The Government pumps dozens of billions of roubles in the regional industrial development, however, issues related to finance, staffing, sales and technological underdevelopment are yet to be addressed. The Advisory Commission of the State Council on the regional industrial policy proposed a relevant action plan.
2014–2016 saw the systematic development of the modern regional industrial policy programme. It seeks to create fertile ground for industrial development in every region. In 2014, following the law on industrial policy, the Ministry of Industry and Trade established the Industrial Development Fund (IDF).
The programme’s framework will include projects on local transport, energy and commodities. In a number of regions, industrial development strategies and regulations are already in place.
- To date, cooperation agreements have been signed between the IDF and 71 constituent entities of the Russian Federation out of 85. As of late 2016, the IDF provided over RUB 34 billion of funding for 130 production projects (concessional loans of RUB 50–500 million at a rate of 5% per annum granted on a competitive basis for up to seven years) , adding 12,500 new jobs. The borrowers are dominated by engineering, healthcare and biopharmaceuticals, metalworking, electrical equipment, electronics, new materials and the textile industry.
- In 2016, similar funds were established across 16 Russian regions. With a view of cooperating with such funds, the IDF developed a Joint Loans programme for regional projects with a budget of RUB 40 million and more.
April 2017 saw the first meeting of the Advisory Commission of the State Council’s working group on the regional industrial policy. Four sets of systemic issues were identified, namely finance, staff, access to technology and sales markets.
- The financial issues translate to the lack of specialised long-term financial products. To address this problem, the working group suggests granting upgrade loans at a low interest rate drawing on the cooperation between the Ministry of Agriculture and Russian Agricultural Bank.
- To eliminate staffing shortages, the Ministry of Industry and Trade is set to create a register of all current and prospective industrial projects up to 2025 broken down by region. The Ministry of Education and Science is supposed to have its university and college curricula geared to the modern economy needs.
- To facilitate access to technology, a development plan is needed to identify key areas, encourage the acquisition and use of these technologies by local businesses, including through tax concessions.