MIL OSI Translation. Region: Russian Federation –
Interview with RIA Novosti
Deputy Prime Minister – Plenipotentiary of the President in the Far Eastern Federal District Yuri Trutnev, who in the new government oversees the North Caucasus and has already travelled to all regions of the North Caucasus Federal District, said that there is still no satisfaction with measures to support investors in the macroregion, the state support system needs to be made fair and transparent. In an interview with RIA Novosti, he told why in the North Caucasus it will not be possible to copy the measures working in the Far East, what to do with illegal construction in the North Caucasian resorts, is it possible in the North Caucasus Federal District to have an analogue of the Far Eastern Hectare program and why the heads of the Far Eastern cities should pay attention on the experience of the development of Dagestan Derbent.
Question: Yuri Petrovich, as the Deputy Prime Minister in charge of the macro-region, you have already visited all regions of the North Caucasus. What can you sum up?
Yury Trutnev: It was an absolutely necessary trip, because until you visited the territory, did not see how people live, what they think, what they are planning, sitting here in Moscow and making decisions regarding the development of the region is absolutely useless and meaningless exercise …
Therefore, I considered myself obliged, if I was instructed to deal with the development of the North Caucasus region, to visit all the regions. Actually, which I have already done. Now for the impressions. If we talk about visual impressions, then, of course, the Caucasus is a very beautiful and fertile place. The people are great. The mountains are magnificent, the climate. But this is such a big picture. If we speak a little more professionally in terms of the characteristics of the development of the region, then the situation there turns out to be interesting.
First, almost all regions of the North Caucasus today demonstrate higher growth dynamics than the average Russian ones. Probably, I would not consider it anyone’s merit. You should always look at the structure of the economy. In our country, the structure of the economy of the North Caucasus is largely confined to agriculture, tourism, the share of industry in most regions is low. It is clear that the restrictive coronavirus did not significantly affect the consumption of food by people, so agriculture is not bad at all. Tourism is also growing due to cross-country isolation. People spend more time in Russia. But if we look at other indicators, for example, income per person or gross regional product per person, then it will already differ several times from the average Russian level. All these indicators are below. What else is important? Population income. The incomes of the population are also lower than the national average, but I do not fully believe in this indicator.
Yury Trutnev: We went there and watched. I don’t have the feeling that people are living in such direct poverty. At meetings in almost all republics, we touched on the topic of shadow income. They are quite significant there.
Therefore, the real standard of living of people is still higher than the standard statistics give. Probably not very good. But I do not think that now it is necessary to try to pull people out of the shadows with tough actions. It seems to me that these actions should be precisely aimed at creating favorable conditions. That is, people should understand that it is more profitable and correct to work in the legal sector.
There is already an order, I asked my colleagues to think about it, to develop a set of measures. If you think about it, today taxes on small businesses are low, there is nothing supernatural that would prevent them from paying them and taking risks associated with illegal entrepreneurship. The tax is 6%, which is hardly an obstacle for people.
Most likely, the point is different – the fact that the created control system, multiplied by, let’s say, not always conscientious officials, leads to the fact that when a person legally registers his business, a whole bunch of supervisory agencies appear, which finds fault with everything, with what can find fault with. A source of corruption appears, and the problem of excessive pressure on people is created. They just prefer to open something that is not very registered, not register anything and be in the shadows. This is probably how the general impression looks like. What else I want to say. So far, I am not satisfied with the support system that has developed in this direction in the North Caucasus.
Question: Is it not effective? Do you already have any ideas how you can change it?
Yury Trutnev: I will give simple examples. In Ingushetia, we looked at two agricultural enterprises. One received 60% of budget support, and the other received zero. The second is even better. The question arises: why did you receive money in one case, but not in the second? Why are the conditions so different?
Further, in the Karachay-Cherkess Republic, assistance was provided to small agricultural producers. In my opinion, this is a very correct story. They took the territory, created the infrastructure for the construction of the garden. A person can immediately receive seedlings, supports, an irrigation system in a set of ten acres. As a result, people have the opportunity to create an intense apple orchard. The economic indicators there are excellent.
At all enterprises that are engaged in gardening, I asked a question about profitability. The numbers range from 30% to 40%, even in some cases up to 60%. We have few industries in which such profitability can be found.
In Karachay-Cherkessia, these kits were given out for some reason free of charge. Surely, if it were given out free of charge to everyone, there would be a lot of people willing. Then I have a simple question: how did you choose those who were given these kits? Got the prettiest ones? Most respected? I don’t understand this principle.
It seems to me that the system of state support should be absolutely transparent and fair. If we want to support private gardening, great. Let’s then make it so that we don’t subsidize 100%. When a person pays nothing for his own future garden, he will not do it, because he will not be interested. He didn’t invest his money. Then let us make less budgetary investments in this support system, and make the number of people we can help significantly more. That it was a permanent program, when people can receive this support. It is necessary to think about on what objective principles to make the distribution, if there will be more applications than budget support opportunities. All this must be thought out, because when there is no fairness and transparency in government actions, in government support, it cannot be effective. Probably ended up with general impressions.
