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MIL OSI Translation. Region: Russian Federation –

TASS interview following a working trip to the North Caucasus.

Deputy Prime Minister – Plenipotentiary of the President in the Far Eastern Federal District Yuri Trutnev in October made a second working trip to the North Caucasus as a curator of the macroregion, visiting the Karachay-Cherkess Republic, the Republic of North Ossetia-Alania, Ingushetia and Dagestan. Thus, the Deputy Prime Minister visited all regions of the North Caucasian Federal District (NCFD) in a new status for himself.

As a result of the trip, Yuri Trutnev spoke in an interview with TASS about the need to create balanced and transparent measures to support all sectors of the economy of the North Caucasus, the possibility of transferring the successful resorts of the North Caucasus Federal District to private investors on a competitive basis, as well as the need to create an individual development plan for each resort in the macroregion and the government’s rate for the development of the North Caucasus by supporting small and medium business projects.

Uniform rules of the game

Question: Yuri Petrovich, as a curator of the North Caucasus you have visited all regions of the district. What systemic problems in the development of the macroregion do you see following the results of two trips?

Yury Trutnev: The picture is uneven. If we talk about the rates of economic growth, they are not bad in the Caucasus today, even higher than the average for the Russian Federation. At the same time, if we take absolute indicators (incomes of the population, gross regional product), then they are several times lower than in the country as a whole. Therefore, it is necessary to catch up for a long time.

The most important thing we must do is create common instruments to support the economy. Because today they are not balanced. In one region, 90% support for investment projects is provided, in another, a program is being implemented entirely at the expense of the state to lay industrial modern gardens on ten acres of land for private households, in the third a subsidy of 50% is given.

That is, complete confusion, which causes people to feel the opacity and unfairness of the actions of the authorities. This must be eliminated. People should understand that the rules are such that we support investment projects in such and such a part.

They (support tools – TASS note) may be different for different spheres of activity, but for one group of recipients they should be the same, understandable and fair.

Question: That is, uniform measures for each separate industry?

Yury Trutnev: Yes. For example, in agriculture we must say: the support mechanism is the same; in tourism, we work this way. All this must simply be worked out, because, I say again, otherwise people do not understand anything, and I have a whole series of questions, why is it done this way.

Question: During your working trips, you said that the Elbrus resorts in Kabardino-Balkaria and Arkhyz in Karachay-Cherkessia may be transferred to private investors for management …

Yuri Trutnev: “Arkhyz” – yes. A lot of budget money has been invested in Arkhyz. On the whole, it is an already established resort, but it can be developed further. I think that Arkhyz may well be in demand today for further development through private investment.

If we talk about Elbrus, then, of course, it has a complicated history. There is every reason to create a recreation center of international importance there.

Elbrus may well write its name next to the largest European resorts. But only so far, nothing like this happens

In order for a major investor to enter Elbrus, a lot needs to be done. Not only, by the way, in terms of investments. This includes development. While there are some separate strings of lifts, different owners. All this is different. Therefore, here a private investor is ineffective, he will not be able to deal with illegal buildings. This is not his, this is a state task. Moreover, we must not chop off the shoulder, but carefully put everything together, because the lifts were built by people, including those living in the region. Nothing can be taken from people. We need to make sure that they can recoup their investment. But we must offer them that form of joint work, that form of development, in which they will earn more than they earn now. Or everything will remain within the framework of the local resort.

But after the task is completed at the state level, it is necessary to transfer the resort to the investor, because the business should be carried out by the business, and not by the state company. The level of motivation is completely different: when a private investor works, he will do everything possible to cut costs, to have the highest possible profitability, to repay loans faster, to make money for his family to live normally. Therefore, business in this respect, in my opinion, is the most effective. And besides, budget money must be protected. We get them from the same business, increasing the load on it and reducing its profitability. Accordingly, it turns out such a circuit: we collect, then invest.

Question: Are there any specific investors interested in managing the Arkhyz resort?

Yury Trutnev: We must create the most transparent, most effective transfer mechanisms. And he himself (the mechanism of handing over to private investors – TASS note) can only be competitive, only competitive. The fact that there is an investment demand for Arkhyz is more likely the result of my conversations with the head of the republic, with representatives of the RF Ministry of Economic Development. And who will invest and how much – a competition needs to be announced, but within the framework of this competition it is necessary to precisely formulate the conditions, that is, to be honest, we are not very interested in simply taking and “throwing” the resort off the shoulders of the state.

Today in the “Resorts of the North Caucasus” employs about 350 people of service personnel. Only on “Arkhyz” there are more than 150 such people in the high season. These are the people who stand on the lifts, they service all the equipment, they work in the state development institute. In my opinion, this is nonsense. This cannot happen. The Institute for Development is completely different.

But still, the main task is not just to remove all this service from state development institutions, but to continue investments, only not at the budget, but at private expense. At the same time, in the conditions of the competition, the entrance ticket must be indicated by what the investor must do next.

There should be a binding agreement fixing further work and what should be built: what is the minimum number of kilometers of tracks, lifts, hotel places. All this must be thought over, then conditions for the normal holding of the competition will be obtained, and whoever wins is a fine fellow.

Question: Do you consider it correct to create a unified concept of tourism development in the North Caucasus Federal District or your own for a particular region?

Yury Trutnev: Let’s first understand what the concept of tourism development is. What do you need for tourists to come to us? First of all – the content: we swim in the sea or ride from the mountain, or we are treated with the use of mineral springs. Around this content, the next is the creation of infrastructure. That is, a person must be able to stay well, eat well, there must be clear logistics of how to get there. To be honest, we’re not doing very well with that.

