Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
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Moscow

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Angara in 2016: political struggle and economic prospects

Rostislav Turovsky on the development of the eastern regions of Russia

The Irkutsk region in 2016 was perhaps one of the most interesting regions of Russia. Much attention in the region and in the center was attracted by the attempts of the elected governor-communist S. Levchenko in 2015 to strengthen his positions and offer voters an attractive model of regional development. At the same time, regional authorities, while in difficult relations with other groups of the elite, often found themselves at the center of scandals, partly generated by themselves, partly having a man-made character. Meanwhile, various FIGs of federal origin sought to strengthen their influence in the region in conditions of political turbulence. The socioeconomic situation was controversial: the good economic and financial results of the region were not accompanied by an increase in the level and quality of life, which led to the spread of depressed moods in society.

Angara in 2016: political struggle and economic prospects
Photo: shutterstock.com

Rostislav Turovsky

Doctor of Political Sciences, Professor of HSE, Scientific Editor East Russia
Good average

From the standpoint of "standard" economic indicators, the Irkutsk region finished last year very well. The region's industry showed an increase of 5,7%, and all of its major industries (aluminum industry, forestry complex, etc.) felt good. A continued prospect for the future continued to be provided by the gradual development of the oil and gas industry, to which the Irkutsk region holds special hopes. Along with the industry grew agriculture (at 5,9%), which favorably distinguished the Irkutsk region from the regions of the Far East, with more or less pronounced agrarian specialization. The launch of new large projects, such as the construction of the "Siberia Power" gas pipeline, led to a rapid increase in the amount of construction work (by 24,3%), which is rare for Russian regions today. The growth of investments (according to data for January-September 2016) can not be called stormy, but positive trends were also evident (an increase of 4,1%).

On the other hand, as already mentioned, economic growth has in no way affected the social well-being of the region's inhabitants. Obviously, it was rather point-like and did not affect the main part of the vast territory. On the contrary, real money incomes of the population experienced a sensitive decline (their index, according to data for January-November 2016, amounted to only 90,3%). Similarly, there was a decline in retail trade turnover (index - 94,3%). Not surprisingly, in an unstable social environment, citizens did not show activity in the elections without giving special support to either the federal "party of power" or the "ruling" party in the KPRF region.

The regional authorities, trying to demonstrate to voters the social orientation of their policies, used a large part of the budget expenditures for social needs. In itself, the consolidated budget of the Irkutsk region has grown significantly, and its dynamics turned out to be among the best in the country. Budget revenues increased by 18,6% and amounted to a solid 153,1 billion rubles. At the same time, their own tax and non-tax revenues of the Irkutsk region, which reached 131,4 billion rubles (growth by 23,1%), demonstrated excellent growth. As in many other regions financially successful, such a strong increase in tax revenues was provided by the income tax (an increase of almost a half times - by 48,5%). The growth of revenues from other key taxes for the region - income tax (by 10,5%) and corporate property tax (by 10,2%) was also good. At the end of the year, the share of income tax in the budget (27,7%) closely approached the share of income tax (29,1%), which is typical for successful industrial regions, and the share of corporate property tax was 8,6%.

For its part, the federal center did not at all demonstrate a desire to "punish" the Irkutsk region for electing a communist governor. Relations developed very difficult, but the Irkutsk region, for example, was able to dramatically increase the volume of subsidies to equalize the budgetary provision (by 79,5%). Significantly increased and income through subsidies - by 10,3%. Subventions remained at the same level. However, in general, federal transfers in the region fell (their index was 93,2%), but this happened only due to a sharp reduction in "other" subsidies.

Carrying out their financial policy, the authorities of the Irkutsk region were able to balance the budget, ensuring almost full compliance of costs and revenues (expenses grew by 9,4%). To improve the budgetary situation, the regional government actively worked to reduce the debt, and the state debt of the region amounted to only 78,3% in comparison with the result of 2015 (11,9 billion rubles). True, like many regions, the Irkutsk region increased its arrears to federal authorities, but at the same time successfully repaid bank loans. It is interesting that the municipalities, on the contrary, only increased the indebtedness, which grew by 47% over the year (it amounted to 4,4 billion rubles).

