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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

Thursday, July 24


Liliana Modiliani, a well-known Russian stylist, will talk about choosing clothes that fit during her lecture at 7 p.m. at the Pryamoy Efir art club, 13 Viborgskoe Shosse.



Friday, July 25


Discuss Russia’s economic and political prospects for 2014 during a Business Breakfast organized by SPIBA at 9.30 a.m. in the Bank Saint-Petersburg office at 64


Malookhtinsky Prospekt.


Start your weekend with adorable miniature pigs at the Squealing Pig festival at 7 p.m. this evening in the Karl & Friedrich restaurant, 15 Iozhnaya doroga, on Krestovsky Island.



Saturday, July 26


Hundreds of brand-new and retro cars, drag and drift shows, test drives and karting are planned for the Avtobum-2014 festival, which will take place in front of the RIO shopping center at 2 Fuchika Ulitsa.


Participants in today’s SaniDay Summer competition will impress visitors with their hand-made, unusual and hilarious boats, which will race at the Igora Resort near the 54th kilometer on Priozerskoe Shosse.


Metro Family Day will include both serious lectures for adults and master-classes for children, making the event interesting for the whole family. To participate, come to Kirov Park on Yelagin Island.


Photography will be the focus of today’s Photosubbota, which features lectures by famous photographers, meetings with photo schools and studio representatives, and participation in a photography competition. The event starts at noon at Petrokongress, 5 Lodeynopolskaya Ulitsa.


If you like cycling, make sure to visit the Za Velogorod Festival with its retro bike exhibition, market and live music. The second round of the Leningrad Criterium race will also take place during the event at Petrovsky Arsenal in Sestroretsk.



Sunday, July 27


Navy Day will be celebrated with a weapon and military transportation exhibition, self-defense master classes and concerts. The event starts at 1 p.m. in the 300th Anniversary Park of St. Petersburg.



Monday, July 28


Don’t miss a chance to see the latest achievements in robotics during the RoboDom interactive show, exhibiting more than 150 robots. The show will be at BUM center, 22/2 Gzhatskaya Ulitsa, until Aug. 3. The entrance ticket costs 350 rubles ($10).



Tuesday, July 29


A video of a Queen concert from 1986 will be shown today at 8 p.m. in Yaschik, 50/13 Ligovsky Prospekt.



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