Ivan Shvarts
Russian President Vladimir Putin assessed key indicators of the Russian economy at the plenary session of the Eastern Economic Forum and announced the introduction of a unified preferential regime for businesses operating in the Arctic and the Russian Far East. Business leaders hope that officials will discuss the details of the special regime with representatives of the business community.
A unified preferential regime for the Far East and the Arctic will come into force on January 1, 2027, Vladimir Putin said at the Eastern Economic Forum (EEF). ‘We are launching a business support system unprecedented in its scale and scope,’ the president said. According to him, the package of available measures will include reduced social insurance contributions, tax and customs incentives, assistance with infrastructure connections and the construction of production facilities.
Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs (RSPP), in turn proposed discussing the parameters of the preferential regime with businesses. He said efforts should continue to remove administrative barriers and combat excessive regulation and oversight.
‘We fully support the Russian president’s call not to overcool the economy and not to “cut costs” at any price, but to spend funds rationally and clearly define priorities. A separate issue is the launch of a unified preferential regime in the macro-region from January 1 next year, which will change the established forms of support. We would ask the Ministry for the Development of the Russian Far East and the Arctic to hold detailed discussions with businesses, including at the RSPP platform, on the specific parameters of the new preferential regime. Such dialogue is crucial to ensuring its maximum effectiveness,’ Shokhin said.
At the end of August, the Russian president signed a decree on protecting critical infrastructure facilities. Under the document, the Russian government is given the right to impose temporary administration at critical infrastructure facilities if their owners have failed to take security measures or have violated protection requirements. The Russian authorities will also be able to impose temporary administration at companies if their restoration is delayed.
The president recalled that Russian businesses had previously had no obligation to protect their companies from attacks by the Armed Forces of Ukraine, but that such obligations had been introduced by the new decree on critical infrastructure protection. ‘And this has absolutely nothing to do with any plans for nationalisation. The state never had any intention of nationalising anything. We asked our colleagues, in this case in the oil and gas sector, to take care of protecting their companies.’ Russian businesses have begun investing money in protecting their facilities from attacks by the Armed Forces of Ukraine, and this is already producing results.
The president said that about 10% of previously planned maintenance work remains to be completed at Russian oil refineries.
Asked whether Russia should save more amid the budget deficit, including by abandoning some major infrastructure projects and various support measures, the president suggested framing the issue differently. ‘It is not so much about saving as about spending federal budget funds rationally and setting priorities,’ Putin explained.
The events at the Eastern Economic Forum were also followed by authors of public and political Telegram channels.
Putin, as usual, used the EEF platform to discuss a wide range of current issues, but one issue stands out and can confidently be called his fundamental and unchanging approach to managing the economy,’ the Adekvat Telegram channel wrote. ‘The foundation of everything is macroeconomic stability. Its main enemy is inflation: if it is allowed to spiral out of control, nobody will like the consequences, whether in terms of investment, the budget or social policy. Therefore, particularly given all the temporary but tangible factors pushing inflation higher, containing it is a top priority. This is despite the very real short-term costs associated with still-high interest rates and their very cautious reduction. How exactly to balance this complex system can and should be the subject of discussion between the Central Bank and the government, and Putin sees nothing abnormal in such discussions. The broader framework for these discussions and revisions, however, is not up for debate: the fundamental understanding remains that the temptation of easy solutions that may create the appearance of success in the short term at the cost of a strategic loss in the longer term must be resisted. Whatever populist incantations may be heard to the contrary.’
The Mysh v ovoshchnom Telegram channel noted that September 3 is a Day of Military Glory of Russia, marking Victory over militaristic Japan and the end of the Second World War in 1945. Is it a coincidence that the Supreme Commander-in-Chief is spending the day in the Far East?
‘We believe not, and would like to hope that our neighbours will draw the right conclusions from this. It was precisely about these territories that the legendary words were spoken that the Russian flag must not be lowered wherever it has been raised, and we have neither grounds nor the right to abandon the legacy of our ancestors.’
‘Putin’s speech at the EEF plenary session establishes a new perspective: the Far East is no longer viewed as a subsidised periphery and has instead become an important testing ground for the country’s accelerated economic development,’ https://t.me/polittemnik wrote. ‘The figures, including a fourfold reduction in unemployment to a record 2.2% and a threefold increase in gross regional product, are being used to justify the transition to a new stage of the region’s development strategy through 2036. The main political and economic signal is aimed at business and regulatory authorities. From January 1, a unified preferential regime will be introduced across the entire Far East and the Arctic. At the same time, the president openly rebuked inspectors: there is little point in offering tax breaks while simultaneously tightening the screws through excessive inspections. This is a clear instruction to cut red tape.’
ORIGINAL: NG/Russian Far East and Arctic to Get Unified Preferential Regime
