The opinion of the expert community will be the basis for the state to resolve the crisis

3 february 2015

The conference on "Industrial policy of the regions: stability, import substitution, new reserves of development" has begun at the Analytical Center. For two days, the experts will talk about the actual needs of the domestic industry in order to modernize the area, and offer their ideas for improving the dialogue between industrialists, government, banks and authorities.

"It is not the first year when the problem of sustainable industrial policy, import substitution and search for internal reserves for industrial growth and diversification is discussed", said Vladislav Onischenko, the First Deputy Head of the Analytical Center opening the plenary session entitled "Recent industrial policy priorities and their implementation in the legal acts. "However, the following problem never was so acute: we had better get renewal or development of our own production on  a new technological basis in a number of areas".

It is important to be aware that import substitution and industrial policy, focused on their own resources, must not become solely a policy to protect domestic producers, which does not take into account the associated costs and competitiveness issues. "If resources, desire and good institutional prerequisites are present, it is necessary to create conditions under which Russia with its small economy in global terms shall be competitive compared to those markets where we want to be present later", the expert said. "Otherwise, this country will not be able to create long-term sustainable incentives for the development of industrial production". At the same time this problem means that the resources of the state which must be involved at least initially, must be spent more efficiently. "The way we will come to success is a very important and complex issue in the current environment.It is necessary to take into account a number of features, regional and sector, which should be linked to strategic planning at the federal level", said Mr. Onischeko.

"In this situation we can not rely on the wizard who waves his wand and resolves all the problems", said Vitaliy Kovalchuk, the assistant of the Department of Industry and Infrastructure of the Executive Office of the Government of the Russian Federation. One of the ways to solve problems is to collect and discuss all the opinions of the expert community, according to the expert. Even in times of crisis and sanctions, there is a large number of tools to improve the situation, but they are not used consistently. "Their consistent use will improve the efficiency and develop production in all sectors and in all territories, and a discussion of industrial policy of the regions, of approaches to import substitution is a strong step that will undoubtedly bring result", concluded the expert.

Andrei Kulintsev, the Deputy Director of the Department of Regional Industrial Policy of the Ministry of Industry and Trade of the Russian Federation spoke about the mechanisms and innovations of the Federal Law "On Industrial Policy of the Russian Federation". The law was adopted, but will become effective within six months from the date of its official publication, according to the official. "This document will be the main rule of the game, will introduce a number of new tools, including an investment contract. Also a number of new support concepts and tools will appear in connection with it", said Mr. Kulintsev. The official noted that the Ministry of Industry actively works with the regions. So, some of them have already started preparing the regional legislation for the implementation of the federal law. "Last year, we introduced a new form of cooperation between the regions: we provide training for managers of industrial enterprises in the ministry, where our experts talk about existing support measures", said Mr. Kulintsev adding that the practice shows lack of information on many issues among experts.

During the second panel discussion "The projection of industrial policy and implementation experience in the regions" experts from the large enterprises shared their experience in efficiency modernization and improvement. Experts also discussed state support and disadvantages of its instruments. Vladimir Samohvalov, the Managing Partner of "SBS Consulting" believes that subsidies should only be granted to those regions that are willing to finance a certain part from their budgets. Criteria for the selection of regions should be as transparent as possible, the presence of the regional program of development of the industry and the amount of co-financing with the region should be the main of them, the expert said. "The subsidies should be allocated to support the priorities formulated at the federal level. The state, in turn, should formulate 2 to 3 priorities and ensure the continuity of these priorities to the region through a system of subsidies", said Mr. Samohvalov.

The discussion boils down to one thing - the choice of a way out of the industrial and economic crisis, according to Boris Sudenko, the Chairman of the Board of self-regulated organization on energy audit. "And we have two options. The first one - with the help of market competition and state support, the second one - with the help of government regulation: government programs and state control. We can't rely only on the market, and the problem can't be resolved without the state support", considers the expert. Mr. Sudenko proposed to create two groups, the representatives of the market and the state, and to explore their views regarding the best way of development. A new industrialization, modernization of existing and construction of new plants, modernization of equipment are necessary, according to him.

Summarizing the discussion, Evgeny Gasho, the expert of the Department for Expert Analytics of the Analytical Center noted, that specific experts' suggestions should be developed further. "Firstly, there is need for a mechanism involving senior managers in the process of energy efficiency. Secondly, we need to correct the training programs including the engineering up to return to five-year program of study", he said. It is necessary to revise the special financial arrangements with the government to promote regional industrial programs that would allow the region to invest in projects that they deem appropriate, according to the expert. "We need an active information policy. We need to show the public all the government innovation", concluded Mr. Gasho.