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Socio-economic development of the Far East: projects and realities

The socio-economic development of the Far East in 2015 was held in ambiguous conditions

On the one hand, it could not but be affected by the country's general economic problems. Moreover, Western sanctions also affected some Far Eastern projects, for example, the Yuzhno-Kirinskoye gas field (Sakhalin-3 project) and the Komsomolsk oil refinery of Rosneft. On the other hand, the launch of new projects and the continued implementation of old ones have played a positive role. As a result, the dynamics of key indicators was either positive or not as negative as in the country as a whole. In general, the Far East turned out to be one of the relatively successful regions of the country.

Socio-economic development of the Far East: projects and realities

Rostislav Turovsky

Doctor of Political Sciences, Professor of HSE, Scientific Editor East Russia
During the year, there was a gradual, but not very rapid, progress in a number of new investment projects. Projects in the fuel and energy complex are now of key importance in the Far East, as well as related Infrastructure projects... The gradual transformation of the Far East into one of the leading oil and gas regions of the country continues. If until now Sakhalin played the main role in this (where it is planned to further expand the production of liquefied natural gas), now Yakutia is becoming an increasingly important oil and gas region. The construction of the Power of Siberia export gas pipeline has started, through which gas from Yakutia and the Irkutsk region will begin to flow to China in a few years. Another major project is associated with the new gas flow - the Amur Gas Processing Plant. In addition, during the year the export of oil to the east through the port of Kozmino grew. Further expansion of exports requires the modernization of the ESPO oil pipeline, which is included in the latest investment plans of Transneft.

The coal industry is also receiving increased attention. In 2015, decisions were made on the selection of priority investment projects by the government (a total of six were identified), as well as projects intended for co-financing from the Far East and Baikal Region Development Fund, which finally started working, (also six projects). This group includes three coal mining projects at once (in Yakutia, Khabarovsk Territory and Sakhalin) and one project of a coal port terminal (Khabarovsk Territory).

Positive shifts are outlined in metallurgy, including the production of precious metals, which is traditional for the territory. One of the stakes is made by the state on iron ore: the project of an iron ore mining and processing plant in Yakutia is among the priorities; Another priority is gold. New gold deposits were started up in the Magadan Region. For the long term, the state will support one gold mining project in the Amur Region and two in Kamchatka at once. Apparently, the development of the largest Natalka field in the Magadan Region, the start of which was constantly postponed due to problems with energy supply, will also accelerate.

Thus, the main attention in the Far East is still paid to the resource economy and the infrastructure projects interconnected with it (including the modernization of the Trans-Siberian and BAM, which is supposed to be carried out with the involvement of NWF funds). In the same logic, the increased interest of the state in the fishing industry of the Far East, where a number of meaningful discussions were held (including at the site of the State Council), which determined the rules of the game for the future (changing the principles of granting quotas), and also designated the creation in the Primorsky Territory the largest fish cluster in the country. As for the manufacturing industry, it is clearly lagging behind. Nevertheless, the state has decided on financing the new Zvezda shipyard - using funds from Rosneftegaz. Due to the state order, the aircraft building plant in Komsomolsk-on-Amur is doing well. With great difficulties, but nevertheless, an ambitious project is being implemented to transform the Far East into a new center of Russian cosmonautics: the construction of the Vostochny cosmodrome has been delayed and is fraught with many scandals, but after the intervention of the head of state, it finally reaches the home stretch.

As a result, a situation has arisen where the development of the Far East continues by inertia, while new projects are, as a rule, at an early stage and do not give an immediate effect. Nevertheless, the current trends in the development of the territory look quite positive by Russian standards, although they do not apply to all regions. For example, while Russia is experiencing a downturn in industry, the Far East has grown by 3% (according to Rosstat data for January-October 2015: in Russia during this period, the industrial decline was 3,3%). The most successful resource regions - Sakhalin (by 14,4%) and Yakutia (by 5,9%) became the drivers of growth. However, a number of regions experienced a noticeable decline in the industrial sector: in the Amur Region it was 9,1%, in the Jewish Autonomous Region - 9,9%, and in Chukotka - all 12%. Among the large regions, the decline in industrial production in Primorye was noticeable (by 5,3%).

