Regions working to improve their economic activity indices

22 march 2017

The Analytical Centre has held a round-table conference titled “Russia's regions: economic potential and growth opportunities”. Deputy Head of the Analytical Center Mikhail Pryadilnikov presented a survey of the economic situation in the regions of Russia, which was conducted jointly with the World Bank.

“A notable inequality when it comes to per capita GRP was found, at the level of regions and districts”, Mr. Pryadilnikov  reported. “Our resource regions can well compete with the developed countries in some parameters, while some other regions are comparable only to Central Asia and Africa.” The expert explains that, in this situation, conducting an objective evaluation based on the forecast model employed is hardly feasible, meaning the said model requires further fine-tuning.

The situation in Russia is characterized by the role of Moscow having long been blown out of proportions, which effectively hampers sustainable development, explains Mr. Pryadilnikov. Furthermore, the ineffective distribution of economic activity and population results in loss of resources. Poles of growth continue to be the same, i.e. the regions showing high human development index, such as Moscow, Krasnodar, Yekaterinburg, Vladivostok, and a few others.

Head of the Investment Climate Development Department at the Agency for Strategic Initiatives Vitaly Khramushin described how the target models for simplifying business procedures and improving the investment attractiveness of the subjects of Russia were developed. A total of 15 target models combining the best available practices were developed for seven areas, including property rights, building licensing, control and supervision, etc.

The Government had given the regions a period ending mid-March this year to achieve the target indicators suggested by the models. Only about half of these regions proved to be keeping pace with the progress planned, with the rest failing to meet the objectives. Development of the roadmaps was also far from being invariably successful, Mr. Khramushin tells. The work is still in progress, and by the end of the year the progress reports will be presented to the head of state at the Council of State meeting. “To date, the development and publication of the roadmaps and the regions’ profiles within the Region-ID system have been completed, and the subjects fill them in with relevant indicators”, the expert reported.

The World Bank's Lead Economist for the Russian Federation Apurva Sanghi spoke about the trends in the fiscal sector of economy, highlighting the excellent work of the regional governments during the economic crisis, with some regions showing as much as positive balance in 2017 already. The key factor here was the reduction of spending and the changes in the expenditure patterns. “But those reductions primarily concerned education, health care, social support, housing and communal services, which is not something one would expect from a country in crisis, for it would have been way more logical to support these sectors instead”, the expert added, explaining his own vision of how spending can be reduced and revenue boosted.

Program

List of Participants