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Far East - 2.0 economy?

From scallop farms to technocratic schools - what is offered to the region’s national development program

In September, Russian President Vladimir Putin ordered 2018 to develop a national program for the development of the Far East until the international year. The experts prepared a number of economic projects for inclusion in the national program, and they are very different in direction, relevance and authenticity. EastRussia tried to figure out how useful they could be for the region.

Far East - 2.0 economy?
We continue the theme of proposals to the national program for the development of the Far East, touched upon in the previous Publication publications. This time it seems appropriate to discuss proposals for the economic part of the national program, developed at one of the strategic sessions held by FANU Vostokgosplan in Khabarovsk in the autumn of 2018.

I would like to start from the fact that the available materials of the session did not formulate the initial setting, namely: what, in the opinion of the experts, is the economic component of the development agenda of the Far East. In the social unit, such an attitude (population deficit) was made, and at least it can be discussed.

The proposals of the economic bloc are a diverse set of projects, five of which relate to aquaculture (ie, agriculture), two projects each - in the field of transport, energy, biotechnology and the institutional environment, one each - in IT and education. Below are the most impressive projects, for some of them are comments of relevant experts.


Let's start with the most expensive ($ 6 billion) of the proposed projects - construction of nuclear power plants in Primorsky Krai. The need for the station is explained by the shortage of power facilities in the region and the realization of the potential of exporting electricity to neighboring countries.

The idea of ​​construction in the region of the nuclear power plant appeared at the end of the 1980s (then it was rejected by the public, frightened by the Chernobyl accident), and its relevance in the context of the national program needs confirmation. According to experts in the field of energy, today there is no volume and structure of energy consumption required for NPPs in the local market: unlike thermal plants, a nuclear plant must constantly produce a stable amount of electricity that cannot be stored for future use.

As indicated in the project, the maximum power shortage in Primorye is estimated at 500-700 mW, whereas one power unit of the VVR-1200 type proposed in the project produces twice as much power (1200 mW). At present, the shortage of the own generation of Primorye is covered by flows from the Zeya and Bureiskaya HPPs. To eliminate the energy shortage plan to expand the Vladivostok CHPP-2 and build two new stations (in Artyom and Nakhodka) that would meet the needs of the Eastern Petrochemical Complex, Zvezdy, NZMU and other enterprises.

For the export of electricity to the Republic of Korea, China and Japan, there are currently certain restrictions. In terms of exports to the PRC, the cost of exporting energy that does not pay for the construction of the station may be a problem. For the transfer of energy to South Korea through the territory of the DPRK, long-term political coordination is needed: a similar project on the Trans-Korean Railway has been discussed by the parties for many years without any visible result. Exporting energy to Japan will require laying an 600 km of submarine cable through the Sea of ​​Japan, which will also entail additional costs.

In this regard, it is appropriate to recall the project "Pacific Energy Ring"within the framework of which seasonal and daily flows of electricity between Japan, Korea, northeastern China, Mongolia and eastern Siberia were planned, which would optimize the energy consumption of Siberian and Far Eastern hydroelectric power plants, as well as solve the energy problems of these countries. But the current vision of the "ring" does not imply the construction of a new nuclear power plant.

In general, for Primorsky Krai, a more pressing issue is not the absence of a nuclear power plant, but network and substation statusdue to the existing procedure for setting tariffs for electricity, around which several groups (generators, networkers, distributors, local authorities, etc.) constantly struggle - together with the orders of the President of Russia on reducing tariffs for Far Eastern electricity, this question purely economic plane in the political.

Second energy project - "Local Energy Systems". A draft solution to the acute problems of the Far East through the process of introducing a new technological base for local energy in the DFO regions through pilot projects and support for regional programs for the development of local energy. As an organizational mechanism, it is proposed to create a specialized structure - the working title “control center”, which will coordinate the implementation of projects for the modernization of local energy, as well as serve as the information center of the Far East in this area.

