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07.04.2016

Herald

Rating of socio-economic development of the regions

Russia is extremely heterogeneous country: whatever parameter is used at comparing of its regions, they will all be different from each other. The territory, climatic conditions, ethnic composition, economic potential and level of social development - all these parameters are different.

However, there is a need to understand the specificity of each subject of the federation, in determining the amount of the investment, demographic and consumer potential, the degree of business representation. For these purposes the Information agency Credinform has prepared a "Rating of socio-economic development of the regions".

The statistical data collected by our experts are quite different in each region, due to the heterogeneity of the territories. Bringing them to the standardized indicators (points) helps to get the generalized result, which will give an objective picture of regional development and allow comparison of the republic, territory, region, autonomous regions, and federal cities with each other.

The bases of the rating consist of 15 indicators best reflecting the current socio-economic situation in each of the 85 Russian regions. This is information on the demographics, level of wages, incomes of regional budgets and size of the GRP (gross regional product) per capita, inflation, investments, retail turnover, number of legal entities and individual entrepreneurs, etc. (see Table 1).

Table 1. Indicators used to compile the rating of the regions; minimum and maximum values.

№	Indicator	Minimum points (1)	Maximum points (85)
1	Population on January 1, 2016	The lowest population	The highest population
2	Rate of natural population growth, 2015	The lowest value	The highest value
3	Relative increase (decrease) of population, 2015	The lowest relative growth / decrease in population	The highest relative growth of the population
4	Life expectancy at birth (both sexes, the entire population), 2014	The lowest life expectancy	The highest life expectancy
5	Unemployment rate in average for the year, 2015	The highest level of unemployment	The lowest level of unemployment
6	Volume of gross regional product (GRP) per capita of the RF subject, 2014	The lowest GRP per capita	The highest GRP per capita
7	Average monthly nominal wage of employees on a full range of organizations, January-December 2015	The lowest wage	The highest wage
8	Investments in fixed capital per capita, 2014	The lowest investments per capita	The highest investments per capita
9	Retail trade turnover per capita, 2014	The lowest retail trade turnover per capita	The highest retail trade turnover per capita
10	Revenues of the Russian Federation subject budget (excluding non-repayable income) per capita of the subject of the Russian Federation, 2014	The lowest revenues of the budget per capita	The highest revenues of the budget per capita
11	Turnover of public catering per capita, 2014 г.	The lowest turnover of public catering per capita	The highest turnover of public catering per capita
12	Basic consumer price index in December 2015 to December 2014	The highest price index (inflation rate)	The lowest price index (inflation rate)
13	Index of industrial production, 2015	The lowest increase in the index of industrial production	The highest increase in the index of industrial production
14	The number of individual entrepreneurs on March 1, 2016	The lowest number of individual entrepreneurs	The highest number of individual entrepreneurs
15	The number of legal entities on March 1, 2016	The lowest number of legal entities	The highest number of legal entities

To assign the region of a numerical point for each of the 15 indicators, the data were ranked by decrease / increase of their numeric values. For example, the inflation rate was ranked from the lowest to the highest value, while the index of industrial production - from the highest to the lowest.

The total index of socio-economic development of the Russian Federation subjects was calculated by summing up the points for all indicators.

Eventually three groups of territories under the following conditional names were drawn: "Regions of the first group" (from the 1st to 30th place), "Regions of the second group" (from 31st to 60th place) and "Regions of the third group"(from 61st on the 85th place).

Expectedly, the "Regions of the first group" are areas with the major sectors of the Russian economy: oil and gas, mining, agriculture, as well as the capital cities (Moscow and Saint-Petersburg). The level of social and economic development in these regions is higher than the average around the country.

The first place in the national rating is taken by Moscow (1091 points). With the exception of high inflation and the reduction of the index of industrial production, the capital shows the great potential both in demographics (ongoing growth of the population, high life expectancy), and in the development of the regional economy in general. The highest number of legal entities and individual entrepreneurs, the highest budget revenues per capita, the lowest unemployment level in the country are recorded in the capital.

The Republic of Tatarstan takes the second place (1046 points) having high values of all 15 assessment indicators.

