“In November of 2018, as per decision by the President of the Russian Federation Vladimir Putin, Buryatia was incorporated into the Far Eastern Federal District. We began providing the tools that are already implemented in the Far East. Today Advanced Special Economic Zone ‘Buryatia’ is functioning in the republic. 13 investment projects are currently being implemented. One of the projects is supported by VEB.RF The overall volume of investment in these projects is 111 billion rubles. There are plans to create over 3 thousand jobs, with over 300 jobs already created. 39 billion rubles have been invested. Today and tomorrow we will be discussing a number of investment projects,” said Yury Trutnev in the opening statement.
The Deputy Prime Minister also reminded that the Russian government has developed a complex plan to support the economy. This complex plan included allocation of 29 billion rubles to co-financing of loans for investment projects. “And we will be actively engaged in this,” he said.
Due to increasing speed of economic growth the Republic of Buryatia has reached the trajectory of a regional gross product taking over an average Russian dynamics. In the last 5 years the regional gross product has increased by 8.1 per cent and reached 313 billion rubles. The industrial production has increased by 31 per cent which is higher than average Russian numbers. The investment volume into the principal capital has shown positive dynamics since 2017. The growth in that particular period is 84.4 per cent (184.4 per cent).
Under the sanctions all of the Republic’s companies work as usual. In order to assist entrepreneurs new additional means of support are being developed. Thus the federal measures were complemented by regional initiatives. Advance payments for regional and local taxes have been deferred for SMEs, property and transport tax rates for aircraft-owning organizations have been annulled for 5 years. Another significant and much anticipated measure has been the allocation of 200 million rubles fr om the Republic’s budget to decapitalize the guarantee fund and microloan fund.
Last year it was decided to implement the investment tax deduction. With sanctions imposed it will provide more stimulation for the investment activities, cutting enterprises’ expenses on income tax up to 100 per cent of private investment into R&D, modernization of production and infrastructure involved in projects of complex development of territories.
Buryatia has actively joined the list of regions implementing the Regional Investment Standard in 2022. “This will allow us, besides adjusting all investment processes, to receive starting in 2023 a federal subsidy intended to cover missing income incurred by the mechanism of the investment deduction. Due to a federal measure as part of infrastructure loan the investor’s expenses for engineering support of the current projects will be reimbursed. A total support sum will be 2.6 billion rubles,” noted Alexey Tsydenov, the head of the Republic.
There were discussions about a possible increase in extractive operations. In 2021, the volume of the shipped products extracted in Buryatia reached 51 billion rubles, which amounts to 26 per cent of the overall industrial production. The production-related tax revenue transferred to the consolidated budget of the Republic of Buryatia in 2021 was 5.1 billion rubles, or 170% compared to 2017. Investment in fixed assets in 2021 amounted to 13.4 billion rubles with the 21 per cent share in the overall investment index accounting for extraction.
The suggestions include reevaluation of major and medium deposits (the existing geological survey base was created in the 1990s) and increase in federal financing of geological surveys in Buryatia.
Another item on the agenda was the support of the agricultural producers. Under the current sanction pressure and growing prices for agricultural produce, firstly vegetables and potato, the issues of the food security have been prioritized. The Republic’s self-sufficiency in terms of horticultural produce is at 55 per cent, while nursery vegetables cover less than 30 per cent. Ready-made projects for building vegetable storages and greenhouse complexes were unveiled.
As a measure of additional support Yury Trutnev assigned the Ministry of Agriculture of Russia alongside the Ministry of Finance of Russia to seek ways to remove time restrictions for building greenhouses from federal legislation in order to provide state support.
Support of investors in agricultural projects is drawn from administrative assistance and tax preferences within the ASEZ mode. In order to strengthen the food security of the region in terms of meat, JSC Svinokomplex Vostochno-Sibirskiy was provided with the status of a resident of ASEZ ‘Buryatia’. The investor intends to increase the output of the complex from 18 thousand to 27 thousand tons of produce while creating 116 new jobs. The volume of the investment into the project is 1.9 billion rubles with 1.2 billion already put in.
As the Minister for the Development of the Russian Far East and Arctic Alexei Chekunkov explained, a resolution to expand ASEZ ‘Buryatia’ was being approved by the Russian Government. This will help support other investment projects by means of tax relief.
In terms of tourism the key project in Buryatia is still the Special Economic Zone ‘The Baikal harbor’. Presently the SEZ has 4 registered residents (Green Flow Baikal LLC; Baikal Hermitage LLC; GEO RBK LLC; Cosmos Hotel Baikal LLC) with accumulative investment volume of 36 billion rubles.
Among the suggestions to support the business was a proposition to possibly expand the free port zone onto Buryatia. The potential territory for this can be the Kyakhtinsky district near Mongolian border, wh ere there are a train and a car border-crossing points. There are three investment transportation logistics projects conducted in the district: TLT Naushki LLC; Avtoinvest-Kyakhta LLC; TLT Kyakhta LLC. The overall volume of these projects is around 1.5 billion rubles.
A separate question was raised about means of supporting transportation investment projects. Namely, Yury Trutnev authorized the Ministry for the Development of the Russian Far East and Arctic to assist in reconstruction of the Ulan-Ude - Romanovka - Chita highway taking into account the co-financing under the Far East Concession.
“From the point of view of trends, general direction of interaction between the Russian government and the investors nothing changes. We continue to develop our country, continue to develop the Far East, continue to develop Buryatia. Practically every federal executive authority attended the conference. The online mode successfully allowed for quick responses to issues raised by the investors and discussions with a specific federal agency. Instructions created as a result of this conference will help answer most of the investors’ questions. We will continue to move forward,” summarized Yury Trutnev.