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Amur Region: a region of difficulties and great prospects
The path of the Amur Region from the depressive zone to the center of industrial development and international cooperation
Amur Region, in the presence of undeniable advantages in the form of an advantageous border position and rich resource potential, has recently experienced a surge of positive expectations related to the implementation of large projects of federal and international significance. They are expected to give a new impetus to the development of the Amur economy and turn the region, traditionally lagging behind in a number of indicators, into a large industrial and transport and logistics center in the east of the country. It is worth noting that similar ambitions were voiced earlier, but several years ago they raised doubts, and it seemed difficult to judge their potential success against the background of changing plans and shifting deadlines for a number of defining projects.
By 2019 in the regional economy, there were clear positive trends that were the result of the implementation of individual large projects, as well as the increased attention to the region from the federal center. At the same time, not all the plans outlined are further developed for various reasons - depending on the market situation (in the field of coal mining or oil refining) or the initial management mistakes made (the protracted construction of the cosmodrome). On the whole, favorable conditions are developing in the areas traditional for the economy of the Amur Region - in gold mining and agriculture, but their development, due to industry specifics, is notable for instability. Thus, the Amur Region today is gradually moving towards improving socio-economic indicators, and the successes that have been made serve as an occasion for optimistic forecasts. For the future, large-scale projects, not only by the standards of the Far East, but also the country as a whole, promise the region a real economic breakthrough, but at the same time make its economy critically dependent on the success of their implementation.
In terms of GRP (336,2 billion rubles at the end of the 2018 year), the Amur Region is ahead of some Far Eastern entities, such as Buryatia, Jewish Autonomous Okrug, Magadan Oblast, Kamchatka Krai and Chukotka Autonomous Okrug, and lags behind Primorye, Khabarovsk Krai and Sakhalin. Against this background, plans to increase GRP in the near future look ambitious. They are connected, first of all, with the implementation of large industrial projects, on the successful development of which the future well-being of the region largely depends. The Amur Region claims to have a prominent role in several sectors of the economy at once - gas processing industry, mining, agriculture and logistics.
The dynamics of industrial production in the Amur industry is still lagging behind most Far Eastern regions, both industrial leaders of the okrug (including Yakutia and the Magadan region), and more similar to the Amur Region - Trans-Baikal Territory, Jewish Autonomous Okrug and Buryatia. At the end of 2018, the Amur Region showed a decline and the lowest index of industrial production in the Far Eastern Federal District, which was largely due to a decrease in production in the mining industry. This year, according to the results of January-September, the situation was evened out - the region returned to the positive dynamics of industrial production, ahead of, in particular, the Trans-Baikal Territory and the Jewish Autonomous Region.
Nevertheless, the main economic prospects of the Amur Region are associated precisely with the development of industry - gas processing and mining. The passage through the Amur region of the Power of Siberia gas pipeline and the presence of cross-border infrastructure determine the possibilities for creating the largest gas chemical cluster in the Far East, for the development of which the specialized Svobodny TOR has been created. Its main enterprises should be the technologically interconnected Gazprom Amur Gas Processing Plant (Gazprom Gas Processing Blagoveshchensk LLC) with a processing capacity of 42 billion cubic meters of natural gas and the Amur Gas Chemical Complex (AGHK) of SIBUR Holding PJSC with an annual capacity of 1,5 million tons of polyethylene. For the implementation of the project, the positive interaction of its main initiators is also required. In particular, last year Gazprom and SIBUR agreed to supply two million tons of ethane per year, and in the autumn of 2019 of the year, the parties entered into a preliminary agreement for the annual supply of 1,5 million tons of liquefied petroleum gases (LPG) and ethane fraction from the gas processing plant to the MCC. As expected, the latest deal will increase the potential capacity of the complex with 1,5 to about 2,3 million tons of polyethylene and 400 thousand tons of polypropylene.
Nevertheless, the expected multiplier economic effect - an increase in tax revenues to the budget and the growth of GRP, the creation of up to five thousand jobs, including the influx of highly qualified specialists, the emergence of additional sources of income for the population - from the implementation of these large-scale projects should be expected no earlier than 2025 of the year. since the AGHK will be commissioned after 2024 in synchrony with the construction of the fourth stage of the Amur GPP. In general, at the moment, a final decision has not yet been made on the configuration of the gas chemical enterprise (basic or expanded). In many respects, it depends on the introduction of a negative excise tax on LPG - a support measure being discussed in the government of the Russian Federation that stimulates the processing of this type of raw material. Involvement in LPG processing will increase the capacity of AGHK to 2,7 million tons of finished products per year, which will allow the company to claim a leading world role in the production of polyethylene and polypropylene.
At the moment, this prospect seems feasible due to the fact that at the federal level the possibility of introducing benefits for liquefied petroleum gases by reducing subsidies for naphtha or by gradually increasing reverse excise tax is being actively discussed. The construction of the Amur Gas Processing Plant, in turn, is tied to the development of the capacities of the Irkutsk and Yakutia gas production centers and the beginning of gas supplies through the Power of Siberia, which are scheduled for the end of this year. Commissioning of the first two production lines of the Amur GPP is supposed to be carried out in the first half of the 2021 of the year.
