nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2012‒10‒13
nine papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Implications of an increase in domestic prices of gas in Russia, an application of the regional economic model SUSTRUS By Christophe Heyndrickx; Victoria Alexeeva - Talebi; Natalia Tourdyeva
  2. Urbanization and Economic Development in Russia By Evgeniya Kolomak
  3. Regional policy and Urbanization in the contemporary Russia By Irina Slepukhina
  4. Communication and location: their interdependencies in contemporary Russian regions By Alexander Pelyasov; Nadezhda Zamyatina
  5. DEVELOPMENT BARRIERS AND PATHS FOR SIBERIA’S AREAS WITH LIMITED TRANSPORT ACCESSIBILITY By leonid Bezrukov
  6. Territorial Cohesion at the EU’s External Border? A Finnish-Russian borderlands perspective By James Scott; Sárolta Németh; Matti Fritsch; Heikki Eskelinen
  7. Northern old industrial regions: breaking the path in resource development By Alexander Pelyasov; Natalya Galtseva
  8. Regional development potential: the evolution of methodological approaches in the Russian Federation domestic regional studies By Natalia Zigern-Korn
  9. The role of integration mechanisms in creation of regional innovative system of Magadan region By Golobokova Galina

  1. By: Christophe Heyndrickx; Victoria Alexeeva - Talebi; Natalia Tourdyeva
    Abstract: The present paper studies the effect of an upward correction of the natural gas price on the Russian domestic market. Russia has the largest gas reserves in the world and currently produces around 550 billion cubic meters of gas each year. Sixty percent of the production is sold domestically at prices below long term marginal cost, for households and for industrial producers. The pricing of natural gas is currently a hot topic in Russia, as the Russian government proposes to liberalize the regulated domestic market price and decrease subsidies for natural gas products. This is claimed to fit in a policy promoting energy efficiency, increasing investments in natural gas production and bringing the natural gas price on the domestic market closer to long term cost recovery. We will approach the issue of gas pricing through taxation of intermediate and final use of natural gas for domestic industries and consumers. Considerable attention is given to economic impacts, environmental issues and social effects of gas pricing. We compare several scenarios of differential gas pricing, simulating increases in price for industrial and private consumers at different annual growth rates, with a time horizon from 2012 until 2020. Our results are based on an application of the SUSTRUS model, a novel computable general equilibrium model, which was developed in the same-named EU funded project. The SUSTRUS model belongs to the group of regional CGE models, applied to analyze policies with a strong social, economic and environmental dimension. The model is constructed as a regional model on federal level, where regions are linked by interregional trade flows, a federal government level and migration. The main data sources for the model are the public databases of Rosstat and the micro-level household data from the Russia Longitudinal Monitoring Survey (RLMS). Calibration of the model database was performed by a flexible cross-entropy minimization sub module and standard applied general equilibrium techniques. We find that deregulating natural gas pricing can lead to a significant improvement in energy efficiency, if prices are gradually increased for both consumers and industries alike. Differences in regional energy efficiency decrease, but are still significant. We show that increasing the consumer price of gas is indeed a regressive policy, but can be compensated for by the government. Keywords: Regional general equilibrium modeling, sustainability, energy, natural gas, pricing, policy JEL codes: R13,Q01,Q41,Q48,Q56
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p113&r=cis
  2. By: Evgeniya Kolomak
    Abstract: The paper studies trends in the urbanization in Russia and compares them with the global ones. Russia has high level of urbanization, urban population reached 73% in 1990, and the rate of urbanization fluctuates around this level past 20 years. The change of the urban population in Russia is influenced by three factors: natality, migration and the administrative reforms. The latter includes the establishing of new urban settlements and transformation of rural settlements into urban or vice versa. Starting in 1992, the low birth rate has become a major factor in reducing the number of urban residents. Immigration from cities was observed in 1991-1992 and it exacerbated the decline of the urban population of Russia. The administrative reorganizations had significant impact on the official statistical data on the urban population in Russia, especially in 1991, 1992, 1999, and 2004. The paper discusses advantages and disadvantages of the urbanization to the economic development and provides empirical analysis of the relationship between the economic growth and the urbanization in Russian regions. Russian regions differ significantly in urbanization, both at the macroeconomic level and the subnational one. Tested hypotheses are the following: 1) urbanization stimulates growth of regional productivity in Russia; 2) the positive effect of urbanization on the regional productivity in Russia is decreasing and at some level becomes an impeding factor; 3) large cities demonstrate higher performance and create positive externalities for the overall regional development. The idea of econometric estimates is to expand an aggregate regional production function including urbanization level and agglomeration capacity of the cities. We use panel annual data for 79 Russian regions and covered period is 2000 – 2008. Estimation tool is fixed effects least squares. The estimates show that increase of share of urban population in the country by 1% gives rise of the average regional productivity by 8%. However, the effect of urbanization is reducing. The growth of a city size per 1 thousand residents would increase economic productivity by 0.1% only. The conclusion is that despite the high level of urbanization in Russia and a number of negative effects of the concentration of economic activity in the cities, the resources of urbanization are not exhausted. Cities develop effectively creating positive externalities and growth impulses on surrounding areas in Russian regions. The potential of changes in the structure of urban settlements in favor of large cities exists, but it is very small.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p82&r=cis