Saint Petersburg is on the third place (1027 points), and as well as Moscow, is lagging behind in terms of higher inflation and lower industrial production index.

Table 2. "Regions of the first group". Top-10 of the RF subjects with the best level of socio-economic development

Place in the rating	Subject of the Russian Federation	Total points
1	Moscow	1091
2	The Republic of Tatarstan	1046
3	Saint-Petersburg	1027
4	Khanty-Mansi autonomous okrug - Yugra	993
5	Moscow region	987
6	Tyumen region (excluding AO)	986
7	Krasnodar territory	961
8	Yamal-Nenets autonomous okrug	932
9	The Republic of Sakha (Yakutia)	929
10	Krasnoyarsk territory	910

The "Regions of the second group" are subjects, demonstrating the best values of one indicators and unsatisfactory of other.

For example, the Chukotka autonomous okrug (595 points) has one of the lowest levels of inflation in the country, the highest level of wages paid, high budget revenues and volume of the GRP per capita, in the background of "catastrophic" demographic processes: Chukotka has one of the worst indicators of life expectancy, total population, and the relative increase in population. Thus, high income today does not make this harsh land attractive for living, as it was in the Soviet period. The romance of the northern territories development has gone.

On the contrary, the Republic of Dagestan (697 points) with a relatively low level of economic development shows good demographic data, including for life expectancy, which is typical for the whole Caucasus.

The "Regions of the third group" are entities of Russia with the worst values of the general index of socio-economic development. New regions of the Republic of Crimea (468 points) and Sevastopol (390 points) were also included in this group.

It is interesting, that last year Sevastopol showed the highest relative increase in population among all the regions of Russia, but poor economic figures has not yet allowed this region to rise above the 75th place of the rating.

The Republic of Crimea has low values of the GRP and budget revenues per capita. Also, the highest value of core inflation dynamics is recorded. All these put the Republic on the 69th place of the national rating.

Kurgan region (298 points) closes the final table with the smallest composite index. The region scored the minimum points on all key indicators.

Table 3. "Regions of the third group". Top-10 of the RF subjects with the worst level of socio-economic development

Place in the rating	Subject of the Russian Federation	Total points
75	Sevastopol	390
76	Oryol region	379
77	Republic of North Ossetia-Alania	378
78	Kostroma region	367
79	Jewish autonomous region	364
80	Ivanovo region	357
81	Republic of Ingushetia	343
82	Republic of Kalmykia	339
83	Pskov region	321
84	Karachai-Cherkessian Republic	309
85	Kurgan region	298

The presented rating largely explains the budget, migration and investment attractiveness of the Russian regions, and their image ("bad" - "good") among the population. Migratory and financial flows go to the conditionally "promising" areas to the development prejudice of other regions of the Russian Federation.

This situation is associated with the policy of level equalization of budget financing through intergovernmental transfers, subsidies, grants. Such actions lead to two paradoxical results: the Federation accumulates tax revenues in a single center, and the regions in their turn expect the budget funds inflow without efforts to their own socio-economic development. Hence, there is a significant predominance of the recipient regions over the donor regions. The same applies to the local authorities, which on paper are endowed with a wide list of powers, but there is often no funds for their implementation. Excessive centralization leads to obvious distortions in the development of the country in general. The government should seek to balance the interests of the regions by providing them more autonomy and financial resources without compromising the integrity.

Appendix. Rating of socio-economic development of the region

Table 4. "Regions of the first group". The first 30 subjects of the Russian Federation in terms of socio-economic development

