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Wednesday, March 14, 2018

Small regions were the fastest-growing

Despite the crisis, in Russia there are regions that show remarkable growth. If you believe the relevant studies, several regions showed strong growth momentum, measured even in double digits, and in all sectors. Successful regions are many – 14, and three of them are absolute leaders. Where in Russia are Islands of stability and what is the secret to their achievements?

The experts of the Institute of comprehensive strategic research (ICSI) looked at the Russian economy by regions. They analyzed the situation in the regions on five key sectors – agriculture, industry, construction, retail trade and paid services.

“Where significantly public exposure through different mechanisms, there is observed the growth of economic indicators”

These data confirm the fact that the only consistently growing sector in the country – agriculture. And the most problematic industries – construction and retail trade. The decline in construction, retail trade and paid services sector is more than half of the regions. Industry and agriculture fall only a quarter of the regions, but in most cases, these sectors show a positive and regenerative dynamics.

Among the unsuccessful were 16 Russian regions, where falling all five, or four sectors of the economy. Outsiders became Amur, Omsk, Smolensk region, Perm territory and the Mari El Republic, for there in the red all – from agriculture to services. On the other hand, as many as 14 regions by the end of 2016 demonstrated growth in four or five sectors of the economy.

The most successful

The leaders were the city of Sevastopol, Dagestan and the Chechen Republic. These regions can boast of growth of agriculture, industry and construction, and even retail trade and paid services. In Dagestan, the industry grew by almost 40%, in Sevastopol, more than 20% increase in industry and retail trade, and construction showed generally mind-blowing figures above 55%.

What is the secret of success in these regions? In many respects that it is a small economy with a low level of development. “When such a humble housekeeper start coming investors even with small projects, I immediately noted a surge in economic activity. On the background of the General situation of the region becomes visible investors,” – explains the Deputy chief of Department of analytical researches of Institute of complex strategic studies Vera Kononova.

If you look at the situation in Dagestan and Chechnya in the context of several years, a noticeable instability of economic development, adds the economist. At the beginning of the implementation of the project statistics shows a high rate of growth, and after the end of such projects is the high rate of decline.

“The incredible growth of the construction industry in Sevastopol more than 55% is also understandable. Because now the entire Peninsula is a large construction project. But this growth of construction in the city also is explained by the low base effect,” says Vera Kononova. To be as successful small economies can be attributed to Ingushetia, which entered the top 14 successful regions. Here for the past year, experiencing growth in all sectors, except retail trade.

For example, the Dagestan last year received more than 250 billion rubles of investments in fixed capital due to all financing sources. Dagestan is manna from heaven. The money for development has received, in particular, a local manufacturer of electro – and radioelements, and local construction company. Dagestan has established ties with other Russian regions for the supply of its products, in particular mineral water “rychal-su” Dagestan glass, meat and sausages. Dagestan also receives investments in the framework of the state program on development of domestic and inbound tourism, the construction of social facilities. So, in Makhachkala by the end of the year completed the construction of the Republican perinatal center with 150 beds. And the country has another 62 investment projects 198 billion.

The Chechen Republic is also not deprived of money. The volume of investments in fixed capital for the year 2016, according to preliminary estimates, will amount to 61.6 billion rubles. In that time, while AVTOVAZ in Togliatti is suffering from falling sales, the plant “Chechenavto” shows the increase in the volume of Assembly of cars Lada in 2.2 times. Nominally, of course, the volume of production in Togliatti and Chechnya are not comparable, but for the Chechen industry is a major boost.

They feel bad in Chechnya and meat-packing plants, and dairy farmers and sugar factory. Ten years ago in Chechnya, there was virtually no tourists, and in 2016, the region was visited by about 80 thousand people. Construction continues year-round ski resort “Veduchi” cost more than 53 billion rubles, a sports and tourist complex “Grozny sea” at a cost of 60 billion rubles. And yet built the Grozny thermal power plant of 440 MW project cost of 45.1 billion roubles.

In Chechnya started coming in large retail chains. In 2016, opened a hypermarket “Lenta”, and this year opened the first shopping spot “Leroy Merlin” worth 1 billion rubles. And this happens on the background of the fall in retail trade in almost all regions and in Russia as a whole and against the background of low purchasing power.

Crimea and Sevastopol

Finally, in the eyes of bloom for Sevastopol and Crimea in General. The Peninsula is also one of the successful regions of Russia, the only difference is that retail trade in the Crimea is still in the red.

The reasons for the success of the new Russian regions, in particular the Federal centre, and the creation of attractive tax conditions for investors. Here is a special economic zone, which came hundreds of residents industrial parks.

How it will look in the Kerch metapribor, in the spring of 2015 resident in the SEZ in Sevastopol was the company “South coast”, which produces bottled water. For the three months and 47 million investment, it launched a factory there. Last year revenue exceeded $ 116 million rubles, and this year plans to expand the line of beverages and to increase production to 1 million bottles per month. Important investments that go through the MIC. Only in the SMZ, which is part of the United shipbuilding Corporation, has invested in the past year to 1.4 billion rubles. All small enterprises of the military industrial complex are combined as part of larger corporations who have the money and are ready to invest.

On the Peninsula was followed by the active construction of roads and housing is growing in double digits. Following the public investment come from private investors. For example, the Vladimir company “Regiontruddorstroy” launched last year a small plant in Sevastopol, and has invested 6 million rubles. This year the guys from Vladimir plan to obtain new contracts and already in 2017 to fully recoup their own production. The Crimea as a whole has become a big construction site, only the construction of energy infrastructure and a bridge across the Kerch Strait worth. Booming tourism industry. And, of course, the Crimea is traditionally the birthplace of agriculture.

