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“The state should be the main investor in the Far East”
State Duma Committee Chairman Nikolai Kharitonov - on the effectiveness of support measures for the Far Eastern Federal District
Russian President Vladimir Putin instructed the government to finalize the draft national program for the development of the Far East. Officials should pay special attention to the goals and objectives of the development of the Far Eastern Federal District, so that the economic growth rate of the macroregion is one and a half times higher than the average Russian value. Nikolai Kharitonov, Chairman of the State Duma Committee on Regional Policy and Problems of the North and Far East, spoke about the national program, measures to support the Far East and their effectiveness.
- In 2013, Russian President Vladimir Putin defined the rise of the Far East as a national priority for the entire 21st century. And our committee and the relevant ministry have always been unanimous in their opinion that the tasks that confront us in this regard are unprecedented in scale and require extraordinary solutions. The number of adopted federal laws has already “exceeded” 40, and by now the regulatory acts of the government are more than 200. You quite rightly refer to the key laws on territories of priority development and on free ports. To date, 20 priority development territories and five free ports have been created. 1 800 new investment projects are being implemented; it is planned to create 145 thousand new jobs. And therefore, we pay special attention to the analysis of the law enforcement practices of these laws. They have already given a certain impetus.
Our committee, together with the Research Financial Institute of the Ministry of Finance of Russia, conducted a special study. I presented its results as part of one of the sessions of the Eastern Economic Forum. A generalized analysis was conducted, as well as a survey of residents of the TOP and free ports. Interviewed by more than 250 respondents. It turned out that over the past two years, the income of TOR residents has grown from 15,5 billion rubles to 70 billion rubles, and the free port - from two billion rubles to 24,6 billion rubles. More than 80 projects with an investment volume of 100 billion rubles have been implemented, about ten thousand jobs have been created.
An increase in the total amount of tax and non-tax revenues to the budget is expected in most ASEZs and free ports. In 2018, labor productivity increased in the territories of the ASEZ and free ports. That is, this is real work on the ground.
- Under the draft national program for the development of the Far Eastern Federal District, the macro-region will need up to 2025 of the year, 11,5 trillion investments, most of which are private investments. How can you attract such money to the Far Eastern regions, given that state-owned companies are still making the largest investments?
- In the Far East, private investors have already actually invested over 612 billion rubles, conducted 242 new enterprises, created 39 thousand jobs. Industrial production in the Far East grew by 22,9%. It is worth recalling that in the 2013 year, the share of direct foreign investments of the Far Eastern Federal District in the all-Russian dimension was only 2%. For 2014-2018, 32 billion US dollars have already come here. This is more than 30% of the total Russian volume. With this in mind, I believe that we have the right to count on tangible development of this territory already in the medium term.
The figure you called is very ambitious. But it is dictated by the need to solve the task set by the president to bring the indicators of social development in the Far East to a level that exceeds the average Russian.
The national program for the Far East needs to be honestly calculated. How much does it cost? Then you need to decide which part of the expenses will be covered by the federal budget, which - regional and, accordingly - what will be the share of extra-budgetary expenses. At the same time, it is necessary to minimize the risks of not attracting such funds. In the near future, we expect a government bill on investment protection to be submitted to the State Duma, which, I believe, will serve as an additional impetus to attract private investment in the Far East.
At the same time, I have repeatedly stated at various sites that, despite the obvious successes of the new mechanisms in attracting investment, the state should still be the main investor in the Far East. It is no coincidence that in a government decree we provided for the possibility of co-financing investment projects in the Far East from the federal budget in the amount of 99% for projects of national importance. It’s not a secret for anyone that we still have territories isolated in transport, energy, and communication terms.
And one question always arises, investors are ready to invest directly in an industrial enterprise, but there it is necessary to lead a railway, gas pipelines, electric networks and so on. Who will do this? When it comes to projects that pass through already settled territories or with clear prospects, this is one thing, but there are projects in remote corners where the infrastructure needs to be built by one specific enterprise, through the tundra or taiga. But this does not mean that in 50 years we will not see this effect.
Infrastructure pays off due to the results of economic growth, due to the budgetary effects of economic growth. In any case, the state needs to deal with infrastructure - this is its main responsibility. Maintain infrastructure, because inevitably people, production, and investment will come for infrastructure.
Now the State Duma is discussing the draft law on the federal budget for the 2020-2022 years, our committee has noticed that the presented draft law and accompanying materials do not contain information on the implementation of the national program for the development of the Far East until the 2025 year and for the future until the 2035 year. But this program, after all, supplements the measures that are laid down in national projects regarding the development of the Far East, and accordingly involves an additional amount of funding. It is necessary to work on this, as well as on further prioritization of state programs. According to the committee, the “Far Eastern sections” are considered to be consistent with the goals of the accelerated development of the Far Eastern Federal District only if they contain indicators whose values are higher than the average Russian level, and also if the necessary level of financing is provided to achieve them. However, to date, this problem in most government programs, unfortunately, has not been solved.