Question: Will additional funds from the federal budget be required to support investors in the North Caucasus?
Yury Trutnev: Regarding investor support. Oddly enough, but if in the Far East we are more actively using all the support tools in relation to large projects, because more jobs are created there, they have a greater impact on the economy, then in the North Caucasus there is a strong impression that it is necessary to do small things first. and medium-sized businesses. There are few opportunities for the construction of large enterprises, a high population density. There are, of course, minerals, this also needs to be dealt with, but still there are not so many minerals as in Siberia, the Far East and the Urals. Therefore, the emphasis is slightly different, and it is necessary to create tools for small and medium-sized businesses.
Now about the amount of funds, enough or not enough. You know, I’ll tell you an amazing thing – budget allocation is directly related to efficiency. When the multiplier in the North Caucasus is 1 to 2, and sometimes even less, I have no reason to meet with the finance minister and suggest that he increase the amount of funds. But if we work out effective transparent instruments, if our multiplier values are not 1 to 2, but much higher, then more money will go to the North Caucasus, we will have more reason to talk about expanding the support mechanism. We will find money for effective methods.
Question: During your working trip, you mentioned the figure of 1 to 10. That is, the regions should achieve this figure?
Yury Trutnev: I’ll be honest, I am afraid of the number 1 to 10, because what is happening there now does not give the impression that we can do this. It is definitely impossible to go below 1 to 5, but we’ll see. We must start this process. It is still a little amorphous.
Question: Could the “Caucasian hectare” program appear in the North Caucasus by analogy with the “Far Eastern Hectare”?
Yury Trutnev: You know, the principles, for example, which have been worked out in the Far East, may well be applied, but they will not be copied and this will not be effective. Look, in the Far East, the population is one person per square kilometer, we can provide there hectares not only for the inhabitants of the Far East, but for all the inhabitants of the Russian Federation. And even if every resident of Russia takes a Far Eastern hectare, there will still be 30% of all land available for issuance.
78% of the land has been developed in the North Caucasus today, and who will we invite to the remaining 22%? Therefore, of course, land, especially for such fertile regions as the North Caucasus, is one of the main means of production.
I will definitely strive to make an inventory and we have information about free land: how much of it, in what areas and how it can be used. This land should be distributed, like state support, transparently and fairly – on a competitive basis, with clear goals and objectives. I did not see this at all in the Caucasus. Until I saw … I was talking about the good, but I will also say about the bad.
The amount of illegal construction in the Caucasus is simply outrageous. We arrive, see the lower village on Elbrus. It is built up all along, across and obliquely. It is not at all clear how. I ask the head of the republic, has it really never occurred to anyone at all that it is necessary to think about making it beautiful, having street lines, style, color schemes? So that Elbrus can be developed as a competitive beautiful resort where people will come. Moreover, we are talking about Elbrus – this is a completely unique mountain range, the highest point in Europe. And we have so diligently ruined this territory over the previous years with a village at the foot of which you will think ten times if you want to go.
The head replies that everything is actually illegal there. People built it the way they wanted it. I have only one question: why, no one saw how the buildings were built and laid? It was not visible? Where were all the regulatory authorities at that moment? What did they do? Did they take bribes to turn their heads the other way when this happened? I do not understand.
And now we are faced with a story that we need to take a bulldozer and demolish everything. I am not a supporter of such decisions. Although people did something completely wrong, they invested their money there, built hotels and restaurants. Don’t we need hotels and restaurants near Elbrus? Needed. Therefore, I asked to conduct an audit and determine where the buildings were built, which can no longer be included in the overall project for the development of the lower village: dilapidated, old, unreliable, ugly. There you have to find some kind of solution. I would still try to make this decision rather soft. Don’t just bulldoze it, but give people some other plots. They will be legal, and people will calmly build hotels there. If soft loans are needed, we will find funds for this. In the end, such a decision should probably be discussed with Prime Minister Mikhail Vladimirovich Mishustin.
To be honest, I would even go for the fact that in some cases, partially compensate for the cost. In general, we need to look for some way out of this story, but there is no option to offend everyone and take everything away.
We will not be able to develop further, because illegally built buildings are breaking everything. We will not invite system investors there who are ready to build hotels and develop ski resorts as a single complex. They will not go to this squatter, it is quite obvious.
And this applies not only to ski resorts, but also to the coastal part. The Ministry of Economic Development and Trade wrote me absolutely fantastic information about the Caspian Special Economic Zone. They wrote that illegal buildings were built there, and since no one provides permits for these buildings, it is impossible to further develop the special economic zone. Fantastic city. First, let’s remember that, according to the legislation of the Russian Federation, illegal buildings are removed, and the one who built them pays the cost of liquidation. It’s actually tough there. Let’s take this as one side, but as the other side – still find a softer solution, without any surgical measures.
Question: What can be the decision on the Caspian economic zone? Will you conduct a dialogue with people?
