In the next 5-10 years, 19 Russian regions may change their economic specialization

29 january 2018 | RBC-TV

In 2017, the majority of Russian regions saw their social performance slip, while economic performance, by contrast, mostly improved. The regional budget revenue grew by about 8% while the public debt decreased, that's according to the interview of the Analytical Center expert Anton Steshenko to RBC TV.

Anton Steshenko
Anton Steshenko
Department for Strategic Development, Public Administration and Regional Policy

"Most regions saw their social performance such as population income and housing construction fall," Mr. Steshenko said. "As for the economic performance based on such indicators as the industrial production and investment index actually improved. Preliminary estimates suggest that the industrial production index increased in most regions while half the regions saw growth in investments. So, overall the situation in the regions last year was better than in 2016." Speaking of the regional budget parameters, the preliminary estimates suggest they earned about 8% in revenue while public debt decreased, the expert stressed.

"We regularly monitor investment projects in the regions," Mr. Steshenko stressed, "And our data suggest that there's investment projects for to be launched that are worth RUB 2 billion and more. If they are implemented in the next 5 to 10 years, 19 out of the country's 85 regions may very well change their economic specialization assuming they manage to capitalize on their competitive advantages and that will mean they will have new sources for growth."

Economists are talking about improvements in the situation but ordinary people don't see any positive trends. 65% of the people polled by RBC said the socio-economic situation in their region had deteriorated.

"This response has to do with falling income and decrease in residential housing construction," Mr. Steshenko believes. The expert noted that late 2017 saw the approval of a new list of indicators for assessing the effectiveness of executive authorities in the regions. "Now, they more closely reflect the day to day needs of the population: we will be assessing the quality of utility services, availability of housing, crime levels," he explained.

One of the biggest negatives in 2017, according to the expert, was the disparity in regional development that never went away and that manifests first and foremost in per capita indicators. Last year saw the adoption of a systemic document titled the Foundations of State Regional Development Policy, in which one of the main priorities is to reduce the disparity in regional development, Mr. Steshenko stressed. "Measures are already being taken: regional budgets are being restructured, some tax revenue is being freed up for profit, the mechanism of infrastructure mortgages is being introduced," the expert stressed. "Altogether, these measures should give the regions access to more resources, allowing them to spend the freed-up funds on development."

Source: RBC TV