Лекция 1. Региональное развитие и типы регионов РФ

1. Лекция 1. Региональное развитие и типы регионов РФ Зубаревич Н.В.

2. «First nature» Resources (minerals, arable land etc.) Geographic location «Second nature» Scale (agglomeration) effect Human capital Institutions New economic geography (P. Krugman) Spatial development factors Development

3. Density – (agglomeration/ scale effect) Distance – economic distance (infrastructure, tariffs, etc.)- all transaction costs Division – institutional barriers (administrative, social, cultural etc.) World Bank Report 2009 Reshaping economic geography

4. Core-periphery spatial system innovations innovations Periphery Core resources Spatial development inequality mechanism

5. Regional Development Trends • Economic development (GRP) • Industrial output • Agriculture • Services • Investment • Globalization trends

6. Economic growth: Siberia and Far East were growing slower (distance factor) GRP Index, 2007 to1998,%

7. Variaty of economic growth factors: agglomeration effect, new oil resources extraction, seaside location, institutions. Regions' GRP index

8. Economic concentration: institutional factors predominateShare of leading regions in total GRP,%

9. Inequality: GRP per capita 40 time differentiation (thousand rubles, in 2005 constant prices, corrected on regional cost of life ) Tyumen Moscow

10. Regions' economic polarization GRP per capita to Russia average, % (Russia =100) Tyumen-400 prevailing downward trend

11. Kazakhstan – the same trends: capitals and nex oil extracting regions growth rates are the highestGRP per capita to Kazakhstan average, % 2 capitals new oil extracting

12. Industrial dinamics and structure shiftsIndustrial branches capitalized index (1990=100)

13. "Old" exporting regions (oil & gaz) – mild decline and faster production restoring. "New" exporting regions (metal, chemistry) – growth from mid-1990s/ Changes in spatial structure of industry in favor of regions specializing in extraction of natural resources for export. ________________________ lowest Industrial decline in the 1990s: - machine-building and textile-producing regions - republics and autonomous districts with underdeveloped industry Agglomerations (food and construction materials industries, electric power) – Moscow region, Leningrad reg. Coastal Western and Southern regions - import-substituting industries: Leningrad, Kaliningrad (machinery construction), Krasnodar reg. (food industry etc.) New oil & gaz extracting regions – Sakhalin ________________________ Slowest growth in the 2000s:- Eastern regions- Depressive machine-building and textile-producing regions- Underdeveloped republics Industry: Regional Dynamics in 1990-th and 2000-th

14. Three types of leaders + 3 types of outsidersIndustrial output dynamics 2008/ 1990, %(1990=100)

15. Regional disparities are growingIndustrial Output Index (1990=100)

16. Industry: concentration • Spatial concentration of Russian industry is extremely high and still growing: the top ten industrial regions accounted for more than 1/2 of production, the top 15 industrialized regions - 2/3 of production. • Regions specializing in raw materials export are predominant among leaders. • Only two manufacturing regions (St. Petersburg and Moscow Oblast) have increased their respective shares in national industrial production. • Moscow industry growth – mainly institutional: 10% of Russian extracting industries (oil&gaz) are de jure "located" in Moscow City.

17. Industrial geography shifts: institutional & agglomeration effect Share of industrial output, % of Russia total

18. Agriculture: institutional bariers lead to de-concentration (1990s)natural advantages factors lead to concentration • In the 1990s regional barriers, restrictions on inter-regional exports, and poorly developed market infrastructure resulted in isolation of producers within the boundaries of regional markets and de-concentration of agricultural production. • As the market developed and institutional barriers lowered, the situation began to improve. Regions with a more favorable climate and soil for agriculture were faster to restore productivity since the late 1990s.

19. Agriculture: the North-South Dualism • Market transformation of the agricultural sector accelerates in suburbian areas and the southern area of grain production. Agrarian production and agricultural workers concentrate in the area with most favorable climatic/soil conditions. • Remote peripheral regions and areas with unfavorable climatic conditions - degradation of the agriculture sector and marginalization of rural population. In areas with marginal agricultural production, employment has reduced most in the Far East and in the Northwestern Federal District. • In the Southern Federal District employment has grown by 7-8% in 1995-2003. Growing numbers of agricultural workers in southern areas of European Russia did not stimulate productivity of labor. • The last years trend – decline of agrarian sector employment in the South and growth of labor productivity.

20. Positive trends of crop agriculture spatial consentration, negative trends of livestock farming Arable land index Agricultural output index • Number of livestock: • collective farms • households

21. Share of leading regions in agricultural output,% Southern Siberia Rural human capital Agglomerat. demand Europian South

22. Spatial concentration of industry and agriculture during transition period (1990-2000s) Agriculture Industry

23. Transformation of the Service Sector • Real structural transition to post-industrial development is most evident in the federal cities with concentration of population, growth of income, higher demand for business to business and market consumer services. Service sector share of GRP: Moscow - 79%, St.Petersburg - 68%. • Lack of agglomerations due to restrictions imposed on urban growth in the Soviet era has become one of the barriers inhibiting real "tertialization" in Russia's regions. • Quasi "tertialization" – underdeveloped republics (Tyva, Ingushetia – 72-73%) • The more important is the role of exporting industries for the economy of a region, the slower is structural transformation of service sector and employment. Service sector is underdeveloped (17-39% of GRP) • Similar tendencies were typical for oil-producing countries of the Gulf and Latin America in the 1970-80s. The majority failed to overcome structural disproportions.