  3. By: Irina Slepukhina
    Abstract: The objective of the paper is to analyze a city network of the Russian Federation (the RF) in order to understand how the existing urban pattern correlates with the aim and strategic directions of a contemporary regional policy. To reach this goal the present hierarchy of Russian urban system will be analyzed, on the base of population size, level of urban functions and accessibility of transport system. The paper will present strengths and weaknesses of current urban system structure. The regional development of the RF has specific features due to a set of historical, political, economical and social aspects. The Soviet period of planned economy had significantly influenced the territorial development of the country. For a long time Russia had been in a self-isolation condition and, as result, it had the unique planned system with their specific terminology, distributive mechanisms and administrative regulations. In the contemporary Russia regional planning is switching over to a new stage. Apparently Russia seems have been reached the era of so-called “regional revolution†later than the other industrial countries. Now we can observe a creep from sectoral (industrial) planning to territorial development planning. On the one hand, Russia tries to devise a regional development strategy based on the principles of polarization. The budget levelling policy is substituted by the growth pole policy. The “open question†is: which regions and cities could be the poles for the future country’s development? Thereby, realization of a new regional policy demands development of a suitable information, data base, statistics, researches, etc. On the other hand, in the RF is emerging a progressive bifurcation between socio-economic policies and spatial planning. The regional policy is realized without territorial binding. The role and place of the city is indefinite in the regional policy. The issue concerning which cities should be alive in national and global competition is still under discussion. The research methodology is based on the analysis of existing planning and strategic documents of the federal, regional and local levels in the RF, as well as on a retrospective analysis of Russian population settlement pattern and in carrying out a comparative analysis. The adequacy of research will be ensured by using a statistical data of the RF.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p482&r=cis
  4. By: Alexander Pelyasov; Nadezhda Zamyatina
    Abstract: The main idea of the research is to investigate how the communication processes could result in the location of productive forces in contemporary Russian regions. The results are based on utilizing several traditional and new methods of regional analysis. We have analyzed: 1) Inter-regional skilled migrants flows, including special case of PhD holders (the official statistics of arrivals and departures for all Russian regions for 2008--2010); 2) Internet links between 40 Russian universities’ sites (the selected universities are located in 25 Russian cities; the results of more than 1800 retrieval requests were investigated); the number of internet links was compared with the national scientific, educational, and other University ratings; 3) career paths studied on the material of Internet social networks for the case of Tomsk University graduates (more than 1200 students graduated from the University in 2006-2009); 4) location of new biotechnology firms in the cluster of the city of Biysk. We have elaborated several lines of research. 1) Location of the new industries (like biotechnology) and communication pattern between economic actors in this industry. 2) Spatial structure of the Higher Education Institutions in contemporary Russia, their status and mobility patterns of the labor force. 3) Different location behavior among post-graduates of Tomsk University, representing specific assets like specialists in chemistry and physics, and common assets like specialists in arts and applied mathematics. For example the significant portion of specialists in physics born in small towns around Tomsk move to such R&D centers like Snezhinsk and Sarov located more than 1000 km far from Tomsk; the specialists in chemistry born in south cities move to the labor markets of the Russian North; the graduates in arts and applied mathematics tend to stay in Tomsk or to move back to the cities where they were born. 4) Different location behavior among skilled migrants and PhD holders (for example in 2008-2010 PhD holders moved to such peripheral regions as Altai and Kurgan which were losing both the skilled population as a whole and the total population); Regional competitive advantage is closely related with the local communication process. Location or relocation of the most innovative activities depend on the model of local community communication as well as on the scale and substance of its outward communication network.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p57&r=cis
  5. By: leonid Bezrukov
    Abstract: Areas with limited transport accessibility are considered to mean territories lacking year-round roads and routes, such as railroads, motor roads, sea routes, and inland waterways. Siberia, as Russia’s largest macroregion, has within its boundaries huge territories difficult of access, where only seasonal waterways and winter motor roads, and also expensive air transport are available. The socioeconomic state of the Siberian areas with limited transport accessibility is under a negative influence of two transport-economic barriers simultaneously. The presence of the former barrier is characteristic for the whole of Siberia, including the zone serviced by railroads and all-the-year-round motor roads. The operation of this barrier is associated with the landlocked macrolocation of Siberia, and with the huge and expensive distances which have to be traveled when transporting cargo and passengers to the leading centers and sea ports of Russia and the world