- The Far East has set a goal - to achieve economic growth rates of 6% per year, as in the leading developing economies of the Asia-Pacific region. Do you think it is realistic to achieve such indicators?
- In many economic areas, this indicator in the Far East is not only possible, but also needs to be exceeded annually. Do not forget about the low base effect. These numbers are not an end in themselves. Economic growth should ultimately provide comfortable living conditions for “today's” and “tomorrow's” Far Easterners.
Every year, the Eastern Economic Forum raises the question of the provision of the Far East with food products of its own production. In 2017, we said that the Russian Far East will be able to provide itself with food in five years. We repeated this thesis a year later. At the same time, in the 2017 year, the Far East showed an increase in agricultural production of the order of 8%, and the next year, unfortunately, we could not repeat this growth - a decrease of 2% in relation to the 2017 year. In the first half of the 2019 year, sown areas for grain and leguminous crops increased by almost 7% in the Far East, but the volumes for potatoes and vegetables decreased slightly - by 0,4%.
Therefore, I believe that, first of all, providing the Far East with our own food products is a strategic component of the national task of raising the Far East. As the saying goes: "There will be bread - there will be a song."
- One of the biggest problems in the Far Eastern regions is population decline. In the near future, the planned investment projects will create 130 thousand new jobs and will face an acute shortage of qualified personnel. In your opinion, what steps should be taken to solve this problem?
- It cannot be said that the problem of population outflow from the Far East is hushed up or ignored, but it is also clear that intermediate successes in attracting investments have not yet become a decisive factor for the influx of people into the Far East. This is due, first of all, to the fact that today the Russian Far East, unfortunately, has a low level of social arrangement.
Yes, the outflow of population from the Far East continues. Moreover, children aged 5-15 years are almost two times less than youth 20-29 years. FEFD has lost its previous benefits in the field of population income. In 1995, the average per capita nominal cash income of the population in the Far East exceeded the average Russian level by almost 24%, and in 2018 this excess was reduced to 10%.
There are not enough places in preschool institutions. For one thousand children there are 667 places in kindergartens. In Kamchatka, in the queue of 1,5 thousand children. Almost 20% of children in Vladivostok are studying on the second shift, while in some classes there are 40 students. These depressing statistics can be continued, but we cannot say that everything is hopeless. Created and planned jobs are an unconditional additional incentive. Since last year, a special program has been launched for the social arrangement of new centers of economic growth in the Far East. More than 700 social facilities are being built and modernized.
I am convinced that within the framework of the new national program for the Far East we will set and solve ambitious tasks. One of the key issues will be precisely the social agenda. We are deeply convinced that in order to attract people, young and initiative personnel to the Far East, first of all, the state must fulfill all its obligations to those living there today.
- In one of the interviews you said that in the 2018 in the Far East two times less housing was built per one thousand people than in Russia as a whole. At the same time, the share of emergency and dilapidated housing exceeds the average indicators by almost three times. How can this situation be changed?
“Yes, indeed it is.” We in the committee annually hold a series of meetings where we consider the solution of the task of the accelerated development of the Far East in state programs, and now in national projects. And from my own experience I want to say that housing issues are one of the most sensitive and acute. Most of the committee is represented by deputies from the Far Eastern and northern territories. In addition, we conducted field events in most of the subjects of the Far East and we know firsthand these problems.
If we take the housing and utilities sector, today the main mechanism for attracting private funds in this area is concessions. But they show their effectiveness in the territories if there is a good tariff base and investment potential. For a large number of cities and rural settlements of the Far East, it is not applicable. We need to think about additional motivation and compensation mechanisms. For example, I suggested considering options for exemption from VAT payment of individual resource-supplying organizations of the Far East, which operate on the basis of concession agreements. This will not entail a significant amount of lost income, which the Russian Ministry of Finance and the Russian Ministry of Economic Development are so worried about.
Most recently, in the State Duma, a government hour took place with the participation of Vitaly Mutko. We thoroughly discussed the problems of "point" development. It is necessary to expand the practice of integrated development of territories, the corresponding standard is already being implemented in Vladivostok and Svobodny. The federal budget includes co-financing of projects for the development of territories within the boundaries of settlements. For the period 2019-2024 years - 183,7 billion rubles.