Agricultural regions

One of the successful regions with a clear agricultural specialization not only Crimea, but also in Belgorod and Voronezh regions, and, of course, Krasnodar Krai. Moreover, it should be noted that it is not only agriculture, but other sectors (four of five). Partly to these regions you can add and the Republic of Altai, where the strong adjacent food industry.

One of the factors of economic growth in these regions, of course, is the food embargo. However, positive growth in these regions was recorded not only in agriculture but also in industry and in the sector of paid services, and in some regions, also in the construction sector.

“One of the most successful regions with a clear agricultural specialization not only Crimea, but also in the Belgorod and Voronezh region, Krasnodar Krai”

“The producers gained access to subsidized credit, and not only agricultural companies, but also businesses in related sectors – agricultural producers, food industry workers. It’s the support of the state, which lacks other manufacturing industry or the service sector”, – says Vera Kononova.

For example, in the Belgorod region in 2016 in agriculture implemented 30 investment projects, scheduled to launch another 23 projects worth about 85 billion rubles: the production and of milk, and greenhouse vegetables, fruits and berries, fermented soybean protein animal feed, construction projects, mixed fodder plant, plant for processing of sunflower, soybean and rapeseed, the construction of pig-breeding complexes and the enterprises for the production of meat products.

In the Crimea implemented 110 projects, which is investing more than 125 billion rubles. The participants were more than 600 companies that invest another 80 billion rubles.

Krasnodar territory only in 2016 planned to attract investment of more than 570 billion rubles. And investors willingly go to the region, the authorities that give tax benefits and the Corporation of development of the region accompany projects to completion. In addition to the huge investment in the agricultural sector, developing industrial parks. Serious investors of the region – JSC “Tander” (a network “the Magnet”), which invests billions in an industrial Park of food orientation, and Basic element, which creates its own industrial Park.

Lipetsk, Sverdlovsk and Altay

Interesting growing Lipetsk and Sverdlovsk region and Republic of Altai.

The success of the Lipetsk region is largely also provided special economic zones, where local authorities are attracted foreigners. Just last year, the region managed to implement 20 investment projects in the industry. Implemented large scale projects in the agricultural sector. For example, in the summer of 2016 opened the complex for the production of 30 thousand turkeys, and this year will launch a plant for freezing strawberries for yogurt. And open the new complex was brought maloletka cows of Holstein breed. “Cherkizovo” plans to construct in this region a pig-breeding complexes.

Sverdlovsk oblast is one of the strongest first year. Only in 2016 the investments promised at the level of RUR 376 billion being invested in agricultural and industrial facilities. Equally important are the investments of Russian Railways into the development of Sverdlovsk railway, which only in the last two years amounted to more than 30 billion rubles. Overall in the region there are 63 projects in the industry in the investment stage, only six of them completed in 2015. Here energy projects in the nuclear and hydropower, and aviation, and in the agricultural sector – for example, dairy.

The Republic of Altai in part to help grow agriculture, especially the farming and animal husbandry. But the main engine becomes the food industry. For example, last year there started to build a pig farm for 602 million rubles with deep processing and biogas plant. Now the pig breeding in the region is underdeveloped compared to production of other types of meat. Also built complex for the production and processing of meat, expansion of milk processing facility for the production and processing of fruits and berries, etc.

But surprisingly, in industry and construction, Republic just shows explosive growth – nearly 40% in each sector. This is the best growth rate in the industry among other regions. And in the construction of the Altai conceded Crimea and Sevastopol.

Such a miracle is explained, in fact, hard electrification of the region. Grow the production and distribution of electricity, gas and water. For example, over the past two years in the country has opened several solar power plants in Kosh-Agach and Ust-Kan. Great importance for the Republic is the construction of the gas pipeline “Power of Siberia”, which takes place on its territory to deliver gas from fields in Siberia to the border with China.

Finally, the region has experienced a significant development of roads due to increased funding and the growth of tourism in the framework of the state program on development of this direction – last year, the mountain region was visited by two million people.

Far East

Among the successful regions also included the Kamchatka Krai and Magadan oblast. This success is primarily associated with the development of Tori (just last year came the first real results) and with the launch of the free port of Vladivostok.

Resident TOR “Kamchatka” are already 17 companies with investment projects amounting to almost 9 billion rubles. At the discretion of “Corporation of development of the Far East” 14 applications totaling more than 15 billion rubles. Last year in the economy of Kamchatka has invested almost 20 billion rubles, or more than 16% higher than a year earlier. Kamchatka enterprises have received twice as much profit than in 2015 – almost 30 billion rubles.

In the past year, with the support of the state in the Kamchatka region commenced two projects – construction of brewery and development of pig breeding in the Magadan region – construction of mining and processing enterprise on the basis natalkinskoe gold deposits. This is in addition to already existing far East investment projects. Only the far Eastern investment projects until the end of 2016 promised to invest more than 2 trillion rubles, said Minister for Far East development Alexander Galushka.

“Where significantly public exposure through different mechanisms, and the Torah, and the SEZ, and development program, there is observed the growth of economic indicators. The economy of the country is in difficult conditions, there is a decline in consumer demand. In these circumstances, private investors are hardly ready for something to implement. So they go where they are best conditions, where reduced risks,” – concludes the economist of ICSI. Now the attention of the state sent to the far East, North Caucasus, the Crimea, and it is logical that these regions show better economic performance.


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