Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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Kamchatka Krai: 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 Kamchatka Territory is still difficult to call a successful and prosperous region. Nevertheless, the events of recent months give grounds to speak of a gradual, albeit slow, implementation of various pinpoint projects, which together create a more intelligible perspective for the region.


Kamchatka Krai: results - 2015, trends - 2016

Rostislav Turovsky

Doctor of Political Sciences, Professor of HSE, Scientific Editor East Russia
Special project TORA and Free Port
At the same time, Kamchatka, due to the peculiarities of its geographic location, remains a region very vulnerable in socio-economic terms. Being heavily dependent on the center and federal aid, she, at the same time, successfully takes advantage of this position, seeking favorable decisions and receiving large funds.

TOP "Kamchatka" as a prototype of the Kamchatka perspective

One of the region's successes was the approval of the Kamchatka ASEZ by the government, as well as the adoption of decisions on financial support for two projects in the food industry and two gold mining projects. ASEZ "Kamchatka" is interesting in that it is a complex project, bringing together under one "umbrella" many different "sub-projects" related to different industries. In fact, this is not just a TOP, but a prototype of the Kamchatka perspective. There are seven sites in the structure of the TOP, it includes such blocks as tourist and recreational, port and industrial, air transport and agro-industrial. Thus, we can talk about attempts to develop the tourism industry, and about strengthening the infrastructure hub, including, first of all, the port of Petropavlovsk-Kamchatsky. Special attention is also paid to providing the transport isolated region with its own food.

In the same logic, two small investment projects were proposed and approved, which, however, have a purely local significance. One of them involves the creation of a pig-breeding complex in the region, which is being dealt with by CJSC Agrotek Holding. It is planned that the complex will begin its operation in 2019. The second project supported by the center is a new brewery, which plans to build the already existing LLC Kamchatka Brewery.

For Kamchatka, given its budgetary constraints, it is important that large federal funds flow to the region for its projects, and that the inflow of private investments, bypassing the region, would finally revive. From this point of view, the Kamchatka ASEZ promises the greatest prospects. It involves the attraction of 28,1 billion rubles of private investment, as well as 5,7 billion rubles of federal funds. In 2016, for example, the center should allocate funds for the power grid infrastructure of the Paratunka site. For their part, the regional and municipal budgets undertook to invest 2,7 billion rubles in the TOP. Given the importance of ASEZ for the region, it can be expected that these funds will be allocated.

However, the agro-industrial projects that are among the priority ones do not add much to the TOP project, and under other circumstances could become part of it. Budget investments in them are extremely small - only 157 million rubles for a pig-breeding complex and 72 million rubles for a brewery. Private investments in the first case will amount to 1,85 billion rubles, in the second - 1,1 billion rubles.

"Golden" GOKs of the region and federal support of the existing infrastructure

Much more promising in this regard are projects for gold mining in the north of the region, which received federal support. In fact, a fundamentally new segment of taxpayers is growing in the region - large mining enterprises. Thus, the Amethystovy mine was launched in September 2015 by Interminerals. The volume of investments in the project amounted to 16 billion rubles, the annual amount of tax deductions - 700 million rubles. Production volume - 4 tons of gold per year. The company received a concessional loan for the construction of the road from the Far East Development Fund.

Ozernovsky GOK of SIGMA Company - construction has begun. The volume of investments in the project is 12 billion rubles. Tax revenues for the period of development of the field will exceed 13 billion rubles. The Ozernovsky GOK receives state infrastructure support in the amount of 1,2 billion rubles.

At the same time, the events of the past year once again reminded of the ambiguous state of the infrastructure existing in the region, although major federal officials showed their concern for it, which is an undoubted plus. For example, the head of the presidential administration, Sergei Ivanov, controls the protracted reconstruction of the airport, which is being carried out by the structure of the federal Spetsstroy, which has already thwarted the previously agreed terms. During his stay in Kamchatka, Sergei Ivanov criticized the airport reconstruction process, which somewhat stimulated this process. The work is now expected to be completed in May this year.

The port berths in Petropavlovsk-Kamchatsky also need reconstruction, which are also in charge of the federal structure - FSUE "Rosmorport". In this case, Yuri Trutnev drew attention to the problem. The importance of the reconstruction of port facilities is great in connection with the ambitious plans for the development of tourism and also for the transformation of Petropavlovsk into a really working junction of the Northern Sea Route. This requires the port to be capable of receiving both cruise ships and icebreakers, but this will still require a lot of work and money.

So far, therefore, there is no need to talk about any megaprojects in Kamchatka. But, perhaps, this also has its advantages, since there are neither overestimated expectations, nor criticism of unrealizable projection. The region's relations with the center look very calm and constructive, and there is a real opportunity to launch a whole group of small and medium-sized projects that are primarily needed by the region itself.



