1. Лекция 1. Региональное развитие и типы регионов РФ Зубаревич Н.В.

2. New economic geography (P. Krugman) Spatial development factors «First nature» Resources (minerals, arable land etc.) Geographic location «Second nature» Scale (agglomeration) effect Human capital Institutions Development

3. World Bank Report 2009 Reshaping economic geography Density – (agglomeration/ scale effect) Distance – economic distance (infrastructure, tariffs, etc.) - all transaction costs Division – institutional barriers (administrative, social, cultural etc.)

4. Core-periphery spatial system Core Periphery resources innovations Spatial development inequality mechanism

5. Regional Development Trends Economic development (GRP) Industrial output Agriculture Services Investment Globalization trends

6. Economic growth: Siberia and Far East were growing slower (distance factor) GRP Index, 2007 to1998,%

7. Variaty of economic growth factors : agglomeration effect, new oil resources extraction, seaside location, institutions. Regions' GRP index

8. Economic concentration: institutional factors predominate Share of leading regions in total GRP,% The biggest 10 1996200020052007 Moscow 12.221.022.223.8 Tyumen region 9.49.912.411.7 Moscow region 3.63.23.94.2 St-Petersburg 3.43.33.73.6 Sverdlovsk region (Urals) 3.52.7 2.9 Tatarstan (Volga) 3.03.32.7 Krasnoyarsk kray (Siberia) 3.03.52.52.6 Bashkortostan (Volga) 2.92.62.12.3 Samara region (Volga) 3.12.52.2 Krasnodar kray (South) 2.32.42.1 10 regions totally 46.454.456.558.1

9. Inequality: GRP per capita 40 time differentiation (thousand rubles, in 2005 constant prices, corrected on regional cost of life ) Tyumen Moscow

10. Regions' economic polarization GRP per capita to Russia average, % (Russia =100) Tyumen-400 prevailing downward trend

11. Kazakhstan – the same trends: capitals and nex oil extracting regions growth rates are the highest GRP per capita to Kazakhstan average, % 2 capitals new oil extracting

12. Industrial dinamics and structure shifts Industrial branches capitalized index (1990=100)

13. Industry: Regional Dynamics in 1990-th and 2000-th "Old" exporting regions (oil & gaz) – mild decline and faster production restoring. "New" exporting regions (metal, chemistry) – growth from mid- 1990s/ Changes in spatial structure of industry in favor of regions specializing in extraction of natural resources for export. ________________________ lowest Industrial decline in the 1990s: - machine-building and textile- producing regions - republics and autonomous districts with underdeveloped industry Agglomerations (food and construction materials industries, electric power) – Moscow region, Leningrad reg. Coastal Western and Southern regions - import-substituting industries: Leningrad, Kaliningrad (machinery construction), Krasnodar reg. (food industry etc.) New oil & gaz extracting regions – Sakhalin ________________________ Slowest growth in the 2000s: - Eastern regions - Depressive machine-building and textile-producing regions - Underdeveloped republics

14. Three types of leaders + 3 types of outsiders Industrial output dynamics 2008 / 1990, % (1990=100) Leningrad reg - N-West 200 Russia 84 Kaliningrad reg - N-West 196 Tyva - Siberia 51 Belgorod reg (metal) - Cen. 181 Ivanovo reg - Center 50 Sakhalin reg (oil) - Far Eest 160 Kamchatka – Far East 48 Moscow reg - Center 145 North Osetia - South 47 Rostov reg - South 130 Magadan reg - Far East 44 Tatarstan (oil)- Volga 128 Kurgan reg - Urals 42 Orenburg reg (oil,gaz,metall)- V. 117 Amur reg – Far East 41 Kaluga reg (vehicle industry)- C. 116 Altay – Siberia 41 Lipetsk reg (metal)- Center 107 Zabaikalsky reg –Sib. 3737 Tyumen reg (oil,gas)- Urals 103 Kalmykia - South 19 Krasnodar reg - South 101 Ingushetia – South 1010

15. Regional disparities are growing Industrial Output Index (1990=100)

16. Industry: concentration Spatial concentration of Russian industry is extremely high and still growing: the top ten industrial regions accounted for more than 1/2 of production, the top 15 industrialized regions - 2/3 of production. Regions specializing in raw materials export are predominant among leaders. Only two manufacturing regions (St. Petersburg and Moscow Oblast) have increased their respective shares in national industrial production. Moscow industry growth – mainly institutional: 10% of Russian extracting industries (oil&gaz) are de jure "located" in Moscow City.