Yury Trutnev: You see, in order for me to find a solution to the Caspian cluster now, I need to look. It did not fit into the program of my trip. The program was quite tough: four days – four regions. I still hope that my colleagues from the Ministry of Economics, who have now taken over responsibility for the development of the region from the Ministry of Caucasus, will find these solutions. If not, then we’ll go to watch it again. I believe that there are no insoluble situations. The solution can always be found. You just need to meet people, talk, explain to them and move forward.
Question: Are there any plans to introduce other mechanisms in the Caucasus that are already working in the Far East, for example, the free port mechanism?
Yury Trutnev: I would like to return to what I said once again. It’s not about the names, it’s about the principles. Today, the priority development area and the free port mechanism are the most effective tools used in the Russian Federation in terms of attracting investors, this is absolutely certain. Our multiplier today is 1 to 25, that is, one budget ruble accounts for 25 rubles of private investment. But the matter is not in the form, the form must depend on the conditions, on the task at hand, the matter is in principle. And these principles are quite clear and simple.
First, if investors do not go, we reduce their costs through budget support to the level when they go. That is, for example, they do not go to the Far East due to the lack of infrastructure, we are building infrastructure in a ratio of no more than 1 to 10, that is, for 10 rubles of private investment, there may be 1 budget ruble. Is the principle clear? Understood. What proportion should be in the North Caucasus? Now there is no solution, it must be found.
Second, is that enough? No, not enough. There should be an escort mechanism that will protect investors from inspections, that will help them obtain land plots, that will help in a number of issues related to obtaining permits, licenses, and so on. That is, we need to create such a mechanism in the North Caucasus, proceeding from a completely different specificity of the region.
Question: After a meeting with the government of the Republic of North Ossetia-Alania, you announced that you will hold another meeting with the head of the region Vyacheslav Bitarov within a month. Are there any more additional meetings planned with the heads of the North Caucasus Federal District in the near future?
Yury Trutnev: Well, you know, first of all, I hope that I am quite accessible to those who need it for some reason, especially for the heads of regions. But if we talk about my fixed desires, then there will be this meeting, which you just told me about. Of course, after a certain period of time we must meet with the new leader of Dagestan, Sergei Melikov, because he has just arrived. On the fourth day of work, it would be a little strange for us to talk about the development strategy. Rather, we talked about the main directions, there was a report by the head of government, and then we need to continue this work.
Question: The head of Chechnya Ramzan Kadyrov asked you to control the development of tourism in the region. You instructed to develop a plan to attract tourists, including from the Middle East. Do you already have any ideas in this direction?
Yury Trutnev: First, a report was made to the President of the Russian Federation, Vladimir Vladimirovich Putin, regarding the trip to the Chechen Republic. He supported the proposal for the development of the republic, including the resort. Secondly, there really were proposals for the development of not only the Veduchi resort, but also Lake Kezenoyam. We will continue to work with the government of the Chechen Republic. It seems to me that they see the direction of development quite well, they have a strategy. It is much easier to work with people who themselves know exactly where they are going. Our task is only to help.
By the way, if we talk about such positive impressions of the trip, then in Dagestan I was in the city of Derbent. I can say that this is probably the first city I came to, and they began to tell me about the vision of the city for many years to come: how the city will be built, what will be needed, what architecture will be. To be honest, it made a very positive impression on me. It seems to me that they are great. Derbent is a very ancient city, and the fact that the people who now rule the city think about its development, urban planning policy, and, most importantly, think about how to make this city beautiful, is very good. People want, of course, to live in beautiful cities. No one is satisfied with living when houses fall nearby, roads in holes. This work is underway there, it’s very cool. Of course, there is an additional factor – Senator Suleiman Kerimov provides great support to the development of the city. He was born in Derbent, invests in development, but this is not the only point. No additional money can achieve anything if it is used ineffectively.
Here I would probably say the opposite process. You are saying what experience to transfer from the Far East to the North Caucasus – we will deal with this, you have already said everything about this. But in terms of creating a city that people can be proud of, I would, on the contrary, suggest that our leaders of the Far Eastern territories adopt the experience of Derbent. They do it very well.
Question: The North Caucasus has great potential for international cooperation, especially in the Arab direction. How are you planning to use it? Do you plan to organize business missions in the future? If so, which ones and where?
Yury Trutnev: First of all, we need to find out the scope of this interest. It makes sense to go somewhere and negotiate when the ground has already been prepared. Here I would go back to the experience of the Far East. Our Agency for attracting investments and supporting exports has established representative offices in a number of surrounding countries. When I arrived, and I was in almost all the countries closest to the Far East, everything was prepared there. An audience gathered there, representatives of local business who are really interested in cooperation with Russia, who are already partially implementing projects in the Far East. Someone is, so to speak, in a pre-project state when they need to ask questions in order to take the next step. These contacts must first be established at the working level. When this is done, and this trip will be provided with meetings with people who are ready to develop the North Caucasus region, invest funds who are ready to talk about the necessary additional mechanisms that need to be introduced, then there is something to talk about.
Interviewed by Svetlana Zadera. Source: https: //ria.ru/20201027/trutnev-1581600000.html
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.