by: Teodor Kalpakchiev
As part of this year’s Haniel Spring School entitled “The Effects of Center-Local Relationships on Public Policy”, which will take place in May in Novosibirsk, a group of four Brandt School students visited the “Wirtschaftsforum Novosibirsk” (Economic Forum Novosibirsk) hosted in the Commerzbank tower in Frankfurt. The meeting took place on April 10th between a delegation of high-ranking administrators headed by the governor of Novosibirsk Mr. Vasily A. Yurchenko along with representatives of business community with interest in investing in the area. The hosts, Deutsch-Russisches Forum e.V., the Informations- und Wirtschaftsforum des Novosibirsker Gebietes, the Industrie- und Handelskammer Frankfurt am Main, and Commerzbank split the Forum into two main panels: a presentation of the increasing economic significance of the district, the policy mix of the local government, as well as another one showcasing “success stories” from the region.
Mr. Vasily A. Yurchenko explained that Novosibirsk with its 1.5 million citizens is a gravitational economic center for the region, which consists of around 5 million people, in addition to the 5 million people that regularly travel there from abroad. Thanks to the differentiated investment possibilities as a part of the Strategy 2025, the city enjoyed a growth of 27.9% of investment in fixed capital, which among others resulted in 18.9% increase in real wages. This became possible thanks to the fostering of research-intensive and infrastructure projects with social value, which are facilitated through various means by the regional government. Among them are support for credits, reimbursement of some costs and other incentives. But what has had the decisive role for the promotion of economic activity is the provision of 2000 hectares of land for numerous industry and technology parks, of which 3 are already in progress and another €300 million investment is awaited. Thanks to these and other efforts in 2012 the “Best Region for Development of SMEs” prize was awarded to Novosibirsk, which on top of that is an acknowledged culture state with its 2170 cultural spots.
The questions that followed were connected with consumer protection regulations and whether the new Eurasian free-trade area will result in better business opportunities. Based on the presentations by EcoNiva, a company in the agricultural sector, S7, the Siberian Airlines and VEKA AG, which is a German multi-national producer of windows, the local companies are satisfied with business environment and rely largely on local professionals. Among the interesting points they brought were that compared to Germany, Novosibirsk area has a more liberal tax policy, which allegedly is also an attractive aspect. The President of S7, the regional carrier, admitted that 8 out the 10 most intensive destinations are situated in Asia, but asserted his readiness to balance them upon an increased interest from western European companies. The most interesting point that VEKA AG made, after being asked about his opinion on energy efficiency, was that he is a supporter of new buildings made from scratch, rather than spending a hard-to-calculate amount on renovation. During the question and answer session that followed and served as culminating point, interest in refuse recycling investments was raised.
The group of Brandt School students was extremely satisfied with the input they received, and on top of that had the chance to personally approach the governor of Novosibirsk, who will be our host during the stay. After the forum there was a susceptible rise of the expectations on our side, as we saw that the good economic performance of the Russian Federation does not solely depend on oil-based activity and other policies made from the federal government. Novosibirsk, as an important trade hub and a geographical centre, well tied with other parts of Asia will offer us a new perspective of the significance of local actions and development, and we are looking forward to our visit.