Another major production planned to be created in the region is the methanol plant of OJSC “Technolizing” (ESN group of Berezkin) in Skovorodino with a capacity of about one million tons per year. It is known that the Japanese companies Marubeni Corporation and Mitsui OSK Lines, as well as the Saudi Sabic, are interested in the project, but no specific memorandum has been reached in addition to the memorandum on the supply of methanol, signed by Japanese companies and ANO IPA.
With regard to oil refining, this year, after long discussions and disputes, the project of the Amur Oil Refinery with a planned capacity of six million tons of oil and condensate per year, which was supposed to be implemented with the participation of Chinese capital, was officially canceled. The Amur Energy Company, controlled by the Chinese Meng Lan Xing He, promised to finance at 90% the entire amount of work worth more than 120 billion rubles. Accordingly, most of the products were supposed to be delivered to China. It is worth noting that the project initially seemed doubtful due to uncertainty with the source of raw materials and Transneft’s expected refusal to give permission to connect the Amur Oil Refinery to the ESPO pipeline.
Power in energy
An undoubted advantage for the development of industrial enterprises in the Amur Region is the presence of large electric power capacities in the region. A significant event in the autumn of this year was the launch of the fourth hydroelectric unit and the full commissioning of the Nizhne-Bureyskaya hydroelectric power station (PJSC RusHydro), the most powerful Russian hydroelectric power station built in the post-Soviet era, with an average annual design power generation of 1670 million kW / h, which is part of composition of the Bureyskiy hydropower complex. The station reached its design capacity of 320 MW. The hydroelectric station is designed to provide reliable energy supply to all large industrial facilities under construction in the region and planned to be built. There is also an increase in electricity generation at the Bureyskaya HPP - by 31% in the third quarter of 2019.
However, unlike the Nizhne-Bureyskaya HPP, the design and construction of which has been going on for a long time, the implementation of new investment projects in the electric power industry in the Amur Region faces some difficulties. Thus, convenient logistics allows us to consider the region as a center of electricity export to neighboring China. But projects in this direction are not in an active stage. So, the project of construction for these purposes of the Yerkovetskaya TPP with a capacity of 1200 MW on the basis of the Yerkovetsky brown coal deposit was postponed, although in 2016 the government and Inter RAO seriously discussed its implementation, and even called the possible launch date of the facility - 2020 year. One of the main reasons for the lack of further progress on this issue was that the parties were not able to agree on the price of electricity. In the near future, one should not expect the implementation of a project to create a thermal power plant for export purposes on the basis of the Ogodzhinsky coal deposit, and given that the Chinese side, represented by Shenhua Corporation, refused to participate in its development, in all likelihood, the construction of energy capacities will simply be canceled.
But the construction of the Power of Siberia gas pipeline brought closer the implementation of the gasification program for some of the municipal and industrial facilities of the Amur Region. First of all, in 2020-21, boiler houses in the cities of Svobodny and Tsiolkovsky will be converted to natural gas. In the future, by the 2022 year, gas will come to Blagoveshchensk and the Annunciation region. In general, it is planned to gasify more than half (about 350) of the settlements of the Amur Region, including the cities of Tynda and Shimanovsk, Tyndinsky, Shimanovsky, Skovorodinsky, Magdagachinsky and Svobodnensky districts. The program for the development of gasification and gas supply in the Amur Region until the 2025 year provides for the design and construction of four gas outlets and gas distribution stations. According to expectations, the transition to gas should reduce the cost of servicing boiler rooms.
Weight in gold
The industry, in which the Amur Region has already been able to demonstrate success, is mining - primarily gold mining. Recently, the indicator of production volumes by the type of economic activity Mineral Extraction in the Amur Region has been characterized by positive dynamics - in January-September of the 2019 of the year, the increase was 10,7% compared to the same period of the 2018 of the year. The best growth rates of this industry in the Far East were demonstrated only by Yakutia and the Magadan region. This year, in the Amur Region, gold production growth resumed, in terms of which the region is one of the leaders in the Far Eastern Federal District and ranks sixth in Russia (according to the results of the 2018 year). The gold mining industry today provides 12-17% of the revenue of the consolidated budget of the Amur Region.
But it should be noted that last year there was a decline in the gold mining area of the Amur Region - precious metal production decreased by 12% compared to the same period of the 2017 year, amounting to 22,7 tons. The fall turned out to be palpable for the Amur Region, given the fact that in previous years its enterprises showed record volumes of precious metal production (due to the launch of new production facilities of Petropavlovsk Group of Companies), which made the region one of the three leading gold mining regions of the country in 2009-2017 years . Such a noticeable reduction was caused by the problems of the leading gold miners in the region - enterprises included in the Petropavlovsk Group of Companies (Pokrovsky and Albynsky mines), and Nordgold (Berezitovy mine).