In their expenditure policy, the authorities of the Irkutsk region sought to demonstrate concern for the population of the region and the social orientation of their policies. Almost all socially significant positions showed an increase in expenses. Particular attention was paid to the educational sphere, the costs of which were 9,8% more than at the end of 2015, and accounted for 31,7% of all expenses. 5,6% more funds were allocated for healthcare, for 4,9% for social policy. At the same time, a substantial increase in expenses occurred in the housing and utilities sector (by 13,3%) and, even more, by road facilities (by 32,6%). Only agriculture in the Irkutsk region was not a priority of budget policy: its share in expenditures was only 2%, and expenditure volumes fell by 12,6%. However, we emphasize once again that with all the efforts of the regional government, it was impossible to retain cash incomes of the population, and for reasons that were hardly completely dependent on the authorities, the residents of the Irkutsk region began to earn less.

A very relevant issue for the Irkutsk region was its inclusion in preferential financial and economic regimes, gradually extended to the Baikal region. But from this point of view, the center paid much more attention to the most problematic territories - Trans-Baikal and Buryatia. Probably, not so much political circumstances affected as much as the really sharper need of two backward territories in federal support. Irkutsk region, which has a reputation as a region of a complex but still rich, is more difficult to obtain federal assistance for objective reasons.

However, the Irkutsk region is able to take advantage of the policy of the federal center, aimed at supporting single-industry towns. Therefore, the practice of creating territories for advanced development in monocities began to take shape here, although not only here. One of the first to arise was a TOP in Usolye-Sibirskoye, to promote the interests of which the former governor, S, Eroshchenko started. Here, gradually, but very slowly, a pool of TOR residents is being formed. In particular, within the framework of the TOP, a gas chemical complex and an enterprise for the production of granulated iron should be made. TOR is mainly interested in local players. Calculations were made for the arrival of the Chinese investments in Usolye-Siberian, but so far they have not materialized.

Mono-against SEZ

Given the relatively successful experience of launching the first TOR in a monotown, the Irkutsk Region counts on the use of this regime in other single-industry towns. In particular, Sayansk is moving in this role, although it has always been considered a prosperous city. But the problems with supplying the raw materials of the Sayanskkhimplast plant, which resulted in the conflict between the Renova Group, which owns the enterprise, and Rosneft, made it necessary to talk about Sayansk as a troubled city. The potential of Sayansk is highly associated with gas chemistry, but here everything is not so unambiguous. This requires the consent of Gazprom and the connection of Sayansk with a gas pipeline with the Kovykta field. Gazprom has not yet made this decision and relies more on creating a gas processing and gas chemical complex in the Amur Region, which is already tied to the work of the TOP. It is not ruled out that the further development of Sayansk will remain at the level of the wishes of the regional elites.

Having created the first TOP in a monocity, the Irkutsk region simultaneously managed to "survive" the process of eliminating inefficient special economic zones. Despite loud criticism of the work of tourist-recreational SEZ in the Baikal region (in the Irkutsk region and Buryatia), the SEZ "Gate of Baikal" managed to resist. His role in this, of course, was played by lobbying activity of the FIG of O. Deripaska. As in many other cases, the federal government transferred powers to manage the SEZ to regional authorities, retaining the SEZ, but increasing the responsibility of the regional government. And at the same time the territory of the SEZ still shrank: it was based on the complex "Sobolinaya Mountain" in the troubled monocity of Baikalsk, and thus the SEZ in the region is also called upon to help the suffering monotown. But the territory of "Big Goloustnoe" in the Irkutsk region from the SEZ federal decision is excluded.

In the end, the Baikal SEZ becomes a joint venture of the regional authorities and O. Deripaska, with whom, incidentally, the authorities are in complicated relationships. The main investor of the "Sable Mountain", where the rate is placed on the ski resort, is the company "Grand Baikal" controlled by O. Deripaska. The prospects for cooperation with Chinese business (with which the memorandum was signed) are developing, which increases the chances for the project to be realized.

