Talia Minullina: 'If they don't know you — they won't invest in your territory!'
The volume of foreign investments in the economy of Tatarstan has been increased by 18 times over 10 years of work of the Investment Development Agency of the Republic of Tatarstan. The residents of the PSEDA alone have attracted more than 30 billion rubles to the republic, the head of the agency, Talia Minullina, said at the online conference of Realnoe Vremya. The speaker told how in recent years the IT sector has become the leader in replacing process manufacturing, why it is vital to develop tourism for investment growth, and why the Laishevsky district may need a “science city” in a couple of years.
Russia scaling the experience of Investment Development Agency
Tatarstan Investment Development Agency turns 10 years old this year. Over the years, the inflow of foreign investments into the economy of the republic, as well as investments in fixed assets, has increased 18 times. It would be much more difficult to achieve these results without the agency, since working with investors is very difficult, explained the head of agency, Talia Minullina, at the online conference of Realnoe Vremya newspaper.
Today, every new investor faces a lot of problems, for example, with competition in the local market — many “do not like” when he begins to “eat a piece of the pie”. The fact of the successful activity of the Investment Developemnt Agency of the Republic of Tatarstan is also evident because the experience of Tatarstan is being scaled throughout the country today. The “new regional standard — AIR 2.0" is being introduced, the work on which is supervised by Deputy Prime Minister of Russia Andrey Belousov.
“And such agencies are being created all over Russia. Now in the subjects of the country, the federal centre is trying to transform various development corporations and institutions — and create investment agencies similar to ours on their basis. If our agency was unsuccessful, it would be ridiculous to scale such project," said Taliya Minullina.
PSEDA residents have attracted more than 30 billion rubles to the economy of Tatarstan
Even despite the difficulties caused by the pandemic, in the first nine months of 2021, the growth of investments in fixed assets in Tatarstan amounted to 11,8%, for private investments — 13,4%. A total of 38 new companies with foreign participation have been registered this year, and 46 companies (including some newcomers) have already invested in the economy of Tatarstan.
At the same time, 8 new residents appeared in Alabuga SEZ, 16 — in Innopolis, 7 new companies were registered in the PSEDAs in the districts of Tatarstan, 5 of them at once in Mendeleevsk alone.
“We plan to plant six more new companies in the Mendeleevsk PSEDA," said the head of the agency. “In general, since the appearance of the PSEDA, 17,5 thousand new jobs have been created in Tatarstan, investments worth 31 billion rubles have been attracted to the economy of the republic.”
New residents have raised personnel issue
With coming of investors, however, a problematic question arose: how to close the gap between the needs of enterprises, the educational sector and the labour market. This issue remains unresolved for the time being. If earlier, for example, KAMAZ fully controlled the personnel situation in the Zakamsky zone, then with the appearance of residents of the PSEDA, personnel competition also increased, the head of the agency noted.
On the one hand, there are still issues of personnel training, but on the other hand, the unemployment rate is one of the lowest in the country, Talia Minullina draws attention. Although such a low unemployment rate is not the most positive factor for investors, they begin to ask: “Whom will we hire then?"
Speaking about the personnel problem, the head of the agency told about the large-scale generational changes in young people which, when they apply for a job, the Tatarstan Investment Development Agency notes itself.
“Today there is more healthy selfishness among young people, the issue of comfort for many workers is more important than self-sacrifice," said Talia Minullina. “Moreover, they are advanced, but with a different paradigm, with a different vision. But what is the main competitive advantage of the civil service? This is stability. But stability for young cadres is no longer so attractive.”
Tatarstan Investment Developemnt Agency is working on hundreds of projects
Turkey and China are showing the greatest interest in the economy of Tatarstan today. At the same time, the agency itself is currently working on 115 potential projects — from Chinese milk powder production (with further delivery to China) to Turkish flour mill and pasta production.
However, there are investors from European countries, despite the political differences between the states. It is curious that, unlike large companies in Turkey and China, representatives of small and medium-sized businesses predominate among Europeans.
“There are a lot of negotiations going on. The funnel is large. But there are few projects left as a result," admits Talia Minullina. “From 5 to 10 percent. If we could raise the level of work with investors in municipalities, we would multiply the efficiency of work with investors. It all depends on the district leaders, on their teams, on the people working in the field, who should be interested in industrial parks themselves, love their work.”