However, important positive results in the industry over the past year were nevertheless achieved - the Petropavlovsk GC autoclave and hydrometallurgical complex was launched at the Pokrovsky deposit (with a processing capacity of up to 500 thousand tons of refractory concentrate per year), where at the end of the 2018 of the year the first history of the Amur region stubborn gold. The extraction of precious metals from refractory ores is associated with the main prospects for the growth of gold mining against the background of a gradual depletion of readily available reserves. Accordingly, the work of the autoclave this year is expected to bring an increase in gold production, thereby offsetting last year's decline. In part, this forecast is being implemented - in January-October this year, the Amur Region subsoil users increased gold production by 12,3% compared to the same period of the previous year - to 22,5 tons, while the mine production index increased by 20%, amounting to 14,3 tons. Meanwhile, production on Amur placers is growing steadily, mainly due to the work of large artels with the participation of foreign capital (XAS-groups combining the Maristy, Mars, Mogot, the Dambuki mine), as well as the artels Roszoloto. For the gold mining industry of the Amur Region, the main problem is the lag in the growth rates of precious metal reserves compared to the rates of its extraction. For this reason, the main hopes are laid on the extraction of gold from refractory ores, the existing reserves of which are estimated to allow the region to stably maintain the current level of gold mining for a long time.
Give the country coal
In the field of coal mining, a strategic project is the development of the Sugodinsko-Ogodzhinsky deposit (Selemdzhinsky district), which has significant reserves of coal - 1,5 mlr. tons, and considered the largest in the Far East. The reason for doubt is the fact that high-profile statements have been heard for quite some time, but large-scale development of the field continued to shift to a later date. Rostec’s subsidiary RT-Global Resources intended to invest up to 240 billion rubles in the Ogodzhinsky project by constructing a mining enterprise and an enrichment plant with a capacity of up to 30 million tons of coal per year, to begin production in 2018-2019 and reach its design capacity in 2023 year. In addition, the possibilities of creating a coal TPP and organizing the supply of electricity to China were considered. The largest Russian coal producer, China Shenhua Energy, was supposed to be Rostec’s partner in the project, but, as is often the case with Russian-Chinese cooperation plans, the matter did not go further than negotiating and signing preliminary agreements.
A new co-investor was already found among Russian coal miners, who have ambitions to increase product exports to the growing market in the Asia-Pacific region. The development of the Sugodinsko-Ogodzhinsky field should now be taken up by RT-Business Development (Rostech subsidiary) and VostokUgol company Bosova and Isaeva, who in 2018 received a stake in 50% in Ogodzhinsky Energy Holding. The fact of the arrival of a new investor in itself inspires some optimism, allowing us to expect that the project will not be frozen. In addition, the new investor intends to develop the Ogodzhinskoye deposit as part of a major project in the Far East, which also includes the Vera coal port, which was put into operation this year in the Primorsky Territory, through which Amur coal can be exported to Asian markets. Thus, the project begins to gain a clearer perspective.
There are also difficulties in the extraction of iron ore. Back in 2015, the iron ore company IRC Ltd, associated with the Petropavlovsk group, froze work at the Kuranakh deposit (Tyndinsky district) in anticipation of more favorable prices for products. Instead, the company focused on its project in the Jewish Autonomous Region - Kimkano-Sutarsky GOK. In 2018, an IRC subsidiary operating in Kuranakh (the deposit has been in operational mode since 2016), Olekminsky Mine LLC was declared bankrupt.
In the Amur Region located in the south of the Russian Far East, agriculture has traditionally been one of the main economic specializations. Today, the Amur Region can rightly be called one of the leaders in the agricultural industry in eastern Russia. According to the results of 2018, agricultural products for the first time ranked first in the region's export structure and amounted to 169,7 million US dollars. The Amur Region accounts for more than 62% of the total sown area of the Far Eastern Federal District and over 32% of agricultural products produced in the Far East. The region intends to develop this industry, demonstrating high performance in several areas.
So, the Amur region is one of the Russian leaders in terms of soybean production - the annual gross yield of this crop is 1,2 million tons, in 2018 the harvest reached a record 1,3 million tons. Thus, the region accounts for over 30% of soybeans produced in Russia. In the 2019 year, the Amur Region retains leadership positions in the volume and export of this culture. In particular, from January to June, 119,27 thousand tons were exported to China. Amur farmers plan to produce 2,2 mln tons of soybeans per year by 2024 due to both an increase in the area under crops and an increase in crop productivity - on average up to 25 centners per hectare, which should be twice as high as the current figures (11 centners per hectare ) It should be noted that in the Amur region there has been a steady increase in sown area - by 21% over the past five years.