Simply, it is proposed to coordinate the replacement of diesel generation with renewable energy sources. Reading the description, one can come to the conclusion that nobody is engaged in the topic of renewable energy sources in the region, and without a special information and coordination center, remote areas will be ruined by fuel oil.
Meanwhile, expert I.E. Shkradyuk, coordinator of the greening industry program of the Wildlife Conservation Center, does not need to collect information: in the schemes and programs for the development of the power industry for each of the 10 subjects of the FEFD there are lists of all local power plants and development plans for 5 years. Power engineers are actively engaged the introduction of renewables in the northern regions of the Far East, the most advanced in this regard - the Sakha Republic (Yakutia), where they prepare packages of specific investment projects in this area for private and private-public investment. About this experience, worthy of study and replication, the authors of the project do not mention.

Since the replacement of renewable energy sources of all diesel power plants in the region will not suffice any budget money, it makes no sense to collect all requests - you need to start with a model that allows you to rank the economic effect of upgrading local electrical and heating systems in order to reduce costs and develop criteria for selecting rankings by priority.

It will be possible to talk about mechanisms for attracting investments after the appearance of indicators of economic efficiency, for which we need not centers and funds, but a qualified assessment. Further, there will be a number of issues: project selection criteria (burning, quick payback, etc.), technology selection, mini-hydropower plant and geothermal CHP applicability, training of technologists and installers, overcoming lobbying of diesel sellers, and others. But without answers to them, and also without the described model, filled with data, talk about some kind of fund will be empty.


Of the five projects in the field of aquaculture, in the opinion of the expert - the head of the Center for Aquaculture and Coastal Bioresources, FGBUN “National Scientific Center for Marine Biology. A.V. Zhirmunsky Far-Eastern Branch of the Russian Academy of Sciences, S. I. Maslennikov - only a proposal to change the procedure for granting aquaculture plots with permits for notifying looks reasonable. Project "Experimental farm - vertical scalloping farm"The expert is convinced that the years were late for 30: this technology was developed and introduced back in the USSR; currently, there is a package of technologies and techniques for suspended cultivation. To create farms there are no problems other than purely economic.

Project for the creation of a pilot farm commercial aquaculture involves the sorting of the catch and the subsequent content of living hydrobionts, which is not aquaculture, it is a direct path to fraud and corruption. "Creating a pilot farm for the introduction of promising aquaculture technology: deep-sea fish farms" qualifies as an economically and biologically unjustified project that does not take into account the limiting environmental factors with respect to these technologies. According to the expert, the authors of the proposal are trying to shift to the budget all the risks of implementing their ideas, which is completely unacceptable. 

Finally, the project for the creation of new productions of aquaculture crops It is a pure business project, which should be based on calculations and projects, and not on the wishes of the national program. Currently, more than a dozen small private plants for the production of planting material are operating in the region, scientific institutes have experimental capacities, and new ones are being designed. It seems that the author is not familiar with the production procedures in this industry.


“Legalization of informal SMEs in the Far East”. To bring business out of the shadows, it is proposed to create locally experimental sites, where entrepreneurs are offered the opportunity to amnesty and conduct business according to the same rules, but do it under control. To ensure the manageability of the experiment, it is proposed to launch the Young Technocrats program.

The selection of program participants is based on a competition of projects. If the project is successfully defended and the site is selected as an experimental site, the graduate of the Young Technocrats school is sent to that particular settlement where he will manage this facility for several years.

The departure of small businesses in the “gray zone” is due to the desire to get rid of excessive control of state bodies and to reduce the costs of paying them administrative rent. If SMEs are invited to conduct business “according to the same rules,” that is, in conditions of minimizing relations with the state, what kind of control are we talking about — will the technocrat control the departure of a businessman from taxes and inspections by regulatory bodies?

After identifying the "reasons for the existence of an illegal business," the technocrat should take measures to implement a tax amnesty, reduce reporting requirements, simplify certification and licensing procedures, obtain land, access to infrastructure, gas and electricity. Generally speaking, these tasks are annually included in all OIU plans and programs, and their implementation is a matter of concern for a huge number of officials at the regional, federal, and municipal levels. There is no explanation in the draft, due to what super-qualities and powers of the “young technocrat” will be able to solve these tasks alone. All this allows us to qualify the justification of the significance of the project as unconvincing.

“Implantation of institutional regimes in the Pacific region”. The project is an experiment on the implementation of institutional regimes of individual APR countries in limited areas of the Far East. The management of this territory with a special status will be carried out by the management company - a representative of one of the APR countries.

