Novgorod region
District: Northwest federal district
Economic region: Northwest region
Territory: 55.3 thousand sq. km
Regional centre: Great Novgorod
Distance from Novgorod up to Moscow - 540 km
Large cities: Novgorod, Borovich, Staraya Russa
Region is formed July, 5, 1944.
Population (2002) – 710.9 thousand residents
Region is located in Northwest of the European part of Russia and has a favorable
geographical position on the basic automobile and railway transport communications
connecting Moscow and Saint Petersburg, the central part of Russia with the Baltics and
Scandinavia. The structure of area includes 21 area, 10 cities, 3 of which regional
submission (Great Novgorod, Borovichi and Staraya Russa), 22 settlements and 3 843 rural
settlements. The share of urban population is kept at a level of 70-71%.
Deposits of peat, brown coal, fire-resistant and building clay, bauxites etc. the Large
rivers: Volkhov, Msta, Lovat, Shelon,Polist. Lakes: Ilmen, Valdai etc.
The climate is moderately continental. The average temperature of January is 7°C, July
+16°C. There are deposits up to 800 mm per one year. The region is located in a wood zone
(a southern taiga and the mixed woods). There is ground podsolic and marshy. Woods (the
birch, an aspen, an alder, a fur-tree, a pine) occupy woods about 50% of territory. There are
the lamb, the fox, an otter, a mink, a marten, fiber, hares and the wolf. In the rivers and
lakes are a pike, a pike perch etc. In territory of region is Valdai national park. Resort is
Staraya Russa.
The leading place in economy of region occupies industrial complex. The industry makes
about 43% of total regional product and, basically, it is concentrated in an administrative
centre of region Great Novgorod and cities: Borovichi, Staraya Russa and Chudovo.
The leading branches are mechanical engineering and metal working (color TVs,
videorecorders, television systems, optical devices, woodworking machine tools, means of
automation etc.), wood, woodworking (furniture, a paper, matches, plywood etc.), food
(meat-and-milk, canning), chemical (mineral fertilizers etc.), light. A national craft embroidery is "white line". The main industrial centres are Great Novgorod, Borovichi,
Staraya Russa.
In agriculture are allocated flax cultivation, milk and meat cattle breeding. Wheat, oats,
rye, barley are raised.
Taking into account prominent features of territory, the basic directions of our economic
policy of steel:
- support on own forces, independence of economic policy, at forming constructive
attitudes with the federal centre;
- orientation to creation and development of the enterprises of small and average
business;
- precise strategy in a sequence of rise of economy the food-processing industry mechanical engineering - a high-tech industry and the rate on quickly paid back projects;
- creation of maximum favorable conditions for investments in real sector of economy
with orientation to a prize in the long term. Active search and attraction of investors;
- orientation on target program management and support by Administration of the
perspective, investment projects approved by it.
- the understanding of that a purposeful and long-term policy can be carried out only by
combined efforts of all branches and structures of regional authority at constructive
interaction with the federal centre and in conditions of "social world ” in region.
On the basis of existing initially positive factors the economic policy of the Novgorod
authorities on attraction of external investments also began to be realized.
At the first stage it was necessary to create an attractive investment climate. Creation of it
went on three basic directions:
1). Creation and development of the investment legislation of region.
Originally the most steadfast attention was inverted on creation of the regional
investment legislation, capable to give investors tax privileges for realization of investment
projects in territory of region. Work on manufacture of the legislation was conducted in
cooperation as with the domestic and foreign enterprises, and known consulting firms.
It is necessary to note, that, initially, foreign and domestic investors in territory of region
were put in equal conditions.
The local investment legislation can be shared into 3 groups: tax privileges; maintenance
of investment appeal of region and a guarantee to investors.
The system of tax privileges and the laws fixing them, developed stage by stage. Since
December, 1994 the regional law “About tax privileges to the enterprises and the
organizations located in territory of the Novgorod region” (the Regional law from
19.12.2002 N95 “About tax privileges to physical persons and the organizations located in
territory of region, for 2003”) operates.
In turn, many areas and cities of region give the enterprises with foreign investments side
benefits under local taxes.
In 1998 the “Law on investment activity of the Novgorod region” is accepted. In the law
are shown all “rules of game” for the investors who are carrying out investment projects in
territory of region. The period of a recoupment of the investment project pays off on the
basis of rules of calculation developed by the consulting company “Ernest and Young”.
Since January, 1, 1997 the Decision of regional Duma in 4 areas of region creates the first
among the Russian regions of a zone of economic preference with a special tax mode.