The most subsidized region of the Far East

Last year, meanwhile, demonstrated a noticeable increase in investment - by 26,5% (in January-November 2015). This can already be considered a good sign, although the volume of investment is far behind other regions of the Far East (Kamchatka also has an extremely small volume of foreign direct investment). There was also a slight industrial growth in 2015 - by 2%. However, the Kamchatka economy is still fragile. For example, agriculture, although the regional authorities are betting on the growth of self-sufficiency, has not yet yielded good results. In this industry there was a decline of 5,4%. The decrease in the volume of construction work is also striking - by 7,6%.

As a result, a noticeable level of social tension persists in the region, which from time to time makes itself felt in bursts of social discontent and protests. High prices and tariffs remain among the grievances. In early 2016, residents of Kamchatka even petitioned the president about tariffs for housing and communal services. Last year did not improve the living standards in Kamchatka. On the contrary, real money income fell 5,1%. The retail trade turnover decreased by 2,8%. Prices for goods and services in December last year rose by 12,6% compared with prices in December 2014. At the same time, food prices increased over the same period by 14,8%. Therefore, the region continues to suffer from infrastructure constraints and expensive electricity and heat. All this cannot but affect the mood of citizens.

First of all, the federal center helps Kamchatka in this objectively difficult situation, and here it should be noted that the support is powerful and effective. As you know, Kamchatka has become one of the largest recipients of federal financial assistance, being in the top ten. Today it is the most subsidized region of the Far East, the most financially dependent on the center (the share of transfers in the budget is just over 60%). Last year, he received almost 40 billion rubles in federal transfers, second only to Yakutia in this indicator. In few places in Russia there are cases when only one and the most important type of federal aid - subsidies for equalizing budgetary provision - make up more than half of budget revenues (52,4% over the past year). But with a weak own tax base, there are no other options in sight.

At the same time, sustained federal support gives regional authorities the opportunity to form a fully balanced budget. Last year, the center did not cut transfers to Kamchatka, as it happened in many other regions, and this can already be considered a victory. The volume of transfers increased slightly by 0,2%. The previous level of subsidies for equalizing budgetary provision (growth by 1%) has also been preserved. The region received even more subsidies than before (by 6%), which is a good sign, as the center as a whole began to cut subsidies to the regions.

While maintaining the previous level of federal support, the region was very good at increasing its own revenues, thereby slightly increasing financial independence. The region's tax and non-tax revenues increased by 11,55%. There is an obvious increase in income from business: income tax - by 11,8%, taxes on total income - by 16%, corporate property tax - by 15,2%, mineral extraction tax - by 51,7%. Despite the ambiguous situation with the income of the population, the income tax showed a significant increase - by 10,1% (Kamchatka became the second region in the Far Eastern Federal District in terms of the growth rate of income tax receipts after Sakhalin). This allows us to speak about the strengthening of its own taxpayers in the region, the need for which is extremely high. However, so far, as in other economically weak regions, income tax (59%) dominates the region's own revenues too clearly, while the share of income tax is only 9,5% (another 7,7% is provided by taxes on total income and 7,5% corporate property tax).



Thus, the financial position of Kamchatka has even slightly improved and began to look more optimistic. This made it possible to avoid one of the most acute problems in the Far East - high debt burden. On the issue of debt, Kamchatka has become just a model region. As a result, the region's public debt fell by more than 15%, and this was the best rate of decline in public debt across the country. True, the municipal debt increased slightly - by 3,8%. Kamchatka did not need to take large budget loans from the center and, on the contrary, repaid them. As a result, the volume of debts on budget loans fell by 42,2% (the second indicator of positive dynamics in the country and the best in the Far Eastern Federal District). The ratio of state and municipal debt to the region's own revenues was a moderate 27%.

In the absence of a strong opposition, only a low voter turnout becomes a problem in any election.

Under these conditions, Kamchatka was able to slightly increase its expenses - by 3,1%, which was especially important in connection with the holding of early gubernatorial elections (the budget deficit was very small, -1,8%). Probably, the electoral season and signs of discontent in the society influenced the fact that the regional authorities made an explicit bet on social spending. In particular, 9,85% more funds were allocated for health care than in 2014, for education - by 8,65% (the best dynamics in the Far East), for social policy - by 8,9%. True, as in many regions, the already small spending on culture (by 1%), physical education and sports (by 19,3%) was reduced. The mood of a few rural residents could be influenced by the growth of spending on agriculture and fishing - by 4,8%. In total, direct social items accounted for just over half of all expenses.

On the other hand, the growth of social spending needed compensation at the expense of any “sacrifices”. The expenditures of the regional budget on housing and communal services have been reduced, which in Kamchatka's conditions, by the way, strongly depends on budgetary injections (by 4,45%). Roads also suffered a little (a 5,4% reduction). Probably, this was also influenced by the scandals about violations at Kamchatavtodor OJSC. In addition, the authorities saved on themselves: the cost of national issues fell by 6,5% (although Kamchatka, together with some regions of the Far Eastern Federal District, remains among the Russian leaders in terms of the share of budget spending on these issues). However, there were no “catastrophic” cuts in the region, as the financial and budgetary situation remained calm and predictable. It is noteworthy that, while the costs of housing and communal services were reduced, Kamchatka still turned out to be the leader in the Far East in implementing the program for the overhaul of apartment buildings.

