Alexander, as the first months of the pandemic affected regions of the North-West?
Alexander hodachek: You know, the situation is more or less normal. If we compare the results of the first quarter in the northwestern Federal district, we see that the performance is not below 2019. The decline was seen only in the construction industry.
According in four months the situation has worsened. Of course, that drop was observed in industries that fall under the restrictions. It services, non-manufacturing, tourism, hotel and restaurant business. But, for example, in agriculture the situation is different, there work did not stop. Now for the regions with developed agriculture an attractive theme agricultural exports. Successfully working in this direction, the Kaliningrad and the Leningrad region, exports its products to a number of farms of the Vologda, Pskov and Novgorod regions.
the Most affected are towns and small villages, where the main employers are small and medium businesses, fell under the regime of restrictions. There is restoration in many cases would be impossible, and we will see a series of forced bankruptcy, closure of enterprises and organizations.
What can we expect from donor regions? If they can maintain their status without the support of the Federal government?
Alexander hodachek: Support is already underway in the framework of national projects and regional components. Another thing is that some of the projects may be assigned at a later date, especially on large-scale strategic projects (roads, engineering infrastructure) is given five or six years.
In the North-West regions as such donors are not many, it’s St. Petersburg, Leningrad region and part of the NAO. The rest of us donors are not. I think that there will be funding in the framework of the additional financial and tax support that is provided for individual industries and backbone enterprises.
But the expenditure part of the budget will be reallocated, as has been done in St. Petersburg. Petersburg increases the amount of borrowings almost two times. In principle, this should not critically affect the parameters of the budget. In the protected items (wages, allowances, social benefits), no changes will occur.
the Budget of St. Petersburg has a margin of safety. The city has always been, is and will be of major Federal projects. They are the drivers of economic growth. For example, a project for the development of intercity trains “weighs” almost 100 billion rubles.
Their large-scale construction projects in other regions, for example in Murmansk, the construction of the new port, and it does not stop, despite the pandemic. No sequesters, as far as I know, there has been road construction in the northwestern Federal district in the framework of the national project “To��importnye road.”
what, then, of course, have to give. For example, in St. Petersburg the reform of city passenger transport was postponed for an indefinite period.
What’s waiting for subsidized regions? Will they be able to continue any projects or they will have the resources to pay salaries and social benefits?
Alexander hodachek: As such private projects have very little, if they are, then there are, as a rule, at the expense of investors, this is not a regional investment. In subsidized entities most likely affected the development budgets, that is, the targeted investment program. The fact that the projects under these programs are financed in the framework of the unprotected budget items and, of course, the shortage of funds, the need to implement quarantine measures and social commitments and projects to be amended. Most likely, the introductory objects of 2020 will be completed, but future events that are developing project documentation and not competitive procedures, is likely to be postponed.
I think that’d do the leaders of many of the regions where the projects were linked with the local budget or with the expected arrival of investors.
How the regions are to attract investors to the new conditions?
Alexander hodachek: Yes, as always. Investors interested in strategic development plans of the region and almost all subjects such programs have, they are designed mainly to 2035-2040 years. There are programs of development of separate industries up to 2050 in the whole of the Russian Federation.
Another issue is that now more than ever it is important to integrate projects that are inter-regional and inter-municipal in nature. We have an old trouble, when one region does not know what his neighbour.
Recently appeared a positive experience of linking the programs of perspective development of territories of St. Petersburg and Leningrad region, a project for the development of the transport system. Here are the examples should be exemplary from the point of view of interregional relations. Because if this is not done, then no one region particularly in the current environment is not enough resources to major infrastructure projects has grown to more related projects, which came to be investors with small amounts of capital.
for Example, in the North-West there is a cluster of electronic industry includes about 70 companies, of which only 12 are located in the territory of St. Petersburg. Such a system is the development of distributed clusters can be quite effective.
it’s No secret that regions compete for investors. Can it happen that St. Petersburg, as a region with a stronger economy, chip away at the complex BP��MENA on all major projects and leave other regions without investors?
Alexander hodachek: a Rhetorical question. We have always had strong regions, there was a strong peasant, but was subsidized. There is a clear indication of the average salary, for example, compare the statistics in St. Petersburg and the Pskov region (63 thousand and 29 thousand, respectively).