The system of guarantees on the part of Administration on maintenance of foreign
investments includes:
- A guarantee of preservation of entry conditions of realization of the investment project;
- The regional investment insurance fund stipulated by an item 46 of the regional law
“About the regional budget for 2003”;
- A full supply with information of potential investors;
- Support of perspective projects by regional economic committee and rendering
assistance in the resolution of problems, concerning federal institutes of authority.
Now a lot of time is given optimization of the legislation for realization in life granting
tax privileges and a principle of “one window”.
To advantages of the Novgorod investment legislation in comparison with the Federal
Law “About foreign investments in the Russian Federation” it is possible to attribute a
guarantee of preservation of entry conditions of realization investment project for all period
of its recoupment in territory of region. And under the federal law the guarantee is limited
to term till 7 years and distributed to the organizations from shares of the foreign capital in
the authorised capital more than 25% or carrying out priority investment projects.
We aspire in a measure of the competence and financial opportunities at a regional level
to compensate available lacks and the changes of federal statutory acts worsening
conditions of activity of investors.
Since 1996, the special attention was concentrated on promotion. The promotion of
region in the investment markets are engaged heads of region, participating in investment
actions in the country and outside.
Personal contacts of heads, their performances on the economic and investment forums,
supported with the extensive and versatile information on development of market attitudes
and the investment environment of region strongly make active interest to region. Direct
contacts have helped accommodation at us manufactures of two strategic investors
"Cadbury" and "Dirol".
2). Promotion of region as territory maximum favorable for investors
The investment promotion directed on attraction of investors goes on 3 various
complementary directions:
1. Activity on formation of a positive image of region:
- the edition of advertising-information booklets on an investment climate of the
Novgorod region;
- the publication of articles and interview in domestic and foreign printed MASS-MEDIA
(“Economy and life”, "Economist", “Wall Street Journal Europe”, “New York Times”,
“Christian Science Monitor”, “Spiegel” and others.
- the organization of direct post dispatch of information materials about region in the
diplomatic organizations of the foreign states and representations of the large foreign
companies;
- realization of information seminars by investment opportunities of region.
2. The activity on direct attraction of investments:
- participation in investment actions (seminars, meetings, forums etc.) in the country and
abroad;
- the organization of visits of investment missions to our region (Korea, Netherlands,
Poland, Germany, Sweden, Denmark, Finland, Estonia etc.);
- establishment and development of contacts to the foreign organizations, establishments
and the companies through correspondence and the organization of visits of their
representatives to Veliki Novgorod and region.
3. Activity on granting investment services:
- maintenance of the advisory help under investments;
- the help in reception of licenses and sanctions;
- maintenance a post of investment services.
The given direction of activity is continuation of work on the legislation and substantially
supports it, raising its efficiency and showing the most important for the foreign investor is
the attitude of authorities. It is necessary to note, that in this sphere we have certain results.
3). Folding an infrastructure of support and development of business
The process of formation of a favorable investment climate goes simultaneously with
creation favorable for development of business of the business environment.
Since 1992, in region the privatization was actively spent which now is practically
completed. The various structures focused on support of business are created and now there
was a complete system of support and service of business, including external investors.
It includes Commercial and industrial Chamber, Fund of support of small business,
Agency of development and attraction of investments (now - group of companies "Investin"), business - park, the leasing company, the Inter-regional Marketing Centre, banks,
auditor firms, the insurance companies and other establishments and the organizations.
With the purpose of training the Novgorod businessmen to business dealing experience of
the western countries with the advanced market economy is widely used.
On base of "the Novgorod training-business centre ” together with the British Fund
“Know How Fund” was organized “the International business school”.
Three years there was a Russian-American school of business administration (RASBA)
on base Portland university which was successfully ended by many representatives of
administrative and business circles of Veliki Novgorod and region, having received degree
MBA.
Reception western business education has helped overwhelming number of graduates
RASBA, 10-years anniversary of creation was marked in October, 2003 to reach
considerable successes in the activity
Together with Norway in Veliki Novgorod, on the basis of the Novgorod state university
it is based and successfully functions business school "Norman" (the best Norway project in
Russia). The university actively cooperates with educational institutions of the
Scandinavian countries and USA, being one of the major centres of a professional training
for market economy.
The important component of existence of the business environment is presence of the
infrastructure providing normal functioning of business.
In area three standards of mobile connection NMT-450, GSM-900 and American
standard TDMA-800 operate. At us services of digital networks ISDN and networks of data
transmission are rendered. The Novgorod paging companies provide connection with 80
regions of Russia and the countries of the CIS. The international satellite communication
operates.
