Appendix to the Resolution of the Government of the Rostov Region dated 31.07.2013 No. 474
Development strategy of the investment area of the Rostov Region for the period till 2020 1. Introduction
The strategy of social and economic development of the Rostov Region for the period till 2020 is worked out and acts in the Rostov Region in which the main problems, objectives, key directions and tasks of development of the Rostov Region for the period till 2020 in all basic areas and branches of economy and society are defined. Thus, the determining factor of realization of the stated strategic objectives is the active position of the Government of the Rostov Region in attraction of investments in the necessary volume and the required quality which should provide the stable, dynamic, expanded growth of the economy based on introduction of advanced technologies for modernization of the existing ones and creation of new productions, maximum attraction of the regional scientific and human resources, rational use of natural resources, and realization of competitive advantages of the geographical position of the region, and, as a result, growth of welfare and life quality of the population of the Rostov Region. Complexity and objective demand for the solution of the problem of working out of the effective long-range policy in attraction of investments into the economy and the social area of the Rostov Region with determination of the goals and the mechanism of their achievement caused the necessity in working out of this development strategy of the investment area of the Rostov Region for the period till 2020 (hereinafter referred to as the Strategy).
2. Level of economic development of the Rostov Region
2.1. Gross Regional Product. In 2010 according to the volume of the Gross Regional Product (hereinafter referred to as the GRP) the Rostov Region steadily took the 13th place among the constituent entities of the Russian Federation, providing 1.7 % of the whole GRP of the country. At the level of the constituent entities of the Southern Federal District (hereinafter referred to as the SFD) the Rostov Region is in the 2nd place forming 27.6 % of the total GRP of the district. According to the estimates of the Ministry of Economic Development of the Rostov Region in 2011 the index of actual volume (hereinafter referred to as the IAV) of GRP made up 107.2 % which advances the index both across the Russian Federation as a whole (by 2.9 percentage points), and across the regions of the SFD (in comparison with the estimates of the governments of the corresponding constituent entities). In comparison with the structure of GRP of the Russian Federation in view of the types of activity agriculture, manufacturing, electric power, gas and water production dominate in the Rostov Region. So, the portion of GRP of the Rostov Region, falling on agriculture, exceeds by 2.76 times the similar one across Russia, by 9.6 % - in manufacturing, and by 31.1 % in electric power, gas, water production and distribution. 2.2. Industrial and fuel and energy complex. In the industrial complex of the Rostov Region more than 25 % of GRP volume is formed. Manufacturing providing more than 80 % of the total volume of the shipped products in the industrial complex form the basis of the industry of the Rostov Region. The enterprises of electric power industry and mining provide 16 and 3.2 % of the total volume of the shipped products respectively. According to the volume of the shipped industrial products (works and services) following the results of 2011 the Rostov Region is the leader of the SFD, and in comparison with other constituent entities of the Russian Federation the Rostov Region takes the 18th place, providing more than 1.5 % of the indicator value across the country, in particular, in manufacturing - the 16th place and 2 % in the Russian Federation, in electric power production - the 14th place and 2.1 % in the Russian Federation. The dominant branches of industry are food industry (20.9 %), mechanical engineering (15.3 %), metallurgy (13.0 %), oil processing (9.4 %) which provide in total about 60 % of the volume of the shipped industrial products of the Rostov Region. The specialization branches both at the local level of the constituent entities of the SFD, and at the level of the Russian Federation as a whole are presented by mechanical engineering, electric power production and light industry, thus, light industry has the highest concentration factor among the specified branches. In regard to the national economy as a whole the industry of the Rostov Region is specialized in food industry and production of construction materials. 2.3. Agriculture. The Rostov Region is the largest producer of agricultural products in the Russian Federation, providing about 5 % of the All-Russian agricultural production. Following the results of 2012 the volume of agricultural production made up 144.9 billion Rubles which is the fourth result across the country after the Krasnodar Territory, the Belgorod Region and the Republic of Tatarstan. The crop production provides nearly 60 % of the cost volume of agricultural products of the Rostov Region. In 2012 in the Rostov Region crop products were made in the volume of 82.1 billion Rubles that made up 5.6 % of the total production volume across Russia and 26.9 % - across the SFD (the second result after the Krasnodar Territory). In view of the types of cultivated crops the Rostov Region is included into the three leading regions of the Russian Federation according to the gross collection of grain crops and sunflower. According to the data of 2012 the volume of animal production in the Rostov Region made up 62.8 billion Rubles, providing 3.7 % of production in the Russian Federation (the 5th place), and 31.5 % in the SFD (the 2nd place). Thus, according to the egg production the Rostov Region takes the 2nd place in Russia after the Leningrad Region – 4.2 % of the total production of this type of agricultural products accrues to it in the country. According to the milk production the region takes the 5th place (3.4 % of the All-Russian production). 2.4. Foreign economic activity. The Rostov Region is an active participant of foreign economic activity: 1.3 % of the total volume of the foreign trade turnover of the constituent entities of the Russian Federation (the 16th place) and 33.4 % - of the constituent entities of the SFD (the 2nd place) accrues to it. Following the results of 2011 the foreign trade turnover of the Rostov Region made up 10.3 billion USD, including export – 5.1 billion USD (49.7 %) and import – 5.2 billion
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USD (50.3 %). Deficiency of the foreign trade turnover made up 73.7 million USD. It should be noted that since 2009 the tendency of the deficiency reduction of the foreign trade balance is observed which is caused by increase in export and decrease in import. According to the data of 2011 the basis of export of the Rostov Region is made by food products and agricultural raw materials (except for textile) - 37.6 %; fuel and energy goods – 32.4 %; metals and metal products – 16.6 %; machinery, equipment and vehicles – 7.0 %. In import goods structure machinery, equipment and vehicles prevail - 29.7 % of the total volume of import; metals and metal products – 28.2 %; fuel and energy goods – 12.4 %, and chemical industry products - 9.1 %. 2.5. Retail trade and service sector. In 2011 the retail trade turnover of the Rostov Region made up 542.5 billion Rubles. As a result according the volume of the consumer market the Rostov Region took the 8th place in the Russian Federation and the 2nd - in the SFD. The main portion of the retail trade turnover is formed in the stationary trade sector – 88.6 %, including 18.4 % - by distributive networks. Dynamics of the consumer market structure is characterized by the portion growth of network large-size trade. According to the data of 2011 in the Rostov Region the catering trade turnover made up 23.2 billion Rubles. According to the value of this indicator the Rostov Region takes the 11th place among the constituent entities of Russia. In formation of the catering trade turnover the main contribution belongs to the small business entities – 83.4 %. In 2011 the volume of the paid services rendered to the population in the Rostov Region made up 122.1 billion Rubles, or 2.2 % of the All-Russian indicator value that corresponds to the 9th place among the constituent entities of the Russian Federation. In view of the types of the paid services in the Rostov Region public utility and communication services prevail - nearly a half of the whole volume of the paid services rendered to the population accrues to them. 2.6. Transport industry. According to the data of 2011 the cargo turnover of the transport organizations of the Rostov Region made up about 50 billion tons/km. In view of the means of transport the main contribution into the value of the considered indicator belongs to railway transport – 75.1 %, sea and inland water transport – by 10.8 %. In the All-Russian volume of the cargo turnover in view of the means of transport the inland water transport of the Rostov Region forms 9.1 %, sea transport – 7.0 %, air transport – 2.3 %, railway transport – 1.8 %, and vehicular transport – 0.7 %. In 2011 the passenger turnover of all means of transport in the Rostov Region (excluding trams, trolleybuses) made up 11.5 billion passengers/km. From this number about 51.5 % accrues to railway transport, and 37.1 % - to vehicular transport. And according to the number of the transported passengers (without including distance) the main carrier is vehicular transport - 95.8 %. 2.3 % of the whole volume of the passenger turnover of the Russian Federation, in particular, 4.3 % of the passenger turnover of railway transport, 7.4 % of inland water transport and 3.1 % of vehicular transport, accrue to the Rostov Region. 2.7. Investments. In 2011 164 592.0 million Rubles of fixed investment were raised into the economy of the Rostov Region that provided 1.5 % of the volume of capital investments to the