Although it seems that the Irkutsk region has long been divided between capital FIGs, the process of strengthening the influence of some of them, as well as the arrival of new players, nevertheless continued, becoming an important characteristic of last year. A special role is played by the group of O. Deripaska, and the matter is far from being in the SEZ. The companies of O. Deripaska have strengthened their positions in the electric power complex, which is closely interlinked with the aluminum industry controlled by it. The company Deripaska Eurosibenergo bought the remaining 40,3% stake in Irkutskenergo from the state corporation Inter RAO UES, concentrating in its hands full control over the key objects of the Irkutsk electric power industry. Moreover, RusHydro bought the dams of the Angarsk cascade of hydroelectric power stations themselves, which, in turn, were transferred to private ownership.

Perhaps the issue of construction in the Irkutsk region of a new - the third aluminum plant in Taishet - is beginning to shift from the dead end. At least, Rusal and RusHydro negotiated on this issue. But it is more correct and more profitable for these players to bring the complex to Boguchany in the Krasnoyarsk Territory to the designed capacity, and it is hardly to be hoped that the issue of the Taishet aluminum plant will receive a prompt decision.

Confidently promoting its economic interests in the Irkutsk region, O. Deripaska's group, however, demonstrated a sharp aversion to the expansion of the Novaport company by R.Trotsenko. Throughout the year it was very difficult to decide (and so to the end and did not dare) the issue of choosing an investor for the Irkutsk airport. Regional authorities do not hide that their choice was made in favor of R.Trotsenko. But their actions constantly encountered resistance from state bodies (for example, the Federal Antimonopoly Service) and Novaport's industry competitors (including Basel). Oblast authorities clearly tried to avoid competitive competitive procedures in relation to the airport, which caused discontent. In the end, they decided to establish a joint management company with Novaport, which will build a new terminal and reconstruct the old one. This decision "reads" and further transfer of shares of the airport, which is still in the regional property, but authorities are cautious about denying the intention to privatize the airport. Basel, which owns an airport in Krasnoyarsk and is unlikely to have the prospect of getting an airport in Irkutsk, still showed dissatisfaction with the arrival of a strong competitor in the region, which is Novaport.

In general, the topic of aviation and its problems took a prominent place in the regional agenda. For example, tension has grown in relations between the regional authorities and the local airline Angara, which is part of the Eastland Group, created in the past by former Governor S. Eroschenko. This airline operating flights to the northern regions of the Irkutsk region, faced with the problem of regional subsidies for its transportation. The likelihood that the region will rely on its competitors in the face of "IrAero" has grown. At the same time, S.Levchenko demonstrated intentions to develop a network of local airports and raise funds in them, which, of course, is important for the organization of domestic traffic in the region. It is possible that the regional authorities will be able to attract Novport funds for this. In the case of Ust-Ilimsk, negotiations were held on investments in the local airport by the Ilim Group.



Another potentially powerful player in the region is Rostekh, given that the head of the company S. Chemezov is a native of the Irkutsk region. There are many assumptions about whether Rostekh will actively engage in the Irkutsk region, and how its relations with the governor will develop (given that at the election of 2015, S.Eroschenko received support from Rostekh). But one way or another, one process in which Rostech is involved is developing: this company, in an alliance with Polyus, received, as expected, a license for the famous gold deposit Sukhoi Log. Leader in this alliance is "Polyus", and also expected to enter the project of the Chinese private group Fosun. But "Rostekh" plays an important role. The very development of the field, which is expected from the middle of the 1990-ies, can become a major breakthrough for the gold mining industry not only in the Irkutsk region, but throughout the country. While it would be more correct to adhere to cautious forecasts, because, like any mega-project, it will be very sensitive to the situation on the world market, and in the worst case it can be frozen.

The fuel and energy complex continues to be a breakthrough direction for the Irkutsk economy, where there is a gradual movement in both the gas and oil sectors. In the latter case, the continuing growth of the Irkutsk Oil Company (INC), a local player who managed to become one of the most successful and influential "small" oil companies in the country, attracts attention. INC is engaged in work at the Yaraktinskoye and Ichhedinskoye fields, and is also expanding into neighboring Yakutia. The company is mainly focused on export, and in this respect it is quite successful, delivering via the ESPO pipe, for access to which, we note, there is a difficult struggle.

