of beds in hospitals (although the number of doctors per 10 thousand inhabitants, on the contrary, is large and is second only to Chukotka). The accumulated negative trends are evidenced by the fact that in terms of life expectancy, the Amur Region surpasses only the Jewish Autonomous Region and the Chukotka Autonomous District in the Far Eastern Federal District. Although at the same time, the infant mortality rate in the region looks very good. In any case, the fact that the Amur Region has become one of the leaders in healthcare spending in the Far Eastern Federal District (in per capita terms) allows us to count on a change in the situation for the better. Although it is clear that in the current conditions, the bulk of these costs go to salaries.

Simultaneously, the authorities of the Amur region tried to allocate more funds for economic articles and, in particular, for road maintenance. So, the cost of roads increased by 60%. As to the share of expenditures on the road economy (8,9%), the Amur Region ranks second in the Far Eastern Federal District after Sakhalin. It is also worth noting that the Amur region has always paid much attention to state support for agriculture. Therefore, in terms of the share of expenditures on agriculture and fisheries (4%), this region is second only to Yakutia.

Nevertheless, the Amur region is clearly not enough funds to finance education and utilities. In terms of the share of expenditures on housing and public utilities (11,1%) in the Far Eastern Federal District, the Amur Region is closer to outsider regions. But, if we take into account the fact that housing and communal services should switch to 100% in the future, payment for services by consumers and the budget will only compensate expenses of socially unprotected citizens, the Amur region is in last place, because here the payment is at a rate that is already close to economically sound.

Following the 2013 results, the region ranked third in the FEFD in terms of the share of dilapidated and emergency housing (7,8%). 60% exceeded the share of unprofitable utilities organizations. In these circumstances, the authorities of the region, understanding the problem, the solution of which is also monitored by the federal authorities, demonstrate an underlined focus on the resettlement program from dilapidated and emergency housing. In 2015, this work should be continued.

The situation with education is similar, although it remains the most important recipient of funds (23,6%). In financing culture (2,25%), the Amur Region takes the last place in the Far Eastern Federal District. At the same time, expenditures on education and culture in January-October of 2014 decreased slightly (expenditures on housing and communal services remained at the same level). The underfunding of the educational sphere is especially noticeable against the background of low indicators of its development (we note that in the development of the social sphere in general, according to the results of evaluating the effectiveness of regional power for 2013, the Amur Region occupied one of the last places in the country). For example, in 2013, in terms of the level of wages in the field of education, in relation to the average wage in the region, the Amur Region was ahead of only Magadan in the DFO. But the successes achieved in providing places for children in kindergartens are also noted. In recent years, the queue in kindergartens for children from 3 to 7 has been completely eliminated.

The economy of the regional authorities on the media has become noticeable, the costs of which have decreased threefold. Now they make up an insignificant share of budget expenditures (0,21%), surpassing only Kamchatka in the DFO. At the same time, the situation with the financing of the activities of the authorities looks ambiguous. Last year, spending on national issues, despite the difficulties experienced by the region, increased, but their share is still lower than in the Far Eastern Federal District as a whole (6,85%), although it is still higher than in Russia.

The budget savings regime has become even more noticeable when preparing the budget for the 2015 year. In particular, the authorities imposed restrictions on the payment of expenses during business trips of officials, a reduction in staff in the regional government bodies and a reduction in salaries of civil servants.

Projects for the future

In the conditions of imbalance of the regional budget, the qualitative change in the financial and economic situation in the Amur region is increasingly dependent on investment and new production projects.

In the current situation, it seems that the Amur region will have to rely more on investment from the federal budget and the funds of state corporations. So far, special hopes have been associated with the extraction of gold and iron ore, which is the international company Petropavlovsk. But a sharp deterioration in the financial position of this company leads to the braking of its projects and threatens to stop them.

The state intends to invest heavily in the strategic project of the Vostochny cosmodrome and the modernization of the railway network in the Far East. A number of new projects are related to the construction of power plants, recalling that the most important potential of the region, which it began to realize in the post-Soviet period, is associated with the production and export of electricity to China.