24. Investment: regional disparities are grown upInvestment per capita

25. Share of the regions with biggest investmentSum total investment 2007-2008, % (Russia =100) In 1990s Moscow concentrated 20% more. Share of budget investment – 35-45%

26. Federal budget investment priorities: developed regions or political decisions? St-Petersburg Tatarstan Moscow Moscow region Krasnodar kray others St-Petersburg Moscow Krasnodar kray Moscow region Leningrad reg. others oil&gaz pipelines seaport terminals

27. Investment influenses future regional development Sum investment per capita (2001-2008)(Russia average =100; in constant prices 2006, regional cost of life adjusted) Tyumen Sakhalin

28. Globalization: ForeighDirect Investment • Nearly 50% of foreign direct investment went to the city of Moscow and Moscow region; in 1990s Russia's capital city accounted for more than 60% of FDI. Concentration of investment in Moscow resulted in the growth of new services. • The share of St. Petersburg in foreign direct investment was small - 3%. • In Sakhalin Oblast PSA projects in oil production have been launched • Since late 1990s, investment has been increasing in seaport and suburbian regions (Leningrad, Kaluga oblasts and Krasnodar kray) • "Foreign" investment with Russian background

29. Geography of Foreign Direct InvestmentShare of Russia total, %

30. Foreign tradespatial trends Europe Asia

31. Global trade: only 60% of regions were more or less involved into the global tradeForeign trade turnover, $ thousand per capita 10 thous $ 4 thous $ 1 thous $ Chukotka okrug: 2000 – $40 ; 2005 – $31,000; 2007 – $2,000. Who knows the reason?

32. Export • Regional statistics of Russia's foreign trade is not adequate as a growing part of exports is not recorded by region of production but by location of major producers' headquarters. • Therefore the share of Moscow City in the total Russian exports is unusually high (growth from 20 to 36% in the years 2000-2007) while the oil-producing Tyumen region share reduced from 23 to 12%. • 70% more of Russian exports is concentrated in 10 regions • Export tax and tariffs are centralized to federal budget

33. Growing centralization: Share of the leading regions in Russian export, %

34. Import: in the shadow of Moscow • Moscow agglomeration accounts for the largest share of imports (44%). • Two federal cities (Moscow and St-Petersburg) account for nearly 45-50% of Russia's imports, • The top ten subjects of the Russian Federation including regions on the national border having a developed transport infrastructure – 70% more of imports

35. Institutional factors of import super centralizationShare of the leading regions in the Russian import,%

36. Internet & mobile communications: diffusion of innovation • Information globalization in Russia is developing in the form of innovations' diffusion spreading through an urban hierarchy from major cities to smaller cities. Prior to 1998 Internet users were largely concentrated in the cities of Moscow and St. Petersburg. • Since 1999 Internet usage was spreading massively in major cities with a population of over 1 million people • Since late 2000, Internet access became common in cities with 500,000 residents • Central-peripheral hierarchy also manifests itself in distribution of mobile communications

37. Innovations dissemination:from the biggest cities and transit seaside regions to exporting regions with higher incomes and futher Mobile tel. users in regions, % of population underdeveloped South and East

38. Regions and Globalization • «Open» - biggest agglomeratons, the main row materials exporting regions, seaside transit regions – about 30%of Russian population. • «Semi-open» - more then 50% of Russian population • «Closed»- underdeveloped republics and depressive regions – less than 20% of Russian population • The lack of globalization experience slows down social modernization and competitiveness.

39. Types of Russian regionsWinners and Losers • Moscow agglomeration is the leading area • Benefits are localized in the biggest urban agglomerations, 10-12 export oriented raw material extracting regions and 2-3 seaside regionson the key trade routes • Russian spatial development is getting more and more similar to developing countries. The strongest are getting stronger, the weakest continue to stay backward

40. Economic development patternsGRP per capita disparities (Russia average=100) Groups of regions leaders more developed semi-developed depressive underdeveloped

41. Types of regions: transition period transformation Federal cities agglomerations The biggest cities: Moscow St-Pb The main oil&gaz extracting regions Developed industrial regions The other exporting industrial regions Semi-developed regions Semi-developed industrial-agricultural regions Depressive regions Underdeveloped regions Underdeveloped regions

42. Share of population living in different types of regions

43. semi-developed outsiders leaders more developed Economic development and density of population differentiation

44. Economic and social disparitiesof Russian regionsGini coefficient institutional factor

45. WB Report 2009: regional inequalities grow worldwideEU 15 regional disparities – the same trend

46. Huge spatial disparities are tipical for developing countries Example of China Unequal concentration within provinces

47. Conclusion • Regional inequality in Russia is a long-term phenomenon caused by objective factors and catching-up stage of economic development. • Regional economic disparities will grow further. • Social inequality is possible to diminish if economic recourses for redistribution are high enough and social policy is effective (targeted) • But slow and contradictory improvement of basic social indicators in Russian regions point to low quality of economic growth and lack of effective social policy.