Also, amendments to the legislation are being worked out, which will help to support at the expense of the federal budget investors implementing projects for the development of built-up territories. You can also pay attention to the established practice of “proactive budgeting” in the regions of the Far East. For example, Yakutia, according to the results of a special international competition in Barcelona, entered the top five best practices on this issue. They managed to achieve co-financing of projects in the amount of 37% by the population, business structures and municipal authorities. This is a good result. But it is necessary to make sure that the responsibility for the improvement of territories is not passed on to the shoulders of citizens.
- On behalf of the Communist Party of the Russian Federation, you submitted a bill to the State Duma to reduce the age of retirement for old age Far Easterners living in areas of the Far North and equivalent areas. What is the situation with this bill now?
- This initiative turned out to be quite resonant, but was introduced not for the media effect. The authors of the bill also include our colleague on the committee from the LDPR faction, Andrei Kuzmin. I am deeply convinced that the applied general approaches to raising the retirement age in Russia are not suitable for the Far East. The main justification for raising the retirement age was statistical data on the increase in the life expectancy of citizens: for 2016 year it amounted to 68,6 years, including for men - 63,5. In the Far East, the numbers are completely different. For example, in the Jewish Autonomous Region, the age is 65,8 and 59,98 years, in Chukotka - 64,4 and 59,7 years.
In the Far East, the proportion of people with incomes below the subsistence level is high. The level of real wages is lower than the national average, while the living wage of pensioners is higher than the average Russian level, and purchasing power is much lower: in Chukotka and Kamchatka - by 20%, in Yakutia - by 17%.
The bill received a negative conclusion from the government, which significantly complicates its passage in the State Duma. But even if the bill is rejected, I think we will return to this issue one way or another. How we returned this year to the issue of a two percent mortgage for the Far East, the need for which we declared back in 2017.
- Do you think it is possible in the near future to create conditions in the Far East so that young people would like to live and work in the macro-region with pleasure?
- According to the sociological studies of youth conducted in the northern and Far Eastern regions, there are four main problem areas: youth self-realization, employment, an idea of the future of the region and life in it. Our committee is convinced that a special role in solving large-scale state problems in the Far East belongs precisely to youth.
The problem of a shortage of young personnel we felt in almost every trip to the Far East. In 2017, as part of the III Eastern Economic Forum, a committee initiative was implemented to hold a youth venue within the framework of the forum. To date, it can already be said with confidence that this site has established itself as a sought-after and effective event. As part of the anniversary V forum, we held a special meeting with the youth of the Far East.
As of January 1, 2019, the number of people under the age of 35 in the Far East was 3,8 million people. In the Far East there are 35 educational organizations of higher education and 44 branch of universities. The number of students in the Far Eastern Federal District is about 153 thousand people.
As part of the forum, we also agreed on the participation of Far Eastern youth at the parliamentary hearings we planned in November to legislatively support the development of the Far East. We also invited the guys to attend the “government hour” in the State Duma with the participation of the Minister for Development of the Far East and the Arctic, Alexander Kozlov, in December.
It is worth noting that not only young parliamentarians and representatives of youth organizations were present at our site, but also young entrepreneurs who already have concrete practical experience and are ready to make their contribution to the development of the Far East. First you need to help them realize their potential. We heard a lot of constructive and practical ideas from youth, we will continue to work.
- A working group has been created in your committee to draft a bill on the socio-economic development of the Arctic zone. How is work on it going and will it somehow overlap with the program for the development of the Arctic, which is being prepared by the Ministry for the Development of the East?
- A very big and important question. It should start with the fact that the government ordered to develop a comprehensive law on the development of the Arctic zone was repeatedly postponed, then an approach was proposed to form the so-called "support zones", which also could not resist. Now we are waiting for the introduction of a package of bills on special measures of state support for investment activity in the Arctic zone. But we are faced with large-scale tasks for the development of the economy and social sphere of the Arctic zone. Climatic conditions, lack of infrastructure create significant obstacles to the development of this territory, the key problems of the Arctic are solved too slowly and inefficiently. Now, when discussing the budget bill, we noted both the low level of implementation and the low level of financing of the state program for the Arctic.
Our Committee has repeatedly noted that the need of the Arctic regions of Russia for a systemic law has not gone anywhere. We need a basic law that would take into account the specifics of the Arctic zone and provide for the mechanisms of complex development. There are, after all, many related questions of such development. These are tariff and customs regulation, land and property relations, urban planning, environmental and ecological activities, and finally, the development of small and medium-sized businesses. I think there will be no competition. Together with the relevant ministry, other interested authorities, both federal and regional, we will try to develop and adopt the really necessary legislative mechanisms for sustainable, progressive and, most importantly, comprehensive development of the Arctic zone.