At the same time, a part of new projects in the electric power industry has an international character, which can give a new impetus to the development of the Amur Region as one of the main centers of Russian-Chinese cooperation. The key project could be the development of coal deposits, the construction of the country's largest thermal power plant and a powerful transmission line to Beijing. The implementation of such an ambitious project is still very far away, but gradually it acquires a perspective. More substantive agreements were reached regarding the construction of flood control hydroelectric power stations in the Amur basin. Against the background of the completion of the process of dealing with the effects of the 2013 flood of the year, proving the need for this project turned out to be simple.

The authorities of the Amur Region were also active in developing relations with the neighboring state. Particular attention was paid to investment cooperation in the processing of agricultural products, one of which is AmurAgroCentre, the development of tourism - the formation of a tourist and recreational complex Amur on the alluvial territory created as part of the bank protection and reconstruction of the Amur River embankment within the city of Blagoveshchensk ...

Governor Oleg Kozhemyako held talks with the leadership of the neighboring province of Heilongjiang on investment cooperation. In addition, investments in the agricultural complex of the Amur Region come from Japan. A successful project of JSC Hokkaido - Russian agribusiness complex, based on the use of modern technologies in agriculture, is operating in the Romnensky region.

High Relationship

Of course, the Amur Region really needs to "convert" its good relations with the center into new large-scale projects and assistance. During the year, Kozhemyako was among the most active governors of the Far Eastern Federal District in terms of contacts with government officials. In particular, he met with Dmitry Medvedev, held talks with Alexey Ulyukaev and the leadership of the Ministry of Finance, and signed a cooperation agreement with the Ministry of Industry and Trade. In addition, in connection with the flood, the authorities of the Amur Region contacted the leadership of the Ministry of Emergency Situations: Oleg Kozhemyako and Vladimir Puchkov took part in the work of an expedition that checked the condition of the channels of the Amur and Zeya rivers. Regular working visits of the Deputy Chairmen of the Russian Government Dmitry Rogozin and Yuri Trutnev to the region have also had a beneficial effect on the region's relations with the federal authorities.

In its relations with Moscow, the leadership of the Amur Region sought to secure support for a number of initiatives and projects. In particular, the region asked for federal assistance to carry out bank protection works on the Amur and resettlement of dilapidated housing in the BAM zone. Of infrastructure projects, it is important for him, like the Petropavlovsk group, to build a railway line from the Transsib to the Garinsky iron ore deposit. In addition, the authorities of the Amur Region returned to the idea of ​​building a bridge across the Amur in the Blagoveshchensk region and came up with an initiative to create a border special economic zone there. The Amur Region expects support from the Ministry of Industry and Trade to create the Vostochny woodworking plant. At present, MES Vostok plans to build a 220 kV power transmission line Fevralsk - Rudnaya with a total length of 175 km have been announced.

The largest megaproject in the region, which is in the sphere of special attention of the federal authorities, is the Vostochny cosmodrome. Its construction was discussed at meetings of Vladimir Putin; Dmitry Rogozin inspected the situation on the spot. At the same time, it cannot yet be said that this ambitious project designed to reduce Russia's dependence on Kazakhstan is unfolding smoothly. The Accounts Chamber found that the project costs are overstated and the funds are spent inefficiently. The structure of management of the space industry is also changing, since a new state corporation has emerged in the place of Roscosmos, which is merged with the recently created United Rocket and Space Corporation (URSC). On the other hand, the construction of a new town, Tsiolkovsky, has already begun, near the closed city of Uglegorsk. It is planned that the new city will be populated by specialists who will serve the space harbor.

The first launches of an unmanned aerial vehicle from this cosmodrome are scheduled (according to the original plan) for December 2015, and for manned spacecraft in 2018. The cosmodrome will be the most expensive project being implemented in the Amur Region. And this in itself attracts the constant attention of the federal authorities to the region, gives it additional opportunities for contacts with the center and promoting its other interests.

In addition, federal assistance may come to monotowns in the Amur Region. Two cities fell into the problem category - Svobodny and Raichikhinsk. These cities have a prominent position in the region and their funding is certainly long overdue, especially if it does indeed lead to diversification of their economies.

