Report - UNDP Russia

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Figure 2.2Accrued industrial growth of regions where the fuel & energy sector has large relative or absolute size,% to 1990 (1990=100%)400350300250200150100500Nenets AutonomousDistrictSakhalin Region1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Republic of TatarstanOrenburg RegionTyumen RegionKhanty-Mansi AutonomousDistrictRepublic of Sakha (Yakutia)Republic of BashkortostanSamara Regionslowest growth rates were in the Komi Republicand Republic of Udmurtia, where oil deposits areapproaching exhaustion, and in coal-miningKemerovo Region, though one should bear inmind that industrial growth in these regionsdepends on machine-building, metallurgy orforestry, as well as on the fuel & energy sector.Development prospects in regionsdepend on investment levels. Extraction of fuelresources is the most capital-intensive industrialsector, so main oil & gas regions rank high byinvestments, along with the ‘federal cities’Moscow and St.Petersburg and with regions, thathave large metallurgy industries. Nevertheless,Astrakhan Regiononly the biggest oil & gas producing regions andregions with newly developed fields have clearinvestment advantages. Per capita investmentrates in such regions are 4-15 times higher thanthe national average, even when adjusted fortheir relatively high consumer price levels (Table2.2).In general, specialization of regionaleconomies in fuel & energy gave them a safetynet during the recession of the 1990s, limitingtheir economic decline, but, with fewexceptions, it did not become the driving forcefor fast and sustained economic developmentin the 2000s.Table 2.2Regions with highest per capita investments in fixed assets in 2000-2008, % to national average*(Russian Federation=100%)Nenets Autonomous District ** 1533 Vologda Region 129Yamal-Nenets Autonomous District 900 Astrakhan Region 129Khanty-Mansi Autonomous District 480 St. Petersburg 121Tyumen Region 468 Tomsk Region 120Sakhalin Region 387 Lipetsk Region 112Chukotka Autonomous District 212 Moscow 109Leningrad Region 192 Moscow Region 108Republic of Sakha (Yakutia) 164 Krasnodar Territory 108Republic of Tatarstan 157 Kaliningrad Region 105Komi Republic 151 Republic of Bashkortostan 104* Figures were calculated in constant prices and adjusted to reflect cost of living in each region (the price coefficient for a fixed number ofcommodities and services used for interregional measurements by Rosstat (the Federal State Statistics Service))** Oil & gas producing regions are in boldTomsk RegionKrasnoyarsk TerritoryYamal-Nenets AutonomousDistrictRussian FederationPerm TerritoryKemerovo RegionKomi RepublicRepublic of Udmurtia30 National Human Development Report in the Russian Federation 2009
2.2. Budget capacityand structure of socialexpendituresThe fuel & energy sector has impact onregional development through the state ofenergy markets, investment issues and otherindustrial factors, but also through the policies ofgovernment and large fuel & energy companies,which redistribute a great deal of the valuearising from energy production. These policiesinfluence the budgets of regions that specializein fuel & energy, but they also influence thebudgets of the federal cities (Moscow,St.Petersburg) due to large tax earnings from theheadquarters of fuel & energy companies, whichare located in those cities.The biggest oil &gas producing regionsare the main ‘bread-winners’ for the Russianbudget. The two autonomous districts in TyumenRegion provide 29% of all revenues to the federalbudget, which are collected in the country’sadministrative regions, equaling the contributionmade by Moscow. This concentration of taxearnings in just three regions reflects the fact thatRussia’s fuel & energy companies have largebusinesses and pay much tax. The main taxes,paid by oil & gas companies, are channeled to thefederal budget (as opposed to regional budgets):all of VAT, a part of income tax, and (since 2005)almost all of the mineral extraction tax.Centralization in the federal budget ofmajor taxes in oil & gas regions leads to specificproportions between federal and regionalbudget revenues in these regions. Taxes that arecollected in Russian regions are, on average,divided equally between the two levels of thebudget system (federal and regional), but 82% ofall taxes collected in 2007–2008 in Khanty-MansiAutonomous District went to the federal budget,while figures for the Nenets and Yamal-NenetsAutonomous Districts were 72-76%, and 63-64%for Komi Republic, Republic of Udmurtia,Orenburg and Tomsk Regions. These figurescompare with 20-40% of all taxes collected inother regions that went to the federal budget.The largest oil & gas producing regions, togetherwith metallurgy regions and the federal cities, are‘budget donors’, contributing to instead ofreceiving adjustment subsidies from the federalbudget.Profit tax is the main source of income forregional governments in fuel & energy regions,contributing 20-45% of their budget revenues. InMoscow, where the largest fuel & energycompanies have their head offices, the share ofthis tax is even higher: in 2007 it was 66% of allMoscow budget revenues and 49% in 2008. Profittax revenue is unstable, declining sharply duringrecession periods, particularly in regions wheremineral resource mining and primary processingare the main industries. This source of taxrevenue is vulnerable to corporate policies as wellas to economic crises. For various reasonscompanies may move the addresses of their unitsfrom one region to another, depriving theabandoned region of a strong source of budgetrevenue.As a result extraction regions are exposednot only to risks posed by fluctuations oninternational energy markets, but also to budgetrisks, including the policy of centralizing energytax revenues in the federal budget. Thus in 2009the government decided to completelycentralize mineral extraction tax. The longestablishedidea that extraction regions havestrong fiscal capacity is becoming a myth: onlythe three leading oil & gas producing regionshave high per capita budget revenues.Human development in the regions isimpossible without increase of budgetexpenditures for social programs and withoutgeneral prioritization of social issues. On averageacross Russia, about half of regional budgets arespent on social items, though most regionsdevote more than half of their spending to socialneeds. The share of social expenditures is higherthan the national average in many fuel & energyregions (Figure 2.3), with the exceptions ofTyumen Region (without its AutonomousDistricts) and Moscow, where social expendituresare only a third of total spending. The latterexceptions are explained by very high budgetrevenues, which enable these regional31