№	Subject of the RF	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	Total points
1	Moscow	85	65	79	84	85	80	81	73	85	81	81	26	16	85	85	1091
2	The Republic of Tatarstan	78	69	67	72	80	72	56	76	78	66	66	69	39	79	79	1046
3	Saint-Petersburg	82	64	73	82	84	75	75	67	77	76	72	24	11	81	84	1027
4	Khanty-Mansi autonomous okrug - Yugra	58	80	77	74	70	83	79	83	81	80	82	8	21	61	56	993
5	Moscow region	84	45	81	62	83	65	73	59	80	70	71	6	42	83	83	987
6	Tyumen region (excluding AO)	54	74	83	50	38	76	71	78	79	79	79	31	79	53	62	986
7	Krasnodar territory	83	50	80	75	44	57	44	75	75	45	74	50	44	84	81	961
8	Yamal-Nenets autonomous okrug	14	81	4	69	81	84	84	84	83	83	84	80	64	21	16	932
9	The Republic of Sakha (Yakutia)	30	79	66	36	24	79	77	79	63	78	80	82	63	55	38	929
10	Krasnoyarsk territory	73	61	65	23	41	74	70	74	62	68	42	83	28	74	72	910
11	Sverdlovsk region	81	46	55	34	35	66	63	57	82	59	77	16	19	80	82	852
12	Novosibirsk region	71	55	70	47	31	56	50	47	59	48	46	67	46	72	80	845
13	Samara region	75	34	43	31	82	61	47	66	74	61	62	30	30	71	77	844
14	Sakhalin region	13	47	39	10	36	82	80	82	84	84	73	75	83	23	25	836
15	The Republic of Bashkortostan	79	56	51	35	43	50	41	46	73	38	55	66	47	77	75	832
16	Belgorod region	57	28	59	73	78	68	38	51	56	41	14	77	68	59	53	820
17	Perm territory	69	49	48	21	37	63	52	52	71	49	68	58	35	73	73	818
18	Nizhny Novgorod region	76	20	32	29	71	51	45	55	72	51	41	62	56	75	76	812
19	Nenets autonomous okrug	1	78	78	56	17	85	83	85	67	85	85	4	76	1	1	802
20	Rostov region	80	31	46	65	42	32	33	32	66	29	56	46	85	82	74	799
21	Khabarovsk territory	50	53	33	11	53	70	72	62	68	69	69	29	38	48	59	784
22	Murmansk region	23	48	17	40	19	71	76	71	76	72	75	42	75	22	33	760
23	Chelyabinsk region	77	42	57	32	27	42	58	36	47	39	40	81	24	76	78	756
24	Voronezh region	64	15	58	61	69	48	36	69	69	33	16	20	60	66	69	753
25	Leningrad region	59	8	62	48	57	69	66	63	49	71	44	18	29	57	48	748
26	Irkutsk region	66	63	49	4	15	64	65	58	18	62	22	53	67	70	70	746
27	Tomsk region	37	66	63	57	20	67	68	68	14	63	58	47	33	35	50	746
28	Stavropol territory	72	59	56	77	49	20	27	18	58	16	70	13	71	78	61	745
29	Magadan region	3	43	2	6	72	78	82	81	64	77	78	64	74	5	5	734
30	Omsk region	62	54	53	45	32	47	49	17	52	43	39	73	41	60	64	731

Table 5. "Regions of the second group". Subjects of the RF from 31st to 60st places in terms of socio-economic development

