Federal Agency for Special Economic Zone Management Interviewed
Russian Prime Minister Mikhail Fradkov signed the documents allowing the Ministry of Economic Development and Trade to declare a competition for the establishment of special economic zones.
Sep 21, 2005
September 14th, Russian Prime Minister Mikhail Fradkov signed the documents allowing the Ministry of Economic Development and Trade to declare a competition for the establishment of special economic zones. That competition has begun last week. Below are excerpts of an interview granted to Kommersant correspondent Alexey Shapovalov by head of the Federal Agency for Special Economic Zone Management Yury Zhdanov.
How will the competition to choose the regions the zones will be located in be held?
The Economic Ministry will organize the competition. There will be two commissions for the two types of zones, each consisting of no less than nine members from interested agencies. The goal is to release financing for the zones in 2006. Choices are to be made by the end of November. All requirements for applicants will be published on the Economics Ministry's website.
What are the criteria for choosing zones?
The criteria are a type of compromise. I will be paying attention not only to financial conditions and number of jobs created, but also to the volume of investment. That issue is related to the guaranteeing the resident the necessary resources (water, heat, electricity). The region has to show that it has practical experience with large investment projects. The time required for preparing them is also very important to us. It would be better to turn a project down than to be involved in an adventure with no clear end to it.
How many of the initial ten zones planned will be hi-tech and how many will be industrial?
I have seen more hi-tech proposals so far. That doesn't mean that the number of industrial zones won't be greater by the end of the application process, though.
If the volume of investment a region can attract is a main criterion, won't depressed regions be ruled out?
Investors are ready to enter depressed regions if there is the necessary infrastructure. There are dozens of applications from them. We plan to travel to Siberia and the Far East soon. Some things are better seen in place. The federal government will help more in depressed regions than in the more developed ones. We live in an amazing country. Here are many unrealized projects from the times of the USSR that were not financed in Russia. But the roads are there, the power supply. It seems to me that there is practically no region in Russia where some project wouldn't be possible. But, as I said, we will insist on successful experience.
Will preference be shown to projects financed by Western or Russian capital?
Absolutely not. The main thing is a well-developed idea. It doesn't matter whose money it is as long as it is not criminal.
What should an application to create a special economic zone contain?
The technical and economic grounds for the establishment of the zone, a characterization of the socio-economic condition of the subject, characterization of the municipal body, the development strategy of the subject, a list of potential residents of the zone – that is very important. Without a pool of potential residents, we won't talk to them.
The social infrastructure won't be financed with federal money?
That is the governors' problem. Maybe they will suggest additional plans – mortgage crediting, reduced interest rates and so on. That is a separate topic. They should calculate and come to an understanding of whether they can handle building housing or not.
Will there be a competition for recreational zones this year?
Ideally, the State Duma will pass the amendments to the law on special economic zones on tourism and recreational zones within two months. Then they have to be passed by the Federation Council and signed by the president. Most likely the competition will be next year.
How will the competition to choose the regions the zones will be located in be held?
The Economic Ministry will organize the competition. There will be two commissions for the two types of zones, each consisting of no less than nine members from interested agencies. The goal is to release financing for the zones in 2006. Choices are to be made by the end of November. All requirements for applicants will be published on the Economics Ministry's website.
What are the criteria for choosing zones?
The criteria are a type of compromise. I will be paying attention not only to financial conditions and number of jobs created, but also to the volume of investment. That issue is related to the guaranteeing the resident the necessary resources (water, heat, electricity). The region has to show that it has practical experience with large investment projects. The time required for preparing them is also very important to us. It would be better to turn a project down than to be involved in an adventure with no clear end to it.
How many of the initial ten zones planned will be hi-tech and how many will be industrial?
I have seen more hi-tech proposals so far. That doesn't mean that the number of industrial zones won't be greater by the end of the application process, though.
If the volume of investment a region can attract is a main criterion, won't depressed regions be ruled out?
Investors are ready to enter depressed regions if there is the necessary infrastructure. There are dozens of applications from them. We plan to travel to Siberia and the Far East soon. Some things are better seen in place. The federal government will help more in depressed regions than in the more developed ones. We live in an amazing country. Here are many unrealized projects from the times of the USSR that were not financed in Russia. But the roads are there, the power supply. It seems to me that there is practically no region in Russia where some project wouldn't be possible. But, as I said, we will insist on successful experience.
Will preference be shown to projects financed by Western or Russian capital?
Absolutely not. The main thing is a well-developed idea. It doesn't matter whose money it is as long as it is not criminal.
What should an application to create a special economic zone contain?
The technical and economic grounds for the establishment of the zone, a characterization of the socio-economic condition of the subject, characterization of the municipal body, the development strategy of the subject, a list of potential residents of the zone – that is very important. Without a pool of potential residents, we won't talk to them.
The social infrastructure won't be financed with federal money?
That is the governors' problem. Maybe they will suggest additional plans – mortgage crediting, reduced interest rates and so on. That is a separate topic. They should calculate and come to an understanding of whether they can handle building housing or not.
Will there be a competition for recreational zones this year?
Ideally, the State Duma will pass the amendments to the law on special economic zones on tourism and recreational zones within two months. Then they have to be passed by the Federation Council and signed by the president. Most likely the competition will be next year.