The regional authorities plan to introduce all fallow lands into circulation and optimize crop rotation by slightly reducing the share of soybeans (from the current 78% to 63%) and increasing the sowing of grain and vegetable crops, as well as increasing the yield of not only soybeans, but also grain crops (from 17 to 27 centners per hectare). However, the fulfillment of these tasks and achievement of advanced indicators depend on state support - compensation for the reimbursement of costs incurred by farmers to improve soil fertility, support for the modernization of the agricultural machinery park, and compensation for transport costs for the delivery of equipment and fertilizers due to the remoteness of the region from the main enterprises - manufacturers, compensation for the costs of restoration and repair of the reclamation system (currently worn by 80%). So far, the Ministry of Agriculture of the Russian Federation declares its readiness to provide such support to the Amur agrarians. In the absence of compensation and in the presence of serious fluctuations in the market for agricultural raw materials, farmers face a typical problem of price disparity, in which prices for raw materials are reduced, and prices for fuel, lubricants, fertilizers, and electricity, on the contrary, tend to increase.
In addition, the agricultural industry is highly dependent on external factors. Damage to her is caused by both natural disasters and diseases of farm animals. In particular, this year as a result of the summer flood, 22% of the total sown area (over 261 thousand ha) was affected - including over 212 thousand ha of soybeans (25% of the total sown area), more than 48,6 thousand ha of grain crops (21% of the sown area), as well as 444 ha of other crops. The damage exceeded three billion rubles. In addition, as a result of the outbreak of the African swine fever virus this year, the livestock of these animals was significantly affected - 15,3 thousand animals were seized and destroyed, and the damage was estimated at more than one billion rubles.
Investments in the agricultural sector of the Amur Region look promising, given the presence of a close market - neighboring China. For example, in the framework of the WEF-2019, an agreement was signed on cooperation and supply of soybeans worth more than 12 million US dollars between the large Chinese food producer COFCO Group and Amurragrokompleks LLC. It should be noted that a distinctive feature of Amur soy is a high protein content, which makes it most suitable for use in food additives.
Nevertheless, the export of not soybean meal, lecithin and soybean oil, but not processed raw materials, is much more profitable. By the 2024-2025 years in the Amur region it is planned to implement a number of projects in the field of processing agricultural raw materials - the construction of the second and third phases of the Amursky oil extraction plant (LLC Amursky Oil Extraction Plant (MEZ), a subsidiary of Amuragrocentr LLC), two new plants for the production of soybean oil companies ANK-Holding and Krasnaya Zvezda. However, in this area, producers are faced with the need for state support, since they have to compete with representatives of the PRC who are seeking to purchase cheaper raw materials (soybeans), and with Russian agricultural producers in the central and southern regions, who offer lower prices for such processed products, as a soybean meal used as a basis for compound feeds. In these conditions, manufacturers expect to receive state support in the form of short-term soft loans, which can reduce existing risks.
As for plans to increase agricultural exports (from the current 169,7 to 368,2 million US dollars), the Amur farmers have to rely on federal support in this matter. The authorities of the region expect that at the government level decisions will be made to abolish quotas for the export of Far Eastern wheat, barley and corn to the PRC and to provide compensation for railway tariffs for the transportation of export agricultural products of the Far Eastern Federal District to Far Eastern ports and customs checkpoints. Currently, deliveries outside the existing quotas are in most cases unprofitable, since the importing company must pay an import duty of up to 65% of customs value upon import.
The border position of the Amur Region opens up opportunities for the implementation of ambitious international logistics projects and the development of international cooperation through the creation of a cross-border Russian-Chinese agglomeration. The priority is to improve transport links. In contrast to the not-so-productive attempts at cooperation between the two countries in the field of mining, electric power and oil refining, joint projects for the development of logistics infrastructure are being gradually implemented. The construction of the Blagoveshchensk-Heihe automobile cross-border bridge was completed, the traffic on which is scheduled to be launched in April 2020 of the year (the investor from the Russian side is GK Most). In addition to the road bridge, it is planned to create a cross-border cable car across the Amur River, the construction of which by the efforts of Region Group and the Chinese company Jinlungan began this summer. The completion of the construction is scheduled for 2022 year.
The 2021 year is scheduled to launch a new customs checkpoint "Jalinda-Mohe" (investor - JSC "Border"), which is supposed to be developed as a major transport and logistics hub for three Russian regions at once - Amur, Transbaikalia and Yakutia. The resumption of deliveries through the customs border point is intended to partially relieve the ports of Primorye, and in addition, for Yakutia and Transbaikalia this route will be more beneficial for export deliveries to the PRC. So, the coal miners of Yakutia have already announced their readiness to ensure the loading of the Amur point at the expense of deposits in the south of the republic.
A significant contribution to the consolidation of the status of one of the leading centers of international cooperation with China for the Amur Region should also be made by the extension of the “port-free” regime to Blagoveshchensk, promoted by regional authorities and practically agreed at the federal level.