Page 1 and 2: National Human Development Reportin
Page 3 and 4: National Human Development Reportin
Page 5 and 6: ACKNOWLEDGEMENTSThe authors express
Page 7 and 8: Dear Reader,You have before you the
Page 9 and 10: PREFACEThis is the 13 th National H
Page 11 and 12: country’s fuel & energy regions r
Page 13 and 14: environmental degradation and enhan
Page 15 and 16: Chapter 1The Energy Sector,the Econ
Page 17 and 18: By 2008 Russia had increased its sh
Page 19 and 20: the share of energy in the national
Page 21 and 22: exported, increased. However, this
Page 23 and 24: elimination of structural and terri
Page 25 and 26: • Establishment of competitive me
Page 27 and 28: number of developed countries, incl
Page 29 and 30: Although the United Nations Climate
Page 31: industrial region of the Urals - Sv
Page 35 and 36: (the Federal State Statistics Servi
Page 37 and 38: Immigration by young and highly ski
Page 39 and 40: energy regions exacerbate the incom
Page 41 and 42: Khanty-Mansi and Yamal-Nenets Auton
Page 43 and 44: the Ministry for Regional Developme
Page 45 and 46: various other long-term problems in
Page 47 and 48: is also associated with the fuel an
Page 49 and 50: Republic of Mordovia 8051 0.732 68.
Page 51 and 52: Legislative control of impact audit
Page 53 and 54: Chapter 3Personal Incomes, the Ener
Page 55 and 56: than any other sources of income -
Page 57 and 58: Are wages now the main instrument f
Page 59 and 60: comparison of month-on-month develo
Page 61 and 62: • The unemployed, people who aree
Page 63 and 64: Employment in the energy sector acc
Page 65 and 66: The share of household expenditures
Page 67 and 68: subsidization practices in the regi
Page 69 and 70: in power use between regions now de
Page 71 and 72: Electricity prices for households h
Page 73 and 74: • Steady decrease in the percenta
Page 75 and 76: 1. The number of graduates with eng
Page 77 and 78: As well as requiring better fuelcom
Page 79 and 80: Box 4.1. The village of Kolvain Uss
Page 81 and 82: continue to use solid fuel for a lo
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Box 4.3. Ambient air pollution andp
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either by large power generating fa
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Box 4.6. A city at riskNovocherkass
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In order to assess impact of thesee
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generation facilities through safer
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achieved in developed countries. So
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equires 2-6 times more capital inve
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government) should set targets and
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networks. In 2007 government budget
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enhancement is also important. Ener
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energy efficiency of the transport
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Box 5.1. Programme of the Ministry
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educational and informational suppo
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mechanism for using national quota
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Figure 6.2Share of electricity gene
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One of the major benefits of renewa
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odies; outdoor air; rocks and soil;
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Design and construction of geotherm
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Box 6.3. Prospects for nuclear powe
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consists of out-dated equipment at
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ConclusionThe world’s nuclear pow
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7.1. Impact of the fuel& energy sec
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Table 7.5Solid waste from productio
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Table 7.7Areas of disturbed and rec
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nature of the impact (atmospheric e
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Further, the economic cost ofenviro
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trends continued the damage would a
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What the government needs to do ino
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Figure 7.2.1Specific atmospheric em
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money value of industrial output) c
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Figure 7.2.4Trends in specific atmo
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Chapter 8The Energy Industry and Su
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eing equal) it only reflects that p
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(MDGs), issued by the UN in 2000. T
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8.4. The energy factorin integral i
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Canada, the USA and Great Britain h
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Box 8.2. Energy efficiencyindicator
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Box 8.4. Energy efficiency rating o
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41 Penza Region 116.0 -35.2 -4.542
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Appendix to Chapter 1Table 1.1. GDP
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Attachment to Chapter 4Table 4.1Rus
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Attachment to Chapter 4Volga Federa
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Attachment to Chapter 4Belovo Belov
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The previous National Human Develop
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