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Russian Federation and 16.0 % - to the Southern Federal District. The Rostov Region is included into twenty leading regions in terms of investment volume in the fixed assets. In 2012 211 924.1 million Rubles of fixed investment in actually current prices were used on development of the economy and the social area of the Rostov Region on the full range of organizations. The investment volume index made up 121.7 % by 2011. Thus, it should be noted that growth of the fixed investment volume was observed for the first time for the reconstruction post-crisis period. The significant role in the investment process of the region belongs to the large and the medium organizations, 65.5 % of the total volume of investments accrues to them in 2012. In 2012 138 929.6 million Rubles of fixed investment is used by them in the territory of the Rostov Region. Following the results of 2012 the volume of the used fixed investment on the large and the medium organizations increased in the majority of types of economic activity, including mining, manufacturing, construction, electric power, gas and water production and distribution, transport and communication, financial activity, etc. "Electric power, gas and water production and distribution" – 30.2 % of the total volume of investments (for 2011 - 28 %), "transport and communication" - 20 % (20.9 %, respectively), "manufacturing" – 17.8 % (17.2 %), remain as the main directions of investment. The Rostov Region is characterized by the considerable proportion of investments in GRP structure. So, according to the data for 2010 the proportion of investments in GRP of the Rostov Region made up 25.1 % by the average Russian value - 20.2 %. Following the results of 2011 the volume of foreign investments into the economy of the Rostov Region, taking into account the ruble equivalent recalculation, made up 2 295.7 million USD that is twice as high as the pre-crisis level. The proportion of the Rostov Region in the total volume of the capital, incoming to the Russian Federation from abroad, made up 1.2 %. In ranking of the constituent entities of the Russian Federation according this indicator the Rostov Region is included into ten leading regions and is the only territory among the constituent entities of the SFD, entered into this list. In the structure of foreign investments in the Rostov Region 7.4 % accrues to direct investments, thus, 79.7 % fall to the trade credits, and 12.9 % - to other credits. Such structure of foreign investments is typical for Russia as a whole where the proportion of direct investments made up 9.7 %. 2.8. Construction. In 2011 the volume of construction works in the Rostov Region made up 83.4 billion Rubles. Following the results of 2011 the Rostov Region is included into twenty leading regions according to the volumes of work realized in the type of activity "Construction", forming 1.5 % in the total volume of the indicator in the Russian Federation. According to the volumes of housing construction the Rostov Region takes the 6th place among the constituent entities of the Russian Federation. Following the results of 2011 in the Rostov Region 1 880.3 ths. sq. m of the total area of residential houses were realized that provides more than 3 % of the total area of the realized housing in the Russian Federation. The greatest proportion in housing construction is occupied by individual houses constructed by the population at its own expense and by means of credits - 69.9 %. 3. Competitive advantages of the Rostov Region
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3.1. Population. As of January 1, 2012 the number of the residential population of the Rostov Region made up 4 260 643 people, or 3.0 % of the total number of the population of Russia. According to this indicator among the constituent entities of the Russian Federation it takes the 6th place, being behind of Moscow and St. Petersburg, the Moscow and the Sverdlovsk Regions, as well as the Krasnodar Territory. The Rostov Region remains as one of the most thickly peopled constituent entities of the Russian Federation: as of January 1, 2012 the population density makes up 42.2 persons on 1 sq. km. The settlement system of the Rostov Region is characterized by high urbanization: the proportion of the urban population makes up 67.5 %. The population of the Rostov Region has high educational level: among 1 000 persons 300 persons have vocational secondary education, 400 persons - general secondary education, 87 persons - incomplete secondary education, and 190 persons - higher education. 3.2. Climate. The Rostov Region is situated in the zone of favourable temperate continental climate with the average annual volume of rainfall of 400 - 650 mm per year. The mean temperatures in January are from -9°C to -5°C, in July from +22°C to +24°C. Owing to the southern geographical position of the Rostov Region, abundant sunshine and heat are observed in its territory. Duration of the period with the temperature above 10°C fluctuates in the territory from 160 to 180 days. The favourable mild climate of the Rostov Region forms comfortable conditions for living of population, increases appeal of the region for migration, as well as provides intensive development of agriculture. 3.3. Land resources. The territory of the Rostov Region makes up 10 096.7 ths. hectares. 87.3 % of the total area of the Don Region forms agricultural lands. According to the size of the area of agricultural lands the Rostov Region takes the 4th place in the Russian Federation (according to the data for 2010), and among the neighboring territories it is behind of the Volgograd Region only. About 65 % of the lands of agricultural designation is occupied by the ploughed fields the basis of which is made by black and chestnut soils. Black soils of the Rostov Region make up about 5 % of black soils of Russia. 3.4. Water resources. Within the Rostov Region more than 4 500 rivers flow, more than 250 lakes; there are 3 water-storage basins and many ponds, and southwards the region is washed by the Taganrog Bay of the Sea of Azov. Recreational resource of underground mineral waters in the region is presented by the deposits of mineral waters. In the territory of the Rostov Region 24 types of mineral waters used as drinking, medicinal and medicinal-table water, are revealed. Nowadays 22 districts of underground mineral waters are used. On the basis of mineral sources diversified health resorts are created and successfully function. 3.5. Raw-material base for production of construction materials. The Rostov Region has almost inexhaustible resources for production of cement raw materials of Portland cement concentrated generally in the Millerovsky and the Tarasovsky Districts. There are also preconditions for expansion of the resource potential of scarce types of raw materials: agrochemical, siliceous, glass, sorbent, pigmental. 3.6. Hard coal deposits.
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The total number of coal storage in the territory of the Rostov Region, measured up to the depth of 1 500 m, makes up more than 13.52 billion tons, including the explored (categories A+B+C1) - 6.58 billion tons, previously estimated (category C2) - 3.16 billion tons, off-balance - 3.78 billion tons. The grade composition of coals is various - from long- flame coals to anthracites. Anthracites (87 %) prevail; coking coals make only 5.2 % of the total number of the balance reserves. 3.7. Raw hydrocarbon deposits. Within the borders of the Rostov Region 20 deposits of hydrocarbon raw were revealed: 15 gas, 3 gas-condensate, 1 gas-oil and oil-gas-condensate deposits. 9 gas and gas- condensate deposits are under development, the largest of which are the Markovskoe and the Azovskoe. The explored geological reserves of non-associated gas make up 31.2 billion cubic km, oil - 1.9 million tons. Perspective resources of the Rostov Region make up 69.4 billion cubic km of gas (geological) and 54.7 million tons of oil (recoverable). 3.8. Technogenic raw deposits. Industrial wastes of mining industry, concentrating, metallurgical, electric power and other productions represent considerable reserves of technogenic raw, and modern technologies of processing allow using it as construction, heat-insulating, ceramic, fire- resistant, adsorptive, colouring and pigmental, energy and agrochemical raw material. In terms of the range of technogenic deposits licenses are obtained for their development. In 2008 about 20 dumps (waste-rock dumps of the former mines "Gorkovskaya-Yuzhnaya", "Krasnonesvetayevskaya, Glubokaya", "Mayskaya", "Sambekovskaya", "Naklonnaya", etc.) were used. 3.9. Geographical position. The unique geographical position provides for the Rostov Region the title and the function of "the Gates of the North Caucasus" and creates the preconditions for active foreign economic activity. The Rostov Region is the participant of the Euroregion "Donbass" that promotes activation of the cross-border cooperation between the Rostov Region, the Lugansk and the Donetsk Regions of Ukraine both in economic and social areas. The proximity of the Rostov Region to the recreational areas of the Black and the Azov Seas is one of the important factors increasing comfort of living of the residents of the region and simplifying the possibilities of rest and health improvement. 3.10. Transit potential, advanced transport infrastructure. The transport infrastructure of the Rostov Region is presented by all means of transport: railway, vehicular, water (sea and river), and air. The basis of the railway system of the Rostov Region is the double track electrified line Moscow - Voronezh - Rostov-on-Don - Baku (495 km). The following main lines are also included into the railway system of the Rostov Region: Rostov-on-Don - Martsevo - Yasinovataya (135 km), providing an access to Ukraine and connection of two largest cities of the Rostov Region - Rostov-on-Don and Taganrog; Rostov-on-Don - Krasnodar - Novorossiysk (110 km), with an access to the largest port of Russia on the Black Sea coast; Bataysk - Azov (30 km), providing connection with the Azov port; Bataysk - Salsk (180 km), providing an access to the highway Krasnodar - Volgograd;
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Likhaya - Morozovsk - Volgograd (225 km), connecting the Rostov and the Volgograd Regions. Water transport provides high transport potential of the Rostov Region too. The Don River, connected by the channel with the Volga River, forms the single transport network of the European part of Russia. It connects the Rostov river port with 16 countries of the Mediterranean, the Black, the Baltic and the Caspian basins, and on the Danube and Rhine Rivers - with the Danube bordering countries. In the territory of the region there are seven ports, including the Taganrog, the Rostov and the Azov ports working in the mode of year- round navigation. Together with the ports of the Krasnodar Territory the ports of the Rostov Region form one of two main export-import oriented regions of the Russian Federation, on equal terms with St. Petersburg and the Leningrad Region. The infrastructure of the vehicular transport of the Rostov Region is presented by a wide network of highways of federal and local significance. Through the territory of the Rostov Region lie: highway of federal significance E115 - M4 "Don" - from Moscow through Voronezh, Rostov-on-Don, Krasnodar to Novorossiysk; highway of federal significance E50 - M19 - begins from highway M4 "Don" near Shakhty and goes to the west to the border of Ukraine through Novoshakhtinsk. Further the Ukrainian express highway M-03 follows in the direction to Kharkov, Poltava, Kiev. The highway is a part of the European route E50; highway of federal significance E58 - M23 - Rostov-on-Don - Taganrog to the border with Ukraine (to Kharkov, Odessa); highway of federal significance E40 - M21 - Volgograd - Kamensk-Shakhtinsky to the border with Ukraine (to Dnepropetrovsk, Kishinev). Functioning of air transport of the Rostov Region is provided by the international airport of federal significance "Rostov-on-Don Airport" and the regional airport "Taganrog - Yuzhny" (Taganrog). 3.11. Diversified industry. According to the level of industrial diversification, calculated with the use of the method of Herfindahl-Hirschman Index and the data on the volume of the shipped products of own production, the works and the services performed using own resources from 2008 to 2011, the Rostov Region takes the first place among the constituent entities of the SFD (Table No. 1).
