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Regions to Gain Control of Russia's Special Economic Zones

Published: June 7, 2014 (Issue # 1814)



  • Construction of a plant belonging to Turkish domestic goods producer Hayat Group in the special economic zone in Alabuga, Tatarstan.
    Photo: Alabuga.ru

From next year, responsibility for Russia's special economic zones key institutions that have proved an invaluable boon to domestic and international companies investing in Russia may be transferred from the federal to regional governments, a news report said Friday.

The decision to delegate management of the zones was reached in late May at a meeting under Deputy Prime Minister Dmitry Kozak, business daily Vedomosti reported, citing two officials familiar with the decision. The Economic Development Ministry confirmed that the decision had been taken. Kozak's spokesman told the newspaper that the shakeup will have to be approved by the government before coming to fruition.

The special economic zone project was launched by the Economic Development Ministry in 2005 and has bloomed to a total of seventeen zones across Russia, which offer tax benefits, customs benefits, simplified registration procedures and other preferential treatment to investors. Crimea is expected to become Russia's eighteenth special economic zone, following the annexation of the peninsula from Ukraine in March.

Up until now, the federal government has been responsible for opening the zones and allotting funds for construction of necessary infrastructure, while a state-run company called Special Economic Zones, or SEZ manages the territories through regional subsidiaries. Federal funds have paid for about 70 percent of the zones' infrastructure, Yulia Stefanishina from consultancy KPMG told Vedomosti. As of April 1, a total of 70.7 billion rubles ($2 billion) had been lavished on building infrastructure for the zones, according to the Economic Development Ministry.

Instead of giving funds directly to SEZ, the federal government will now provide the regions with subsidies for developing the zones, Vedomosti said, though the federal government will retain the power to approve or veto the creation of new zones.

Regional governments will be required to submit a set of targets for their proposed zones to Moscow, and if they do not achieve their aims, they will be forced to repay the federal subsidies, a representative of the Economic Development Ministry said. The criteria for judging a zone's effectiveness will also change, he added while before they were evaluated according to the number of residents they attracted, the new benchmarks will be the number of high-technology jobs they create and their contribution to the region's economy.

All existing commitments to investors, including promises of land in the zones and anticipated infrastructural development, will be transferred to the regions, the ministry representative said.





 

ALL ABOUT TOWN

Wednesday, Sept. 3


Although thesand sculptures at the Peter and Paul Fortress are more centrally located and therefore more visible to the throngs of tourists, the 300th Anniversary Park of St. Petersburgs own collection closes today so fans of the classic beach activity should get there while they can.



Thursday, Sept. 4


Vladimir I. Danchenkov, Head of Baltic Customs, will be in attendance during AmChams Customs and Transportation Committee Meeting convening this afternoon at the organizations office near St. Isaacs Square at 3 p.m.



Friday, Sept. 5


Scrabble lovers and chess masters get their chance to assert their intellectual dominance at the return of the British Book Centers Board Game Evenings tonight. Held weekly on Friday nights, the event gives both board game lovers and those hoping to improve their English the chance to meet, greet and compete. Check out the centers VK page for more details.



Saturday, Sept. 6


Athletes will relish the chance to get the latest gear and try out something new at I Choose Sport, an annual event at Lenexpo forum that plans to welcome more than 30,000 people this week to the international exhibition center. Not only will visitors get to try their hand at various athletic endeavors but they will also be able to peruse equipment that can fulfill their dreams of becoming a champion.


Local KHL team SKA St. Petersburg open their season this evening at home against Lokomotiv Yarovslavl at the Ice Palace arena next to the Prospekt Bolshevikov metro station. See their website for a full schedule and available tickets.



Sunday, Sept. 7


Check out retro and antique cars at Fort Konstantin on Kronstadt Island in the Gulf of Finland at FORTuna, a yearly car festival that highlights the eccentricities of the Soviet automobile industry. A car race, contests and a stunt show will give visitors a chance to rev their engines.



Monday, Sept. 8


This evening marks the opening of the two-week ballet festival High Season at the Mikhailovsky Theater. Check the theaters website for more details about performances and featured dancers.



Tuesday, Sept. 9


Discuss the latest news and issues at the AmCham Hazardous Waste Management Roundtable this morning in the Tango Conference Hall of the Sokos Hotel Palace Bridge on Birzhevoy Pereulok. Starting at 9 a.m., planned topics include the Krasny Bor landfill and waste transportation between Russia and Finland.


Learn more about the citys modern architectural trends at the SPIBA Real Estate and Construction Committees meeting on the topic Contemporary Petersburg Style: What is It? Participants will get the chance to discuss whats in-demand with RBI Holdings Irina Petrova and Lubava Pryanikova, and the current state of the local real estate market. Please confirm your attendance by Sept. 5 through SPIBAs website if you wish to attend.



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