A more complex, but potentially even more promising, situation is related to the gas industry. The upcoming launch of the Kovykta field and the construction of the "Siberia Power" gas pipeline make the issue of what will be the gain for the region become more urgent. During the year, it was repeatedly discussed (including at the talks of the regional leadership with Gazprom), but the issue of creating a gas chemical production in the Irkutsk region and gasification of the region was not found. Therefore, by the end of the year it is still too early to conclude whether pipelines will be built from Kovykta to Sayansk and Irkutsk, and also to Zhigalovo. Without this, the effect of the gas industry for the region itself will not be so powerful.

Simultaneously, a certain competition for positions in the gas industry between Gazprom and Rosneft began to appear on the territory of the Irkutsk region. An agreement has been reached between Rosneft and the Chinese company Beijing Gas Group, which supplies gas to Beijing, which involves selling to the Chinese an 20% stake in Verkhnechonskneftegaz, which is developing the Verkhnechonskoye field in the Irkutsk region. Oil production is being carried out at this field, but Rosneft also expects to extract and use the gas component. However, this brings up the issue of the route of gas supplies to China, since the Siberia Power pipeline is clearly not intended for "outside" players. In any case, this is just a project, and one can expect that its implementation will face difficulties.

In general, an important and important trend for the Irkutsk region is the strengthening of its ties with China. As we have already noted, Chinese capital can come to the gold mining industry and the oil and gas sector. In addition, last year there was a sharp increase in the number of tourists from China who visited the Irkutsk region. Therefore, although the region does not border on China and is much farther away from it than the Far East, the prospects for cooperation related to the resources of the Irkutsk region are quite favorable.

For their part, the regional authorities are trying to pay attention to working with investors and improving the business climate in the region, where the "giants" of Russian business traditionally play the main role, while small and medium-sized businesses are relatively poorly developed. In particular, the law on industrial policy was adopted in the region and the Foundation for the Development of Industry is going to be created.

Poisoning elements

However, far from all major projects there is a favorable prospect. In particular, there is no way to "attach" the Nepa deposit of potash salts, the tender for which was once again canceled in the absence of strategic investors. In Russia, even in the main region where potash fertilizers are produced, the implementation of new projects is constantly postponed by the Perm Krai. Therefore, it is generally difficult to predict whether the matter will reach the development of reserves in the Irkutsk region. The ambitious project of the Bratsk Metallurgical Plant, which was proposed under S.Eroschenko, also hovered. One gets the impression that its implementation will be canceled altogether, since the project does not have any major interested investor.

The socio-political situation in the region remained difficult, and a negative background constantly arose in the information field around the Irkutsk Region. For example, a story with a massive poisoning of "hawthorn", in connection with which not only in the regional, but also in the federal agenda, was the topic of the use of various alcoholic surrogates by the Russian population. This story led to the dismissal of a number of officials and the investigation of the incident, which attracted attention not only in the region, but also outside it.

Another problem plot for the Irkutsk region remained ecology, and in many different manifestations. The themes of protecting Lake Baikal, re-profiling the now closed Baikal pulp and paper mill, using forest resources (forest fires, a sick question of the so-called "black lumberjacks") are important here. The actions of the regional authorities took into account all these problems, and the governor sought to keep the situation under control. It is no coincidence that in the structure of the regional government the previous forestry agency was raised to the Ministry of Forestry. However, influential federal figures, such as Minister of Natural Resources S.Donskoy, criticized the situation in the region's forestry complex. A new State Duma deputy from the region, N.Nikolaev, is actively working on this agenda, which can hardly be called a supporter of S.Levchenko.

