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Primorye: Towards a New Strategy

Lev Kolomits about what plans the authorities of the region have come true and have not come true and what to do next

Primorye: Towards a New Strategy
7 November, the results of a tender for developing a strategy for socio-economic development of the Primorsky Territory up to 2030 became known, the NIU "Higher School of Economics" became the winner. The previous strategy, which described the landmarks of the development of the region until 2025, was adopted back in 2008. We can say that now is a good time for strategizing, defining new landmarks and priorities for the development of the region.
A surface comparison of the previous strategy and the current state of the regional economy shows that, according to the results of the almost 10-year period, the guidelines and reality did not coincide. The target scenario of the “Strategy-2008” was the “new industrialization” of Primorye, which involved the construction of a whole range of new processing industries integrated into the supply chains of raw materials in the Asia-Pacific Region: oil and gas processing, woodworking and fish processing. It was supposed that due to the preparation for the APEC-2012 summit, a powerful building complex would be formed in the region and large investors would be attracted to the shipbuilding industry, which would make it possible to form a shipbuilding cluster. Another scenario - inertial - suggested “the development of foreign trade of the Russian Federation and APR countries: strengthening the position of Russian export commodities on the APR market and implementing a number of major projects for developing and developing the infrastructure for transporting raw materials, increasing imports from Asia-Pacific countries”.

Today in the region one can observe the implementation of separate projects from both scenarios. Oil refining at the end of the ESPO "pipe" should appear after the creation of the Eastern Petrochemical Complex, shipbuilding - as a result of the construction of the Zvezda shipyard. Gazprom’s projects for the construction of a plant producing LNG and gas chemical production have been curtailed, but the National Chemical Group is building a fertilizer plant near Nakhodka. The increase in cargo traffic from / to the Asia-Pacific countries is obvious: the Vostochny port is expanding, the Kozmino oil port is functioning, a new port in Zarubino and a coal terminal have been announced in b. Suhodol. The planned access roads to Nakhodka — the second railway route and the bypass road — have not been built. There was no wood and fish processing around the port areas. “World-class transport and logistics operators” have not yet been marked in the region. The topic of transit of goods from northeastern China through the ports of Primorye Territory still remains at the level of discussion of plans for the development of transport corridors "Primorye-1" and "Primorye-2". Plans for the integrated development of the transport hubs of Nakhodka and Vladivostok are not implemented, nor are the Napoleonic plans for the development of the regional road network, although some of these roads are or are being built at present.

Of the energy development projects, only the transfer of the Vladivostok CHPP-2 to gas has been implemented. The capacities of power plant engineering, metallurgy, and the production of construction equipment, mentioned in the “Strategy-2008”, have clearly passed into the category of utopian ideas. In addition, the fisheries cluster also remained only on paper. As part of the tourist complex, a gambling zone was built (although it did not reach its design capacity), the remaining tasks of the section - the construction of hotels, the tourist and recreation zone, and so on - were not fulfilled. The “cluster of production of innovative technologies” exists mainly in the plans of the institutes of the Far Eastern Branch of the Russian Academy of Sciences.

The growth of the agricultural sector in Primorye is visible to the naked eye, it is possible to consider favorable factors for it as state support of agricultural producers, import substitution in the sphere of food products and prospects for entering the Chinese market. However, while Russian manufacturers do not allow Chinese to themselves, preferring to master it independently. 

The creation of the Vladivostok agglomeration from a formal point of view has been carried out; so far, it has only resulted in difficulties in obtaining land for construction on the territory of the agglomeration (although the strategy should have been exactly the opposite). But the section "Development of the agglomeration transport infrastructure" can rightfully boast three Vladivostok bridges and a bypass road.

"Development of the labor market" presupposed a beneficial impact on him of the newly created federal university, which was to become a point of attraction to the region of an "educated and active population", including foreigners. At the present stage of this project, we have a university where half the students are enrolled than at 4 universities before their unification, and which from foreigners attracts mostly poor people from Uzbekistan, China and Colombia. The development of the labor market on the background of the continuing outflow of population from the province is handled by a special agency under the Ministry of Far Eastern Development.

The document also lists a number of important points, such as “Improving the management system” and “Removing barriers at the federal level”. Each of the sections requires a thorough review, for which one article is clearly not enough. A full analysis of the results of the implementation of the Strategy-2008 is not yet included in our plans, but even their cursory review allows us to draw several conclusions. 

First, most of the projects listed in it were not implemented, which can be explained by various factors - for example, the overestimated expectations of developers from the state against the background of economic growth in the late 2000s. The incompleteness and partial implementation of the entire planned set of measures leads to the fact that the goals of the strategy cannot be considered achieved. Second conclusion: all implemented projects (mainly infrastructure) are either part of the nationwide trend of "turning to the East", and implemented at the expense of the federal budget, or are part of the development trajectories of large companies and state corporations (NK Rosneft, Summa Group ), for which the Primorsky Territory is one, far from the main of the many "territories of presence." In principle, the next statement of the decisive role of external actors in the development of the region is not a discovery, but leads to the question of the subjectivity of strategizing.

