Economic zones are expanding their geography – Kommersant FM

Three new special economic zones will appear in Russia. They are planned to be created in Mordovia, Rostov and Tver regions; the corresponding decree has already been signed by Prime Minister Mikhail Mishustin, the government press service reports. Saransk should house six enterprises producing construction materials, electrical equipment and chemical products. It is expected that almost 800 new jobs will appear here. The volume of investments will exceed 33 billion rubles. Eight companies producing trailers and industrial refrigeration equipment will become residents of the Rostov economic zone. The business expects to raise RUB 8.5 billion. investments. In the Tver region, the authorities hope to develop the production of polyethylene pipes and domestic cable cars.

How feasible are the plans? And why did they decide to create economic zones in these regions? Kommersant FM discussed these issues with Oleg Komolov, Candidate of Economic Sciences, Associate Professor at the Financial University: “As a rule, a number of factors are taken into account. This certainly includes proximity to the sales market, logistics features, and provision of manufacturing companies with an appropriate qualified workforce, that is, you need to look at which educational institutions produce specialists for a particular industry.

Plus, of course, there is accumulated experience. If in Soviet times in one region or another they were engaged in the production of some kind of product, it means that there were at least some enterprises that were dying, but still, enterprises. After all, it is more convenient to develop an already existing industry than to start it from scratch.

In turn, business will most likely look for an opportunity to take advantage of the new favorable conditions for optimizing taxes, but it is unlikely to begin massively transferring money into real production, since fees alone will not solve the problem.

In Russia, the macroeconomic situation is unfavorable, loans are extremely expensive. Here, in principle, it is ineffective to start any manufacturing production due to unfavorable exchange rates, lost competencies and labor shortages.”

Residents of special economic zones receive several benefits, in particular, they have a simplified system for registering enterprises, zero property and profit taxes, as well as reduced insurance premiums. Now the effectiveness of this mechanism will probably be higher, since Russian companies need tax breaks, noted the head of the Infoline-Analytics company, Mikhail Burmistrov:

“From the moment the free economic zone is created until it is filled with residents and when they begin to create the first jobs and make the first investments, a certain cycle goes through. Therefore, the SEZ mechanism itself works quite effectively.

This is more of a question from the point of view of efficiency and its differentiation, related to how certain regions operate. Somewhere there is a lack of financial resources, somewhere there is a lack of communication efficiency, somewhere there are some other issues. Objectively, this period from the launch of the free economic zone turns out to be longer.

But in general, it is clear that in the current situation, from the moment the SEZ is launched, it takes two to three years until it begins to operate effectively.”

According to the latest national rating of investment attractiveness of special economic zones, since 2012, the revenue of residents of such territories in Russia has exceeded 2.2 trillion rubles, and the volume of private investment in these projects amounted to almost 900 billion rubles. Companies received benefits worth more than 125 billion rubles. and transferred various fiscal payments worth 365 billion rubles to the budgets. The industries that will be emphasized in the new special economic zones were most likely determined by the availability of existing resources in these territories, believes Oleg Buklemishev, director of the Center for Economic Policy Research at the Faculty of Economics of Moscow State University:

“The most reasonable approach would be this: if there is appropriate production and infrastructure, assets that are not sufficiently utilized, personnel, and so on, accordingly, according to these characteristics, it makes sense to determine this or that specialization. Some other approaches do not seem very relevant to me. It’s impossible to dig up something in a given geographic area that has never grown there.”

There are currently about 50 special economic zones in Russia. More than half of them are industrial and manufacturing; there are also tourist, technology and innovation areas and port areas.

Ivan Khorushevsky, Andrey Zagorsky