A similar situation has developed with investments: against the background of an all-Russian decline of 5,8%, the Far East showed their growth by 4,8% (according to Rosstat data for January-September 2015), however, it is extremely uneven. The clear leaders in terms of investment volumes remained the same Sakhalin (166,1 billion rubles over the same period) and Yakutia (133,9 billion rubles), and there was also a significant growth on Sakhalin - by 14%. A positive trend and a very important guarantee for the future was a sharp increase in investments in the Amur (by 59,6%) and Magadan (by 59,3%) regions, which are characterized by an unstable socio-economic situation (the current situation in these regions, as we will see unfortunately, this has no effect below). As a result, the volume of investments in the Amur Region (66,2 billion rubles) reached the level of the Khabarovsk Territory (66,6 billion rubles), but still remained less than in the Primorsky Territory (74,1 billion rubles).

At the same time, the "capital" region of the Far East - the Khabarovsk Territory, on the contrary, experienced a major decline in investment - by 27,5%. In total, investments decreased in five regions of the Far Eastern Federal District of nine - Khabarovsk Territory, Primorsky Territory, Yakutia, Chukotka and Kamchatka. Their significant decline in Primorsky Krai - by 7% does not inspire optimism. Thus, the “central” regions of the Far East have shown negative trends in attracting investment, in contrast to a number of marginal resource regions. The key ASEZs created in these regions have not yet changed the situation.

An ambiguous situation has developed in the construction sector. In the Far East, it still reduced its turnover (by 5,2% in January-October 2015), although not to the same extent as in Russia as a whole (a decline of 10,3%). Interesting is the sharp growth in the Amur Region - by 74,2%, which coincided with the inflow of investments into this region. However, the Primorsky and Khabarovsk Territories, which had lost less investment, showed an even greater decline in construction, the first - by 20%, the second - by 21,7%. This indicator has worsened by almost 40% in the Jewish Autonomous Region. Even on Sakhalin, construction has been reduced by almost 15%. Yakutia, on the other hand, stood out for the better against the general background, simply keeping the same volumes of construction.

The actual remains structural problems Far Eastern economy. The growth in industry and in the volume of investments was predominantly of a raw material nature. There were no clear positive developments in other sectors. It is noteworthy, for example, that in the agricultural sector a decline in the first half of 2015 (according to Rosstat) occurred in all southern regions, where the agro-industrial complex is of significant importance (Primorsky and Khabarovsk Territories, Amur Region, Jewish Autonomous Region). Moreover, in regions with a solid share of the rural population, the decline amounted to a considerable 7,2% in the Amur Region and 13,4% in the Jewish Autonomous Region. Growth in agricultural production in the northern regions, incl. sharp - in Chukotka (according to Rosstat, the volume of agricultural production in ChAO in January-June 2015 amounted to 76,6% compared to the corresponding period last year, i.e. decreased) is not so important, since there is no agro-industrial complex is a branch of specialization.

Chukotka generally differs from year to year by constant leaps in its economic indicators (construction work, for example, has grown there more than fivefold).

Under these conditions, it has not yet been possible to solve the social problems of the Far East, as evidenced by the ongoing migration outflow of the population, which this year affected all subjects of the Far Eastern Federal District. In January-September 2015, according to Rosstat, 199,5 people left the Far East, and 181,6 profits. In general, the outflow intensity in the federal district did not increase, but the migration balance was negative everywhere. Moreover, the rate of population decline increased in one of the key regions - the Khabarovsk Territory.

