Obstacles to Regional Development Stem from Previous Policy

22 december 2016

The Analytical Center held discussions about conditions and factors of economic growth in the Russian regions, priority measures to promote economic growth on a shoestring budget as well as ways to improve the mechanisms of state support.

Deputy Head of the Analytical Center Mikhail Pryadilnikov identified the key characteristics of regional development in Russia. “In th early 2000s the inequality between the regions grew. At the same time, efforts to equalize regional budget had a mixed effect. The differences in economic development were decreasing while competition between the regions intensified,” the expert said. Mr. Pryadilnikov believes that the current obstacles to regional development stem to a large extent from the previous regional development policy. In his opinion, each territory should take advantage of its unique strengths which for some regions mean natural resources, for others a good geographical location and transit capacity and for still others agglomeration potential.

Deputy Head cited Tatarstan and the Primorsky Krai as good examples. “Tatarstant increased its population concentration and economic activity in regional centers, which reduced the distances that have to be traveled and transportation costs, while making the workforce more mobile, integrating infrastructures and creating a single real estate market,” the expert stressed. Mr. Pryadilnikov sees 3 ways to promote regional growth: use of the agglomeration effects, cooperation between regional governments and a rethinking of spatial development.

Director for Applied Research of the Center for Economic and Financial Studies and Developments Natalya Volchkova talked about the impact of production and export diversification at the regional level. “If a region has large and medium sized companies that are not exporting any of their products, it arouses mistrust in the companies and in the regional government,” the expert believes. In Ms. Volchkova’s opinion, companies like that must offer their products for exports to benefit the region in one way or another, for example by creating new jobs.

Olga Smirnova, a representative of FGBNU Council for Studies of Production Forces, believes that more work should be carried out with development institutions. Financing should be provided to innovative projects and infrastructure development projects, loans and guarantees must be made available to companies and support should be granted to regional projects, the specialist believes.