Rustam Minnikhanov: ‘Our target for the current year is to achieve GRP volume of 4 trillion rubles’
The rais of Tatarstan fears that changes in the taxation of oil industry will bring new losses to the budget of the Republic of Tatarstan
“The most important thing is that the republic's economy turned out to be stable," said Rustam Minnikhanov, the rais of the Republic of Tatarstan, assessing the sanctions pressure for the republic in 2022. The operational headquarters under his control implemented a package of federal and republican support measures for a significant amount. “Tatarstan ranks fourth in terms of production and sixth in terms of investment volume in the country," Aleksey Khersontsev, the deputy minister of economic development of Russia, praised the republic's resilience to external shocks. In the changed conditions, the head of Kazanorgsintez asked the leadership of the republic to join the issue of expanding “the ethane ring” of Gazprom, and the SME Corporation promised business investment loans of up to 2 billion rubles.
Operational headquarters under Ministry of Economy of Tatarstan worked with shocks of 2022
The results of Tatarstan's economic development in the shock 2022 year were summed up on 17 February at the annual board meeting of the Ministry of Economy of the Republic of Tatarstan. They did not change their usual location: an hour before the start of the reporting board meeting, the heads of municipalities where PSEDAs operate arrived first at the building of the Volga Academy of Physical Culture and Sports, head of the Tatarstan State Committee for Tourism Sergey Ivanov was there, as well as the heads of various SME supporting funds.
Then political “heavyweights” from the deputy corps and big businesses began to “catch up”. However, they did not particularly want to talk about the consequences of international sanctions with the press. Although it is clear without words that it was hard for many and it was worth waiting for the official reports from the annual board.
However, there was a nuance that predetermined the upbeat tone of the speeches. For the first time this year, the reporting meeting was also held in the format of a joint meeting of the operational staff for ensuring socio-economic stability in Tatarstan (Operational Headquarters for Ensuring Socio-Economic Stability in the Republic of Tatarstan, chaired by Rais of the Republic of Tatarstan, R.N. Minnikhanov, was established on March 29, 2022 — editor's note). The additional status appeared due to that the Ministry of Economy of the Republic of Tatarstan was responsible for a lot of organisational work of the operational headquarters on interaction with federal authorities. In other words, the ministry turned out to be a kind of centre through which resources passed under new federal programьуs related to the restructuring of the economy under sanctions.
300 support measures, benefits for 1,5 trillion rubles for the whole country
It is not surprising that the first word was given to State Secretary — Deputy Minister of Economic Development of Russia Aleksey Khersontsev. Speaking via video link, he said that since the beginning of sanctions, the federal authorities have launched 300 business support measures in the country. Large businesses were granted benefits for 1,5 trillion rubles, SMEs — for 1 trillion rubles. Another 670 billion was allocated by VEB for the development of infrastructure in the regions. He did not specify which resources from this package of anti-crisis measures went to Tatarstan.
But some details were announced later. For example, Kirill Kolomiytsev, the deputy director general of SME Corporation JSC, said that Tatarstan businesses received 17 billion rubles of concessional loans under the 1764 programme (the programme is designed for investment projects and the opening of project financing) and another 10 billion rubles under the loan incentive programme.
“This is a significant contribution to the total volume of issuance in Russia," he noted.
This year, the limit under the programme of preferential lending to priority sectors of the economy has been increased to 100 billion rubles. The loan amount — from 50 million to 2 billion rubles. Medium-sized businesses can get up to 2,5% per annum, microbusinesses — up to 4%. Preferential rates are fixed for 5 years. Priority industries are manufacturing, logistics, hotel business, scientific activity, Khersontsev said, inviting businesses to participate.
There is no escape from sanctions, but there are other markets
In the conditions of sanctions, Tatarstan has retained its leading position, Aleksey Khersontsev noted. GRP volume amounted to 3,8 trillion rubles, investments in fixed assets — 850 billion rubles. According to him, the republic ranks fourth in terms of production, sixth in terms of investment volume in the country, and second in the ranking of national attractiveness.
A more complete picture of the economic results was presented by Minister of Economy of the Republic of Tatarstan Midkhat Shagiakhmetov. He recalled that unprecedented sanctions have significant restrictions on the development of the economy. This led to the restriction of foreign trade activities, the severance of logistics ties, which affected the implementation of investment projects.
According to him, under these conditions, work was carried out in five key areas of economic support. Maintaining employment became the priority. As a result, the industry showed good dynamics.
“In 2022, the index of industrial production amounted to 106,6% compared to the level of 2021, the volume of shipped products (taking into account unrealised balances) — 4,6 trillion rubles," said Shagiakhmetov.
Almost all industries are experiencing growth. The exception is that retail trade turnover fell by almost 3%. The head of the Ministry of Economy of the Republic of Tatarstan explained the failure by the fact that people began to buy cars noticeably less. He noted the influx of 129 residents to industrial parks. In the future, the head of the Ministry of Economy predicts further growth in production.
Kazanorgsintez asks to expand the “ethane ring”
The speech of the CEO of Kazanorgsintez PJSC, Ayrat Safin, inspired even more optimism. He said that after joining SIBUR Holding a year ago, the company fulfills all investment obligations, and 2022 turned out to be the most profitable. Tax deductions have increased.
“Deductions to the consolidated budget of the republic have increased by 17%. Total payments to budgets of all levels exceeded 19 billion rubles," Safin said.
Kazanorgsintez intends to continue investment programmes. Investments of 70 billion rubles (excluding VAT) are planned for the upcoming five-year period. Six major projects are at the final stage of project implementation, including the modernisation of the polycarbonate plant and the construction of CCGT-250. This became possible thanks to the solution of the raw material issue after joining SIBUR. “Today we are provided with stable supplies of liquefied petroleum gases from other enterprises of the Group," the head of the enterprise noted.
Nevertheless, he drew the attention of Rustam Minnikhanov to the need to expand the supply of ethane from the helium plant in Orenburg, which will make it possible to increase production by 40%.
“We have the opportunity to increase the processing of this type of raw material by 40% if a new ethane unit is built at the Orenburg helium plant with a capacity of up to 350 thousand tonnes," said Ayrat Safin.
Gazprom Pererabotka is currently studying the possibility of building a new unit for the production of ethane from Kazakh gas at the Orenburg Helium Plant, Rustem Galiyev, the deputy director general for long-term development of the company, said earlier at the gas forum. But there are also alternative options.
“Dear Mr Minnikhanov, I ask you, within the framework of cooperation with Gazprom, to support the project of increasing the capacity of ethane production in Orenburg and its transportation to the republic," Safin addressed the rais of the republic.
A new milestone — 4 trillion rubles
“It is necessary to ensure the smooth operation of enterprises in all industries. The task for the current year is to achieve the GRP volume of 4 trillion rubles. Everything will depend on the economic situation, but we must achieve this goal," Rustam Minnikhanov outlined the task for this year.
However, the rais of Tatarstan expressed concerns about innovations in the regulation of oil prices and asked to calculate the consequences for the budget of the republic.
He believes that the state is ready to share investment risks with business through support mechanisms. “These are instruments within the framework of government Resolutions No. 1119 and 1704, the agreement on the protection and promotion of capital investments, the infrastructure menu and programmes of federal development institutions. We should make the most of all these opportunities," Minnikhanov instructed.
In conclusion, he called on the heads of municipalities to assist businesses: “Our focus should be on all economic entities — from self-employed and microenterprises to the largest companies, everyone who creates jobs, pays wages, and taxes. The task of all ministries and departments is to assist businesses.”