№	Subject of the RF	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	Total points
31	The Republic of Komi	26	58	6	22	28	77	74	80	70	74	67	32	48	29	31	722
32	The Republic of Udmurtia	56	60	52	42	59	44	37	27	29	44	65	71	22	52	57	717
33	Orenburg region	63	44	31	17	61	62	35	50	33	56	60	78	9	58	55	712
34	Yaroslavl region	47	19	54	55	52	49	43	45	42	65	47	14	70	46	60	708
35	Kaliningrad region	31	41	75	49	47	53	53	39	34	55	52	54	13	41	67	704
36	Primorye territory	61	38	40	18	30	59	67	44	41	57	54	57	2	64	71	703
37	Astrakhan region	34	67	37	59	23	41	40	72	54	35	53	44	72	38	29	698
38	The Republic of Dagestan	74	82	76	83	5	12	1	41	60	4	83	15	52	62	47	697
39	Lipetsk region	42	17	45	53	77	60	32	60	61	52	28	49	43	40	32	691
40	Kamchatka territory	8	62	29	12	68	73	78	53	38	73	76	43	53	9	15	690
41	Kemerovo region	70	30	35	9	21	39	51	56	20	46	36	60	54	63	65	655
42	Saratov region	67	24	41	63	62	28	22	23	19	23	20	63	58	67	63	643
43	Arkhangelsk region (excluding AO)	41	36	7	46	34	52	69	43	65	67	61	19	12	45	37	634
44	Vologda region	43	37	34	33	33	55	48	40	23	54	23	52	51	47	58	631
45	Tula region	55	2	22	30	76	38	46	33	44	60	6	34	80	54	51	631
46	Kaluga region	33	27	50	39	73	54	57	65	53	58	25	7	4	42	42	629
47	Penza region	51	16	20	68	64	25	26	28	32	21	38	72	73	51	41	626
48	Volgograd region	68	29	25	67	26	40	30	48	25	30	11	38	32	69	66	604
49	Kirov region	48	26	18	52	56	18	17	15	24	24	63	74	62	50	54	601
50	Chukotka autonomus okrug	2	72	9	2	79	81	85	77	10	82	7	84	1	2	2	595
51	The Republic of Khakassia	15	57	61	20	45	46	59	49	21	34	43	85	23	17	14	589
52	The Republic of Buryatia	32	76	68	16	11	16	55	7	37	20	64	70	55	27	30	584
53	Kursk region	39	12	64	44	75	37	28	38	40	37	17	10	65	37	36	579
54	Novgorod region	16	6	21	14	66	58	42	64	48	50	51	40	57	16	19	568
55	Amur region	24	39	19	5	46	43	64	61	55	64	49	22	5	26	24	546
56	Bryansk region	44	14	16	27	67	21	10	22	51	13	59	35	82	44	34	539
57	Tambov region	36	4	3	64	65	35	12	70	50	17	13	45	66	31	28	539
58	The Republic of Chuvashia	45	51	47	54	58	17	8	12	12	18	48	61	17	49	39	536
59	Ryazan region	40	10	23	60	63	36	39	21	36	36	26	36	18	36	45	525
60	Vladimir region	53	9	15	24	51	29	29	19	28	31	34	41	50	56	46	515

Table 6. "Regions of the second group". Subjects of the RF from 61st to 85st places in terms of socio-economic development

№	Subject of the RF	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	Total points
61	Tver region	49	3	8	15	48	30	34	34	45	47	32	51	14	43	49	502
62	Ulyanovsk region	46	22	28	51	60	26	24	30	27	25	15	21	45	39	43	502
63	Ulyanovsk region	52	85	82	78	3	3	20	11	6	3	57	11	40	28	12	491
64	Smolensk region	29	5	14	28	39	33	25	25	43	32	45	65	34	30	40	487
65	The Republic of Karelia	17	21	26	25	12	45	60	20	46	40	33	59	31	13	35	483
66	Altai territory	65	32	30	41	16	15	2	9	26	14	8	55	36	65	68	482
67	The Republic of Mordovia	25	13	44	66	74	24	19	26	7	53	9	68	15	19	18	480
68	The Republic of Marii El	20	52	38	26	54	23	18	42	11	15	35	27	78	11	21	471
69	The Republic of Crimea	60	25	71	58	25	1	21	2	5	1	5	1	81	68	44	468
70	Zabaikalye territory	38	68	27	7	7	22	62	35	22	28	50	12	27	34	20	459
71	The Republic of Adygea	10	40	69	70	13	10	15	8	57	11	19	48	61	14	10	455
72	The Republic of Tyva	7	83	72	1	2	8	54	24	2	8	4	76	77	7	4	429
73	The Republic of Kabardino-Balkaria	28	75	60	81	8	5	5	3	15	7	12	5	69	33	17	423
74	The Republic of Altai	5	77	74	8	9	13	23	37	9	10	10	39	84	6	8	412
75	Sevastopol	9	33	85	76	14	2	31	1	8	75	21	2	7	15	11	390
76	Oryol region	22	7	11	37	40	31	11	31	30	22	27	37	25	25	23	379
77	The Republic of North Ossetia - Alania	21	73	42	79	10	11	6	13	31	6	24	28	3	18	13	378
78	Kostroma region	19	18	24	43	55	27	13	10	13	26	31	33	8	20	27	367
79	Jewish autonomous region	4	35	1	3	18	34	61	29	17	42	29	79	6	3	3	364
80	Ivanovo region	35	11	12	38	50	6	7	4	35	12	30	23	10	32	52	357
81	The Republic of Ingushetia	12	84	84	85	1	4	14	5	1	2	1	3	37	4	6	343
82	The Republic of Kalmykia	6	71	13	71	6	9	3	54	3	9	3	56	20	8	7	339
83	Pskov region	18	1	10	13	29	14	9	14	39	27	37	17	59	12	22	321
84	Karachai-Cherkessian Republic	11	70	36	80	4	7	4	16	4	5	2	25	26	10	9	309
85	Kurgan region	27	23	5	19	22	19	16	6	16	19	18	9	49	24	26	298