17. Industrial geography shifts: institutional & agglomeration effect Share of industrial output, % of Russia total 20071997 1. Tyumen Oblast 12 1. Tyumen Oblast 9 2. Moscow City 11 2. Moscow City 7 3. Moscow oblast 5 3. Sverdlovsk oblast 5 4. Sverdlovsk oblast 5 4. Samara oblast 4 5. Tatarstan republic 4 5. Chelyabinsk oblast 4 6. Chelyabinsk Oblast 4 6. Bashkortostan rep. 4 7. St. Petersburg 4 7. Tatarstan rep. 3 8. Samara Oblast 3 8. Krasnoyarsk kray 3 9. Krasnoyarsk kray 3 9.Nizhny Novgorod obl. 3 10.Nizh. Novgorod obl. 3 10. Kemerovo oblast 3 Subtotal 10 53 Subtotal 10 45 Subtotal 15 64 Subtotal 15 57

18. Agriculture: institutional bariers lead to de-concentration (1990s) natural advantages factors lead to concentration In the 1990s regional barriers, restrictions on inter-regional exports, and poorly developed market infrastructure resulted in isolation of producers within the boundaries of regional markets and de-concentration of agricultural production. As the market developed and institutional barriers lowered, the situation began to improve. Regions with a more favorable climate and soil for agriculture were faster to restore productivity since the late 1990s.

19. Agriculture: the North-South Dualism Market transformation of the agricultural sector accelerates in suburbian areas and the southern area of grain production. Agrarian production and agricultural workers concentrate in the area with most favorable climatic/soil conditions. Remote peripheral regions and areas with unfavorable climatic conditions - degradation of the agriculture sector and marginalization of rural population. In areas with marginal agricultural production, employment has reduced most in the Far East and in the Northwestern Federal District. In the Southern Federal District employment has grown by 7-8% in 1995-2003. Growing numbers of agricultural workers in southern areas of European Russia did not stimulate productivity of labor. The last years trend – decline of agrarian sector employment in the South and growth of labor productivity.

20. Positive trends of crop agriculture spatial consentration, negative trends of livestock farming Number of livestock: -collective farms - households Arable land index Agricultural output index

21. Share of leading regions in agricultural output,% 1993-1995 average,% 2002-2006 average, % Krasnodar kray4,5Krasnodar kray6,6 Bashkortostan res.3,7Bashkortostan repub.4,3 Tatarstan resp.3,5Tatarstan republic4,3 Moscow obl.3,1Rostov obl.4,0 Rostov obl.3,1Moscow obl.3,1 Altay kray2,6Altay kray3,0 Stavropol kray2,5Stavropol kray2,9 Krasnoyarsk kray2,5Saratov obl.2,5 Omsk obl.2,4Volgograd obl.2,4 Novosibirsk obl.2,4Omsk obl.2,4 10 regions30,310 regions35,5 Europian SouthSouthern SiberiaRural human capitalAgglomerat. demand

22. Spatial concentration of industry and agriculture during transition period (1990-2000s) Agriculture Industry

23. Transformation of the Service Sector Real structural transition to post-industrial development is most evident in the federal cities with concentration of population, growth of income, higher demand for business to business and market consumer services. Service sector share of GRP: Moscow - 79%, St.Petersburg - 68%. Lack of agglomerations due to restrictions imposed on urban growth in the Soviet era has become one of the barriers inhibiting real "tertialization" in Russia's regions. Quasi "tertialization" – underdeveloped republics (Tyva, Ingushetia – 72-73%) The more important is the role of exporting industries for the economy of a region, the slower is structural transformation of service sector and employment. Service sector is underdeveloped (17-39% of GRP) Similar tendencies were typical for oil-producing countries of the Gulf and Latin America in the 1970-80s. The majority failed to overcome structural disproportions.

24. Investment: regional disparities are grown up Investment per capita LeadersOutsiders The main oil & gas extracting regions Northern Caucasus republics Moscow & St.-Petersburg agglomerations Depressive regions Developed industrial regions (metallurgy, oil&gaz, chemistry) Eastern Siberia Seaport regions (West & South) Far East (without Sakhalin)

25. Share of the regions with biggest investment Sum total investment 2007-2008, % (Russia =100) In 1990s Moscow concentrated 20% more. Share of budget investment – 35-45%

26. Federal budget investment priorities: developed regions or political decisions? St-Petersburg Tatarstan Moscow Moscow region Krasnodar kray others St-Petersburg Moscow Krasnodar kray Moscow region Leningrad reg. others oil&gaz pipelines seaport terminals

27. Investment influenses future regional development Sum investment per capita (2001-2008) (Russia average =100; in constant prices 2006, regional cost of life adjusted) Tyumen Sakhalin

28. Globalization: Foreigh Direct Investment Nearly 50% of foreign direct investment went to the city of Moscow and Moscow region; in 1990s Russia's capital city accounted for more than 60% of FDI. Concentration of investment in Moscow resulted in the growth of new services. The share of St. Petersburg in foreign direct investment was small - 3%. In Sakhalin Oblast PSA projects in oil production have been launched Since late 1990s, investment has been increasing in seaport and suburbian regions (Leningrad, Kaluga oblasts and Krasnodar kray) "Foreign" investment with Russian background