But the investor can’t attract beautiful promises, should be the conditions, the infrastructure, the investor needs to understand where it will take footage for a particular project. Where there are conditions, regulatory framework, where the investor comes, as it does not slide to another region.
In an attempt to create the most attractive conditions, regions often offer tax benefits to investors. Can now it to reach the dumping?
Alexander hodachek: In fact, benefits are not great. You can give them only within the powers of the subject, and they are very limited. For example, the region can offer a discount on the income tax, which is not yet, or property tax, which has not yet been built. Also have such a tool as the creation of areas of advancing socio-economic development very attractive for investors, but it can be done only with the permission of the Federal government.
In the near future an important element of regional development of the northwestern Federal district will be adjusted the development strategy of the Arctic zone of the Russian Federation until 2035. It affects virtually all of the territory North-West from the point of view of production processes, development of mineral resources, training, and construction vessels. A special role here in Petersburg, it can become a focal, industrial and scientific center of the Arctic. This program is, I think, will be able to consolidate the efforts of authorities and investors and will allow to continue work on large strategic projects in the northwestern Federal district.
what about labour market? In what areas should expect layoffs?
Alexander hodachek: These areas on the surface: hotel industry, catering, services, food retail, tourism, small business. They are very much sunk, I think, at the end of four months, the turnover decline is 40-50 percent. But most of all were not protected workers in the informal sector.
And the peak of the registered unemployment awaits us in September. By this time, the support measures established businesses and organizations will be exhausted. Many companies, even those who received assistance, will not be able to stay afloat. Also in September, the labor market will be those who spent the summer at home or in the country forced to leave.
Will there be jobs?
Alexander hodachek: In St. Petersburg – will. The economy of the city�� diversified, Yes, a period can be situations when people will not be able to find work on a specialty, or wages will be below the desired level, but overall jobs in the city.
In many regions plan to introduce paid public works. They are a little to stabilize the situation on regional labour markets. It will be easier where there is a large building, such frames are always needed. But in small towns or villages people can face the fact that they are in a period of will not find jobs. No.
can it happen that in search of work, people go EN masse to St. Petersburg, and other regions of the North-West there is a sharp shortage of personnel?
Alexander hodachek: Petersburg and Leningrad oblast have been a specific career cleaner for the whole of the North-West. In the last two or three years the outflow of qualified specialists in the regions is hampered, creating a new high-tech jobs. Such processes are observed in the Kaliningrad, Pskov, and Arkhangelsk regions, as well as Veliky Novgorod, Pskov and Cherepovets. In the near future the creation of such places will be called into question.
the Relocation specialists, I think, in the coming months will be in the nature of temporary employment. The fact that the costs of social adaptation for the year in Petersburg has grown. Therefore, to move long haul is simply not profitable to many. As soon as in their native towns and villages the situation will improve, professionals will begin to return.
How long will the negative trends?
Alexander hodachek: For all different. For some industries, the crisis will end immediately after the lifting of restrictions. Take non-food retail. People do gardening, repairs, economic Affairs, this sector is on pause, but by the pent-up demand. So as soon as the shops open, the area will go to growth.
Services, hospitality and foodservice to recover will be long and not the fact that many of the players will return to the market.
If to speak about industrial enterprises, it is appropriate to recall the financial crisis of August 1998, then sharply decreased competition, the borders were closed. In the end, the industrial enterprises of St. Petersburg by the end of December reached the pre-crisis level. If there is no inflow for the competitive price and quality foreign goods, there is a chance for our real economy. Can begin to develop the production of food, clothing, shoes, FMCG. Opportunities for growth will get the economy of simple things, that is what people really need, regardless of the state of the economy and the epidemic situation.
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“Adaptation. Think about that later” – national journalism project of the epoch of quarantine. The organizer – the Union of journalists of Russia on the initiative of the St. Petersburg branch of the Union of journalists of Russia, co-organizer – “the Russian newspaper” and the newspaper “St. Petersburg Vedomosti”. Coordinator – Dmitry Sherih, Chairman of the St. Petersburg branch of the Union of journalists of Russia ds@jourspb.ru.
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