Sverdlovsk Region is getting ready for industrial breakthrough

25.12.2012 — Analysis

In 2013, the support program for manufacturing companies will be the key guideline document of the regional government.

In this year spring the position of Sverdlovsk Region Governor was taken by Evgeny Kuyvashev, who not only changed the administration team but also modified the main approach to the region development. The key priorities of the government now center around better fiscal performance, industrial development and establishment of efficient relations with the municipal authorities.

According to a number of economic indicators, in the year 2012 Sverdlovsk Region  ranked among the leading constituent regional entities of Russia. In particular, the volume of goods shipped by the regional companies increased by 12%. Gross regional product manufacturing output increased by 7.5%, which is almost twice as much as the value of national indicator.

Economic growth ensured higher income. The regional budget received additional 8 billion rubles while the municipal budget revenue grew by 33 billion. In terms of revenue, Sverdlovsk Region ranked second only to Yugra Subregion.

Additional income was used in the first place for implementation of social programs. The salary of teachers and kindergarteners was increased, public healthcare and low-income citizen support system were successfully developed. In 2013, social targets shall take as much as 70% of the regional budget.

This year the regional government put their best effort into elimination of waiting lists for kindergartens. Thus, additional 18 thousand children will be able to go to kindergarten due to establishment of preparatory groups in schools and modernization of existing kindergarten buildings.

It is also worth mentioning that in 2012 for the first time since the collapse of the Soviet Union birth rate in Sverdlovsk Region was higher than the death rate. Natural population increase shall be approximately 1,200 people. "We managed to overcome the so-called demographic "Russian Cross". And this is just the beginning," emphasizes Evgeny Kuyvashev.

Resolution of such complex tasks requires strong and well-coordinated team. That is why Governor has no regrets getting rid of its weak links. Before commencement of the new year Minister of Construction Sergei Fedorov and Minister of Culture Alexei Badaev will be relieved of their duties. The latter minister was also reprehended for insufficient protection of landmarks. Mr. Kuyvashev believes that old buildings are the key tourist attractions which form the base for investment development of the region and strongly objects to their destruction.

At the same time Evgeny Kuyvashev sees no real grounds for serious changes in the Mayor’s office. The main goal for the municipal entities is to survive the cold season without any major setbacks in the district heating system. One of the weak points in Russia is low energy efficiency of local boiler houses: up to 70% of generated heat literally gets "wasted through the stack". According to Governor, the housing and communal system will get healthier but this process requires investments. In 2013, the regional budget will allocate 8 times the value of the previous year for development of this sector.

The key driving power for the region has been provided by the two largest cities – Ekaterinburg and Nizhny Tagil. In October 2012, the Mayor’s post in the latter was given to Sergei Nosov. The city of metal workers shall change since his appointment. Special attention shall be paid to the industrial development. "How is it possible that in the city with over 400 thousand residents only 30 thousand square meters of residential housing is constructed per year. Construction is one of the key spheres of economy. With new housing come new work places and better servicing castor," says Evgeny Kuyvashev.

However, the most ambitious projects shall take place in Ekaterinburg. Following Governor’s initiative, the year 2013 will see the implementation of the Capital program. In the framework of this project, 4 billion rubles shall be allocated annually from the regional budget for development of this million-plus city. The larger part of this financing shall be used for modernization of transport infrastructure.

Such positive transformations of the megacity will not only improve its image but also make it a high level venue for Russia-Kazakhstan summit 2013, World Cup and the Global exhibition EXPO 2020 over which Ekaterinburg is currently competing with four other candidates. "The volume of investments shall increase, companies shall receive additional financing, new work places shall be created," forecasts Evgeny Kuyvashev.

According to Mr. Kuyvashev, the year 2013 in Sverdlovsk Region will be marked by industrial development. The government will have to take measures to save the timber industry which was damaged by inefficient owners trying to gain maximum profit and not really caring about future prospects of these assets. Governor believes that wood processing sector needs to be developed rather than simple sale of rough logs.

A search for investors will be continued as required to establish the Russian Magnesium plant in the city of Asbest. Evgeny Kuyvashev admitted that private investors are not willing to contribute to this project. The current magnesium prices in the global market are at their lowest, and thus potential customers cannot expect fast return on investment and high profits.

Much hope is placed by the authorities of Sverdlovsk Region on the Titanium Valley special economic zone. Located in the northern part of the region, this zone is expected to accommodate its first permanent residents in 2015. This project is expected to modernize approximately 350 thousand work places and create almost as much new job opportunities in this Russian Federation region.

"We fulfill not only our promises but also those made by previous governments. There is no other way. This is the key to our success," emphasizes Mr. Kuyvashev.

Dmitry Konstantinov, RusBusinessNews