An important component of the plan to form an international transport hub in the Amur Region is also the planned reconstruction of Blagoveshchensk International Airport (Ignatievo), which remains one of the few regional international airports with growing passenger traffic that are not part of large holdings (and the only such harbor in the Far Eastern Federal District) . Regional authorities expect to increase the capacity of the air harbor in international destinations by 2,5 times and by 2025 increase international passenger traffic to 250 thousand passengers per year, transferring the region-owned airport to concession and reconstructing the international terminal. Although a concessionaire investor has not yet been found, the federal authorities and representatives of the core business see a certain potential in the facility - the Far East Development Fund (FRDV) and VEB have signed a memorandum of cooperation, implying an investment of three billion rubles in the reconstruction of the airport. The presence of interest in the asset was announced by the Novaport holding Trotsenko.
Speaking about the implementation of the logistic potential of the Amur Region, it is necessary to separately note the modernization of the Baikal-Amur Railway as part of the development program for the Eastern Landfill of Russian Railways. The growth in rail traffic, primarily coal, in the direction of the Pacific ports encourages the accelerated elimination of bottlenecks and the expansion of railway capacity. A number of important objects are also in the BAM zone in the Amur region. In particular, preparations are underway for the commissioning of a railway bridge over the Zeya River (Bamstroymekhanizatsiya), which aims to almost double the throughput capacity on this section. Investments in this facility amounted to almost five billion rubles.
It is expected that the modernization of the highway should give a new impetus to the development of the adjacent territory, which remains economically depressed and continues to lose population. In the “capital” of BAM - the city of Tynda, as of 2018, 33 thousand people lived, over the past ten years the population of the city has decreased by more than five thousand people. The same trend is observed in other settlements on the BAM. Against the background of growth in freight traffic on the highways, the leadership of the region and the Far Eastern Railway (Far East Railways) are afraid of a shortage of personnel. Therefore, the main issue is the consolidation of the population in the BAM zone and the attraction of new personnel by creating a modern social infrastructure, compensating for utility bills and providing housing. In particular, the Amur Region annually spends significant amounts (about 400 million rubles) to provide compensation to the “BAM Utility Systems”. Major projects in the mining industry should also make a certain contribution to the development of the BAM zone.
Large construction sites
The construction industry of the Amur Region is largely tied to the implementation of large industrial projects. So, in the 2017 year, the region reached a record for the macro-region in terms of the dynamics of the volume of construction work (143,2% in relation to the corresponding period of the previous year), which was due to the construction of such facilities as the Vostochny Cosmodrome, Amur Gas Processing Plant, Nizhne-Bureyskaya Hydroelectric Power Station and the Power pipeline Siberia. " Nevertheless, the construction of some facilities has almost been completed (gas pipeline, hydroelectric power station), and as for the cosmodrome, this project is accompanied by a large number of problems and scandalous situations (delaying the commissioning of the facilities and the lag in the pace of construction, detecting violations and theft of funds, delayed salaries), hindering his successful promotion and endowing him with the depressing status of the most problematic construction site in Russia.
The issue of a possible next change of the contractor (now PSO Kazan) is still being discussed, although other large construction companies are abandoning the contract due to difficulties with existing calculations and pricing (the construction of the launch complex for the Angara rocket is estimated at 38,7 billion rubles). A military construction company created in October 2019 under the Ministry of Defense is also considered as a possible new general contractor. This fall, the Investigative Committee of the Russian Federation opened two more criminal cases in connection with the theft during the construction of the Vostochny cosmodrome (in total, investigators are examining 12 criminal cases, and 42 are also brought to court). Thus, despite the assurances of Roscosmos that the cosmodrome will be completed on time, and the construction peak will take place in 2020, the facility remains a problem
As for housing construction in the Amur Region, it has a tendency to decrease. In particular, in 2018, 2 768 residential premises with a total area of 158,9 thousand square meters were built in the region. meters, which is only 87,5% of the level of 2017 of the year. At the same time, the projected growth in housing construction volumes again depends on the implementation of large-scale investment projects - since 2020, growth in housing construction is expected due to the construction of a housing complex for employees of the Amur Gas Processing Plant in Svobodny and housing as part of the construction of the second stage of the Vostochny Cosmodrome in the city Tsiolkovsky.
The volume of investments in fixed assets in the Amur Region has been growing in recent years - in the 2018 year it amounted to 240 billion rubles, increasing by 2017% compared to the 10,1 year. However, it should be noted that a significant contribution to the achievement of advanced results over several years was made by gold miners, who invested, including in technological improvement of production, a significant amount due to the investment program of Russian Railways, working on the modernization of the Eastern training ground, and the construction of the Power of Siberia gas pipeline. In other words, investment growth in the Amur Region is tied to the implementation of large projects.
The preferential regimes operating in the Amur Region and other additional economic incentives give certain results. So, the Amur region is not the most demanded region among the participants of the Far Eastern Hectare program, who prefer land in the Amur hectares in Primorye, Khabarovsk Territory, etc. The region accounts for 13,2% of the total land included in the program. The area of the Amur lands, defined as hectares, is 14,8 million ha (in total, as of February 2019, 5 788 people participated in the program). The vast majority (95%) of recipients of the Amur Far Eastern hectare are residents of the region itself (5 535 people). Thus, the program in the region is more likely to help implement entrepreneurial initiative and solve housing problems of Amur residents, contributing to their consolidation in the territory, rather than stimulate migration flow into the region. Stories about initiative citizens who decided to move from another part of the country to implement their plans on the Far Eastern land are still rare for the Amur Region.
