HOME Regions Kamchatka 04.02.2015

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Kamchatka Krai: results of the year

Exit from the shadow

Kamchatka rarely makes headlines in economic and political news. For some, it is steadily associated with volcanoes and geysers, for others - with endless problems of very expensive energy and housing and communal services, but it was never possible to say that this region is in the center of constant and priority attention. In the past year, this state of affairs began to change.

Pros of remoteness

In 2014, regional authorities began to demonstrate unprecedented activity in promoting their investment projects. For their part, the federal authorities showed enviable benevolence and provided great support to Kamchatka. Of course, this situation is largely due to preparations for the gubernatorial elections, which may be held ahead of schedule, already in 2015 (or on time - in 2016). But the matter is not only about the elections, since regional projects have long-term prospects, and the center, of course, will not stop them after the elections. Meanwhile, for the first time in many years, Kamchatka has optimistic prospects.

So far, of course, the region is more likely to count and hope than to implement any projects. During 2014, Kamchatka saw no rapid economic growth. In the industry, in January-August 2014, there was a slight decline. Agriculture was more likely to repeat the past performance. Evaluations of the effectiveness of the regional authorities for 2013 placed Kamchatka in 78th place in Russia. Moreover, the worst situation was with the dynamics of economic development (much better - with the dynamics of social development). Thus, a turning point in socio-economic development has not yet happened. But in promoting the region at the federal level, the shifts have acquired a qualitative character.

At this stage, Kamchatka is highly dependent on the federal center and has a weak financial base. In terms of income, it looks good - in its second group of Far Eastern regions (if we include the obvious leaders - Primorsky and Khabarovsk Territories, Yakutia and Sakhalin). Its budgetary revenues exceed those in the Amur and Magadan regions, not to mention Chukotka and the Jewish Autonomous Region. At the same time, the budget is replenished mainly through federal transfers: according to the level of its subsidies, Kamchatka is now the Far Eastern leader. In January-October 2014, its own revenues accounted for only 35,8% of all its budget revenues. Kamchatka looks like the clear leader of the Far Eastern Federal District in terms of the share of subsidies for equalizing budgetary provision in its budget: this share is as much as 57%. The lack of its own funds and the calculations of the Ministry of Finance, taking into account the remoteness and extreme conditions of the region, allow Kamchatka to claim large funds from the federal center (recall that in the process of creating the Kamchatka Territory, the former Koryak Autonomous Okrug, which also received large transfers, being one of the most remote regions of the country, along with Chukotka). At the same time, the significance of other transfers, on the contrary, is insignificant: subsidies amount to only 2,6%, subventions - 1,9%. In other words, the center helps the region to solve its basic financial problem, but does not provide equally large funds for projects and delegated powers.

Kamchatka's own economy is still too weak to provide the region with tax revenues. It is noteworthy that in terms of the share of income tax in the structure of its own revenues, Kamchatka is an outsider of the Far Eastern Federal District (only 11,4%, while the share of income tax is maximum - 56,65%). There are no large enterprises-taxpayers in the region, but at the same time small business is well developed. Interestingly, in terms of the share of taxes on total income, Kamchatka is ahead of other regions of the Far Eastern Federal District (this share is 8,65%). In terms of the structure of its own income, Kamchatka resembles Primorsky Krai, but in a more hypertrophied form.

Salaries are rising

At the same time, the trends in budgetary policy clearly indicate an improvement in the current situation. Thus, income from income tax showed an increase of as much as 45%, from tax on property of organizations - by 56,6%. As a result, own income increased by 12%. At the same time, the center does not refuse transfers to Kamchatka, although in this case its capabilities are most likely close to exhaustion. Thus, the center increased subsidies for equalizing budgetary provision last year by almost 10%, but at the same time subsidies decreased by a third (subventions remained unchanged). As a result, the growth of regional budget revenues amounted to a solid 8,4% in January-October last year.

Positive trends in the budgetary sphere allowed Kamchatka to form a fairly balanced budget. Over the past year, there was a surplus. The debt burden on the budget of Kamchatka remains relatively small (according to the results of 2013, it was at the level of 27,5%).

At the same time, in the expenditure side of the regional budget, a high proportion of expenditure on national issues is striking. Here, Kamchatka is also the leader of the Far Eastern Federal District (the share is 9,35%). Officials in Kamchatka receive high salaries, which are higher than the average for the region by 78%. According to this indicator, Kamchatka lags behind in the Far Eastern Federal District only from the Khabarovsk Territory. However, on the media, on the contrary, Kamchatka spends very little, and their share in spending is lower than in other regions of the Far Eastern Federal District (0,13%). The authorities of the Kamchatka Territory also spend a lot of money on the national economy (20,6%). Housing costs are 12,65%, which is higher than the average share in Russia, but below the average DFO.