at large (and, accordingly, vice versa). The chief point is that there is still a significant difference between land transport tariffs, on the one hand, and economical sea transportation rates, on the other. Therefore, in landlocked regions, and in Siberia in particular, the high transport expenses continue to have an unfavorable influence on economic efficiency and remain a severe obstacle to the entry into the remote markets. The second barrier arises directly because of lack of year-round communications, and its operation is characteristic precisely for areas with limited transport accessibility doomed to drag out a backward socioeconomic existence or bear sky-rocketed transport expenses. Compared with the belt along the railroads, the transport expenses in areas without railroads increase several times, which was established through our estimation of cost for the transport-geographical location (TGL) of Siberia’s administrative districts. Districts with a particularly disadvantageous TGL are represented by the most backward and peripheral territories of the Sakha Republic, Krasnoyarsk Territory, Irkutsk Oblast, Tyva Republic, and some other Siberian subjects of the Russian Federation which are distinguished for an exceptionally sparse network of human settlements, a total lack of good roads, and for extensive kinds of economy. The broad-scale construction of new railroads and all-the-year-round motor roads, as planned by the “Transport strategy of the Russian federation into the year 2030â€, would radically change the situation for the better. According to our assessment, the implementation of the aforementioned “Strategy†would lead to a reduction in transport expenses and to an improvement in TGL of about 100 areas of Siberia, which would create favorable possibilities for their full-fledged socioeconomic development.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p206&r=cis
  6. By: James Scott; Sárolta Németh; Matti Fritsch; Heikki Eskelinen
    Abstract: Territorial co-operation has become an integral part of European Union Cohesion Policy, and is regarded as an instrument towards achieving the EU policy objective of Territorial Cohesion. Since the inception of the INTERREG Community Initiative in the early 1990s, EU-funded cross-border, transnational and inter-regional co-operation has enabled diverse actors to co-operate in a variety of fields, thus contributing to territorial integration through the common identification of problems and solutions for territorial development, exchange of knowledge, benchmarking, processes of learning and, not the least, 'getting to know each other'. Also across its external borders, the European Union has facilitated cross-border co-operation through a (though, uneasy) combination of INTERREG and TACIS funding, which has recently been replaced and simplified by the European Neighbourhood and Partnership Instrument (ENPI). Cross-border co-operation across the external border both shares similarities and exhibits differences with co-operation across the EU's internal borders. Although, the types of actors involved and priorities and project contents on the ground are generally similar, high politics and large economic trends have significant impact on EU-external border regions. This is true also for the Finnish-Russian borderlands, which had been for a long time separated by a closed border and the distress of forced land cession, and which, two decades after the collapse of the Soviet Union, includes an EU-external 'neighbourhood'. Co-operation across this external border is also conditioned by the macro-level framework of factors such as political relations between the EU and Russia, intricate and variable customs regulations, changing border regimes and a general 'ambiguity between co-operation and control' (Cronberg 2003). Leaving from the assumption that territorial cooperation contributes to territorial cohesion/integration across borders, we seek answers to questions including the following: To what extent this is true in the context of external borders of the European Union? Are there any signs of territorial cohesion/integration across the Finnish-Russian border? Using findings from the empirical analysis carried out in the TERCO project (ESPON 2013), this paper thus also sheds light on the potential schisms between internally oriented cohesion policy and externally oriented neighbourhood policy. Keywords:: territorial co-operation, EU Cohesion Policy, Cross-border co-operation, EU external borders JEL code:R58 - Regional Development Planning and Policy
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p626&r=cis
  7. By: Alexander Pelyasov; Natalya Galtseva
    Abstract: The major reason of economic depression of old industrial regions is the aging of their economic structure and loss of competitive advantages of their basic sectors. Not the sectors of the regional economy are getting old but determined by economic age conditions of their development in the concrete region. Indicators of basic sectors getting old can be production of non-competitive output because of backward technique and technology, ineffective organization of the industrial process etc. It is possible to include in the list of old industrial regions not only manufacturing but also resource-dependent regions like Magadan Oblast in the North-East of Russia. Resource regions have distinct specificity in their aging: it is general decrease in the quality of extracted resources and lack of technology to utilize depleted resources. Generally the main directions of the restructuring of the economy of the old industrial regions are diversification, introduction of product, process and organizational innovations and elaboration of new competencies. Magadan Oblast in the North-East of Russia has been developed its gold deposits for more than 80 years. So it can be regarded as Northern resource old industrial region. And its directions of economic restructuring lie in resource diversification, technological and institutional innovations, and new economic competencies of the labor force. Efficiency of each direction of regional economic restructuring is measured by indicators of GRP, employment, and real income. At the result of different combination of the projects in the three directions of restructuring one can characterize four scenarios for Magadan Oblast future development. The first is connected with the introduction of innovation in the existing resource projects. The second includes existing and new projects connected with coal deposits. The third includes the projects from the previous scenarios plus project of diversification connected with elaboration of tin and tungsten deposits. This scenario can help Magadan Oblast to come into the group of Russian regions with the average level of economic and social development. And finally fourth scenario related to the large-scale exploitation of the off-shore oil and gas deposits can help to change radically the economic specialization of the region and increase rates of economic growth of the previously territory of economic depression.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p234&r=cis