Table No. 1 RATIO of industrial diversification in view of the constituent entities of the SFD in 2008 - 2011
Constituent entities Ratio Place in the Southern of the Southern Federal District Federal District 1 2 3 Republic of Adygea 0.87 5 Republic of Kalmykia 0.68 6
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Krasnodar Territory 0.88 4 Astrakhan Region 0.89 3 Volgograd Region 0.93 2 Rostov Region 0.95 1
3.12. The developed network of educational and scientific organizations. The education system of the Rostov Region is one of the most developed in the Russian Federation. The system of higher education of the Rostov Region is presented by the greatest number of higher education institutions in the SFD (14 state independent higher educational institutions and 11 non-state institutions) and has a wide branch network. According to the data for 2011, according to the number of the postgraduate leavers with the thesis defense the Rostov Region takes the 3rd place in the Russian Federation and leads in the SFD. Following the results of 2011 in the Rostov Region 109 organizations fulfilled scientific researches and projects, among them 47 research organizations, 13 design organizations, 21 higher educational institutions, 12 scientific and technical subdivisions of industrial enterprises. In view of the specified indicators the Rostov Region is an absolute leader in the SFD and takes the 6th place among the constituent entities of the Russian Federation. The scientific and educational system of the Rostov Region provides the demands of the economy and the social area for the qualified personnel in all directions, defines high potential of the innovative development, gives ample opportunities for self-realization of active, creative youth, as well as it is an important factor of migration attractiveness of the region. 3.13. Rostov agglomeration. According to the different estimates, the population of the Rostov agglomeration makes from 1.8 million to 2.0 million people. Only in Rostov-on-Don in the beginning of 2012 1 096 448 people lived, or more than 25 % of population of the region, and daily push- pull migration makes up more than 50 ths. people. Rostov-on-Don is the center of development of the Rostov agglomeration. Historically developing as a large industrial, cultural and scientific center, an important transport node having strategic political and economic significance, Rostov-on-Don is justly considered to be the capital of the South of Russia, and since 2002 this function is assigned to it officially - the city obtained the status of the capital of the Southern Federal District. Rostov-on-Don concentrates administrative functions at the level of the SFD and the southern macro-region of Russia as a whole. The Executive Office of the Envoy from the President of the Russian Federation in the SFD, the Headquarters of the North Caucasian Military District, the North-Caucasian Railway Board, the Southern Customs Administration and others are located here. Rostov-on-Don plays a major role in international cooperation which is confirmed by the fact that the Representative Office of the Ministry of Foreign Affairs of the Russian Federation, the Consulate General of the Republic of Armenia, the Consulate General of Romania, the Honorary Consul of the Slovak Republic, the Trade Representative Office of
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Hungary, the Consulate General of Ukraine, the Republic of Belarus carry out their activities here, as well as the Deputy Head of Trade Mission of Ukraine in Russia. The function of the financial center is provided by the Closed Joint Stock Company "Regional Exchange Center "MICEX-South" - the center of technical access to the auction at the Moscow Interbank Currency Exchange (hereinafter referred to as the CJSC "MICEX") and the Closed Joint Stock Company "Stock Exchange of the Moscow Interbank Currency Exchange" (hereinafter referred to as the MICEX Stock Exchange) located in Rostov-on-Don. In the south of Russia the CJSC "MICEX-South" is the single center of access to exchange trade at the CJSC "MICEX" by foreign currencies, government and corporate securities. The Rostov branch of the self-regulatory organization "National Association of Securities Market Participants" (hereinafter referred to as the NASMP) is also located in the Don capital, there is a representative office of the self-regulatory organization "Professional Association of Registrars, Transfer Agents and Depositories" (PARTAD). According to the data for 2011 in the Don capital 16 out of 25 independent higher educational institutions of the Rostov Region act, including the Southern Federal University formed in 2006 by the Order of the Government of the Russian Federation, and being the unique scientific and educational center in the south of Russia. As a whole in higher education institutions of Rostov-on-Don more than 58 % of all students of the region study. The scientific potential of Rostov-on-Don is provided by design and design-and- engineering institutes the total number of which reaches 40, including the State institute of design of combine harvester plants, power engineering, enterprises of oil-processing and petrochemical industry, construction and road engineering; the North Caucasus Scientific Center of Higher School; the Research Institute of Biology, Physical and Organic Chemistry, Mechanics, Applied Mathematics under the SFU; Radiology Research Institute, the Rostov Cancer Research Institute, etc. Rostov-on-Don is the center of economic activity of the Rostov Region. More than 37 % of turnover of all organizations of the region, more than 50 % of the retail trade turnover, more than 60 % of the volume of the paid services, more than a half of the volume of works, performed in the type of activity "Construction", about 37 % of fixed investment, and 36 % of the volume of the shipped industrial products (works, services) are formed here. The industrial potential of Rostov-on-Don is presented by the large enterprises of food and light industry, mechanical engineering (production of unique radio and navigation equipment, harvester equipment, helicopter engineering, instrument engineering), chemical industry, as well as the medium and the small enterprises producing unique high- technology, innovative goods. Besides, Rostov-on-Don is considered to be one of the most attractive cities for living in Russia. So, according to the rating of appeal of the Russian cities, made by the Russian union of engineers, the city took the 5th place out of 164.
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4. Investment image of the Rostov Region
The ratings calculated by various international and national rating agencies, as well as by competent publications, are one of the quantified indicators characterizing the investment image of the region. Today the Rostov Region is one of the most attractive regions of the Russian Federation from the point of view of the investment image that is confirmed by its rather high positions in ratings among which one can point out: Fitch Ratings CIS Ltd. - long-term ratings in foreign and national currency, short- term rating in foreign currency and national long-term rating. In 2011 according to the results of the monitoring carried out by the international rating agency Fitch Ratings CIS Ltd. the long-term ratings in foreign and national currency "BB-" with the forecast "Stable", the short-term rating in foreign currency "B" and the national long-term rating "A+(rus)" with the forecast "Stable", appropriated to the Rostov Region, are confirmed (Table No. 2). Table No. 2 INVESTMENT RATINGS of the constituent entities of the SFD developed by the analytical group Fitch in the international regional finance
Constituent Long-term Forecast Short- Rating Rating Rating date/ entities of the ratings in term according forecast the last SFD foreign and rating in to the according revision national foreign national to the currency currency scale national scale 1 2 3 4 5 6 7 Astrakhan B+ stable B A(rus) stable 16.12.2011 Region Volgograd BB- stable B A+(rus) stable 15.08.2012 Region Krasnodar ВВ+ stable B AА(rus) stable 07.06.2012 Teritory Republic of — — — — — — Adygea Republic of — — — — — — Kalmykia Rostov Region BB- stable B A+(rus) stable 08.12.2011
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The Rating Agency “Expert RA” is an investment rating of the regions of Russia. According to the Rating of the investment appeal of the regions of Russia, carried out by the Rating Agency “Expert RA”, following the results of 2012, the rating "Medium potential - moderate risk" is assigned for the Rostov Region. Thus, among 83 constituent entities of the Russian Federation the Rostov Region takes the 11th place according to the criterion "Investment potential", according to the criterion "Investment risk" - the 12th place (Tables No. 3, No. 4). Table No. 3
INVESTMENT POTENTIAL of the constituent entities of the SFD in 2012 according to the investment climate rating of the Rating Agency "Expert RA" Rank Constituent entity Ranks of investment Potential of the Southern Federal potential components rank
change,
District
2012 to
2011
ur
resources
-
labo tourist
financial
innovative
production
institutional
consumption
infrastructural
atural n 1 2 3 4 5 6 7 8 9 10 11 12 5 Krasnodar Teritory 4 5 7 7 4 19 5 26 2 -1 11 Rostov Region 6 8 14 15 6 17 20 33 15 -1 22 Volgograd Region 17 18 20 20 23 42 41 34 36 -3 58 Astrakhan Region 47 46 62 55 48 49 49 30 64 -1 76 Republic of Adygea 74 73 77 74 70 77 39 80 73 0 82 Republic of Kalmykia 77 81 81 81 77 79 78 48 80 0
Table No. 4 INVESTMENT RISK of the constituent entities of the SFD in 2012 according to the investment climate rating of the Rating Agency "Expert RA" Rank Constituent entity Ranks of investment risk components
of the Southern Risk rank change,
Federal District 2012 to 2011
social
criminal
financial
economic
ecological managerial
1 2 3 4 5 6 7 8 9 2 Krasnodar 14 3 19 16 10 28 -1 Teritory 12 Rostov Region 26 4 49 3 18 22 -6 38 Republic of 52 31 73 8 3 10 -5 Adygea 11
39 Volgograd 27 54 26 52 36 63 4 Region 40 Astrakhan Region 59 33 37 72 53 15 -6 80 Republic of 82 60 76 54 47 78 0 Kalmykia
The presented results characterize the Rostov Region, on the one hand, as the region of rather high prosperity with the factors of production and infrastructure, as well as with high potential of consumer demand and level of institutional development, competitive positions in the financial market and in the tourist-recreational area, and, on the other hand, confirms rather low probability of sharp reduction of investment activity. However, it should be noted the relative decrease in the total rating of investment appeal of the Rostov Region (on 7 positions) in comparison with the results of 2010 - 2011 that, certainly, demands mobilization and activation of the joint activity in the investment area of the government, business and public institutions of the region. Forbes Magazine – the expert review "The best regions for business". In 2011 Forbes Magazine carried out an expert review "The best regions for business", according the results of which in the rating of 30 regions of Russia the Rostov Region took the 10th place (Table No. 5). Thus, in view of social characteristics the Rostov Region takes the 2nd place after the Republic of Tatarstan among the constituent entities of the Russian Federation, and according to the level of comfort for business dealing - the 3rd place. RATING Forbes Magazine "The best regions for business" in 2011
Posi- Constituent entity Population Social Prospe- Business Wealth Infra- Comfort for tion of the Russian character- rity of climate of the structure business Federation ristics popula- region dealing tion 1 2 3 4 5 6 7 8 9 3 Krasnodar Teritory 5 200 000 4 14 1 8 3 5 10 Rostov Region 4 300 000 2 23 6 26 11 3 21 Volgograd Region 2 600 000 10 28 17 22 12 17 30 Astrakhan Region 1 000 000 28 25 22 28 19 13
The World Bank - the report "Business Dealing in Russia - 2012". In the joint report of the World Bank and the International Finance Corporation "Business Dealing in Russia - 2012", prepared in 2012, the results of the situation monitoring connected with the peculiarities of business dealing in 30 largest cities of the Russian Federation were published. Rostov-on-Don took the 4th place in the rating, for comparison - Volgograd took only the 16th place. According to the reviewed report, the Administrative Center of the Rostov Region managed to demonstrate one of the best practices in the connection procedures and speed to the electrical power system and the property registration (Table No. 6).
