Rustam Minnikhanov: “We should not be satisfied with our work. A 1% growth is nothing”

KPIs for national projects exceeded

The first for a long time separate from the ministry of industry and trade annual board meeting of the republican ministry of economy has recently gathered the establishment of Tatarstan in the assembly hall of the Kazan State Finance and Economics Institute (KSFEI). Announcing the results of the department's work and the areas it oversees, Economy Minister Farid Abdulganiev put emphasis on National Projects. They are, as Vladimir Putin has repeatedly noted, “of crucial importance for the economy and social sphere of the entire country and all regions”.

Tatarstan did a good job here last year, taking an active part in 48 Federal projects, for which 27,4 billion rubles were allocated, including 20 billion rubles from the federal budget. Another 40 billion rubles were allocated for regional programmes. As Farid Abdulganiev explained, considerable funds were spent on the construction and repair of more than 1,700 socially significant objects, providing targeted support measures, social payments, conducting training and other events.

The reason for pride was the over-fulfillment of the plan for the national project 'Small and medium-sized businesses and support for individual business initiative', for which about 2 billion rubles were allocated in 2019.

“The organizations subordinated to the ministry of economy helped businesses to attract more than 12 billion rubles. A third of all financial support measures were aimed at developing entrepreneurship in rural areas. The national project plan for the number of SMEs exported was also exceeded: in Tatarstan, 94 enterprises entered the export markets for the first time, their total exports exceeded 25 million US dollars. The supplies include food, building materials, and medical devices," Farid Abdulganiev shared.

If we talk about plans, then in 2020, 24,9 billion rubles will be allocated for the implementation of national projects in Tatarstan: 17,1 billion from the federal budget and 7,8 billion from the republican budget. At the same time, about 50 billion rubles will be allocated for the construction of social and engineering infrastructure, and 42,9 billion rubles will be allocated for the development of transport infrastructure.

“There should be no such problems this year”

It is clear that it was not easy to work at the stage of launching national projects. Diplomatically omitting the details, the minister in his report complained that last year all sectoral ministries for the implementation of national projects faced a number of problems — mostly of a bureaucratic nature.

These include the lack of flexible and regular financing of national projects, long procedures for approving capital construction projects and specifications of purchased equipment, which led to a delay in the conclusion of state contracts. “There should be no such problems this year, all agreements have been signed," the head of the ministry of economy of the Republic of Tatarstan said with optimism. However, time will tell how it will be in practice.

Farid Abdulganiev also pointed out the need for full synchronization of national projects with state programmes and industry strategies.

“Within the framework of the Command Centre, 15 federal indicators were decomposed to assess the effectiveness of the activities of senior officials of the subjects of the Russian Federation, regional projects, and state programmes. In total, there were about 2,000 indicators, the main of which are included in the state task for managing the ministry. We got acquainted with the conclusion of the Accounts Chamber of the Russian Federation on the effectiveness of the federal government's efforts to dilute responsibility for performance indicators. The work carried out by us will allow us to avoid such assessments," the minister said. “We also have to complete the work on automating the monitoring of the implementation of national projects in their relationship with all programmes and projects implemented in the Republic of Tatarstan.”

The situation is stagnation

In 2019, Tatarstan's GRP amounted to 2,584 trillion rubles, an increase of only 1% over the year — the main positive contribution was made by industry and agriculture. Taking into account the implementation of the largest investment projects and forecasts of enterprises of the republic, the growth of GRP in 2020 may exceed 2%. The modest growth is due to the restrained dynamics of investment in fixed assets, low labour productivity and growing competition, the minister emphasised.

The announced results and forecasts of GRP growth cannot be considered satisfactory, Tatarstan President Rustam Minnikhanov said. “I think we should not be satisfied with our work. A 1% growth is nothing. It is clear that we can refer to that the oil industry is a serious part of our economy, and there are sanctions problems. But the goals and objectives set by the head of the state are somewhat different. I didn't hear how we would achieve at least five per cent growth. And this is the most important thing. Without economic growth, it is impossible to improve the quality of life," he said, addressing the audience.

Indeed, stagnation is the number one problem in the economic sector for the whole of Russia. The country's GDP growth in 2019 was only 1,2%. According to the financial and economic model, Tatarstan is a mini-copy of the country, so the same trends are observed here as in Russia as a whole. The problem of low economic growth is raised by experts, discussing it on the pages of Realnoe Vremya. For example, former Russian Economy Minister Yakov Urinson said in a conversation with our correspondent that the main reason for the stagnation in the Russian economy is the reduction of competition by increasing the growth of the state sector of the economy. “The state's share in the economy keeps growing, and over the past 10-15 years, according to our antimonopoly department, it has grown from 35 to 70 per cent, but it is well known that the state is not the most effective owner, not the best entrepreneur, and because of this, competition, economic efficiency and, of course, incomes of the population fall," says Urinson.

The same problem was brought to the attention of the board of FC Otkritie Bank by ex-Minister of Finance of Russia Mikhail Zadornov in an interview with Realnoe Vremya. “It is worth thinking about why, with such an abundance of budget support tools, our economic growth over the 10 months of the year is only 1,2 per cent. It turns out that it is not the measures of state support that should be in the first place but the desire of people and businesses themselves to develop production or service and invest in it. And state support is already added to this, but it cannot replace the natural desire of a person or an enterprise to invest.”

Yury Koptelov, the well-known economist and columnist for Realnoe Vremya, sees the Central Bank's policy as a source of stagnation. “The policy of the country's main bank leads to a stupor of economic life," he writes.

“There are no plans or goals for creating businesses”

From the point of view of stimulating industrial production and investment in the republic, the work is not being done well enough, Rustam Minnikhanov believes.

“Let us turn to the infrastructure — special economic zones, industrial sites, government funding. Let's take Aktanysh industrial park, where we seem to have a very active manager, the occupancy rate is 8 per cent here. In Novosheshminsky district, the occupancy rate is 21 per cent. At the same time, we have directed budget funds — both republican and federal," the president highlighted.

Besides, the head of the republic has accumulated claims to five districts of the Republic of Tatarstan — Aksubayevsky, Atninsky, Verkhneuslonsky, Kaybitsky and Cheremshansky. According to Rustam Minnikhanov, they “have no plans or goals to create businesses there”. He called for “creating platforms there so that entrepreneurs can enter there and get support and infrastructure”. Chistopol and Mendeleev districts were also criticized because of low PSEDA indicators.

“In general, we are not bad, but...”

The Tatarstan president called what is happening in engineering centres and prototyping centres “a complete mess”.

“We have invested a lot of our own money and received federal funds. Efficiency is very low today. And KAI-Laser does not work, as well as others. The government has been instructed to investigate and take measures. We have created such innovative centres and purchased equipment.

The president also criticized the leading universities of the republic, which, according to him, are not improving in terms of innovation.

“In China, the number of annual patent registrations has increased 26-fold over the past 17 years. As for our republic, we make up 2 per cent of the federal budget. We are not an innovative region. Rectors sit here, the Academy of Sciences. Where are patents? Where is the work? I believe that we should seriously analyze how our universities work: federal, technical, technological, construction. It is necessary to position ourselves as the best universities in your profile, then there will be some work. I am very dissatisfied," the president said.

Concluding his report, Rustam Minnikhanov thanked the team of Farid Abdulganiev for the work done and then addressed the heads of other ministries and departments gathered at the board meeting: “In general, we are not bad, but there are certain points. We have shortcomings, not all our ministries and municipalities have reached the level that should be.”