The most important thing is to have objects, hotels, resorts (ski or non-ski), so now tourism is divided into specific objects, we cannot just say: let’s write something now, do something, and tourism will flourish. No, we need to be specific, we need to put Elbrus (a resort in Kabardino-Balkaria – TASS) in order, Dombay (in Karachay-Cherkessia), we need to decide on Arkhyz, we need Mamison ( in North Ossetia) to build, because there may be a wonderful resort there, it is necessary to continue the construction of the Veduchi resort (in Chechnya). In a number of regions there are proposals for joint use for sports recreation, and, as I said, for treatment. All our common work on tourism development is broken down into specific objects, each of which should have its own individual development plan, because they are all different, each project has its own amount of funding. That is, some kind of sequence of actions that will lead to the fact that the existing resorts on our map will become more comfortable, safer, more efficient, and in addition, new ones will appear.

Question: Now only the Stavropol Territory participates in the experiment on resort collection from all regions of the North Caucasus, are there plans to expand the experiment and introduce it in other regions of the North Caucasus Federal District?

Yury Trutnev: I now believe that when we can avoid an unnecessary burden on citizens, on enterprises, it is better to avoid it. We must collect as much money from people in the form of taxes as is necessary for the defense of the country, for the protection of borders, for health care, education and utilities. Leaving people and enterprises with a larger amount of funds, we are just trying to increase the rate of development of economic growth, and not vice versa: we will collect everything, we will build everything ourselves, then in the process someone else will steal money or will not complete it, as we have it happens. This is not the best way. If we are talking about the development of resort infrastructure, let’s better try to bring private investors there, reduce their costs, please – lower taxes, create some kind of preferences. It seems to me that this is much wiser and more correct than collecting and then using it like this.

New investor support system

Question: At the beginning of October, a government decree was issued on the reorganization of the two main development institutions of the region – the North Caucasus Resorts and the North Caucasus Development Corporation. How effective do you think it will be? And is there now an understanding of what the new development institution will look like?

Yury Trutnev: We believe that their functions can be combined. Today, on the balance sheet of the “Resorts of the North Caucasus” there are a number of assets that have been created at the expense of the state, and they must be disposed of as efficiently as possible. Therefore, it was decided to reform it by joining the North Caucasus Development Corporation to the North Caucasus Resorts. But this is more of a technical solution. This does not mean at all that the newly formed structure will be called the “Resorts of the North Caucasus”. It will be called differently. I also cannot tell you today who will lead it.

This is a general process, there is an order from Prime Minister Mikhail Vladimirovich Mishustin. He believes that it is necessary to reduce the number of development institutions. We are doing this work not only in the North Caucasus, we plan to do it in the Far East as well. There will also be such a consolidation of institutions. Because in this case we will be able to reduce a number of budgetary expenditures, which we can do without. And most importantly, in the Far East, it is very important for us to create a unified chain of support for investors, which is still breaking in our country. The Far East Agency for Attracting Investments and Export Support works, in my opinion, professionally, but it “drags in” the investor, and then the investor goes to the Far East Development Corporation. The accompanying people change, this is very uncomfortable for the investor, because he received guarantees of support, saw how people work, and suddenly other people come who did not guarantee him anything. It’s uncomfortable.

Question: Will the reorganized institute of the North Caucasus have any new functions?

It seems to me that in the North Caucasus, in general, a complete, let’s say, assembly of all tools for supporting business projects is needed: attracting investments, accompanying, providing support – all this should be brought together

It seems to me that in this part the experience gained in the Far East can be useful.

Question: Do you plan to create a new system of preferences or expand the preferential regimes that are now in the North Caucasus Federal District?

Yury Trutnev: The answer is yes. We will do this. We will also use the experience gained in the Far East. But the principles themselves can be very different. In the Far East, we are currently supporting large investment projects, because large investors come there. And in the North Caucasus, we will focus on supporting small and medium-sized businesses.

Question: Are there plans to increase the number of special economic zones or to extend this regime to the entire North Caucasus?

Yury Trutnev: The important thing is not how many zones we will create, but how many investors will come there, how much will be invested and what will be the result. It is not a supernatural difficulty to create a special economic zone or a priority development area. The corresponding document is adopted by the government and that’s it.

But we are trying to prevent – for us this is very important – the formation of empty preferential zones. Therefore, the principle will be the same that we have already worked out: if a subject applies for the creation of a preferential territory, we will check each project, make sure that these projects will come true, that they have money, that people understand technologies, understand markets, and then we will be happy to continue this work. While it is still to come.

Question: Will there be any sanctions for those investors or those projects that are not being implemented as planned?

Yury Trutnev: When projects are not implemented, then it is not investors who should be punished, but officials.

An investor does not owe us anything at all if we do not build infrastructure specifically for it. All these preferences start to work only when the enterprise is built. If he does not build it, then he will not take advantage of any state benefits and, I say again, he does not owe us anything. But our respected officials, employees of development institutions, governors, regional governments who put forward this project, defended it – which means they did not understand it completely

This means that they did not see any risks. This also happens. In development work, it does not happen so that everything conceived comes true.

But it cannot be massive. That is, if, for example, we created a special economic zone, we wanted there to be five anchor projects, but it turned out three, and two are still stalled, then we just need to roll up our sleeves and make sure that new ones come. It seems to me that this is not such a gross mistake. But if five were planned, and none came, then there is a reason for the investigation: how, how was it prepared, and why did we do it?

A situation similar to what I just tried to say is observed with the project to create a Caspian coastal cluster in Dagestan. That is, they seem to have created a special economic zone, nothing happens at all, they cannot deal with land, property, illegal buildings. We will figure it out, we will try to revive this cluster. If it does not work out, then, then, we will also consider a solution to liquidation.

Interviewed by Ksenia Orlova

A source: https: //tass.ru/interviews/9817067

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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