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Table No. 6 PARAMETERS of business dealing in Rostov-on-Don in comparison with other countries according to the report "Business Dealing in Russia - 2012" (The World Bank)
Indicator Rostov-on-Don Europe and Organization Central Asia of economic cooperation and development 1 2 3 Registration of enterprises Procedures (quantity) 11 6 5 Term (days) 21 16 12 Cost (income percent per capita) 2.5 8.3 4.7 Minimum paid capital 1.6 10.0 14.1 (gross revenue percent per capita) Obtaining of construction permits Procedures (quantity) 18 20 14 Term (days) 294 238 152 Cost (percent from the volume 95 440.8 45.7 of per capita income) Connection to the electrical power system Procedures (quantity) 6 7 5 Term (days) 223 168 103 Cost (income percent per capita) 115.1 751.2 92.8 Property registration Procedures (quantity) 3 6 5 Term (days) 33 33 31 Cost (percent from the property cost) 0.2 2.8 4.4 Thus, the reviewed ratings of investment appeal confirm the positively formed image of the Rostov Region within the Russian Federation. At the same time in connection with the subsequent increase of competition of the regions for the attracted capital it is necessary not only to maintain favourable investment image, but also to develop the mechanism of its improvement at the international level.
5. Investment attraction policy of the Rostov Region
5.1. The legal base of the Rostov Region focused on investment attraction. The normative legal base regulating the investment activity in the territory of the Rostov Region is presented by the following regulations: - Regional Law dated 01.10.2004 No. 151-ZS "On investments in the Rostov Region"; - Regional Law dated 02.07.2008 No. 35-ZS "On granting of state guarantees in the 13
Rostov Region"; - Regional Law dated 22.07.2010 No. 448-ZS "On basics of public and private partnership"; - Regional Law dated 10.05.2012 No. 843-ZS "On regional taxes and several issues of taxation in the Rostov Region"; - Regional Law dated 05.07.2013 No. 1114-ZS "On industrial parks in the Rostov Region". The specification of separate aspects and further development of the regional legislation in the area of investment attraction is regulated and provided with the regulations of the Government of the Rostov Region, in particular, in regard to such important directions of stimulation of investment activity, as public and private partnership, rendering of state support to investment activity of the organizations from the regional budget, granting of state guarantees of the Rostov Region, etc. Long-term guidelines of policy of the Rostov Region in investment attraction are formed according to the Strategy of social and economic development of the Rostov Region for the period till 2020, as well as the Regional long-term target program "Creating of Favourable Conditions for Investment Attraction into the Rostov Region for 2012 - 2015" approved by the Resolution of the Government of the Rostov Region dated 23.09.2011 No. 6. In the Rostov Region the Strategy of investment attraction of the Rostov Region approved by the Resolution of Legislative Assembly of the Rostov Region dated 28.06.2004 No. 402 was worked out too. 5.2. Measures of state support of investment activity in the territory of the Rostov Region. In the Rostov Region the current legislation is focused on investment attraction into the region, as well as creation of the maximum favour condition for the entities of investment activity irrespective of their organizational and legal form and proprietary form. The current investment legislation provides: providing of privileges on profit taxes and property of organizations. Privileges are provided to the investors carrying out activity in the territory of the Rostov Region, within the payback period of the investment project, but no more than for five years, namely: on property tax of organizations: investment projects with the volume of capital investments up to 300 million Rubles are imposed by property tax of organizations of 1.1 %; the investment projects with the volume of capital investments up to 300 million Rubles and more - tax exemption; on profit tax of organizations - establishment of the tax rate in the amount of 13.5 % as to the tax amount charged into the regional budget. Granting of subsidies for compensation of the part of the expenses on payment of percent of the commercial banks provided for new construction, expansion, reconstruction and technical upgrading of the acting enterprises. Realization of investment projects on the basis of state and private partnership offers state support at creation of infrastructure facilities within the realized investment projects. Participation of the Government of the Rostov Region in realization of the investment projects in the territory of the Rostov Region can be carried out by means of: providing to the city district or the municipal district of the Rostov Region of inter- budget transfers in the form of a subsidy for co-financing of expenditure obligations arising
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at creation (reconstruction) of capital construction objects (engineering and transport infrastructure), including the linear objects necessary for ensuring of connection (utility connection) of the capital construction object of the investor (the organization) to heat supply, water supply, water disposal networks, upon condition of lack of the approved tariffs for connection (utility connection) to utility lines and (or) rendering to the plot lines on which the investor’s capital construction object of the transport infrastructure objects, including highways of general use and local significance, bridges (hereinafter referred to the transport infrastructure objects) is located (will be located). providing to the organizations, irrespective of their organizational and legal form, won at the competition on conclusion of the agreement on participation of the parties of state and private partnership in realization of the investment project in the territory of the Rostov Region, subsidies for compensation of the part of the expenses for connection (utility connection) of the capital construction objects being an integral part of the investment project, to the utility networks (as related to electric power supply and gas supply). The specified subsidies are provided to the investor (organization) in the volume of 50 % of the whole volume of expenses according to each investment project. At realization of the projects with the volume of capital investments from 200 million Rubles up to 1 billion Rubles, including the volume of the subsidy, makes up no more than 50 million Rubles on electric power supply and no more than 30 million Rubles on gas supply. At realization of the projects with the volume of capital investments more than 1 billion Rubles and to 3 billion Rubles, including the volume of the subsidy makes up no more than 75 million Rubles on electric power supply and no more than 50 million Rubles on gas supply. At realization of the projects with the volume of capital investments more than 3 billion Rubles the volume of the subsidy makes up no more than 100 million Rubles on electric power supply and no more than 70 million Rubles on gas supply. 5.3. Register of investment projects and List of "100 Governor's Investment Projects". For increase of investment appeal of the Rostov Region and creation of favourable investment climate in the Rostov Region the Register of investment projects is formed. According to the Resolution of the Government of the Rostov Region dated 05.07.2012 No. 578 "On the procedure of formation and maintenance of the Register of the investment projects in the territory of the Rostov Region" the branch ministry (department) of the Rostov Region provides: investment project monitoring at all stages of their realization and in solving of the issues connected with the technical specifications, formation of the engineering infrastructure, order and preparation of design and estimate documentation, fulfillment of the government expert review of the documentation on the investment project, obtaining of the official permission for the construction start, in the course of construction; quarterly monitoring of realization of the investment projects with indication of the grounds for non-performance of the plans of the investment project realization; consideration of the report on the course of the investment project realization at the meetings of the Investment Board under the Governor of the Rostov Region. On the basis of the Register the List of "100 Governor's Investment Projects" is