The region on a level and range of services of telecommunications occupies one of
conducting places in Russia and concerns to most computer regions of the country.
The bank sector of region is submitted by 11 credit establishments. Their number
includes 2 local banks, 5 branches of banks of Moscow, 3 branches of the Petersburg banks
and branch of the Vologda bank. Banks of region have direct correspondent accounts with
banks of Germany, Denmark and Austria. In region the central administrative Board of the
Central Bank of Russia functions. In the share market 4 investment companies operate.
Insurance activity in area is carried out by 6 regional companies, 5 branches of the Moscow
and 4 branches of the Petersburg insurance organizations.
The region of one of the first has started the organization of the market of the ground and
the real estate. At support of the Swedish governmental organizations work on drawing up
of ground and wood cadastres of region is conducted. Together with Agency of the
International Development of USA (USAID) productively there was a work on
development of the market of the real estate of Veliki Novgorod. The secondary market of
the ground and the real estate was actually generated.
The administration of region has developed the mechanism of guarantees of preservation
of the ground areas on which the enterprises with participation of the foreign capital are
located. On territories of Novgorod region the investor can expect for the positive decision
of questions of purchase and using the ground and the real estate safely.
Investors in territory of region do not have necessity to solve customs problems outside
of its limits, because since 1991 the Novgorod customs rendering all spectrums of customs
services functions. For qualitative service of business, in the places most convenient for
investors 4 customs posts are located and 3 customs warehouses are open.
One of the important conditions of existence of foreign business in region is creation of
the appropriate conditions for work and rest of experts. In Veliki Novgorod there are many
places where it is possible to stop to the businessman among which four star hotel "BerestPalas" is allocated. Some city hotels recently are reconstructed. The level of service in
which is lead up to European. In city there is a construction of modern habitation, there are
opportunities for construction of cottages for foreigners.
Creation of the legislation and infrastructure for business it yet everything, that is
necessary for foreign business. As it was already mentioned, investors appreciate the
relation to them of regional authorities. The administrative resource in region is aimed at
service of businessmen, on creation of comfortable conditions of realization of investment
projects.
In region there are no irreconcilable contradictions between legislative and executive
branches of authority, between federal, regional and local controls. Constructive
cooperation and mutual search of compromise variants of the decision of regional problems
by all bodies and levels of authority, movements, trade unions and commodity producers,
irrespective of patterns of ownership, have allowed the Novgorod team to develop uniform
economic policy to define priorities and directions of development, to provide a sequence
and a continuity of market transformations.
We had usual practice of support by administrations of region and municipalities of
perspective investment projects which promote their faster realization, rendering of
assistance in the sanction of various problems, including concerning passage through
corridors of the federal authority.
Projects are supported by regional Administration and answer the purposes and tasks of
attraction and an effective utilization in the Novgorod region foreign material and financial
resources. Prominent feature practically all projects is the production, using steady demand
in the domestic and external markets.
The administration of region and areas supports investors not only at all stages of
realization of the project, but also after end of its realization when the enterprise begins
industrial activity.
For granting to potential partners of the actual information on free industrial platforms
and about investment projects are created and computer databases are conducted. The wide
range of free industrial platforms with a complex of a necessary infrastructure (a supply of
gas, water, the electric power, clearing constructions etc.) is offered to investors. The full
free-of-charge supply with information is given potential investors.
In territory of region from representatives of the companies with foreign participation the
Association of the Enterprises with Foreign Investments was created. At sessions of
association the questions arising during realization of projects are considered, and ways of
the decision of these problems are developed. The regional administration works in close
contact to association and supports it by search of the decision of problems of a federal
level.
The administration of region at all does not accept participation in activity of the
organizations with foreign investments, especially participation in the share capital of
foreign investors.
In Veliki Novgorod and in a number of areas of region “the Plan of the reserve ground
areas for development of industrial productions, potentially suitable for realization of
investment projects” is developed. Occurrence of such product allows offering potential
investors the fullest information on an infrastructure, communications and layers of the
ground.
Creation and development of the investment environment of the Novgorod region could
be less successful and more delayed in time, if not the technical and consulting help of the
international and foreign organizations.
In 1996 in region experts of Consulting Service in Foreign Investments (FIAS) joint
division of the International Financial Corporation and the World Bank actively worked.
Result of their activity of steel of the recommendation for improvement small business
environments and to attraction of the greater number of direct foreign investments for
development of economy of region which are used in daily work of the external economic
division of regional economic committee and in activity of system of support and
development of the small and average business, usual in region in second half 1990th years.