In the Amur Region there are three priority development areas of different specializations, which corresponds to the main priorities of the region's economic development - industrial, transport and logistics, and agricultural. In total, 24 companies became residents of the Amur TOPs (the number increased by eight compared to last year). The plans for their development are traditionally ambitious: the total investment should exceed one trillion rubles by the 2025 year, and the number of jobs created should reach about 5,5 thousand. There is a long way to go to achieve this result - today, TOR residents have invested 200 billion rubles, and only 780 people got a new job. Despite the external desire for diversification, several large-scale projects, the implementation of which should provide a multiplier effect, play a leading role in achieving advanced indicators.
The anchor residents of the Svobodny industrial TOP, as noted above, are large federal players who intend to form a world center for the gas chemical industry in the region. According to expectations, a network of smaller industrial enterprises specializing in the production of building materials (Amurstalkonstruktsiya LLC, Smena LLC, PTC Pchely Svobodny LLC), railway rolling stock repair and food production will be created around large plants.
The Belogorsk TOR is responsible for the development of the agroindustrial industry, with the Amursky oil extraction plant as the anchor resident with a processing capacity of 240 thousand tons per year (Amuragrocentr LLC). Currently, the company is preparing to launch the second phase, which should take place before the end of the year. It is expected, including the commissioning of the first soybean isolate workshop in the Russian Federation. In addition, the TOP includes enterprises specializing in the production of lumber and charcoal (Bellesprom LLC), bakery products (BelKhleb LLC), construction materials (Krepost LLC, KMK-Partners LLC), and industrial waste processing (LLC Amurekoresurs). In total, the TOP has eight residents, however, compared with the anchor resident, their production is developing at a slower pace.
The industry and logistics TOP Amurskaya is currently least developed, the resident status in which was obtained by companies with projects for storing agrochemicals (LLC Agrokhim DV), production of microbiological fertilizers (LLC Bisolbi-Blagoveshchensk) and animal feed (LLC Agro factory ”), oil refining (the failed project of Amur Energy Company LLC), cement production (S Technology LLC), production and repair of wagon wheels (VKM-Bureya LLC). The period of intensive development of Priamurskaya is scheduled only for the 2021-2035 of the year.
Tourism is another industry designated as promising in the comprehensive strategy of socio-economic development of the Amur Region. The Blagoveshchensk international airport has a simplified entry mechanism, which implies the use of an electronic visa, which in recent years has contributed to the growth of tourist flow. The bulk of it is made up of citizens of China. Over ten years, inbound tourist flow to the region from China has increased nine-fold, having exceeded 2018 thousand people by the end of the 101 year. In the nine months of this year, the number of Chinese tourists visiting the region has already exceeded 103 thousand people.
The further growth of the tourist flow from a neighboring country allows us to count on the construction of an automobile bridge and a cross-border cable car. As for guests from other countries, their share in the total tourist flow is insignificant - in 2018, it amounted to two thousand people. However, in general, the tourist flow in relation to the 2017 year increased by 8,1%, which is also a consequence of the introduction of the electronic visa mechanism.
Nevertheless, it should be noted that tourists, including foreign ones, often visit the region in transit, on their way to other parts of the country, limiting themselves to visiting the administrative center of the region. Although the border and transit position ensures the growth of the tourist flow in the Amur Region, long excursion and event programs, including opportunities for family vacations and extreme tourism, can bring much profit from the industry for the region. Such proposals in the Amur Region are still in short supply, although the authorities have an understanding of the need to move in this direction. The planned flow of Blagoveshchensk to SPV status can also increase the tourist flow - in this case, foreign guests will be able to come to the city without a visa for up to eight days. True, such an opportunity will still affect primarily Chinese tourists.
Work and income
In terms of average per capita cash income, the region is not yet a leader in the Far East - the revenue here is lower than the average for the Far Eastern Federal District, but it is still ahead of such traditionally problematic entities as the Jewish Autonomous Region, Buryatia and Zabaykalsky Krai, having made 2019 33 in the second quarter of 304. ruble. The same situation is typical for wages - the average monthly wage in the Amur Region steadily exceeds only the indicators of the clearly lagging Jewish Autonomous Oblast, Buryatia and Transbaikalia. In recent years, the Amur Region has also slightly surpassed Primorye in terms of salary, but in this case, the indicators of the two regions are as close as possible.