However, many long-standing financial problems remain unresolved in the region and periodically have a negative impact on its agenda. One of them is the level of energy tariffs, which are still financed from the budget. The issue of prices for fuels and lubricants periodically flares up, and last year the authorities again had to pay attention to it. So, the governor Vladimir Ilyukhin himself applied to the regional prosecutor's office with a request to check the validity of gasoline prices. The audit revealed violations committed by the Independent Oil and Gas Company (NOC), the owner of the Khabarovsk refinery. With regard to gasoline prices, the case was initiated by the regional department of the Federal Antimonopoly Service. However, there is no need to talk about any radical solution to the problem and lower prices. Unless the authorities are trying to restrain them by putting pressure on suppliers.



"Fish interest"

A separate issue on the regional agenda is the promotion of the interests of the fishing industry, one of the specializations of the region, with which many leading business players are associated. It is no coincidence that the regional authorities and Vladimir Ilyukhin directly take the most active position on the "fish" issues at the federal level, trying to influence the legislative process. In particular, Vladimir Ilyukhin advocates a change in the position of the federal legislation, which since 2010 has recognized coastal fishing as nationwide. To protect local players, he proposes prioritizing quotas for coastal regions, in connection with which he turned to the head of the Russian government, Dmitry Medvedev. Kamchatka also advocates the prohibition of drifter fishing, which caused enormous damage to this particular region (when the Japanese were engaged in it throughout the 20th century). In this she found support from Yuri Trutnev, and as a result, a bill was submitted to the State Duma. However, like all the other problems of Kamchatka, these also do not find quick solutions.

By the way, an acute conflict in the Kamchatka State Technological University, which is under the jurisdiction of the Federal Agency for Fishery, was also indirectly related to the fishing industry. The teaching staff of the university has elected a new rector - Yulia Morozova. In turn, Rosrybolovstvo did not agree with the decision of the university and proposed another rector. The collective opposed sharply and began pickets at the Federal Agency for Fishery. With the help of the regional authorities, it was possible to find a compromise figure - adviser to the governor Sergei Levkov. This conflict is, of course, temporary in nature, but once again testifies to social tension.

At the same time, the gubernatorial elections were held in Kamchatka without any problems. The elections were early, and Vladimir Ilyukhin received the Kremlin's go-ahead to hold them. The level of competition has decreased due to the fact that the well-known critic of the regional authorities, a representative of Fair Russia, Mikhail Puchkovsky, refused to participate in the elections. He chose not to turn to United Russia for help in overcoming the municipal filter, while the support of his fellow party members was not enough for this. After that, in the absence of a strong party opposition, only a low turnout could become an election problem. As a result, the Kamchatka elections against the Russian background became a vivid example of a combination of very high support for the governor (75,5%) with extremely low activity of the population (31,9%). The protest electorate was divided among themselves by the unpopular local leaders of the Communist Party of the Russian Federation (Mikhail Smagin, almost 10%) and the Liberal Democratic Party (Valery Kalashnikov, 8,1%). Following the elections, a member of the Federation Council from the executive branch Boris Nevzorov, a well-known and major figure of the local elite, remained in office.

In parallel with the elections, the regional authorities also carried out personnel changes in key municipalities. The issue of a new city manager in Petropavlovsk-Kamchatsky was being decided for a long time, when Elena Panchenko was forced to leave her post after scandals around the poor quality of snow removal in the city. The post was vacant for almost half a year - it was only in the second half of the year that the decision was made and approved to move to the regional capital to the post of city manager D. Zaitsev, who was in charge of the administration of the neighboring Elizovsky district. In the Elizovsky district, the new head of the administration was the former deputy of Dmitry Zaitsev, Roman Vasilevsky. Also, the head of the administration of the actual urban settlement of Elizovo was replaced, where the changes were also smooth (the position was taken by the former deputy head Dmitry Shipitsyn). Ultimately, new heads of administrations began to work in key municipalities, the results of which are still too early to judge.



Promotion of "point" projects - as a positive shift

Thus, the last year did not answer the question of Kamchatka's ability to move from a survival regime (heavily sponsored by the federal center) to a sustainable development regime. A positive shift was the promotion of a number of “point” projects by the region, the bulk of which were united in the Kamchatka ASEZ, as well as the receipt of state support by two of the largest gold mining projects in the region. However, the former acuteness of social problems in Kamchatka remains, and in this regard, the attention of both the center and the regional authorities should probably be drawn to the search for those growth points that can bring qualitatively different results and allow Kamchatka to occupy a certain promising niche in the Russian economy and, possibly in the Asia-Pacific region.
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