In the second half of 2000 experts FIAS studied availability of the introduction into the
market of businessmen (investors) in territory of Saint Petersburg, the Leningrad, Novgorod
and Sverdlovsk regions. The given research is devoted to studying of administrative
barriers existing at the organization of an own affair in Russia on an example of 4 regions
of the country. Recommendations of experts FIAS serve as a reference point which
promotes overcoming of administrative barriers in sphere of business in our region.
Novgorod region, being a component of Northwest region of the Russian Federation,
accepts active participation in realization of programs and projects of EU. The international
activity of region is directed and on strengthening of trading and humanitarian attitudes
with cities of Ganzejski Union of New Time, the countries of region of Baltic sea and on
participation of region in the international investment projects of the state level, i.e. on
consecutive involving of our region to integration processes going in Europe.
Expansion of frameworks of the EU has resulted in an intensification of attitudes between
our region and the countries - members of EU on all directions of activity. Moreover,
creation of a favorable investment climate was conducted with the direct help of these
states, and the basic investments came to us from EU.
The Novgorod region cooperates with the states of EU in sphere of ecology, an exchange
of administrative experience, public health services, the technical help in creation of ground
and wood cadastres, an educational exchange etc.
Many efforts are applied by our European colleagues to transfer us the administrative
experience with a view of modernization of our control system. Sweden became the base
country for realization of projects “Local democracy and self-management in the Novgorod
region” and optimization of system state statistics in region. For municipal serving of
region are organized training seminars on the basis of the Swedish experience of
development of municipal management with visiting the Swedish organizations.
Norwegians accept our young civil servants within the framework of the program “New
managers for Russia”.
Without exaggeration scale it is possible to name education programs of the separate
countries of EU and their joint development of training projects within the framework of
programs TACIS, INTERREG for preparation and retraining of personnel of market
economy of region.
The Novgorod region participated or participates in the following projects of EU:
- the program of the Council of Europe (the International centre of development of
regions);
- the program of Council of Europe (development of an infrastructure of
formation(education) in Veliki Novgorod);
- projects of development of regional library system in the Novgorod region (the project
of development of the Information-exhibition Centre with distribution of activity on
northwest of Russia).
The German program of rendering of the technical help at realization of a privatization of
industrial enterprises “Transform” was successfully executed. One of results of realization
of German program “Transform” was creation of the enterprise for manufacture of the
automobile diagnostic equipment together with German concern “Snap-On-USA, company
“Kartek”.
French Strasbourg rendered powerful influence on development of a tourist infrastructure
in Veliki Novgorod, having accepted active participation in creation and opening of tourist
information office “Red Log hut”.
The Novgorod region often takes part in the international projects, conferences and
seminars.
The region is the constant participant of the international programs in the field of
economy, business, an agriculture, education, culture, public health services etc. (TACIS,
FIAS, and Transform etc.).
The region is marked by a number of awards by the Council of Europe for successful
steps on integration in the European community. (Honourable Banner - 1997, the Medal 2000).
Mentioned some results of participation of region as a whole have served in the
international and foreign programs to creation and development of the favorable investment
environment of the Novgorod region.
Creation of a favorable investment climate did not remain unnoticed by foreign experts.
By their estimation major factors of an investment policy of the Novgorod region are:
- political stability;
- a guarantee of preservation of starting conditions at realization of investment projects;
- granting equal rights for strategic partners;
- simplification of administrative procedures.
These factors, in their opinion, became solving during attraction of the foreign capital and
have allowed making region of the most attractive to investors.
The western experts mark, that under approximately equal starting conditions and at
presence of all same problems, as in other areas, there are “normal European processes” in
region. It is especially emphasized, that the regional management could build effective
system of attraction of investors, more free from usual for Russia bureaucratic red tape.
It is necessary to note, that realization of a purposeful independent policy on development
of market economy, steady dynamical development has resulted in the international
recognition.
“Novgorod region is a rare example of successful economic policy of regional authorities
… The reason of success is simplification of administrative procedures and procedures of
reception of the ground areas, and also granting of tax privileges to investors. As a result of
such policy, since 1995, in region economic growth is observed, and more than half of
volume of a let out industrial output is provided today with the high-efficiency companies
with foreign investments. ” (from the report “Economy of Russia: growth is possible” the
consulting company McKinsey.
Direct result of creation optimum investment climate and acceptance in 1994-2003 of the
investment legislation became the sure growth of the involved foreign investments.