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created which provides realization of the main priorities of the Strategy of social and economic development of the Rostov Region for the period till 2020. Inclusion of the project into the list of the investment projects requires from the responsible executive authority the monitoring of this investment project at all stages of the investment cycle from designing till putting in operation. The main proportion of the projects as a part of the List of "100 Governor's Investment Projects" is accrued to agriculture and industry, including fuel and energy industry. 5.4. Investment Board under the Governor of the Rostov Region. For attraction and effective use of state and private investments, for development of the economy and the social area, increase of the living standard of the population the Investment Board under the Governor of the Rostov Region is created in the Rostov Region (hereinafter referred to as the Board). Activity of the Board is focused on solution of the following problems: definition of the unified positions of the executive authorities of the Rostov Region in relation to realization of the investment projects; assistance to formation of the territories of intensive economic development; development of recommendations and making suggestions on acceptance and improvement of the normative legal acts regulating the issues of investment activity; development of suggestions on protection of investors, settlement of controversial issues at realization of the investment projects; development of suggestions on conclusion of the investment agreements (memorandums); development of mechanisms of settlement of the issues on payments into the regional budget connected with realization of the investment projects as well as assistance in settlement of other financial and property problems between the parties responsible for realization of the investment projects and their participants; consideration of other issues concerning realization of the investment projects in the territory of the Rostov Region. For improvement of working efficiency of the Board the working group on organization of mutual interaction with the branch investors and ensuring of the investment project monitoring is created in each branch ministry, as well as the investment council of municipal level is created in each city district and municipal district. 5.5. Investment Promotion Agency of the Rostov Region. In the Rostov Region the investment infrastructure is created and continues to be developed. Since 2004 in the Rostov Region the Non-Profit Partnership "Investment Promotion Agency of the Rostov Region" functions. In 2007 "Investment Promotion Agency of the Rostov Region"(hereinafter referred to as the Agency) was recognized as the best in Russia. The main objective of the Agency is attraction of investors into the Rostov Region and their monitoring at all stages of realization of the investment project, including: selection of areas; regulation of the issues of providing of the future buildings with utility lines; assistance to the fastest possible passing of the necessary bureaucratic procedures and document processing; organization of contacts with the local authorities; 16
search of the local partners for realization of the projects; assistance in acquiring of analytical data on the current potential of various market segments of the Rostov Region; informational monitoring of the projects; organization of negotiations and visits to the Rostov Region. With the assistance of the Agency for six years about 40 investment projects with the total amount of the declared investments of 3.8 billion USD started in the Rostov Region. Nearly 60 % of all projects in the portfolio of the Agency are industrial, thus, more than 70 % of the projects are with foreign investments. With the assistance of the Agency the representative offices of such companies as Coca-Cola, PepsiCo, Lafarge, Guardian, Air Products, Praxair, Imerys, Auchan, Castorama, Real, and others are opened in the Rostov Region. 5.6. Industrial parks and perspective investment sites. The key direction of infrastructure providing and territorial balance of the investment process of the Rostov Region is development of the system of industrial parks. Now in the territory of the Rostov Region 7 industrial sites are located which are at different stages of formation: Krasnosulinskaya, Novoalexandrovskaya, Oktyabrskaya, Yugo-Vostochnaya (Azovskaya), Yuzhno-Batayskaya, Matveevo-Kurganskaya, Gukovskaya, on the basis of which the industrial parks will be created. Enterprises producing glass products, industrial gases, heat-insulating materials of basalt fiber, cement and other construction nonmetallic materials, sandwich panels, metal structures, polyethylene pipes, refrigeration equipment, food products and soft drinks, champagnes, starch products and glucose-fructose syrups, aluminum beverage cans, cardboard, paper and other goods successfully work and are developed in the territory of the industrial sites. The main characteristics of the specified industrial sites are provided in Appendix No. 1. For further development and activation of the processes of industrialization of the region the Concept of creation and territorial and positional placement of the industrial parks in the Rostov Region is approved on December 5, 2012 by the Governor of the Rostov Region V.Yu. Golubev, the Regional Law dated 05.07.2013 No. 1114-ZS "On industrial parks in the Rostov Region" is developed and adopted. The first step in development of the network of industrial parks was formation of the list of prospective investment sites of the municipal units of the Rostov Region for placement of industrial parks. The Register includes information on territorial placement of the site, assessment of time and financial expenses on providing of its engineering and transport infrastructure. The specified prospective investment sites are characterized by various readiness conditions that are in direct dependence on the level of social and economic development of the corresponding municipal unit. At the time of development of this Strategy the total number of prospective investment sites makes up 58 units with the total area of 2 370 hectares. According to the preliminary calculation, 17.9 billion Rubles are necessary on providing of engineering and transport infrastructure of all investment sites, including on electric power supply - 8.74 billion Rubles, water supply and water disposal - 4.82 billion Rubles, gas supply - 2.66 billion Rubles, transport infrastructure - 1.70 billion Rubles.
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5.7. Direct link. For operative solution of issues and problems arising in the course of realization of the investment projects and business activity in the Rostov Region, the system of providing of direct link of business and management of the region is created and continues to be developed. Investors can ask the targeted question or appeal with the arisen problem by hot- line phones, by means of the Internet portal of the corresponding executive authority, by means of the investment portal of the Rostov Region, as well as on the official website of the Government of the Rostov Region within the feedback channel for the investors. 5.8. The system of multifunctional centers of providing of state and municipal services of the Rostov Region. Multifunctional centers of providing of state and municipal services (hereinafter referred to as the MFC) are the main instrument of ensuring of transparency and increase of the quality of service rendering to the citizens and the organizations in Russia. In the Rostov Region the MFC network was formed since 2007. At the bottom of formation of the MFC regional network the network method of organization of service rendering according to the principle of step availability is established. In 2012 about 800 thousand state and municipal services were provided, more than 200 thousand consultations were rendered by the MFC regional network. In the 1st half-year of 2013 more than 500 thousand state and municipal services were rendered, more than 140 thousand consultations were rendered by the MFC network of the Rostov Region. According to the results of the annual rating carried out by the Ministry of Economic Development of the Russian Federation in October, 2012, the Rostov Region was included into the number of 5 best regions of Russia and won a grant from the federal budget resources in the volume of 10 million Rubles. As of June 1, 2013 the MFCs work in all 55 city districts and municipal regions of the Rostov Region, 296 access centers of the MFC are created (including in 270 rural settlements), 1 134 service points work for applicants. For affording access for 90 % of residents of the Rostov Region to obtaining of state and municipal services, according to the principle of one service point in the residence place, in 2013 the infrastructure of the MFC will be modernized in 28 municipal units of the Rostov Region at the expense of creation of 40 new access centers of the MFC and development of 55 active centers. 5.9. Authorized Representative of the businessmen's rights under the Government of the Rostov Region. In 2012 in the Rostov Region the Authorized Representative of the businessmen's rights under the Government of the Rostov Region began to work; he carries out consultations, collects data on violations concerning business, about those additions or changes which it is necessary, according to the businessmen, to introduce into the federal, regional legislation, the municipal regulations. All these data are systematized, generalized and transferred to the Government of the Rostov Region. Thus, the institute of the Authorized Representative of the businessmen' rights promotes decrease in administrative and other restrictions for the entities of business activity, providing a guarantee of state protection of rights and legal interests of the entities of business activity. 5.10. State and private partnership.
