TASS, September 14. The basic law on the Northern Supplies is aimed at enforcing the state control over prices and tariffs, Anna Shishigina, an expert at Yakutia's Arctic Research Center, told TASS.
The topic of Northern Supplies was on agenda of the Eastern Economic Forum (WEF) in Vladivostok, where experts discussed the basic law, which President Vladimir Putin inked on August 4. The document introduces the basic concepts, categories of goods, legal powers, as well as the Northern Supplies territory criteria. The new regulations will come into force on April 1, 2024.
"This law has been adopted due to long-term efforts of the regions and many participants in the supply process. <...> In the 1990s, these issues were addressed by municipalities independently, and after 2008, all authorities were transferred to the regions. Nowadays, these aspects have been consolidated at the federal level, and the law imposes full responsibility on the state for the North's life support. The new law is aimed at regulating prices and tariffs, and establishes state control over their compliance," the expert said.
The new system's advantages include lower final costs of goods due to consolidated order and transport logistics, the purchase of ships for unified deliveries to remote areas, the creation of distribution centers with intermediate storage at existing property complexes, the creation of own retail networks, the option to bring goods to satisfy the local annual demand within a short sea navigation period, she added.
State incentives
The new law introduces two categories of cargo. The first is vital cargo for the population and social organizations, housing, utilities and energy sectors. The second category is cargo for state and municipal needs. The Russian government will determine the list of such goods and will offer state incentives to involved participants. The document additionally introduces the institute of cargo delivery planning.
"In most regions, state support for supplies to hard-to-reach areas is provided in the form of subsidies or inter-budgetary subventions to municipalities with subsequent distribution among businesses. However, the methods to specify financial volumes and to distribute them are different in every region," she noted.
In Yakutia, the Yakutopttorg Company delivers year-round socially significant food products to the Arctic districts and remote settlements. According to the company's Director General Nikolay Alekseev, the new law provides for the federal budget support for such businesses - a 3-year budget loan at the rate of 1%.
"For comparison - a regional budget loan is for one year only, and the interest rate is 0.5% of the Central Bank's refinancing rate. Thus, as of now, we would've attracted a regional budget loan at the rate of 6%. Thus, there will be no burden on the regional budget, while we will have better conditions to fulfill our obligations and we will be able to meet all our goals," he said.
New options
According to interviewed experts, the adopted law offers additional opportunities to the regions. The Magadan Region's parliament speaker Sergey Abramov believes the document will allow for prompt and timely delivery to the region of fuel and lubricants, medicines, food, construction materials and other vital goods.
While drafting the bill, the legislators insisted Kolyma's all municipalities were put on the list of territories with a limited cargo delivery period. If that had not been done, only the North-Even Municipal District and the settlements of Yamsk and Takhtoyamsk, not the entire Magadan Region, would have belonged to territories with a limited cargo delivery period. Even though the entire region depends on the Northern Supplies and often faces problems with supplies of necessary goods.
Viktor Bochkarev, Chukotka's acting deputy governor and head of the industrial policy department, stressed that federal subsidies in the Northern Supplies system would be evident to every person living in the region. "First of all, it will affect prices and volumes, the competitive environment for businesses, Chukotka's investment attractiveness. Moreover, for our region of importance are not only subsidies for sea transportation, but also for river transport, as well as winter roads, since we need to carry cargo further on," he said.
The law on Northern Supplies will be an option to improve further the shipment process.
"The law is a framework to be amended with action mechanisms of the region and municipalities. One of the first tasks to face is to supplement the first-category goods lists with products for industrial and technical purposes. <...> Issues that require more complex and thorough efforts are - the improvement of the federal legislation on food security and medicines provision with the focus on our interests. For example, the pharmaceutical care system development is a longer path, but we need to take it now, to work systematically and constantly," the research center's expert said in conclusion.
About forum
The 8th Eastern Economic Forum (EEF) took place in Vladivostok on September 10-13, 2023. The slogan for this year’s forum was: On the Path to Partnership, Peace and Prosperity. The Roscongress Foundation was the event organizer. TASS was the forum's general information partner.