At the same time, per capita incomes and average monthly wages in the Amur Region have recently tended to increase. In August 2019 of the year, salary growth amounted to 7,5% compared to August 2018 of the year (up to 45 196 rubles), and income for the second quarter of this year increased by 7,7% compared to the corresponding period of 2018. However, rising incomes and wages are also accompanied by rising prices, which significantly reduces the positive effect. In September, the consumer price index for goods and services in the Amur Region amounted to 103,6% compared to December last year, which corresponds to the level of Yakutia in the Far Eastern Federal District and is second only to the Jewish Autonomous Region. Considering that the level of incomes and salaries (as well as indicators of their growth) in the Amur Region as a whole is lower than in the macroregion, this trend cannot be called favorable.
Compared to other Far Eastern regions, the unemployment rate in the Amur Region is not the highest (according to the results of 2018 of the year - 5,6% of the labor force), especially against the background of a different share of unemployed in Buryatia and neighboring Trans-Baikal Territory and the Jewish Autonomous Region. However, this state of affairs can hardly be called optimistic. At the same time, in the region there is currently no significant increase in unemployment. Unlike the 2016 year, when according to the Ministry of Labor of the Russian Federation, the Amur Region, along with the Jewish Autonomous Region and Transbaikalia, was among the subjects of the Russian Federation with the largest increase in the number of unemployed, as of 2019 the situation on the Amur labor market did not undergo significant changes, and according to the results 2018 year, the unemployment rate decreased in relation to 2017 year.
As for most Far Eastern regions, the problem of migration outflow is characteristic of the Amur Region. As of the beginning of 2019, the population of the region was 793,6 thousand inhabitants. For the Far Eastern Federal District as a whole, this is an average indicator, however, it is important to note that among the closest neighbors in the okrug - regions that differ in similar geographical position and climatic conditions (Primorsky and Khabarovsk Territories, as well as Buryatia and Transbaikal Territory), the Amur Region has the smallest number of inhabitants ( among the regions of the south of the Far East, the population is less than only in Jewish Autonomous Oblast). In addition, the region has a large population of retirement age. According to the Amur branch of the Pension Fund of the Russian Federation, on 1 of January this year, 234,8 thousand pensioners lived in the region, which is about 30% of the total population of the region, from 2000 the population of the retirement age increased by 14,1%.
At the same time, recently, the Amur Region has been acting as one of the Far Eastern regions that demonstrate not worse migration indicators - in January-August this year, migration growth amounted to 1 998 people significant for the region. Since 2015, a slight decrease in migration outflow has been noted in the region. Such indicators are mainly related to the implementation of large projects. Nevertheless, the migration balance following the results of recent years remains negative - the number of visitors to the region, including for work on large-scale construction projects, is not able to exceed the flow of people leaving the region. In 2018 of the year, as a result of the outflow of the population, the region lost 3 392 people, which, nevertheless, is not the worst indicator compared to other regions of the district.
It is migration outflow that plays a major role in the overall reduction of the region’s population. In fact, only a few areas of the region, Blagoveshchensk and the Blagoveshchensk district, are distinguished by population growth, not least due to the influx of residents from the countryside, as well as the eastern city Tsiolkovsky, which is being built near the cosmodrome. In the future, population growth is expected in the city of Svobodny and Svobodnensky district.
Amid persisting social problems, the budget of the Amur Region for several years remains socially oriented, while the volume of social expenditures per inhabitant is growing - in 2019, the Amur region was among the leaders among Russian regions in terms of the growth rate of adjusted social expenditures per inhabitant with a growth rate of more than than by 25%. It is important that the region is able to gradually overcome the chronic budget problem - the revenues of the regional treasury are growing, although largely due to federal support. In particular, if in the 2017 year the revenue of the regional treasury amounted to about 58 billion rubles, then in the 2018 year the revenues grew to 65 billion rubles. Gratuitous receipts from the federal budget make up about 28% of all regional revenues.
Nevertheless, in 2018, the Amur Region showed an increase in budget revenues for almost all types of taxes. A certain contribution is also made by tax revenues from ongoing investment projects. A third of tax revenues to the regional treasury were received from the activities of Russian Railways, RusHydro, Petropavlovsk, Nordgold and Transneft. The implementation of large projects in the 2018 year provided the budget with an additional 3,6 billion of revenues, which was twice as much as last year. According to the results of budget execution for nine months of this year, the region shows positive dynamics: revenues grew by 25% compared to the same period of 2018 year (up to 45,1 billion rubles), primarily due to income tax (growth by 2,5 billion rubles) and tax on personal income (an increase of 2,2 billion rubles). Basically, tax revenues were again provided by organizations that take part in the implementation of large industrial and infrastructure investment projects.
The Amur Region is traditionally among the subsidized regions, however, if in the 2015 year the region belonged to entities in whose budgets the share of subsidies from the federal budget ranged from 10% to 40% of the consolidated budget's own revenues (during the two of the last three reporting financial years) then in 2016 and 2017, the share of federal subsidies in the regional treasury no longer exceeded 10% of the volume of own revenues. In terms of budgetary provision, the Amur Region compares favorably with most Far Eastern regions (with the exception of the Sakhalin Region) - in 2017 it amounted to 81,7% after the distribution of subsidies (80% before distribution). Similar indicators, in particular, are observed in the Khabarovsk and Primorsky territories, and in most Far Eastern regions the level of budgetary provision is significantly lower.