Taliya Minullina considers two of the latest new projects interesting. Firstly, the opening of the production of Aurus cars (the volume of investments is 6,6 billion rubles, the UAE fund has pledged to provide 110 million euros). Secondly, the launch of a plant for the production of strategic raw materials for carbon fiber — PAN-precursor (investment volume — 8,5 billion rubles).
How IT and medicine have become attractive to investors in the pandemic
Interestingly, if previously the vast majority of investment projects were related to the process manufacturing industry (their share still exceeds 50%), agriculture, real estate, today investors are increasingly interested in the IT sector. The agency is currently recording a really high growth in demand for IT projects, especially in Innopolis, where one company, “like a magnet”, eventually attracts another.
Today, it is necessary to work on budget investments so that they also primarily go to the IT industry, Talia Minullina believes, especially since information technologies lead all over the world, and not only in Tatarstan.
“The field of medicine is growing very interestingly in connection with the coronavirus pandemic. A lot of services have appeared around. In one production of tests alone, can you imagine what kind of funds are there? Investments in the healthcare sector have really grown a lot recently.”
However, at the same time, according to the head of the agency, today there is a large “import dependence” of the healthcare sector, especially for medical equipment. In this regard, Talia Minullina noted, the FarmMedoPolis project should be promising. Tatarstan started developing it even before the pandemic. In 2021, this cluster planned to attract up to 2 billion rubles of investment, 1 billion rubles more than planned.
“If they don't know you — they won't invest in your territory!”
There are still not enough tourist services in the economy of Tatarstan and Russia, the niche is practically not occupied, the head of the Investment Development Agency of the Republic of Tatarstan said with regret. This is especially sad because thanks, among other things, to tourism, investments appear in the regions and the country.
“Why do we spend so much so that our Tatarstan is known? If they don't know you — they won't invest in your territory! And tourism could be a great driver in this sense. But the players in the lending sector, unfortunately, very rarely invest in the tourism sector.”
In addition to tourism, the head of the agency considers it necessary to develop infrastructure, which is still “limping”. To attract a large amount of investment, first you need to engage in territorial development, strategic planning. But the issue of general plans has not yet been resolved. There are also difficulties with monopolies, which are very difficult for entrepreneurs to work with, it is almost impossible to enter some sectors.
KIT will find officials who fail to work with investors for Investment Developemnt Agency
To analyze the “weak points” of the previous year, Tatarstan launched the Tatarstan investment control system (KIT, as it is called in the agency) — in order to understand which of the officials “fail” to work with investors.
“This has been done to increase the transparency of the system. During the year, we filled the system with 115 projects. The interface was “finished”. We have refined analytical functions to know in which sectors of the economy of the Republic of Tatarstan the projects are going best. We connected a couple of departments to the system. They have already begun to see which projects are not reaching the end, to understand the reasons for this. In 2022, I would like the system to receive large-scale implementation and distribution," Talia Minullina said.
A large industrial park is needed in Laishevsky district
A number of projects failed to be implemented in industrial parks. Some of the sites were transferred “under the wing” of the agency, and the agency analysed 18 parks. As it turned out, somewhere there were not even management companies, somewhere huge funds were spent with low occupancy (about 15%).
On the other hand, the agency drew attention to that Alabuga SEZ and Khimgrad were repeatedly called in Russia one of the best industrial parks in Russia. Taking them as a basis, today in Tatarstan they want to create a similar platform, but already in the Laishevsky district. Talia Minullina considers the science city project to be the most promising and desirable on this territory. Moreover, many residential complexes are being built in the area today, and there are practically no potential jobs for future residents. In the near future, this may threaten Kazan with another transport collapse — due to the commuting labour migration of the population.
Why the Investment Developemnt Agency undertakes the reconstruction of the Central Stadium
Talia Minullina also told why the agency is currently looking for investors for the reconstruction of the Central Stadium in Kazan for the World Aquatics Championships in 2025. As it turned out, this is due to a change in federal policy.
Previously, Tatarstan could receive federal grants and subsidies in various areas for international events, including the construction of facilities for the Universiade and the 2018 FIFA World Cup. Now, first of all, the federal centre requires the presence of a private investor in the project.
“If the region wants to create a sports facility, the federal government wants the region to first offer to build it to private owners, and if it doesn't work out, then only apply for federal money," Talia Minullina explained. “According to my information, this scheme will later spread to other sectors of the economy.”