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For stimulation of the investment activity towards the realization of socially significant projects in the economy and the social area of the Rostov Region the practice of state and private partnership is actively implemented (hereinafter referred to as the SPP). According to the Regional Law dated 22.07.2010 No. 448-ZS "On the basics of state and private partnership" the following forms of interaction are provided: participation of the parties in realization of investment projects in the territory of the Rostov Region; participation of the Rostov Region in the authorized (reserve) capitals of legal entities; providing of state property of the Rostov Region for rent, free use, confidential management; concession agreements (contracts); other agreements (contracts) concluded by the parties of state and private partnership and meeting the purposes and objectives of state and private partnership. Definite obligations of the parties, conditions of the agreement (contract), including the procedure and the stages of its performance, terms and volumes of participation of the parties in realization of state and private partnership, are defined by the parties of state and private partnership by conclusion of the agreement (contract). 5.11. Realization plan of the key infrastructure projects of the Rostov Region. In the Rostov Region as of the end of 2012 up to 2017 more than 20 large investment projects with the total amount of financing over 170 billion Rubles are realized or prepared for realization. In particular, in transport complex the realization of these investment projects will allow optimizing the network of highways, increasing the traffic capacity of air service for passengers and freight (construction of the airport complex “Yuzhny”), increasing competitiveness and efficiency of functioning of the transport and logistics complex of the Rostov Region (construction of the multimodal transport and logistics node "Rostov Universal Port", construction of the vehicle logistic center – the transport terminal splitter plate for freight overload and storage). In the electric power area the projects are focused not only on increase in generating capacity (construction of the power units No. 9 of Novocherkassk State District Power Station and construction of power units No. 3 and No. 4 of the Rostov Nuclear Power Plant, creation of the power complex providing power supply of social objects in large districts of Novoshakhtinsk due to prior use of local renewable energy sources), as well as, just as important, development of network economy. Realization of the investment projects in housing and utilities will provide stable water supply of consumers of settlements of the Rostov Region; it will increase the quality of drinking water, energy efficiency, reliability and technological safety of its production and distribution, as well as it will decrease the environmental risks and the operational costs. A number of projects will be focused on solution of the environmental problems connected with imperfection and worn-out state of the current systems of wastewater disposal and water purification, including increase in the volume of cleared discharge water, increase in operational reliability, improvement of the quality of discharge treatment and decrease in environmental risks. In telecommunication area and communication area construction of the Rostov Regional Automated Sorting Center is provided by the Federal State Unitary Enterprise
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"Russian Post". It will allow improving the quality of mail processing, reducing the terms of their delivery to addressees. Development of business infrastructure will be supported with creation on the basis of the Don State Technical University of a media technological park - a cluster of educational, innovative and production structures and transfers of modern media and information technologies which will provide training of highly qualified specialists and support of youth startups in the area of media and information business. Creation of the new complex "International Congress Center" will increase investment appeal of Rostov-on-Don and the Rostov Region, stipulate development of regional business and information infrastructure and integration of the South of Russia into the world economic community. 5.12. Standard of activity of the executive authorities of the constituent entity of the Russian Federation on ensuring of favourable investment climate in the region. According to the Decree of the Government of the Russian Federation dated 27.12.2012 No. 2550-r "On methods of determination of indicator target values for efficiency assessment of activity of heads of federal executive authorities and high ranking officials (heads of the supreme executive authorities) of the constituent entities of the Russian Federation on creation of favourable conditions for business activity and realization of comparative rating assessment of activity efficiency of high ranking officials (heads of the supreme executive authorities) of the constituent entities of the Russian Federation", one of the components of activity efficiency assessment of high ranking officials (heads of the supreme executive authorities) of the constituent entities of the Russian Federation on creation of favourable conditions for business activity and realization of comparative rating assessment of activity efficiency of high ranking officials (heads of the supreme executive authorities) of the constituent entities of the Russian Federation is the availability of the main components of the activity standard of the executive authorities of the constituent entity of the Russian Federation on ensuring of favourable investment climate in the region (hereinafter referred to as the Standard) and assessment of realization efficiency of these components by the enterprise community. The standard is developed by the Autonomous Non-Profit Organization "Agency of Strategic Initiatives on Promotion of New Projects" for creation of conditions for inflow of investments at the regional level. The minimum set of requirements to the region policy in the area of attraction of investments is presented in the Standard, as well as the list of definite measures for improvement of standard and organizational mechanism of support and stimulation of investments. The policy on attraction of investments realized by the Rostov Region meets the requirements of the Standard in many respects. The Strategy of attraction of investments of the Rostov Region was approved by the Resolution of the Legislative Assembly of the Rostov Region dated 28.06.2004 No. 402, and this document is consecutive realization of the strategic planning policy of the Rostov Region. The legal base for ensuring of protection of the rights of investors and improvement of the mechanisms of investment activity support is worked out and continues to be developed in the Rostov Region. For achievement of the most productive state regulation in the area of business the Resolution of the Government of the Rostov Region dated 02.08.2012 No. 714 "On the Procedure of assessment of regulating influence and public evaluation of projects, regulations of the Rostov Region" is accepted. 20
Since 2004 the specialized organization on attraction of investments and work with investors – the Non-Profit Partnership "Agency of Investment Development of the Rostov Region" functions in the region. The standing collegial advisory and consultative body – the Council for Investments under the Governor of the Rostov Region carries out assistance in attraction of investments, and for immediate solution of the problems arising in the course of investment activity and the issues an instrument of "direct channel" between the investors and the executive authorities is realized and continues to be developed. For providing of available infrastructure in the Rostov Region the list of prospective investment sites is formed by the Governor of the Rostov Region V.Yu. Golubev. The Concept of creation and territorial and spatial placement of industrial parks in the Rostov Region was approved on December 5, 2012, the Regional Law dated 05.07.2013 No. 1114-ZS "On industrial parks in the Rostov Region" was worked out and adopted. For avoidance of administrative barriers and reduction of time on administrative procedures the principle of "one service point" is implemented in the Rostov Region. At the same time work on introduction of other recommendations of the Standard is conducted, such as approval of the annually updated Plan of creation of the objects necessary for infrastructure for investors in the region; forecast of requirement of the economy in the qualified personnel; organization of the personnel training of the profile executive authorities and the subordinated organizations in the appropriate authorities and development institutions in other constituent entities of the Russian Federation and abroad; preparation of reports on investment climate and investment policy in the region at the summary meetings of the Government of the Rostov Region and the Legislative Assembly of the Rostov Region.
6. Strategic objectives, main directions and problems of development of the policy of the Rostov Region on investment attraction
The system of strategic planning documents, having the hierarchical structure, stipulating the interrelation of the purposes, the objectives and the key directions of social and economic development of the region, is developed in the Rostov Region. The Strategy of social and economic development of the Rostov Region is the main document of strategic planning for the period till 2020 (hereinafter referred to as the Strategy-2020 of the Rostov Region). Thus, the objective of the first level of the Strategy is providing with the necessary investment resources of realization of the purposes and the key directions of social and economic development of the Rostov Region till 2020, specified in the Strategy-2020 of the Rostov Region. The objectives of the second level of the Strategy are: increase in investments into the economy and the social area of the Rostov Region; improvement of the quality of the attracted investments. Achievement of the objectives can be realized within the following four tasks defining the policy of the Rostov Region on attraction of investments: creation of conditions for maximum preferential treatment to business; participation of the Rostov Region in global investment process;
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creation of conditions for permanent social and economic development of the Rostov Region; establishment of Rostov-on-Don as an administrative, financial, business, innovative and educational center in the south of Russia. 6.1. Actions for solution of the task on creation of conditions for maximum preferential treatment to business. 6.1.1. Improvement of the mechanism of stimulation of investment activity in the Rostov Region. In spite of the fact that the regional legislation assumes a wide range of means for support and stimulation of investment projects, it is necessary to carry out audit of the regulatory base according to the results of which to define, in what degree the current regulations provide realization of the priorities of social and economic development of the Rostov Region, and their regulating influence stimulates the investment activity. The legislative base should take into account the tendencies of social and economic development as much as possible and to be adequate to the requirements of the modern investment market. Besides, improvement of the current system of attraction of investments should be focused on strengthening of support of the priority directions of economic and social development of the Rostov Region. It is necessary to create the flexible system of investment stimulation in which the support mechanisms are differentiated depending on branch and territorial peculiarities of the economy of the region. 6.1.2. Avoidance of administrative barriers. It is necessary to continue work on avoidance of administrative barriers and simplification of the process of interaction of business and state. First of all, it concerns optimization of the terms and the order of passing of various procedures of the investment project coordination, as well as transparency of these procedures for the investor. The effective mechanism of fighting against the administrative barriers is further realization of the principle of "one service point" that should promote exception or minimization of participation of the businessman in bureaucratic procedures of interaction of the structures of federal and territorial executive authorities, local governments, public organizations necessary for realization of business activity, including the investment stage. The institute of the Authorized Representative on protection of the rights of businessmen under the Government of the Rostov Region is an effective instrument in fighting against administrative barriers too. At this stage development of the regulatory base necessary for its further development is actual. It is necessary to implement actively the practice of assessment of regulating influence of the accepted and adopted regulations concerning business activity, for prevention of creation of administrative barriers and unreasonable regulation of business. 6.1.3. Ensuring of information transparency and availability of executive authorities. An important component of this action is further development of information support of investment process for increase of transparency of bureaucratic procedures. For creation of the information field for effective interrelation of private, state and institutional investors, increase of information availability on conditions of realization of investment projects in the territory of the region, as well as promoting of investment activity in the territory of the Rostov Region in 2012 the bilingual portal on investment activity of the Rostov Region was developed, providing of information of the main sections of the portal is carried out. On the 22
portal a wide range of information, analytical and documentary resources of investment topic in open availability in information and telecommunication network “Internet” is presented, including the information on the key social and economic indexes of development of the region, providing its investment appeal, federal and regional regulatory base, the data on the main types of state support are placed, the possibility of interactive search in various criteria and others is provided. Another direction of realization of this action is further development of the principle of "direct link" of the investors with the management of the Rostov Region for providing of immediate solution of the problems and removal of the issues arising in the course of investment activity. Hot line phones, official websites of the executive authorities of the Rostov Region can be used as such direct communication channels. It will allow not only reducing many administrative barriers, but also serving as a signal for business on improvement of investment climate in the region. 6.1.4. Staffing of investment projects. As showed the analysis of the labour market of the Rostov Region, deficiency of the qualified labour power can be serious restriction of growth of the economy of the region. In this regard the strategic objective of investment policy is providing of the economy of the Rostov Region with highly qualified personnel. This purpose will be completely coordinated with the Strategy of social and economic development of the Rostov Region for the period till 2020. For realization of this purpose it is necessary: to create the system of monitoring and forecasting of perspective requirement for professional personnel of the labour market of the Rostov Region for development of measures on providing the region with the necessary of manpower in the main directions of economic and social development, by means of regulation and redistribution of the budgetary places in the professional educational organizations and the educational organizations of higher education; to organize vocational training, retraining, professional development of personnel according to the requirements of the labour market both according to the demands and at the expense of funds of the employers, and at the expense of budgetary funds within the specialized programs; to stimulate social and professional mobility of the population of the Rostov Region; to provide effective regulation of inflow of foreign labour power in the territory of the Rostov Region taking into account the requirements of the labour market; to promote actively the development of flexible forms of employment focused on stimulation of use of labour potential of employees of old age, disabled people, the women having small children, including at the expense of improvement of the mechanism of quoting of workplaces for disabled people and implementation of the mechanism of stimulation of employers to employment of the citizens having restrictions in labour activity. An important instrument of formation of active personnel policy in the region is development of annually corrected scientifically reasonable perspective forecast of the requirement for personnel in the main directions of economic and social development of the region that will allow planning training of the personnel by means of regulation and redistribution of the budgetary places in the professional educational organizations and the educational organizations of higher education. 6.1.5. Infrastructure provision of investment projects.
