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Regions to Gain Control of Russia's Special Economic Zones

Published: June 7, 2014 (Issue # 1814)



  • Construction of a plant belonging to Turkish domestic goods producer Hayat Group in the special economic zone in Alabuga, Tatarstan.
    Photo: Alabuga.ru

From next year, responsibility for Russia's special economic zones key institutions that have proved an invaluable boon to domestic and international companies investing in Russia may be transferred from the federal to regional governments, a news report said Friday.

The decision to delegate management of the zones was reached in late May at a meeting under Deputy Prime Minister Dmitry Kozak, business daily Vedomosti reported, citing two officials familiar with the decision. The Economic Development Ministry confirmed that the decision had been taken. Kozak's spokesman told the newspaper that the shakeup will have to be approved by the government before coming to fruition.

The special economic zone project was launched by the Economic Development Ministry in 2005 and has bloomed to a total of seventeen zones across Russia, which offer tax benefits, customs benefits, simplified registration procedures and other preferential treatment to investors. Crimea is expected to become Russia's eighteenth special economic zone, following the annexation of the peninsula from Ukraine in March.

Up until now, the federal government has been responsible for opening the zones and allotting funds for construction of necessary infrastructure, while a state-run company called Special Economic Zones, or SEZ manages the territories through regional subsidiaries. Federal funds have paid for about 70 percent of the zones' infrastructure, Yulia Stefanishina from consultancy KPMG told Vedomosti. As of April 1, a total of 70.7 billion rubles ($2 billion) had been lavished on building infrastructure for the zones, according to the Economic Development Ministry.

Instead of giving funds directly to SEZ, the federal government will now provide the regions with subsidies for developing the zones, Vedomosti said, though the federal government will retain the power to approve or veto the creation of new zones.

Regional governments will be required to submit a set of targets for their proposed zones to Moscow, and if they do not achieve their aims, they will be forced to repay the federal subsidies, a representative of the Economic Development Ministry said. The criteria for judging a zone's effectiveness will also change, he added while before they were evaluated according to the number of residents they attracted, the new benchmarks will be the number of high-technology jobs they create and their contribution to the region's economy.

All existing commitments to investors, including promises of land in the zones and anticipated infrastructural development, will be transferred to the regions, the ministry representative said.





 


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Friday, Oct. 31


Put your grammar and logical thinking to the test in a fun and friendly environment during the British Book Centers Board Game Evening starting at 5 p.m. today. The event is free and all are welcome to attend.



Saturday, Nov. 1


The men and women who dedicate their lives to fitness get their chance to compete for the title of best body in Russia at todays Grand Prix Fitness House PRO, the nations premier bodybuilding competition. Not only will men and women be competing for thousands of dollars in prizes and a trip to represent their nation at Mr. Olympia but sporting goods and nutritional supplements will also be available for sale. Learn more about the culture of the Indian subcontinent during Diwali, the annual festival of lights that will be celebrated in St. Petersburg this weekend at the Culture Palace on Tambovskaya Ul. For 100 rubles ($2.40), festival-goers listen to Indian music, try on traditional Indian outfits and sample dishes highlighting the culinary diversity of the billion-plus people in the South Asian superpower.



Sunday, Nov. 2


Check out the latest video and interactive games at the Gaming Festival at the Mayakovsky Library ending today. Meet with the developers of the popular and learn more about their work, or learn how to play one of their creations with the opportunity to ask the creators themselves about the exact rules.



Monday, Nov. 3


Non-athletes can get feed their need for competition without breaking a sweat at the Rock-Paper-Scissors tournament this evening at the Cube Bar at Lomonosova 1. Referees will judge the validity of each matchup award points to winners while the citys elite fight for the chance to be called the best of the best. Those hoping to play must arrange a team beforehand and pay 200 rubles ($4.80) to enter.



Tuesday, Nov. 4


Attend the premiere of Canadian director Xavier Dolans latest film Mommy at the Avrora theater this evening. The fifth picture from the 25-year-old, it is the story of an unruly teenager but the most alluring (or unappealing) aspect is the way the film was shot: in a 1:1 format that is more reminiscent of Instagram videos than cinematic art. Tickets cost 400 rubles ($9.60) and snacks and drinks will be available.



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