Nevertheless, in general, the Far East looks good against the Russian background in terms of the dynamics of its social indicators. For example, the Far Eastern Federal District kept the level of real incomes of the population (in January-September 2015, according to Rosstat, they increased by 0,2%), while in Russia this indicator fell by 4,2%. However, the income of citizens has seriously decreased in the Magadan region - by 11,4%. Interestingly, in the Khabarovsk Territory, in the context of negative dynamics of general economic indicators, the real income of the population, on the contrary, showed an increase of 6,4%. In other regions, incomes of the population did not change very significantly, which is not bad in itself.
The volume of retail trade, which is a good indicator of social welfare, almost remained at the level of last year: in the Far Eastern Federal District, it decreased by 1% (in January-October 2015, according to Rosstat data), and in Russia as a whole - by 8,8%. A more significant decrease in retail trade turnover (at the level of more than 5%, but still below the national average) was demonstrated only by the Amur and Magadan regions.

The rise in prices in the Far East was generally in line with the all-Russian level: the price index for food products in October 2015 to December 2014 amounted to 110,3% (in Russia - 111,2%). However, the very noticeable rise in prices in remote regions is alarming - a clear consequence of their isolated situation. For example, in Kamchatka, food prices increased by 10,6%, in Chukotka - by 9,5%, in the Magadan region - by 11,4%. Thus, in Magadan Oblast, the decline in household income was combined with a rise in prices and a decline in trade, which makes it a particularly problematic region. It is impossible, alas, to say that in any of the regions of the Far Eastern Federal District there was no significant rise in prices.

Unemployment in the Far East remains at a moderate level. Rosstat data obtained from sample surveys of the population in August-October 2015 indicate that unemployment in the Far Eastern Federal District (5,8%) is almost the same as the national average (5,3%). For the worse, however, the Jewish Autonomous Region stands out (7,6%), which is expected, but also Yakutia (7,2%), which indicates the presence of problems in the labor market in this relatively prosperous region. At the same time, in the rest of the northern regions - in Kamchatka, Chukotka, in the Magadan region, unemployment does not exceed 4%.

Not the worst financial and budgetary situation attracts attention. The growth in the incomes of the consolidated regional budgets in the Far Eastern Federal District turned out to be higher than the national average (15% and 6%, respectively), and it was due to their own revenues, which increased by 25%, and not federal transfers, which decreased by 11% (in our calculations we relied on data from the Federal Treasury, comparing January-October 2015 and 2014).

Again, the growth was provided primarily by the most financially prosperous region of the Far Eastern Federal District - Sakhalin (income growth by 51%, including own tax and non-tax revenues - by 56%). But own incomes also grew noticeably in Yakutia (by 24%), Magadan (by 20%) and Amur (by 11%) regions, in Chukotka (by 46%). However, the Khabarovsk Territory and the Jewish Autonomous Region, on the contrary, showed negative trends. In the Khabarovsk Territory, budget revenues decreased by 10% (including own - by 2%), in the Jewish Autonomous Region - by 6% (own - by 4%). However, we see that it was the reduction in federal aid, and not the collection of taxes on the territory, that had a negative impact on the income situation (as well as on the forced reduction in some regions of expenses) in the Far East.

The federal center, creating new development institutions in the Far Eastern Federal District and approving investment projects, is beginning to change its attitude towards the region. The center wants the Far East to become developing and self-sufficient. This has not happened yet, but the volume of transfers coming from Moscow is already falling. This is especially noticeable in the example of the Khabarovsk Territory (a decrease in transfers by 34%), Magadan (by 24%) and Amur (by 12%) regions.

But this is where an uncomfortable situation arises, when the regions of the Far Eastern Federal District, except for Sakhalin with its unique budget surplus, are not ready for financial independence. An indication of this was the increase in the debt burden, which turned out to be much more serious than in Russia as a whole (calculations according to the Ministry of Finance data as of November 1, 2015, compared to November 1, 2014). If in Russia the state debt of the constituent entities of the federation grew by 21% during the study period, then in the Far Eastern Federal District - by 46%. The increased debt burden - the ratio of public debt to budget revenues - now distinguishes the Amur and Magadan regions, the Jewish Autonomous Region and Chukotka. At the same time, in the Magadan Region, the volume of debt itself increased by 2,2 times, negative dynamics also characterized the Primorsky (4,3 times growth) and Khabarovsk (68% growth) regions, Kamchatka (75% growth), although there themselves the amount of debt is not yet critical for the budget.