At the same time, there is still no complete clarity with the projects promoted by the Ministry for the Development of the Russian Far East. The mining project of the Petropavlovsk group - gold mining in the Selemdzhinsky district - took the first positions. It was he who was among the priority investment projects, applications for which were immediately approved by the ministry. At the same time, the Amur Region presented one of the largest lists of projects. Three of them at once belonged to the agro-industrial complex, one more - to gas processing and one - to the production of building materials. With such a mass of projects, the question of investment remains open.

Push on the gas

There are still many questions regarding the creation of priority development areas in the Amur Region. None of the region's proposals were included in the priority lists. The proposals themselves changed throughout the year. Ultimately, the region, in this case, also leaned towards projects in the field of the agro-industrial complex. In particular, it was proposed to create a TOP "Ekaterinoslavka" in the Oktyabrsky district. The TOP project in Belogorsk, which was the first to appear in public space, was declared as an agricultural project.

The most ambitious prospects of the region can be associated with the fuel and energy complex, where RusHydro, Gazprom and Rostec can play key roles. In particular, the Amur Region can get a powerful impetus through the Power of Siberia gas pipeline, the construction of which began last year. It is assumed that gas will come to the region in 2019. It is very important for the industrial complex of the region that the plan of Gazprom and SIBUR to create a gas processing complex in the Svobodnensky District is implemented. It is assumed that Gazprom will build a gas processing plant here, with which it will be connected by the technological chain of the SIBUR gas chemical complex. Both companies have already decided on the choice of the industrial site. Gazprom established a separate division of Gazprompererabotka LLC, which is registered in Blagoveshchensk, SIBUR registered a legal entity for its subsidiary. The regional authorities, Gazprom and SIBUR have signed their necessary agreements. In accordance with the comprehensive calendar and network work schedule for the Amur Gas Processing Plant project, the start-up of the gas processing complex is scheduled for the end of 2018.

New prospects are also being formed in the power sector of the Amur Region. The influence of RusHydro and its subsidiary RAO ES Vostoka is growing. Now the construction of the Nizhne-Bureyskaya HPP is underway, the completion of construction is scheduled for December 2015, a project of flood control HPPs is being prepared. Along with this, the possibilities of developing a large Herbikano-Ogodzhinsky coal deposit, next to which a power plant could be built, began to be discussed again. Several years ago this field was a project of the Chinese company Shenhua and the Russian Rostopprom. Now Rostec is interested in him and, possibly, foreign investors will also be involved in the project.

Gas processing and electric power projects can change the economic profile of the Amur Region and create new prospects for the region, incl. lead to the emergence of large taxpayers and an improvement in the financial and budgetary situation. Another extremely important economic entity for the region is Russian Railways. Significant funds may come to the Amur Region in connection with the government-supported intentions of Russian Railways to modernize the BAM and Transsib, incl. at the expense of the NWF. However, in the current conjuncture, negative news is also associated with Russian Railways, since the Amur Region was not spared the process of canceling suburban electric trains: important routes were closed on the Transsib in the most remote, western part of the region. Currently, with sharp criticism from Moscow regarding the reduction of routes, it is possible that the communication of electric trains will be restored. The demand to find ways to solve the issue of reducing commuter trains was made by Vladimir Putin in early 2015.

As for private business, the Petropavlovsk group continues to exert a major influence on the region, with which both the prospects for gold mining and the creation of the future mining and metallurgical cluster are connected. But the financial problems of the company, along with the fall in world gold prices, put all these prospects into question (meanwhile, one of the co-owners of the company, Pavel Maslovsky, returned from the Federation Council to the management of Petropavlovsk). The company is quite successfully lobbying for its gold mining project in the Selemdzhinsky region. But with iron ore projects, there is less clarity. There was talk of a possible decline in production at the Olekminsky mine (Kuranakhskoye deposit). The largest new project - the Garinsky deposit, as well as the construction of a metallurgical plant in the Amur Region are in question.

The region has a lot of prospects, but there is no need to wait for rapid results, therefore, the Amur Region should not be reduced in promoting its interests and strengthening contacts and contacts with the center, key FIGs and Chinese partners.

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