  8. By: Natalia Zigern-Korn
    Abstract: Regional development potential: the evolution of methodological approaches in the domestic regional studies The problems of methodology and method tools in the regional development potentials study are under consideration. Definition of the category “potential†is considered on the number of domestic (Russian) works and research example. The evolution of researchers methodological positions from the Soviet period to the present time are subjected to analysis. A step change in the content of the natural-resource potential while geosystem approach to natural resource research is gradually enriched with economic content is shown. We prove the incorrectness of identifying the category 'potential' with the category of 'resources', and estimate it in the context of underutilized resources to be used in the modern region development forecasts. The main areas of regional potentials investigation in recent studies are distinguished and discussed by author. They are: the study of individual potentials as factors of regional development and as a set of some functional significance resources; the search of regional development potential integral index as a set of resources and opportunities for regional development. It is noted that in the last few years, the notion of potential appears and develops in the context of regional development tasks and out of forecast and analysis of regional development, this category makes no sense. But, according to the author, the previous domestic attempts to create a logical system of views on the issue of socio-economic forecasting by regional development potential assessing both from a solely geosystem approach, and with the help of new research concepts for domestic regional economy (reproduction approach and new concepts of the region) have been failed. The article shows geosystem constructive approach to analyze the spatial dynamics of regional factors for development. Further to this the author concept of 'functional capacity of the territory' is introduced. To analyze the temporal (time) dynamics of economic systems the relevance of an evolutionary approach, studying the cyclical patterns of development of complex systems is proved. Due to the cyclical patterns of complex systems development this approach emphasis on the evolution of the regional policy goals and objectives according different stages of social development and in different technological structures.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p771&r=cis
  9. By: Golobokova Galina
    Abstract: The role of integration mechanisms in creation of regional innovative system of Magadan region Galina M.Golobokova, Administration of Magadan region, Magadan, Russia The regional innovation system, innovation infrastructure, interation mechanisms. In Russia the adoption of new technologies by changing the “raw-material†economy to the competitive production one faces a number of difficulties originated by sequences of our transition to the market economy, partial loss of priorities in technological development as well as weakness of national innovative system. That’s why it is important to work out a number of scientific approaches for development of synergic mechanisms to integratethe efforts of all participants of the innovative process.It makes the basement for legal and institutional reorganization (legal acts on innovative activity as well as on development of intellectual property market, commercialization of results of scientific and research activities, effective management of financial resources, compiling of innovative governmental order and stimulation of investors in innovative businesses). Within the framework of “Scientific research of innovation processes and development of mechanisms for implementation of innovations in regional economy†we have completed the following studies: modeling of strategic alternatives and mechanisms for implementation of innovations in regional economy; vectors of innovation development of regional economy on the basis of synergetic mechanisms of integration of various players in the innovation market; development of information and communication models of innovation; building of innovation mechanisms of the regional energy development; problems of formation of the regional market of intellectual property. We have drawn up technical approaches towards implementation of the strategy of innovation development of the Northern territories and a unique model of regional innovation policy building and functioning. The regional innovation system of the Magadan region is a set of interacting subjects of innovation activity. Regional innovation infrastructure provides support and sustainable development. The adopted strategy of development of the Magadan region till 2025 is intended to introduce innovations in various areas of economy: mining, fishing industry, energy conservation and electricity, oil and gas production, production of new building materials that will require new mechanisms of integration and considerable financial resourses. Nowadays the Magadan region is rated second in the Far East Federal district on the numbers innovation companies – 35 and on the volume of innovation goods (works and services) – 2,4 billion rubles. The share of innovation goods, works and services total 5,2% in the general volume that is the maximum in the Far East.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p584&r=cis

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