Year
Foreign
investments
(million USD)
1994 1995 1996 1997 1998 1999 2000 2001
3.5
69.1 168.0 95.7 62.6 88.1 49.5
50.1
2002
a half-year
2003
61.6
43.1
Active work on attraction of investors in economy of region during lines of years brings
more and more appreciable results.
In 1999 - 2002 food and woodworking branches occupied leading position on a share of
the enclosed investments.
The most significant investments have arrived from Denmark, Finland and Germany.
Since 2001 investment activity of Spain, Netherlands, France and Slovenia is appreciable.
More than 90% of all foreign investments are placed in Veliki Novgorod.
Since 2002 inflow of new investments began to economy of region. As the positive
moment it is necessary to note that fact, that from now on investors began to come in the
remote areas of region (Pestovsky, Lubytinski, Okulovski and Demynsky), and not just in
territory leaders on volumes of the involved investments (Veliki Novgorod, Chudovski and
Borovichsky areas).
The sum of investments in 2002 has made 61.6 million USD or 123% by 2001. As of
01.01.2003 in region it is involved foreign investments in the sum 650,0 million USD. The
basic volume of the arrived foreign investments is directed in wood, woodworking and both
pulp-and-paper and the food-processing industry (31.1% and 61.7% of receipts
accordingly). The greatest share of investments has arrived from Denmark (36.6%), Finland
(30.8%) and Germany (14.9%). The 19 projects for the sum 180 million USD now is
realized.
The region according to a rating of investment appeals of regions of agency “Expert R?”
(2002) second year in succession occupies the 1st place in a nomination “low potential is
the minimal risk”.
The first half-year 2003 has added in a total sum of the involved investments 43.1 million
USD and on 01.07.2003 in the Novgorod region is saved up foreign investments for the
sum more than 690 million USD (691.1 million USD).
In first half of 2003 the basic volume of investments is directed in wood, woodworking,
pulp-and-paper, the food-processing industry (61.3% and 33.4% accordingly), i.e. the rating
of branches has exchanged and on thirst place investments in woodworking sector have left.
For thirst half of 2003 from total amount of foreign investments arrived in not financial
sector of economy of region direct investments have made 28.7 million USD (66.6% of
total amount of arrived capital investments).
The most significant investments have arrived from Finland (59.3%), Denmark (15.1%)
and Germany (9.1%).
Among investors come to us recently Russian branch of Austrian company "VELZ", the
Italian company “Golden Lady ”, Belgian concern "Sibelko", "WIMM-BILL-DANN" etc.
The 182 organizations are registered in region with 1992 for 2003 with foreign
investments. Now in region 123 organizations with foreign investments operate on
30.10.03. For 10 months 2003 in the register it is brought 23 organizations with the foreign
capital.
The largest investors are the companies from the countries of the EU. The list of investors
includes such companies: Cadbury (the Great Britain), Dandy (Denmark), Schauman
Wood, Raute, UPM Kymmene, Stora Enso (Finland), Oldam (France), Sommer, Pfleiderer,
Benteler (Germany), Holzindustrie Prading, Welz (Austria), Amcor (Australia), Cisa,
Golden Lady (Italy), Joyco (Spain), Dresser Industries (USA) etc.
At the enterprises of region it is realized 329 investment projects, from them 62 with
participation of the foreign capital, about 80 projects are in study.
Since 1995, by Administration of region it is approved 120 investment projects. For the
period with 1995 for 2002 it is given tax privileges for the sum 17.27 million USD,
including from the budget of region 14.15 million USD, from road fund 3.12 million USD.
By these organizations it is listed in budgets of different levels and unappropriated funds
43.76 million USD, from them in the budget of region 20.22 million USD, in road fund
5.86 million USD, in the state social unappropriated funds – 17.66 million USD. It is in
addition created and kept 6750 workplaces.
The Novgorod enterprises with foreign investments play rather significant role in
economy of region. The share of the enterprises with participation of the foreign capital in
volume of release of an industrial output in the Novgorod region made about 60%. Their
share in export makes 75%, in import of 45%.
In 2002-2003 years construction and modernisation of working enterprises proceeded and
new investment projects are begun.
Austrian company Welz realizes the project on erection of the modern logistical terminal
with volume of investments more than 1 million USD.
At factory Amcor Rentsch Novgorod which opening was held in Veliki Novgorod in
September, 2000, in one year it was developed II line on manufacture cigarette packing,
and in February, 2003 is started already III line. Novgorod enterprise Amkora has achieved
the best labour productivity among the related enterprises of concern in the branch. The
project of start of IV line on release cigarette packing prepares for realization.