The beginning of the work on the new strategy by the will of the case coincided with the appearance of a new governor at the head of the province. In this connection, it is appropriate to assume what exactly should be taken into account in the new strategy, and what steps should be added to the efforts of the federal center for the development of the Far East. "Development institutions" of the Far East - Minvostokrazvitiya, "Corporation for the Development of the Far East" and others - provide infrastructure development of TORs and attract investors in them. Selection of investors (more precisely, project holders) from local actors is not dependent, but you can find and bring the project yourself in a particular TOP - provided that there is an idea of ​​what investors need the edge. 

Otherwise, the “territory of advanced development” is transformed into a zone whose inhabitants are in no way connected with the environment, and the degree of beneficial influence of the resident on the area beyond the TOR’s fence depends solely on his desire: he can bring migrant workers instead of hiring Aboriginal people, he is not obliged to pay taxes local budget, and free to use no local resources other than geography. If there is still an understanding of what investors are needed for the development of the local economy, the government has the opportunity to build a dialogue with the investor on its inclusion in the economy of the territory (ideally, this view should underlie the TOP project).

It seems that priority areas, firstly, should have prerequisites in the form of resources required for their deployment, and secondly, they must have clear sales markets. From this point of view, it is possible to evaluate the tasks of economic development, which have a chance to get into the new strategy.

Transfer of the first redistribution of raw materials (forest, fish, minerals, except hydrocarbons) to the Russian territory. The problem of fish processing development remains relevant, its solution is connected not only with the construction of coastal infrastructure (refrigerators, workshops, etc.), but also with the change in the financial and legal conditions in which it is more profitable for the Chinese to fish and sell it at sea right now than take ashore and tinker with the overload, storage and manufacture of fillets. You also need to deal with potential markets for seafood. As for the forest, the processing for the developed (non-Chinese) markets is represented by hardwood (oak and ash), whose reserves in the region are small. The bulk of the exploited forest fund is spruce, the use of which within the region is limited by low demand, the expansion of the domestic market is possible, for example, by launching a program of low-rise wooden housing construction. It is unlikely that it will be possible to influence the development of the mining industry in the direction of deep processing of minerals in the territory of the region, since all coastal enterprises are built into Russian holding companies as “mining workshops”, and the management of these holdings has no visible desire to somehow change the situation.

The development of construction. In this area there are both resources and demand. So far, this promising industry segment, which has a good multiplicative effect, faces difficulties in obtaining building land, as well as the lack of prepared sites equipped with utility networks. At the same time, the cost of housing in Vladivostok is the third in the country (after Moscow and St. Petersburg), and mass building in the south of the region has not been conducted for many decades.

Power engineering. In addition to modernizing existing power capacities and grid facilities, which certainly require attention, it is advisable to launch a power supply program for enclave settlements that have no connection with main power lines. While these villages are provided with diesel generators, which can be supplemented (or replaced) by windmills in combination with solar panels - good, the coastal climate with its insolation of 300 days a year and constant winds on the coast provides all conditions for this. Necessary technological solutions are certainly on the market.

Transport and logistics - the seaside “our everything”. There is no doubt that this sector of the economy in Primorye will remain the leading one; it was said above about promising projects. The other day, the Chinese proposed to the seaside administration another mega-project - a high-speed highway from Harbin to Vladivostok. A few years ago with a similar proposal (VSM Changchun - Vladivostok, including the bridge across the Amur Bay). The reason is transparent: Primorye for the northeastern provinces of the People's Republic of China is an annoying barrier to the sea, which they are trying to overcome by extending their transport infrastructure along the adjacent territory. It is easy to see that in this way the south of Primorye is included in the transport and transit system of northeastern China, which in itself gives the region great opportunities, and the conditions of this inclusion should be discussed. For the time being, in order to organize full transit from Europe to Asia and their northern China to southern China, there is not enough infrastructure - ports, roads, logistics sites, requires an increase in the carrying capacity of the Trans-Siberian Railway.

Shipbuilding and ship repair. The creation of the TOP "Big Stone" is a logical step, which should contribute to the formation around the new plant of a network of enterprises - suppliers of ship components. At the same time, the success of the "Star" entirely depends on the state of "Rosneft", which in this project is forced not to do business: first build a shipyard, and then build ships on it. With ship repair is more difficult: civil ship owners prefer Korea and China, where repair is faster and cheaper. Is it possible in the existing economic conditions to build in Primorye a competitive shiprepair cluster - a matter requiring separate consideration.

Finally, it seems reasonable to increase the positioning of Vladivostok as a platform for international communication in the APR. Obviously, the already invested funds in the infrastructure of congress and exhibition activities and tourism are not enough to build it, but to attract new investments, a new business plan is needed that would answer the question “What should Vladivostok become in the next 10 years?”. Today, different answers to it are discussed in the course of discussions about the city’s general plan, some statements about this are in the recently prepared Vladivostok development strategy and in the development program of Fr. Russian; Some tips we get from Japanese and Korean urban development experts. All these hypotheses and versions should be reduced to a general non-contradictory concept of the development of the Vladivostok agglomeration, which, most likely, will be the main driver of growth of the coastal economy.
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