As a result, the regions find it difficult to fulfill their social obligations, although so far the authorities are coping with them. For example, in the healthcare sector, the Far Eastern Federal District showed an increase in expenditures at a level higher than the national average. Calculations based on the data of the Ministry of Finance when comparing January-October 2015 with the same period in 2014 showed that in the Far East the expenditures of the consolidated regional budgets for health care increased by 10%, and in Russia as a whole - by 5%. Salaries in this sector in all regions are already significantly higher than average. According to the results of the first half of 2015, the salary of doctors exceeded the average for the region by at least 27% (in Yakutia) and even twice (in the Jewish Autonomous Region). But budgetary spending on education increased slightly (by 3% both in the country as a whole and in the Far Eastern Federal District), and the level of wages in this sector is noticeably lower than in healthcare. So, in Sakhalin and Chukotka, according to the results of the first half of the year, the salary in education simply corresponded to the average salary in the region. However, in other regions of the Far Eastern Federal District it exceeded the average level by at least 24% (in Yakutia, the Jewish Autonomous Region), but the maximum - by 35% (in Kamchatka). Thus, the regions of the Far Eastern Federal District fulfilled the requirements of the President's "May Decrees", but in health care it turned out much better than in education.

On the other hand, housing and communal services are becoming an obvious victim of budget savings, with the rate of cost reduction exceeding the national average - a drop of 7% in the Far Eastern Federal District and by 3% in the country as a whole (given that in the Far East these costs are always higher than in the rest of Russia in connection with a higher demand, especially in remote areas). The cost of the road sector decreased slightly - by 2% (with an increase in Russia by 6%). In the budgets for next year, the regions of the Far Eastern Federal District tried to preserve the social component of their expenditures, but the margin of safety is small, as evidenced by the growth of the national debt.

Some regions already this year significantly reduced budgetary expenditures in general, especially the Amur Region (by 15% in January-October 2015 compared to the same period in 2014) and the Jewish Autonomous Region (by 13%). The almost total reduction in social spending in the problematic from the financial and budgetary point of view of the Amur Region was striking (by 18% on social policy, by 14% on education, by 10% on health care, and by 31% in housing and utilities). The budgets of the Magadan Region, the Jewish Autonomous Region, and the Khabarovsk Territory differed, according to our calculations, as of November 1, by a large deficit exceeding 10%. Although Sakhalin, on the contrary, remains a unique region in modern Russia, where incomes significantly exceed expenditures (its budget surplus exceeded 30%, and in previous months it was even higher). In these conditions, by the way, it was decided that the main part of the financing of the new federal target program for the socio-economic development of the Kuril Islands, which will start operating in 2016, will fall on the regional budget in the first years.

Thus, the Far East, on the one hand, does not show negative dynamics in its socio-economic development. First of all, this is the result of the gradual implementation of previous raw material projects, i.e. the existing and in this case quite good inertia. It is worth recalling that many Far Eastern projects are simply projects of the Soviet period that have not yet been implemented, when local resources were not yet put into circulation due to their remote geographic location and lack of demand. On the other hand, the Far East has a small margin of safety, and this demonstrates a gradual increase in budgetary problems, even if they are not yet critical. The center, for its part, increasingly counts on the independent development of the Far East, creates conditions for this, but does not give a lot of money. But numerous new projects, on which the strategic perspective of the Far Eastern Federal District depends, still have to take place, this takes more than one year. All this means that the coming years may become a period of unstable development for the Far East, high expectations and difficult current realities, as well as acute interregional imbalances.
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