In 2003 the Italian company Golden Lady started realization of the investment project
from construction of factory on manufacture of hosiery.
Prospective activity of the enterprise is manufacture of hosiery on imported raw material
and semifinished items and sale of finished goods in Russia through an existing marketing
network. The project provides manufacture up to 30 million pairs’ hosiery per year and
creation of 160 new workplaces for inhabitants of region. The total amount of investments
will make 10,2 million Euro.
In 2000-2003 years the project with participation of Italian company CISA on
manufacture of locks of the raised privacy is realized. Planned capacity of the enterprise
makes 1.2 million locks per one year. It is created 570 workplaces. The total amount of
capital investments designed till 2008 makes 16.9 million USD. The enterprise realizes
locks in the markets of Russia and the countries of the CIS.
The large Finnish company UPM Kymmene has started realization of large projects in
sphere woodworking:
- in Chudovo has entered in build a factory on release thin birch lead which became fine
addition to existing 12 years to plywood manufacture of Finnish companies Raute and
Schauman Wood. The volume of investments is 16.3 million Euro.
- in Pestovo there is a construction sawing enterprises "Pestovo-new ", volume of
investments 43.0 million dollars c in volume of manufacture 200.0 thousand cube meters.
Construction of a factory on manufacture of saw-timbers in Ljubytinskom area was initiated
by another powerful woodworking company from Finland Stora Enso. Volume of
investments is 9.0 million USD. Start-up of a factory is planned for December, 2003.
Belgian concern SCR Sibelco has made the decision on realization of geological studying
quartz sand on a site the area. The 270 hectares and further - construction of a large
concentrating complex in Ljubytinskom area productivity not less than 500 thousand per
one year due to own means. Realization of the project is assigned to Joint - Stock Company
“Russian Mountain Company”.
Belgian concern "Sibelko" is considered the world leader in the field of extraction and
processing of quartz raw material for manufacturers of a glass and ceramics.
The realization of one of the largest investment projects to sphere woodworking began.
The project is carried out by German firm “Pfleiderer” which already has an operational
experience on manufacture isolation materials in territory of region. The realization of the
project will allow using potential of region more effectively and will allow to solve a
problem with waste products woodworking branches. General capacity of the project is
about 600.0 million dollars.The Novgorod region accepts not only foreign investors. Do not
lag behind foreigners and domestic businessmen. Starting-up and adjustment works on a
metal works on manufacture cathodic cooper from waste products of nonferrous metals, a
total cost of the project 37 million USD are carried out. The 500 workplaces are created.
Trial start was held in September, 2003. Start-up of the basic manufacture is planned to IV
quarter 2003.
Joint-Stock Company "Sodrujestvo" from Saint Petersburg has organized sawing
manufacture in Ljubytinskom area. Cost of the project is 4.5 million USD. The 50
workplaces are created. Start-up of manufacture was held in I quarter 2003.
In March, 2003 official opening one of the largest and modern enterprises for pouring
mineral water in the European part of Russia, included in Open Society WIMM-BILLDANN Food stuffs ” - a factory of Open Company “Rodniki of Valdai ” with volume of
investments 7,0 million USD was held.
The stone on a site of large garment factory "Skara" is incorporated. It is the Russian
project with volume of investments in 16.5 million USD. Is pleasant to note, that is planned
to enlist at factory not less than 1800-2000 women since at the common rate of
unemployment in 1.5% of economically active population of region, the majority of the
unemployed consisting on the account in services of employment is made by women.
Realization of this project will allow removing an acuteness of a problem of female
unemployment in region.
Carried out in the field of reform and created maximum friendly for business the
investment environment have generated preconditions for escalating rates of industrial
production:
Year
1997
1998
1999
2000
2001
2002
104.7 121.3 110.8 117.8 107.6
In % by the previous year 101 %
%
%
%
%
%
Since 1997, the industry of area keeps positive dynamics of production. On rates of
growth of industrial outputs the Novgorod region last two years outstrips Russian rates: in
2001 they have made 117.8% (on the Russian Federation - 104.9%), in 2002 - 107.6% (on
the Russian Federation - 103.7%).
In 1990th years in the industry there were big changes in structure of the property. Today
in it the enterprises of the private and mixed pattern of ownership, including the
organizations with foreign investments prevail. On their share it is necessary over 90% of
output.
In total amount of industrial production of 94% is a share 6 conducting branches:
chemical, food, wood and woodworking, mechanical engineering and metal working,
electric power industry and ferrous metallurgy.