29. Geography of Foreign Direct Investment Share of Russia total, % 1996-1999 % 2000-2005 %2006-2008% Moscow 44 Moscow 25 Moscow 42 Moscow region 10 Sakhalin reg. 25 Sakhalin reg. 16 Sakhalin reg. 8 Moscow region 9 8 St-Petersburg 5 Krasnodar kray 5 St-Petersburg 4 Krasnodar kr. 4 Tyumen reg. 5 Chelyabinsk reg. 3 Leningrad reg. 3 Lipetsk reg. 3 Tatarstan repub. 2 Novosibirsk reg. 2 Leningrad reg. 3 Leningrad region 2 Samara reg. 2 St-Petersburg 2 Tomsk reg. 2 Tyumen reg. 2 Samara reg. 1 Kaluga reg. 1 Sverdlovsk reg. 2 1 Krasnodar kray 1 sum 10 83 sum 10 79 sum 10 81

30. Foreign trade spatial trends Europe Asia

31. Global trade: only 60% of regions were more or less involved into the global trade Foreign trade turnover, $ thousand per capita 1 thous $ 4 thous $ 10 thous $ Chukotka okrug: 2000 – $40 ; 2005 – $31,000; 2007 – $2,000. Who knows the reason?

32. Export Regional statistics of Russia's foreign trade is not adequate as a growing part of exports is not recorded by region of production but by location of major producers' headquarters. Therefore the share of Moscow City in the total Russian exports is unusually high (growth from 20 to 36% in the years 2000-2007) while the oil- producing Tyumen region share reduced from 23 to 12%. 70% more of Russian exports is concentrated in 10 regions Export tax and tariffs are centralized to federal budget

33. Growing centralization: Share of the leading regions in Russian export, %

34. Import: in the shadow of Moscow Moscow agglomeration accounts for the largest share of imports (44%). Two federal cities (Moscow and St-Petersburg) account for nearly 45-50% of Russia's imports, The top ten subjects of the Russian Federation including regions on the national border having a developed transport infrastructure – 70% more of imports

35. Institutional factors of import super centralization Share of the leading regions in the Russian import,%

36. Internet & mobile communications: diffusion of innovation Information globalization in Russia is developing in the form of innovations' diffusion spreading through an urban hierarchy from major cities to smaller cities. Prior to 1998 Internet users were largely concentrated in the cities of Moscow and St. Petersburg. Since 1999 Internet usage was spreading massively in major cities with a population of over 1 million people Since late 2000, Internet access became common in cities with 500,000 residents Central-peripheral hierarchy also manifests itself in distribution of mobile communications

37. Innovations dissemination: from the biggest cities and transit seaside regions to exporting regions with higher incomes and futher Mobile tel. users in regions, % of population underdeveloped South and East

38. Regions and Globalization «Open» - biggest agglomeratons, the main row materials exporting regions, seaside transit regions – about 30% of Russian population. «Semi-open» - more then 50% of Russian population «Closed» - underdeveloped republics and depressive regions – less than 20% of Russian population The lack of globalization experience slows down social modernization and competitiveness.

39. Types of Russian regions Winners and Losers Moscow agglomeration is the leading area Benefits are localized in the biggest urban agglomerations, 10-12 export oriented raw material extracting regions and 2-3 seaside regions on the key trade routes Russian spatial development is getting more and more similar to developing countries. The strongest are getting stronger, the weakest continue to stay backward

40. Economic development patterns GRP per capita disparities (Russia average=100) Groups of regions more developed semi-developed depressive underdeveloped leaders

41. Types of regions: transition period transformation The biggest cities: Moscow St-Pb Developed industrial regions Semi-developed industrial-agricultural regions Underdeveloped regions Federal cities agglomerations The main oil&gaz extracting regions Semi-developed regions Underdeveloped regions Depressive regions The other exporting industrial regions

42. Share of population living in different types of regions

43. Economic development and density of population differentiation leaders more developed semi-developedoutsiders

44. Economic and social disparities of Russian regions Gini coefficient institutional factor

45. WB Report 2009: regional inequalities grow worldwide EU 15 regional disparities – the same trend

46. Huge spatial disparities are tipical for developing countries Example of China Unequal concentration within provinces

47. Conclusion Regional inequality in Russia is a long-term phenomenon caused by objective factors and catching-up stage of economic development. Regional economic disparities will grow further. Social inequality is possible to diminish if economic recourses for redistribution are high enough and social policy is effective (targeted) But slow and contradictory improvement of basic social indicators in Russian regions point to low quality of economic growth and lack of effective social policy.