The question of the political "survival" of S. Levchenko remains one of the interesting intrigues of Russian regional policy. On the one hand, the Kremlin demonstrates its readiness for normal business interaction with the new Irkutsk governor, as evidenced by his meeting with Vladimir Putin. On the other hand, security forces continue to investigate violations in the construction business, which is the son of Governor A. Levchenko. Ambiguous assessments met under these conditions and the arrival of A. Levchenko in the position of a deputy of the regional legislative assembly from the Communist Party.

It is difficult for S.Levchenko to form his team: the regional government continued to change, some of which were caused by scandals. In particular, against the backdrop of the scandal, the Minister of Economic Development O.Teterina left her post. Not having worked for a year, the Minister of Housing Policy, Energy and Transport A.Kapitonov, the former head of the Angara district (the governor himself comes from the provincial government), left the regional government. Has been replaced by the Minister of Nature. One of the most experienced regional politicians, V.Ignatenko, who was known for his work as head of the election commission, could not resist in the regional government. His place was taken by another experienced official V. Dorofeev, elevated to the post of first vice-premier and having experience with previous governors D. Mezentsev and S. Eroshchenko. In the economic block of the regional government, the team was strengthened by the team of one of the few political allies S. Levchenko - the former mayor of Irkutsk V.Konlrashov. The representative of this team A.Logashov became the curator of the economy in the status of vice-premier.

Relations between S.Levchenko and the heads of a number of large municipalities acquire an acute character. An independent policy is pursued by the head of Irkutsk D. Berdnikov, who is gradually becoming an influential political figure. S.Levchenko, in the meantime, openly conflicts with the head of Bratsk, S.Serebrennikov, one of the most influential figures in the corps of the municipal elite. In particular, the mayor of Bratsk was accused of disrupting the timing of resettlement from dilapidated and emergency housing, and this issue is of great political importance in modern Russia. The public demarche of some mayors who did not agree with the agenda of the meeting of the Association of municipalities, proposed by the governor, received a wide response. The regional authorities are trying to maneuver and search for more reliable supporters among the municipalities, especially the heads of subsidized territories.

The situation at the municipal level has a traditionally dynamic character in the Irkutsk region in connection with the competitive elections of local chapters and their frequent replacement. During the year, too, several important campaigns took place in the cities and districts of the region. At the same time, the Communists, for example, succeeded in electing their candidates in the Kirensk and Taishet districts.

The Duma elections have clearly shown the fragile balance of forces that is developing in the region. The Communist Party did not, and could not become a full-fledged "party of power." Voting for her remained significant (24% of votes and the third result for the country), but there was no positive dynamics in supporting the party after the coming to power of S. Levchenko. According to the party list headed by S. Levchenko, the CPRF decided not to hold local politicians, but its federal functionary A. Ponomarev. However, the success of the Communist Party was the victory of its candidate M. Shapova in one of the districts over the nominee of "United Russia" O. Kankov. At the same time, in the remaining three districts, the elections were won by representatives of United Russia S.Ten, A.Chernyshev and A.Krasnoshtanov (of whom the latter, however, is in good relations with the governor). According to the list, "United Russia" confidently bypassed the Communists, gaining 39,8% of the votes (the LDPR in connection with the apparent opposition of "United Russia" and the Communist Party won not so many votes as in other regions of Siberia and the Far East - 17%). The role of the "troublemaker" began to be played in the region by the prominent Moscow activist of the ONF, N.Nikolaev, elected on the list of "United Russia", who also headed the Duma committee on natural resources, property and land relations. A significant part of voters meanwhile does not go to the polls, confirming the reputation of the Irkutsk region as one of the most "passive" regions of the country (total 34,6%, the third from the end turnout by regions of Russia). In general, by the end of the year, a feeling began to develop that the relationship between the governor and the "United Russia" elites began to assume a more even character, but full-fledged constructive cooperation is still unlikely to be possible.

Thus, a sharp change of government increased the level of political turbulence in the Irkutsk region, but did not abolish the gradual advancement of major economic projects. However, neither these projects nor the stable position of the basic branches of the economy of the region led to an increase in the living standards of Irkutsk residents. Moreover, not always these projects have a clear perspective, and not always an area whose head has very limited influence, it is possible to successfully use its lobbying resource to create a positive effect for the region and its inhabitants