15 years of economic miracle

Alexander Gomaleev, Dmitry Tyutin, <url>

The term "New Economic miracle of modern Russia" has long and thoroughly become synonymous with the Kaluga Region. The economic indicators of the region over the past 15 years have repeatedly become a topic of discussion for analysts and the focus of attention of numerous rating agencies.

Thanks to its policy in the development of industry, the region entered the international category "high investment attractiveness" of the rating of the National Rating Agency and won in the nomination "Regions with minimal investment risks", which indicates a high efficiency of economic development.

Such achievements of the region are the result of an integrated approach in the development of all spheres of the local economy. How and at the expense of what was it possible to achieve such results? We decided to talk about this in more detail.

Investments in the spotlightA key factor in the development of the region, embedded in all strategic programs, is the creation of comfortable conditions for attracting Russian companies and foreign investors from Germany, Switzerland, Austria, Sweden, France, Finland, South Korea and other countries to the territory of the region.

The attractiveness of the region as a territory favorable for business development has become the basis of all the positive changes that have occurred in the Kaluga Region over the past 15 years and of which the region can rightfully be proud.

Here are just a few numbers. During the period from 2000 to 2013, the region increased the inflow of investments by 11 times. According to the results of 2014, in terms of investment per capita, the region was the leader in the Central Federal District and ranked 18th in the country, rising in the ranking of regions by 24 positions. Dependence on federal aid has been significantly reduced: for the first time, the region has become a donor region.

Enterprises – in clustersIt is this way of developing the local economy that analysts recognize as the most effective.

The production of cars and automotive components, new generation medicines and building materials are just a few sectors of the industry developing in the region.

11% of all cars in Russia are produced in the Kaluga region. Auto enterprises account for more than 40% of the total volume of industrial production in the region and provide more than 20% of tax revenues collected in the region. In 2015, the Volkswagen Concern plans to launch a plant for the production of internal combustion engines. The opening of the Cellino Group enterprise is planned soon.

A cluster of pharmaceuticals, biotechnologies and biomedicine is being actively formed in the region, based on factories of Russian and foreign companies. Since 2006, Chemopharm LLC, a member of the STADA group of companies, which ranks third in Germany and seventh in the world among manufacturers of medicines, has been working in the region. In 2014, the first Russian plant for the production of medicines "Berlin-Pharma" was opened. Astra Zeneka Industries, Niarmedic Pharma, Novo Nordix and Sphere-Pharm are building their factories. Pharmaceutical production facilities for the production of polymer medicines are being created in the region together with JSC Rusnano. A positron emission tomography center is being built.

Last year, production was launched at the Lafarge Cement cement plant, the Master association is building a cement plant in the Duminichi district of the Kaluga region.

The developed transport infrastructure, the proximity to Moscow, good relations with foreign countries and a large volume of production at the enterprises of the region create a great potential for the development of the transport and logistics cluster. A huge step in this direction will be the opening of Kaluga International Airport in 2015, which has already accepted the first technical flight of a passenger liner on December 18 last year. Experts expect a steady demand for air transportation, which inspires optimism in the prospects of its development.

Success in a combination of tradition and innovationThe modern economy of the Kaluga Region is an effective combination of new industries and traditional Kaluga industry.

Modern enterprises are successfully operating – Samsung Electronics, Nestle Russia, the NLMK Kaluga metallurgical plant launched at the end of 2013.

The Vorsino, Obninsk, Detchino, Grabtsevo, Kaluga-Yug and Rosva industrial parks created in the last few years have become a powerful tool that stimulates R&D, the creation of new technological platforms and their production development. Modern production facilities operating in such parks are not only new jobs, but also a catalyst for the development of the economy and the social sphere as a whole.

At the same time, the enterprises of the "traditional economy" receive serious support from the regional authorities. Regional legislation gives them the opportunity to take advantage of the preferential taxation regime for property and profit taxes in the part that goes to the regional budget. But on one condition: funds must be invested in the modernization of production. In other words, you develop – you get considerable preferences.

This approach is already bearing fruit. According to the latest data, 13 enterprises have benefited from the help of the region. At the end of 2014, the region extended the right to property tax benefits for modernizing enterprises until 2017.

Agriculture as the basis of food securitySignificant investments are not only in industry.

Agriculture retains its priority positions. Especially now, when the emphasis is on import substitution in food supply.

A number of new generation enterprises have been created in the agricultural sector: a fully robotic farm "Alyoshinsky", LLC JV "Kaluga", the largest robotic complex in Russia "Kaluga Field", mushroom growing complex "Verny Way", farm in Selections, fish farming complex LLC "F-Trout" in Borovsky district. Last year, the first resident came to the special economic zone "Ludinovo" – the company "Agroinvest". It will be the largest indoor vegetable growing and processing complex in the Central Federal District. The largest livestock complex in the region is being created in the Sukhinichi district. The largest Dealership of the EkoNiva-Technika group of companies in Europe has been opened in the Detchino Industrial Park.

The regional authorities have embarked on technological modernization of agriculture. A program is being implemented to create 100 robotic dairy farms in all districts of the region. This opens up new opportunities for the development of small businesses in rural areas.

Man – the investment centerThis thesis is the basis of the strategy of socio-economic development of the region.

A person is the main value of the region. And the main goal of the large–scale industrial development of the region is to make the life of each of its inhabitants comfortable, confident, as protected as possible from the cataclysms of the modern economic situation.

The region invests considerable efforts in the multifaceted development of the social sphere – the creation of modern high-tech medical centers and public health facilities, the development of institutions of higher education and solving the problem of queues in kindergartens, the development of tourist facilities and a multiple increase in tourist flow, the arrival in the region of a whole galaxy of major Russian cultural projects and the creation of the Kaluga Youth Symphony Orchestra. This is only a small part of the huge work that resulted in the formation of a stable image of the region as one of the centers of the cultural life of the country, a socially oriented region that managed to create the most comfortable living conditions. All this, coupled with the dynamic development of the economy, has created a stable situation in the labor market. Kaluga Region remains one of the regions where the number of vacancies exceeds the number of those wishing to find a job. The number of unemployed has almost tripled since 2000!

The number of residents living below the poverty line has significantly decreased: from 45.5% in 2000 to 9% in 2013. The level of average monthly wages in the region over the past few years has consistently ranked 3rd in the Central Federal District, second only to the indicators of Moscow and the Moscow region.

For the first time in many years, the population of the Kaluga Region exceeded 1 million people. Since 2000, a steady increase in the absolute number of births has been registered in the region. Life expectancy is also growing. From 66.2 years in 2006, this indicator has grown to 70 years in 2013.

Development continuesThe development indicators of the Kaluga Region over the past 15 years are impressive.

Including in comparison with all-Russian indicators. So, if in 2000-2014 industrial production in Russia increased by 59.2%, then in the Kaluga region – by more than 4.6 times! The investment component continues to develop. There are 39 new projects in the negotiation portfolio.

Everything that has been created has formed a unique basis for the further successful development of the region's economy. Numerous assessments of the prospects of the region show that the conditions for business have been created almost greenhouse. What will grow in such conditions? Time will tell, but it is quite obvious that everything will depend on the continuity of the economic policy of the regional authorities.

About the authors:
Dmitry V. Tyutin – Candidate of Economic Sciences, Deputy Director of the branch of the Russian Academy of National Economy and Public Administration under the President of the Russian Federation in Kaluga.
Alexander O. Gomaleev – Candidate of Economic Sciences, Associate Professor of the RANEPA branch in Kaluga.

Portal "Eternal youth" http://vechnayamolodost.ru04.03.2015