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Presence of available, qualitative and comparatively inexpensive basic infrastructure becomes one of the main factors of investment competitiveness and attractiveness of the region. State and private partnership is an effective instrument for removal of infrastructure restrictions and development of the investment area. This form of interaction of the state and business is urged to solve effectively socially significant problems on mutually advantageous conditions. On the part of business it is provided at the expense of attraction of private capital, professional experience, effective management, flexibility and efficiency of decision-making, ability to innovation, and, on the part of the state, granting of guarantees of observance of the owner’s powers, various measures of support, basic infrastructure, as well as material and financial resources. At the same time the Legislation of the Russian Federation demands improvement in terms of the legal acts regulating interpretation of the basic concepts of this area, authorization of public authorities at the level of the constituent entity of the Russian Federation and the municipal units on the project financing realized on the principles of the SPP, solution of land and property matters. In this regard work on improvement of the SPP mechanism in the Rostov Region should be continued. 6.1.6. Improvement of the regulation system of the tariffs of natural monopolies. The tariff policy on services of the entities of natural monopolies has special value for development of the investment area in the region. In this regard an important task is maintenance of the cost of joining the engineering networks and tariffs of services of the entities of natural monopolies at the level providing competitiveness of the economy of the Rostov Region, at the net cost of the corresponding expenses in comparison with other comparable regions, at simultaneous improvement of the quality of the rendered services and reduction of time of joining the engineering infrastructure. It is necessary to provide competitiveness of the tariffs in comparison with the basic competitive regions (the Krasnodar and the Stavropol Territories, the Volgograd, the Voronezh, the Astrakhan Regions and others) by means of interaction of executive authorities of the Rostov Region authorized in the area of state regulation of tariffs, with the relevant federal executive authorities and the entities of natural monopolies. 6.1.7. Information support of perspective infrastructure development. An important component of the Strategy of investment attraction is the corresponding information support of perspective infrastructure development of the Rostov Region. Realization of this direction is possible by means of development of the Plan of perspective infrastructure development of the Rostov Region (hereinafter referred to as the Plan) in which the list of the key objects of all types of infrastructure will be presented, construction of which is planned within the framework of realization of program actions by the executive authorities of the Rostov Region. The plan should be annually updated and approved by the authorized body of the executive power of the Rostov Region. This will allow the managing entities managing risks of their investment decisions. The publication of the Plan will be carried out on the investment portal of the Rostov Region. Upon developing of the Plan it is recommended to use the geo-informational technologies allowing in an obvious form (including 3D-technology) to represent on the map of the Rostov Region the geographic location of the infrastructure objects planned for construction with the possibility of output of information on each object on the terms of construction, sources and extent of financing and other necessary information.
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6.1.8. The public statement of basic principles and directions of policy of the Rostov Region on attraction of investments by the Government of the Rostov Region. The Government of the Rostov Region will develop and approve the investment policy statement of the Rostov Region in which the main priorities of development of investment activity in the Rostov Region will be recorded, guarantees and obligations of the governmental authorities of the Rostov Region for ensuring of the rights of investors, as well as the main measures of state support of investment activity. The investment policy statement of the Rostov Region should establish the principles of interaction of the governmental authorities with the entities of business activity. Among these principles are: - equality - non-discriminatory treatment to all entities of business and investment activity within the framework of the predetermined and public priority system; - involvement - participation of the entities of business and investment activity in the process of making of decisions and evaluation of their realization; - transparency - general availability of the documentary information of the governmental authorities (except for the information relating to the limiting list of the secret information categories); - the best practices - orientation of administrative procedures and regulation to the best practice of mutual interaction of the constituent entities of the Russian Federation with the entities of business and investment activity from the point of view of interests of the entities of business and investment activity. Besides the investment policy statement of the Rostov Region this direction is realized within the framework of the annual letter of the Governor of the Rostov Region to the enterprise community and the authorities on the results of realization of investment policy and long-term plans of development. On the one hand, it is an additional signal for the business entities, confirming the improvement of investment climate in the region, and on the other hand, an additional stimulating factor for increase of the activity efficiency for realization of policy of the Rostov Region on investment attraction for the executive authorities of the Rostov Region. 6.2. Actions for solution of the task on participation of the Rostov Region in global investment process. Today creation of favourable conditions for investors is not so easy; it is important to promote actively the investment potential of the Rostov Region in the world investment market. It assumes: active participation of the Government of the Rostov Region and the Don business in various investment forums and realization of own actions of this kind (organization of meetings and seminars, presentations, holding of conferences and forums, acceptance and organization of missions) with their active information support and monitoring; image formation of the Rostov Region as a leader among the Russian regions, including by means of active promoting through mass media of positive processes in economy, the social area and the public administration system. The Government of the Rostov Region should also conduct active policy in relation to development of interregional communications and advance the initiative on development of the SFD at the federal level;
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target search of strategic investors for ensuring of realization of the priority directions of economic and social development of the region (contacts, negotiations with target potential investors, professional support, including search of investment platform and (or) partner, organization and participation in negotiations); information support of investment process in various mass media (advertizing campaigns in mass media, prospects and brochures, website support, etc.). It is necessary to publish the experience of the successfully realized investment projects. 6.3. Actions for solution of the task on creation of conditions for sustainable social and economic development of the Rostov Region. The sustainable development is understood as such the model of development of economy and society in which the requirements of the present do not put at threat the resource endowment of the future generations, as well as the conditions for progressive all- round development are created. 6.3.1. Improvement of the life quality of the population. The active position of the Government of the Rostov Region on investment attraction for intensification of economic development should provide, first of all, improvement of the life quality of the population. In this context expediency of realization of the investment project should take into account not only its economic efficiency, but also influence on environment and health of the population of the Rostov Region. 6.3.2. Formation of stable structure of economy. In the Rostov Region historically there were types of economic specialization the basis of which is made by large enterprises - the main branch producers. By providing of the release of the final output, these enterprises create demand for production of intermediate consumption. Thus, the large enterprise is capable to provide stimulation for development of the medium, highly specialized enterprises, production of which is intended for realization of the main production. Formation of stable structure of economy of the Rostov Region, with strong interregional production ties, integrated in the world system of division of labour and production, will provide intensive growth to the region at the stage of lifting of the world economy recovery and minimization of the consequences of the crisis phenomena. 6.3.3. Balanced territorial development. Further development of the network of industrial parks is one of the perspective directions within the realization of this action. Now this process is at the initial stage. It is obvious that in the conditions of limitation of the budgetary funds and the requirements of market efficiency of the private capital it is necessary to realize work on development of the network of industrial parks in the Rostov Region successively, step by step. Industrial parks should act as the pilot on the basis of the most prepared investment platforms. Besides, the criteria defining the choice of priority for development at the first stage of investment platforms, can be: the current level of the requirement for industrial park from the part of the potential residents - investors; the costs on providing of investment platform with engineering and transport infrastructure; resource provision (manpower, raw materials, etc.); compliance of assumed production specialization of the industrial park placed in the territory of the investment platform, to the priority development directions of the Rostov 26
Region defined by the Strategy of social and economic development of the Rostov Region for the period till 2020. An important task on the way of realization of this direction is further development of legal support, definition of organizational and economic model and financial projects of creation and development of the system of industrial parks. In particular, the following issues require the analysis: legal basis of creation and development of the network of industrial parks; use of the mechanism of state and private partnership; form of ownership of the land plots in the territory of industrial parks; range of measures of the state support; organization, realization, monitoring and control of creation and development of industrial parks; definition of the key participants of the process on creation and development of industrial parks and their powers; industrial park management, etc. The detailed study of the issues stated above is provided by the Regional Law dated 05.07.2013 No. 1114-ZS "On industrial parks in the Rostov Region", as well as approved on December 5, 2012 by the Governor of the Rostov Region V.Yu. Golubev by the concept of creation and territorial and spatial placement of industrial parks in the Rostov Region. 6.3.4. Improvement of the quality of the attracted investments. The priority of policy of the Rostov Region on investment attraction is creation of modern, hi-tech productions in the manufacturing industry, agriculture and other priority types of economic activity. It will provide: creation of high-performance workplaces - one of the necessary conditions for expansion of production in the conditions of the limited labour resources; increase of competitiveness of the regional economy at the expense of decrease in the costs of production and improvement of the quality of the output; ecological safety of the region. 6.3.5. Innovative orientation. The policy of the Rostov Region on investment attraction should be focused on stimulation of innovative activity of business: support of innovative investment projects; stimulation of innovative production; import support of separate advanced foreign technologies and equipment; development of small and medium enterprise; development of innovative infrastructure; active support of scientific organizations and innovative activity of the system of higher educational institutions. 6.4. Actions for solution of the task on establishment of Rostov-on-Don as an administrative, financial, business, innovative and educational center in the South of Russia. 6.4.1. Realization of this task predetermines the investment appeal of not only Rostov-on-Don, but also the Rostov Region as a whole, and, thus, it is one of the necessary conditions of realization of policy of the region on investment attraction. Ensuring of competitiveness of Rostov-on-Don in comparison with other leading cities according to the level of development both in Russia and abroad in the following directions is planned:
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engineering and transport infrastructure: roads, transport, communication, municipal services; city infrastructure: trade, public catering, hotels, public spaces (convenient, comfortable and useful space for life); social infrastructure: education, health care, social service, culture, sports, entertainment; business infrastructure: banks, investment, consulting, auditing, leasing and insurance companies, commercial real estate (office buildings, business centers, showrooms, warehouses, etc.); institutional infrastructure: state administration, law enforcement authorities; institutes of innovative development: business incubators, innovative and technological centers, scientific parks, technologic parks, technopolises, center of transfer of technologies; improvement of the quality of the urban environment: ecology, town-planning policy; active promotional marketing of Rostov-on-Don as an administrative, financial, business, innovative and educational center in the South of Russia at macro-regional, country and international levels. The solution of the above-mentioned complex of tasks will create the following positive effects: increase of appeal of the city for accommodation; development of economy of Rostov-on-Don in the direction of post-industrial type with the developed financial, legal, innovative infrastructure, the area of educational and medical services; preservation of the personnel potential and involvement of highly qualified specialists for work in the priority branches of economy and the social area; increase of appeal of the city for placement of head offices of large companies, administrative headquarters at the level of the southern macro-region here; decrease in business expenses.