In a complex estimation of a level of social and economic development of subjects of the
Russian Federation in 2001/2003 years the region occupies 10 places.
Acceptance last years some federal statutory acts has resulted in deterioration of the
invest tax laws and conditions for managing subjects, to infringement of rights of subjects
of federation in economic sphere.
In a case reduction of quantity of given tax privileges, at realization of the investment
project term of a tax vacation is increased and on all settlement time of recovery of outlay
to the investor preservation of starting conditions is guaranteed.
Separately it would be desirable to stop on cooperation of region with USA. Between
cities of the Novgorod region and USA are established connections (Veliki Novgorod Rochester, state New York, Valdai – state Colorado, Borovichi - state New York). Attitudes
between cities for a long time have developed frameworks of a mutual exchange of
delegations and simple acquaintance with each other. Stably develop connections of
Novgorod and Rochester. Joint projects here develop in social sphere (a problem of
homeless children and social adaptation of children - orphans at adoption and after the
ending of training). Valdai and state Colorado carry out the project on decrease of criminal
conditions with participation of the public. A number of interesting projects is realized and
in Borovich together with state New York.
In sphere of business is worthy activity of the joint venture on rendering a photo of
services in the local market, especially taking into account, that Novgorod - Rochester is
capital of world famous company "Kodak". The newest shop of the photo goods in Veliki
Novgorod carries the name "Rochester".
Besides mentioned school RASBA the Novgorod University carries out wide student's
exchanges with universities CSHA by the organization “the Russian-American exchanges”
with university of Rochester (state New York) and with university Purdue (state Indiana).
Programs of cooperation of the Novgorod and American higher educational institutions
successfully develop. Within the framework of the project “Partnership in a name of
freedom” University of Rhode Island and NovSU develop the program on preparation of
civil servants. The same university helps NovSU in development of the program and
materials on business-training for students of university. The University of Cleveland
assists NovSU on creation of the curriculum and preparation of methodical materials on
legal bases of business for a faculty of law.
Friendly and business relations have developed at us with the American Chamber of
commerce in Russia (ACC). The American Chamber of commerce in 1998 has named the
Novgorod region as a Region of Year for successes in attraction of foreign investments in
the economy.
The Novgorod region began the first in Russia where there passed realization of the pilot
project “Novgorod Great. Partnership is called freedom” is within the framework of the
program “the Regional Initiative”.
The program created for rendering of technical support of Russia, unites two basic
purposes of cooperation: rendering assistance of Russia with parallel efforts on promotion
of opportunities for the American business and the local and foreign investments
stimulating economic growth.
The Novgorod project “Partnership is called freedom” - a first step of the program “the
Regional Initiative” (RI). Our area became first project RI in Russia due to a progressive
policy of the Novgorod administration, its vigorous activity on creation of attractive
conditions for development of business.
Activity of the Novgorod project “ Partnership is called freedom” was directed on search
of the enterprises of the small and average business ready to reception of technical and
information support for their further development and attraction of investments through:
1. Acceleration of creation of the competitive ground market by means of creation of the
register of the real estate, introduction of the tax to the real estate in Novgorod and in
municipal formation of region and creation of system of the geographical information of the
Novgorod area;
2. Attraction of the capital for small business by development of a financial infrastructure
with resources and an opportunity of crediting and investment of small enterprises;
3. Perfection of opportunities of educational institutes on training and training to
business, the finance, jurisprudence, works with the real estate;
4. Creation of a package of documents on legal regulation and studying of the market of
Novgorod for attraction of investments, development of trade, tourism and perspective
projects;
5. Expansion of opportunities of USA in sphere of trade and investment by means of
creation of an accessible database about the Novgorod region.
Within the framework of the program the following directions were developed and
involved:
- support and financing of the small and average enterprises (under the projects:
investment of average business, credits and the equipment on leasing for small business,
investment of the enterprises of small and average business, regional guarantee fund,
microfinancing (loans up to 1000 American dollars), support of small and average business,
the consulting help to the Russian businessmen);
- reform of public health services (under the project: the Centre of family medicine);
- land reforms (under the project: registration, sale of the ground; preparation for
introduction of the tax to the real estate; systems of the geographical information);
- formation and development of human resources (under the project: cooperation of
universities; the program of an exchange and training in USA; civil training at schools;
short-term training to business and the finance; the Internet and access to the information);
- trade, tourism, investments (under the project: promotion of foreign investments;
investments in an environment);
- participation of the public and strengthening NSE (under the project: grants to the not
governmental organizations).