For the 2020 year, the authorities of the Amur Region are forming a surplus budget - it is expected that revenues of 0,5 billion will exceed expenses (62,3 billion against 61,8 billion rubles), while social orientation will remain - 54% of expenses or 33,2 mlr. rubles are supposed to be spent on education, healthcare, and social protection. Including in the budget is an increase in wages of public sector employees.
The authorities of the Amur region also expect to gradually reduce the volume of public debt, which has become one of the main problems in the region. This year, its volume is about 27 billion rubles (17,1 billion rubles - budget loans, 9,9 billion rubles - commercial loans), but next year the amount of debt is supposed to be reduced to 26,5 billion rubles, and by 2022 year - to 22,7 billion rubles. Optimistic plans are supported by the positive dynamics observed over the past few years - the state debt of the region decreased from more than 30 billion rubles in 2017 year to 27,4 billion rubles in the 2018 year. Nevertheless, the volume of public debt of the Amur Region is still one of the highest in the Far East - a higher indicator is noted only in the Khabarovsk Territory and Yakutia.
Unlike its neighbors in the federal district, the Amur Region is characterized by higher political stability. Over the past ten years, the region has undergone such political destabilizing events as the high-profile resignations of governors or major corruption scandals. However, over the past ten years, three governors have been replaced in the region.
In recent years, the Amur region was distinguished by the absence of serious internal political conflicts. And against the background of the Khabarovsk Territory and Primorye, the Amur Region looks politically a much more calm territory. This year only municipal election campaigns took place in the region, among which the most significant were the elections of the city council of Blagoveshchensk. Nonetheless, their results turned out to be quite favorable for the party in power - United Russia received 25 from 30 mandates. A year after his election, Governor Vasily Orlov managed to maintain a stable political situation in the region and build productive relations with the federal center. Orlov has high hopes for the implementation of large industrial projects in the Amur Region, linking with them the further growth of the region’s economic indicators, the creation of new jobs and, as a result, the improvement of the quality of life of the population. It should be noted that the presence of work experience in Sibur’s structures in Orlov’s work biography allows us to expect that the new governor will be able to effectively build interaction with financial and industrial groups entering the region, and, moreover, testifies to the seriousness of their plans.
Currently, the governor has made certain progress in promoting at the federal level a number of decisions that are significant to provide additional opportunities for the development of the regional economy. So, the Russian government is preparing a decision on granting Blagoveshchensk the status of a free port (SPV), which is expected to be adopted before the end of the year. The status of port-free will extend the special regimes of customs, tax, investment and related regulation to the capital of the Amur Region. Among the potential residents of SPVs presented in the region’s application, there are projects from various industries - the Blagoveshchensk – Heihe cross-border cableway (ZED Development LLC), a plant for the production of soybean meal and soybean oil with a capacity of up to 300 tons of soybeans per day (Soya Plant LLC ANK ") and an enterprise producing aerated concrete products with a capacity of up to 100 thousand cubic meters per year (Blagoveshchensky GBZ LLC). However, the main task that the introduction of the new preferential economic regime on the territory of the region is to implement is the implementation of the Blagoveshchensk-Heihe cross-border agglomeration project. In addition, at the beginning of last year, by the decision of the Government of the Russian Federation, the borders of the Priamurskaya TOP were expanded to implement an investment project to create a car-wheel workshop (VKM Bureya LLC).
Thus, the positive expectations associated with the accelerated socio-economic development of the Amur Region are supported by real results, which the projects being implemented in the region are beginning to bring. A distinctive feature of the Amur region was that it was chosen for the implementation of several large-scale projects of strategic importance - the creation of a gas processing center, the construction of a cosmodrome, the Power of Siberia gas pipeline, and the expansion of the capacity of the Baikal-Amur Railway. These objects have already ensured an increase in revenues to the regional treasury, and also made the region an object of close attention from the federal center.
The expansion of existing economic development mechanisms (ASEZs) in the Amur Region and the introduction of new ones (SPWs) is an undoubted success of the regional authorities in promoting the interests of the territory at the federal level and can help attract new investors. Nevertheless, given the created preferential conditions, including in terms of the tax regime, their activity does not mean automatic replenishment of the regional treasury by billions of rubles. But even in the case of an increase in the regional budget’s own revenues from these projects, the region actually remains dependent on the federal center and FIG.
Under these conditions, providing additional support and creating favorable conditions for the development of local small and medium-sized businesses and strengthening the regional economy is of particular importance. In addition, to reduce the outflow of the population and consolidate it in the territory, additional incentives are required - the creation of a favorable urban environment, the modernization of the existing and the creation of a new social infrastructure, improving the quality of medicine, education, and the service sector. Only taking these factors into account will allow the authorities of the Amur Region to derive the maximum benefit for the region from the implementation of large-scale plans of the federal center and large business, as well as ensure socio-political stability for the future.