7. Strategic priorities of policy of the Rostov Region on investment attraction
Definition of the priorities of investment policy should promote increase in efficiency of the objectively limited means of support and stimulation of the investment process at realization of the goals determined by the Strategy of social and economic development of the Rostov Region for the period till 2020 and this Strategy. Priorities of policy of the Rostov Region on investment attraction are formed according to the competitive advantages, specialization of the Rostov Region, as well as the problems of policy of the region of investment attraction. In accordance with the competitive advantages and the specialization of the Rostov Region the branch priorities of the regional investment policy are: agriculture - intensive development of crop production and creation of large livestock enterprises; industry - food industry, mechanical engineering, light industry, metallurgy, chemical industry;
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transport and logistics - infrastructure ensuring of economic development and realization of transit potential of the region. According to the task of providing of sustainable development, the priorities of policy of the Rostov Region on investment attraction are: priority of social development – the preference is given to the investment projects having larger social effect, expressed in welfare growth, improvement of the life quality and improvement of the population health of the Rostov Region, involvement into the labour relations of the disabled persons, etc.; priority of ecological safety – the preference is given to the investment projects which do not have negative impact on the environment condition; priority of innovative development – the preference is given to the investment projects assuming: creation of innovative production, introduction of modern technologies, organization of high-performance workplaces, realization of scientific potential; priority of formation of cluster structures - the priority is given to the investment projects created within the existing and the planned clusters, increasing the positive effect from concentration within the territory of the Rostov Region of the interconnected subjects of economic activity: the suppliers of products, components and specialized services, infrastructure, research and educational organizations, etc.; priority of the balanced territorial development - the priority is given to the investment projects focused on decrease in territorial differentiation according to the level of social and economic development at the expense of intensive development of the lagging territories of the Rostov Region. Geopolitical priority of the policy of the Rostov Region on investment attraction is realization of the task of establishment of Rostov-on-Don as an administrative, financial, business, innovative and educational center in the South of Russia.
8. Organizational mechanism of the Strategy realization
The organizational mechanism of the Strategy realization includes: instruments of the Strategy realization; system of monitoring and evaluation of efficiency of the Strategy realization. The organizational mechanism of the Strategy realization has two-level hierarchical structure: strategic (the first) level; program (the second) level. 8.1. Instruments of the Strategy realization. The instruments of the Strategy realization of the first level are in 2013 - the Regional long-term target program "Creating of Favourable Conditions for Attraction of Investments into the Rostov Region for 2012 - 2015" approved by the Resolution of the Government of the Rostov Region dated 23.09.2011 No. 6, in 2014 - 2020 – the actions of the state program of the Rostov Region in the area of creating of favourable conditions for attraction of investments into the Rostov Region;
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The instruments of the Strategy realization of the second level till January 1, 2014 are other regional long-term target, since January 1, 2014 - other state programs of the Rostov Region. The specified program documents of strategic planning define the investment projects, the organizational actions and the legislative initiatives realization of which promotes achievement of the Strategy objectives. 8.2. System of monitoring and evaluation of efficiency of the Strategy realization. Monitoring system of the Strategy realization. At the strategic level control of the Strategy realization is carried out by the Governor of the Rostov Region, as well as by the general public of the Rostov Region by means of ensuring publicity of this process. The public form of expression of control and assessment of the results of the Strategy realization, as well as the main directions and priorities of policy of the Rostov Region on attraction of investments is the annual report of the Governor of the Rostov Region before the deputies of the Legislative Assembly of the Rostov Region. The key measures are defined in the report too which are necessary to take in the year following the report year, for attraction of investments and improvement of conditions of business in the region. 8.3. System of evaluation of efficiency of the Strategy realization. At the strategic and the program levels the target indicator is the indicator "The volume of investment at the expense of all sources of financing" the standard forecast of which for the period till 2020 is defined by the innovative plan of development of the Strategy of social and economic development of the Rostov Region for the period till 2020. The specific values of the target indicator of strategic and program level are given in Appendix No. 2.
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Appendix No. 1 to the development strategy of the investment area of the Rostov Region for the period till 2020
BASIC PARAMETERS of industrial platforms of the Rostov Region Lo
Industrial platform Location Space (ha) Residents Specialization of residents Total Occu- pied 1 2 3 4 5 6 Krasnosulinskaya Krasny Sulin 1 100.0 66.2 LLC “Guardian Steklo Rostov”, LLC “Air glass manufacturing, production of Products Gas”, LLC “Praxair Rus”, industrial gases, minerals, LLC “Zavod Techno”, LLC “Imerys Vostok” production of thermal insulation of basalt fiber Matveevo- vil. Matveev 608.0 608.0 OJSC “Lafarge Cement” production of cement, nonmetallic Kurganskaya Kurgan materials Novoalexandrov- Azovsky 114.4 114.4 LLC “Coca-Cola HBC Eurasia”, LLC “Parma”, production of soft drinks, starch skaya District LLC “Rostov Factory of Sparkling Wines”, products and glucose-fructose OJSC “Aston”, LLC “Ball Packaging Europe syrups, production of aluminum Rostov”, CJSC “Rostov Paint and Varnish beverage cans, cardboard and Factory”, LLC “Gofrotara”, Company paper, production of sparkling “Danone-Unimilk”, CJSC “Donelectrosteel” wines, production of paint and varnish products, production of rolled steel Oktyabrskaya Oktyabrsky 866.0 382.6 LLC “MetallDon”, LLC “Evrodonyug”, LLC production sandwich panels, metal District “Irdon”, LLC “StalSnab”, LLC “Industrial constructions, hot galvanizing Park” Yugo-Vostochnaya Azov 222.6 47.9 LLC “Frito Lay Manufacturing”, LLC production of polyethylene pipes, (Azovskaya) “PepsiCo”, LLC “Neva-Plast”, LLC “Azov- aluminum disks, soft drinks, food Tek” products Yuzhno-Batayskaya Bataysk 957.8 187.6 FSUE “Russian Post”, LLC “Expo-Line”, construction of modern transfer LLC “RTL-Container”, LLC “EC “Yug Rusi” silo, motor-car logistic center, Individual Entrepreneur Toros V.E., LLC construction of meat-processing “Agrocom”, LLC “Spetsavtokhozyaystvo-2”, enterprise, etc. LLC “Don-Stroy” Gukovskaya Gukovo not 184.2 LLC “Aviation Concern LAVViP”, LLC output of basalt carbon-based defined “Southern Coal Company”, LLC “GRIF” composite material, production of copper anodes and cathodes, coal mining
Note. The list of the used abbreviations: CJSC - Closed Joint Stock Company; LLC - Limited Liability Company; OJSC - Open Joint Stock Company.
31 Appendix No. 2 to the development strategy of the investment area of the Rostov Region for the period till 2020
TARGET INDICATORS of strategic and program levels for the whole period of the Strategy realization
Target indicator 2013 2014 2015 2016 2017 2018 2019 2020 1 2 3 4 5 6 7 8 9 Volume of investment at the 225 162.6 245 599.9 296 485.3 346 887.8 387 362.0 443 840.1 501 870.6 565 606.4 expense of all sources of financing in the current prices, million Rubles Volume of investment at the 100.3 103.1 113.7 109.9 107.2 107.2 107.2 107.2 expense of all sources of financing in percentage to the previous year, in the comparable prices