Course of realization and some basic results:
On a direction Support and financing of the small and average enterprises microfinancing
small and average business, basically of business of women, through created cooperative
society "Perspektiva" was carried out. From the beginning of the activity " Perspektiva"
was given over 700 individual and group loans on a total sum from above 0.267 million
USD and it is created about 800 workplaces.
Since 1995 in region volunteers of the Case of citizens for democracy (CDC) which
advised many local enterprises worked: "Akron", "Adherent", "Deck", firm "Galichi", the
Novgorod taxi pool, hotel “Beresta Palas” etc.
For support of small and average business representatives of Agency of the International
Development of USA (USAID) have developed and have presented strategy of support of
small business, some seminars for local businessmen have held, stimulated dialogue
between authorities and business circles.
In 2000 the project of creation of uniform information space is discussed by association
of information resources of the service organizations of support of business and public
associations on the basis of an existing Internet - server “Veliki Novgorod for the
businessman”.
In Staraya Russa the Centre of support of female business rendering services of a training
and consultation for women starting the business is created.
Within the framework of a direction Trade, tourism, investments in August, 1997, within
three weeks, in Novgorod worked experts of the known American consulting company
“Karana Corp.” with the purpose of studying the positive and negative sides of the
investment environment of region, and also training of experts of local enterprises “planets”
and “Alloy ” to engineering of effective management.
On the basis of studying an investment climate of area experts "Karana" have prepared
recommendations which were taken into account by preparation of the regional program of
attraction of investments of area working in territory during 1997-1998.
The main result of activity "Karana" in 1997 was creation of Agency on development and
attraction of investments which was transformed to group of the companies “Invest-In” and
has a number of positive examples of attraction of external investors in the Novgorod
economy.
After realization "Karana" of work on "Alloy" the enterprise started realization of the
investment project together with the American company Dresser Industries. The joint
venture DS Controls makes valves for the petrochemical industry.
American polygraphic company "Alphagraphic" has opened the centre in Novgorod with
granting copy, printing services and services in design.
The company DHL the world leader in sphere of aviation express train of delivery of
documents and premise has opened the office in Novgorod and now it is possible to take
advantage of its services here again.
In 1999 - 2000 Corporation "Karana" closely worked above the project of training of the
Novgorod experts and heads to the International Standards of book Keeping and its
introductions in daily business practice of the Novgorod business.
Since December, 1997 within the framework of a direction Participation of the public and
strengthening NSO by Fund Eurasia is given about 40 grants to the local not governmental
organizations for expansion of services in social sphere and development of local
community. The Internet - program has allowed opening 5 public popular channels of an
input in the Internet in educational institutions and library of Novgorod.
The organization “Achievements young” trained teachers of schools of region in a rate
“Applied economy” with the purpose of introduction of programs on business in high
schools.
A number of projects on a direction Formation and development of human resources is
connected to cooperation NovSU and universities of USA in business of preparation and
retraining of experts in sphere of economy, management and jurisprudence.
Under the program of an exchange and training to USA representatives of city and
regional administrations engaged in preparation and retraining of personnel in 1998 trained
in USA. The 50 businessmen from Novgorod have passed six-week training in the
American firms.
On a direction Land reforms the project of creation of geoinformation system (GIS) of
the Novgorod region especially would be desirable to note. On means of the American
grant the given project is realized, GIS areas exists and develops for an effective utilization
of natural resources of region.
With assistance of the American side the project “Registration, sale of the ground is
realized. The introduction of the tax to the real estate perpetrates”. In its frameworks the
database, the information on the property rights to the ground and the real estate is created;
the documentation is prepared for sale of sites of the ground.
Thus, practically on all directions of the program the Regional Initiative powerful results
are received.
The main result of realization of the program is that fact, that it became that locomotive
which has was a powerful spur to development of region. As a result of performance of the
program there were such positive changes in the Novgorod community in economic and
social spheres which can become model for all country.
Visits of the first persons of general consulate of USA to Saint Petersburg to Veliki
Novgorod for discussion of the questions representing mutual interest became kind
tradition. Last high visit was held in March, 2002 when Veliki Novgorod was visited by the
Plenipotentiary Ambassador of USA in Russia Mr. Alexander Vershbou with
accompanying persons.
Thus, cooperation between the Novgorod region and USA develops on a number of
directions and develops successfully though has many reserves.
The information is prepared with
assistance of Economic committee of
Administration of the Novgorod region.
www.intera.ru