A comparatively small share of social expenditures attracts attention. As a rule, it is slightly lower than in Russia and the Far Eastern Federal District: 24,7% goes to education, 12,4% goes to social policy, 11,65% goes to health care. Given the high index of budgetary expenditures, as a correction factor, it turns out that in terms of social expenditures, Kamchatka is ahead of only Chukotka in the DFO (if you calculate health expenditures per capita, expenditures on general education per student, and expenses on preschool education per preschool child) . However, Kamchatka perfectly fulfills the requirements for raising public sector wages. For example, already in 2013, the salary in health care was almost equal to the average for the region, and in this respect Kamchatka surpassed all other DFO regions. The level of wages in the field of education was also the highest in the DFO, although with a noticeable lag behind the average. The region is distinguished by a rather high level of security in the field of education by teachers and places in kindergartens (third positions in the DFO). As for health care, its availability of doctors and beds in hospitals is rather average.

In general, it can be said that the existing expenditure of the budget on the social sphere more or less corresponds to the needs. But, perhaps, more active intervention is needed in the housing and utilities sector, which is traditionally problematic in Kamchatka. For example, Kamchatka is characterized by the highest in the DFO's share of loss-making organizations of housing and communal services (more than 60%). In connection with the high cost of imported fuel, it is unrealistic to create efficient housing and communal services in the region. The share of dilapidated and emergency housing, however, according to the results of 2013, was not so great (5,4%).

Active policy

It should be borne in mind that Kamchatka noticeably stands out in the Far Eastern Federal District for its protest activity, concentrated mainly in the regional center. The reaction of the population and public organizations to problem situations can be very acute. In the city, protests were held against the rise in gasoline prices, the rise in prices for goods and services of housing and communal services, for the increase in wages in the social sphere, etc. Periodically resonant actions and statements were noted by the regional trade unions, the movement "People for Kamchatka!" At the city level, the Union of Individual Entrepreneurs declared itself, criticizing the municipal authorities. Therefore, the authorities of Kamchatka need to keep the situation in the social sphere under control if they do not want to face a protest movement, even if not a massive one.

At the same time, regional authorities are pursuing a fairly active policy aimed at financing their priority facilities. In particular, the program of social and economic development of the Koryaksky district, the most remote territory of the region is being implemented (it is planned to spend 2014 billion rubles for it in 18-38). Infrastructure facilities are being constructed (for example, the construction of runways in Yelizovo and Palana, bridges in the Ust-Kamchatsky region), social institutions (regional hospital), great attention is paid to tourism and sports.

Lack of investment remains an obvious problem for Kamchatka. Moreover, according to the data for the first half of 2014, investments in the region also fell by 15%. But one of the main achievements of the last year was the sharp activation of the investment policy of the regional authorities. For the first time, the region hosted the investment forum "Far East - 2014", supported by the Ministry for the Development of the Far East. The regional assembly adopted a bill providing tax incentives to mining companies when they implement new investment projects. The Kamchatka Territory Development Corporation, which has concluded a number of cooperation agreements, is looking for partners.

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The Kamchatka Territory is not at all spoiled by foreign investments. In the past year, attempts to attract them have also become more successful. For example, a pilot Russian-Japanese project is being implemented in the region for the construction of a wind power complex in the Ust-Kamchatka region (the regional authorities, the Russian company OAO RAO ES of the East, and the Japanese government organization NEDO participate in it). Contacts with India have intensified: Governor V. Ilyukhin held a meeting with the Consul General of this country, and Tata Power expressed interest in developing coal deposits. The issue of creating industrial parks was discussed together with the Turkish company Orteksan. Negotiations are underway with French business on the development of ski tourism in Kamchatka. There are no major breakthrough projects yet, but at least there are positive trends.

There will be a port city!

But, perhaps, the main breakthrough in Kamchatka is a cardinal improvement in relations with the federal authorities, which actually promises serious prospects for the region today. During the year, regional authorities regularly contacted their federal counterparts and hosted high-ranking guests. In October 2014, V.Ilyukhin met with V.Putin. The capital hosted the Days of Kamchatka in the Federation Council, an agreement was signed with the Moscow government. Directly in the region visited the Chairman of the Federation Council V.Matvienko, the Minister of Agriculture N.Fedorov and others. Of course, the regional authorities have repeatedly contacted Deputy Prime Minister Y. Trutnev and the leadership of the Ministry of Regional Development.

One of the visible results of cooperation between the region and the center was the inclusion of the Kamchatka ASEZ among the highest priorities. This project primarily involves the development of the port infrastructure of Petropavlovsk-Kamchatsky, it is closely linked to the plans of the federal authorities for the development of the Arctic and the Northern Sea Route: Petropavlovsk-Kamchatsky is intended to become the most important transport hub, closing the NSR from the east. During the discussion of the projects, relations were strengthened between the government of the Kamchatka Territory and the Federal Agency for Sea and River Transport, as well as FSUE "Rosmorport". Their agreements presuppose the modernization of the Petropavlovsk-Kamchatsky commercial sea port, which until now had rather local significance. It is planned to build a container terminal in the port, reconstruct berths, and create an infrastructure for cruise shipping.