These sites are experimental. The search for the optimal administration mode is carried out on the basis of a random search. The Ministry of Eastern Development should evaluate the effectiveness of existing regimes. After determining the optimal administration mode, work is underway to implant this administrative regime onto the entire territory of the Far East.

As can be understood from the above quotation, it is proposed to abandon the use of the norms of Russian law in the territory of the Far East, as not attractive for investment, in favor of a more appropriate legal regime - Chinese, Korean or Japanese.

Such a proposal contradicts Russian legislation and is unlikely to be considered by the ministry, as the scenario of extending the regime of priority development areas (TOR) to the entire territory of the Far Eastern Federal District was not discussed at the time. The project description does not mention which shortcomings of the existing regimes of the TOP and the Free Port of Vladivostok, which are unavoidable in the current situation, require the introduction of regulatory regimes of the APR countries - although we should start formulating the problem with assessing the effectiveness of institutional measures applied by the development institutions in the region. 

In addition, the institutional environment is not limited to the establishment of special taxes and customs rules, it also includes the economic policies of the executive, legislative and judicial branches of government, the activities of financial institutions, market regulators, the change of which is a complex task of a completely different plan.

The statement about privileges and preferences of “free zones” as the main factors for attracting foreign investors is, at a minimum, controversial, because for investors, first of all, the prospect of making a profit is important - which, in turn, is determined by market size, availability of effective demand and development infrastructure. The absence of these conditions cannot be compensated for by lowering costs due to a change in norms.


Project "Education for export" offers "Orient higher educational institutions of the Far East to the provision of educational services to foreign citizens". Due to the difficult demographic situation, the number of Russian citizens entering or planning to enter higher education institutions in the Far East is decreasing. This leads to a reduction in workload in universities and, in the long term, to a reduction in educational programs, faculty members and the number of institutions of higher education in the Far East.

The rationale looks strange because, for example, FEFU, as a participant in the 5-100 program, puts an increase in the share of foreign students as one of the strategic goals, today this figure is approaching 20%. In addition, this parameter is taken into account by all university rankings, both Russian and international, therefore all DFO schools aspire to increase this indicator by attracting applicants from abroad.

The thesis about the demographic reasons for reducing the number of applicants in the DFO is also unconvincing: this is not so much due to the shortage of students, but due to the loss of local universities to universities in Moscow, St. Petersburg and other educational centers for competition for the quality of education and prospects for future employment of graduates.

On the whole, the project looks like a desire to replace lost strong Russian applicants with weak foreign ones (as usual, at the expense of the budget), instead of improving the quality of educational programs and competition to attract talented young people.


Of course, among the results of the session there are also quite worthy of attention actual projects such as “Developing a unified scheme for the integrated development of the transport infrastructure of the FEFD” or “Development of computing power”. But a substantial part of the projects raises many questions and comments, and some of them cannot even be considered seriously.

It is puzzling that a replicable recipe for solving a particular (real or imaginary) problem is to create a “support center” or a “development fund”: such bureaucratic structures are already in a wide assortment in all subjects of the FEFD, and there is no certainty that multiplying their number for a budget account, it will somehow affect the development of the region.

As for the national program, for its construction it is required to understand what the priorities of the Far Eastern economic policy mentioned at the beginning of the article are.

In military history, the strategy is the art of choosing the most important direction for concentrating available resources on it, since they are usually not enough for the entire set of tasks. There can not be many priorities, otherwise it’s just a set of good wishes.

The situation of the Far East in the same way deals with limited resources that need to be used as efficiently as possible. To do this, you need to understand - which infrastructure is more important for the region: energy, transport or scientific and educational? Which industries should be relied on: extractive, processing or service? What should be considered a criterion of the importance of the industry - its profitability, stability, the size of tax deductions, the number of jobs? How can the state support business in the region? What economic models are preferred for the Far East?

And, last but not least - in what capacity does the country need the Far East? The answer to this question (which, logically, should be the first, since all the previous ones depend on it) changes over time: yesterday it was a protected raw material province, today it is a raw material province, entered into international markets.

For a new national program for the development of a region, it would at first be a good idea to decide what it should become tomorrow.
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