04.04.2016

Article

What are the small and medium enterprises waiting from the State?

The operating efficiency of the small and medium enterprises (SMEs) is one of the main indicators of the State’s competitiveness. According to the experts, in France the share of SMEs by GDP cover is 62%, in Italy - 60%, Japan – 55%, Germany – 54%, Great Britain - 53%. The share of SMEs by GDP cover in Russia is about 20%. SMEs play important role in the market conditions, but can they unlock the potential and become the reason of rise and development of the Russian economy?

Legislation establishes the criteria of enterprises’ affiliation to the SMEs. The Federal Law № 209-FZ of July 24, 2007 «On the development of small and medium enterprises in the Russian Federation» (as amended on 29.12.2015) defines the average number of workers for small and medium enterprises. Meanwhile the order of the Government of the Russian Federation # 702 of 13 July 2015 set the maximum sales revenue for each category. The number of enterprises by categories and separation criteria are represented in Table 1.

**Table 1. The number of SMEs in Russia by categories**
The SMEs categories	The number of active legal entities, units
Micro-enterprises (up to 15 workers, maximum sales revenue up to 120 mln RUB)	1 428 536
Small enterprises (up to 100 workers and 800 mln RUB)	412 060
Medium enterprises (101-250 workers and 2000 mln RUB)	34 166

Taking into account the criteria above, according to the Information and analytical system Globas-i, currently there are more than 1,87 mln of SMEs in Russia; that is 37,5% of total active legal entities (4,99 mln legal entities). The comparison of SMEs number and the result of their activity demonstrate the minor contribution of SMEs to the country’s economy. For incorporation and development of SMEs, as well as investors, it is necessary to create the conditions.

What are the small and medium enterprises waiting from the State today? Some interesting suggestions were made on the forum «Small business – the national idea», the Presidium of business association «Support of Russia», VII Conference of the Chamber of Commerce and Industry of the Russian Federation; the events were held in the first quarter of 2016 and dedicated to small and medium enterprises. Among noteworthy proposals are:

the use of VAT credit in the simplified procedure for enterprises, exporting non-oil and gas products;
leave the number of reporting forms at current level, simplification of HR record management in micro-enterprises;
depositing the amount of security by the winner of the contract in dependence on proposed price in the competition (now on price of the contract);
deliverance of respectable companies from banking collateral;
increase of maximum revenue amount from 60 mln to 120 mln RUB for using of simplified taxation system;
extension of small business participation in procurement of state-owned companies up to 15% of annual procurement volume by direct contracts;
mitigation of the requirements for execution of contracts, the transition to life cycle contracts in procurement of state-owned companies (the cycle includes procurement, future maintenance, and disposal);
establishment of the uniform rules for taxation and others.

By the end of the events, the Administration of the President of the Russian Federation released a list of orders, which satisfied the representatives of SMEs. It is expected, that in April the Government of the Russian Federation will consider the number of bills, which let to facilitate business activities. However not all requests of SMEs will be satisfied. For example, the Ministry of Finance of the Russian Federation imposes the restrictions on use of some tax benefits.

In particular, the abolition of unified tax on imputed income is transferred on 1 January 2021. It is also suggested to decrease the amount of expenditure tax instead of tax rebate for online buying of cash register equipment, if SMEs were not required to use the cash registers earlier; there are also other restrictions. However, one thing is obvious – the facilitation of small and medium business activities will contribute its revival, the growth of economic entities, their income and, accordingly, income of the State.