Along with this, the Kamchatka authorities are promoting the Paratunka tourist and recreational project. Most likely, they will be able to finally agree with the federal authorities on the creation of a training base in Kamchatka for Russian athletes in preparation for the 2018 Winter Olympics to be held in South Korea. In addition, Kamchatka began to be perceived as a strategically important region, solving the problem of providing the country with fish products in the context of a sharp rise in import prices. In this regard, it is still impossible to speak of any breakthrough, although there are certainly growth points (for example, Sberbank provided a loan for the modernization of the salmon fish factory Vostochny Bereg LLC). In addition, against this background, there was a clash of interests between crab hunters and Rosrybolovstvo, which refuses to increase quotas for catching crab (the captains of the ships, quite in the spirit of civil activity typical for Kamchatka, even wrote a letter to the head of state on this issue).

Gold is a priority

The great success of Kamchatka, along with the successful promotion of its TOP, was the selection of priority investment projects designed for state support. These projects meet the interests of both regional authorities and big business, which is also engaged in successful lobbying. It was Kamchatka that gave the most projects, namely, three, which have successfully passed the preliminary selection (and one more project was in the list of those for which it was proposed to eliminate comments). The implementation of all these projects is designed to transform Kamchatka into a larger gold mining region, and among the FIGs, Renova's interests are especially noticeable. It is the Renova structures that are implementing the project of the Amethystovy GOK, which fell into the first group, and the Baranyevskoye field, which fell into the second group. Another project that has earned government support is the Ozernovskoye gold deposit, which is being managed by the Siberian Mining and Metallurgical Alliance (SIGMA). Moreover, Kamchatka was able to successfully lobby its agro-industrial project, which is important for self-sufficiency in meat products. This is a project for the development of pig breeding, which is being implemented by CJSC Agrotek Holding.

No other region of the DFO managed to get such a high level of support from the Minvostokrazvitiya at the first stage of selection of investment projects. If these projects are implemented, Kamchatka will be able to take the next step in the development of its mining industry, as well as improve the food situation (for a region that is isolated in transport, the issues of providing its own products are of particular importance).

As already mentioned, if investment projects are implemented in the region, the influence of such a FIG as Renova will continue to grow, which has been working here for a long time, but was in no hurry with new projects until they had government support. Sigma, for which the Ozernovskoye field is the main project, and which re-registered in Kamchatka last year, will also become an important player.

Meanwhile, the regional fuel and energy complex, which is one of the traditional problem areas, remains dependent on large federal players. The situation with Gazprom is simpler and more positive, which some time ago started gas production and provides the region with its own raw materials, which is fundamentally important for Kamchatka, which previously depended on expensive supplies of coal and fuel oil. Last year, the management of Gazprom Geologorazvedka discussed gas exploration issues with Governor V. Ilyukhin and signed a cooperation agreement with the head of the Sobolevsky District V. Kurkin.

At the same time, the problematic situation has worsened on the issue of providing Kamchatka with fuel and lubricants. The transfer of Kamchatnefteprodukt into the hands of the Alliance group, which controls the oil refinery in Khabarovsk, was accompanied by an increase in fuel prices, which caused social protests and dissatisfaction with the regional authorities. V. Ilyukhin held negotiations with M. Bazhaev on this matter, in general, the regional authorities managed to find support in the federal center and, in particular, in the antimonopoly service. Nevertheless, the emergence of this situation makes the authorities think about diversifying fuel supplies. In this regard, they began to actively contact Rosneft, which is another key producer of oil products in the Far Eastern Federal District. In particular, cooperation between Kamchatka and Rosneft was discussed at the negotiations between V. Ilyukhin and the vice-president of the company V. Ishaev. It is planned that Rosneft will create its own oil depot in the region, which, in particular, will be used to supply the Northern Sea Route.

Success in promoting regional projects allows the Kamchatka authorities to count on a quiet passage through direct gubernatorial elections. In the region there have not been major election campaigns for a long time, and the governor in the meantime was actively engaged in strengthening the power vertical and personnel reshuffles. One of the most important decisions was the appointment of the former Minister of Economic Development, Entrepreneurship and Trade of the region E. Panchenko to the post of city manager of Petropavlovsk-Kamchatsky. This allows V.Ilyukhin directly to influence the work of the city administration. In the meantime, direct elections to the municipal chapters were finally abolished in the region, but this was no big news, as the city manager model spread widely in Kamchatka much earlier. Directly in the gubernatorial team was replaced by a number of high-ranking officials.

Thus, 2014 year in Kamchatka marked the beginning of a new stage in the development of the region, which promises him considerable prospects. The region was able to enlist the support of the federal authorities, who see Kamchatka as one of the main growth points in the Far Eastern Federal District. The variety of projects, which we mentioned above, is impressive. They are not so lucrative to turn Kamchatka from a recipient into a donor to the federal budget. But in any case, the region has the opportunity to play the role of one of the development centers of the Russian Far East, and not its far periphery, and this can already be considered a breakthrough.

Text: Rostislav Turovsky, Doctor of Political Sciences, Professor of the Higher School of Economics