This text is translated into Russian by google automatic human level neural machine.
EastRussia is not responsible for any mistakes in the translated text. Sorry for the inconvinience.
Please refer to the text in Russian as a source.

"Development programs do not replace statistics on the region"

"Development programs do not replace statistics on the region"

Anton Tabah

Candidate of economic sciences, senior economist of the Institute of Energy and Finance, associate professor of the Higher School of Economics

Anton Tabakh, PhD in Economics, senior economist at the Institute of Energy and Finance, associate professor of the Higher School of Economics:

- In recent years, at the federal level, there has been a certain consensus in the approach to the advanced development of territories. Creation of special zones, preventive construction of industrial and transport infrastructure, active (and maximum public) invitation of investors. The basis of this policy is the experience of the "Kaluga miracle" (and to a lesser extent the history of the development of industrial clusters in the Samara region and near St. Petersburg). Industrial parks and export priority development areas are becoming the backbone of the “new industrialization”. The construction of a kind of "investment vertical" also provides for the separation of regional authorities from the management of these zones and the formation of a uniform policy with industrial production with the participation of foreign companies as the main result of the development policy.

However, methods that have shown good results in densely populated areas near the borders of the country or the largest megacities are not always suitable for direct borrowing by the regions of the Far East. Sparse population, high transport costs, the lack of close markets for industrial products create obstacles to the "new industrialization" and make it impossible to pay back. At the same time, there is still an urgent need to modernize the economy and improve the quality of the workforce, the federal allocations for development are rather limited, and the integration of Crimea and Sevastopol made them getting for other regions even more difficult. The slowdown of the Russian economy, as well as EU and US sanctions against Russian state-owned banks and most commodity companies, also made it difficult to attract private investment. The development of mass production of conveyor already encountered natural obstacles in the model regions, and the successful copying of such experience at the moment is a direct transfer rather related to the field of fiction.

For the regions of the Far Eastern Federal District, a realistic response to current challenges should be the adaptation of a standard approach to local conditions, with amendments to changes in the Russian and global economic situation, as well as an increase in the cost of borrowing for regions and corporations.

First, it is a conscious orientation in the search for financial and technological resources to the east (primarily in the PRC and the countries of the Persian Gulf). Investors from these countries should not be expected to participate in super-scale projects that inevitably require the participation of global corporations and federal banks, including VEB. Moreover, in the case of the organization of such megaprojects at the initiative of state corporations and federal structures, they can become a sales market for companies established in the region as part of priority development. In addition, cultural characteristics and the real potential of potential Asian investors should be taken into account. Most likely, it will be necessary to target investment projects not so much for existing mineral deposits or other natural resources and already developed projects, as for finding out the needs and opportunities of investors and correlating them with the real needs and capabilities of the regions themselves.

Secondly, a shift in emphasis (and this is already happening) from the resource sector to intangible infrastructure, including social and educational, subject to partnership with the state and adaptation of infrastructure to the requirements of developing industries. The experience of the development of the northern territories of Canada and the United States, Iceland and (to a lesser extent) Northern Europe shows that income from raw materials industries can become the basis for the development of high-tech industries and services. Their suppliers do not need industrial parks, but they require high-quality human resources, an educational system and transparent conditions for launching and continuing the activities of strategic investors. The choice of industries as engines of growth almost always involves the development of special measures aimed at creating anchor points and growth clusters. Different industries require different support measures - for example, KIBS are more likely to require investment in education and tax breaks than high costs of building physical infrastructure. The relatively low debt burden of large regions of the Far Eastern Federal District provides additional room for financial maneuver, but many tax measures will require justification for approval at the federal level.

Thirdly, the most important factor can and should be the information component. For example, in the last few years, special attention was paid to the promotion of investment portals and the creation of "road maps" for regions and investors - and the quality of the information environment quickly reached new levels. But in conditions of the most severe global competition for investment this is not enough. Regional investment portals are abundantly filled with descriptions of large-scale investment projects and instructions for prizes received at domestic competitions of regional development programs. At the same time, the data, which the investment committee will eventually look at during the initial selection of possible investment sites, employees of investing companies or their consulting bank have to look for and find in other sources. Development programs, regional decrees and approved investment strategies do not replace basic and detailed statistics on the region and possible markets, including financial aspects of the situation in the region. When developing the information policy, it is extremely desirable to put yourself in the place of the user of the data and to offer projects not in the most beautiful for the author, but in the format most convenient for the strategic (and financial) investor.

The Far Eastern regions (and even individual areas) have very different strategic advantages - in the border Khabarovsk and Primorye territories and the Amur region they are one, in Yakutia and the Magadan region they are different. Sakhalin has already achieved very great results in the development and increase of budgetary security in recent years. Developing programs and institutes of advanced development that are adequate to regional conditions will require a strong adaptation of European Russia’s experience to them, a reorientation of the information component to Chinese and Middle Eastern investors and strategic planning with a choice of tools to use the existing advantages and mitigate the effects of factors such as low population Conscious diversification and diversity of development tools, rather than one-size haircut, can create an institutional environment conducive to economic growth. 

October 17: current information on coronavirus in the Far East
Digest of regional events and latest statistics