Problems of depressed regions in the Russian Federation and possible solutions

Khaidarov Shamil' Magdanurovich Student, Department of Higher School of Historical Sciences and World Cultural Heritage, Kazan (Volga Region) Federal University 420000, Russia, Republic of the Republic of Tatarstan, Kazan, Kremlevskaya str., 18, Republic of Tatarstan hajdarovsamil49@gmail.com

Rakhmatulin Aidar Rishatovich Student, Department of Higher School of Historical Sciences and World Cultural Heritage, Kazan (Volga Region) Federal University 420000, Russia, Republic of the Republic of Tatarstan, Kazan, Kremlevskaya str., 18 aydar_rakhmatulin@mail.ru

There are different classifications of regions, which are based on natural, geographical and geopolitical characteristics, which distinguish: extreme natural and climatic zones, coastal regions, border regions and regions remote from the main territory of the state ^[28]; on signs of investment attractiveness, which distinguishes: reference regions, regions "poles of growth", "point regions growth", "regions with uncertain prospects", "problem regions" and "regions of special attention" ^[28]; on structural and sectoral characteristics, which distinguishes: post-industrial, industrially diversified, industrially resource-processing, agro-industrial, agro-polyservice, polyservice and energy resources ^[15]. In this work, a classification of regions is used, based on the identification of key problems of regional development, which distinguishes: a depressed, pioneer, stagnant and programmatic region ^[28]. Depressive refers to a region that has shown high rates of development in the past, but is currently stagnating.

The problem of uneven development of intra-country regions in terms of socio-economic indicators is not new and is inherent in all states in the world. To eliminate such asymmetry, an alignment policy is being implemented, in which regions are considered either as donors or recipients, depending on their capabilities. Scientists consider the relationship of regions in the plane of the "center" and "periphery" ^[24]. The center is understood as an area that attracts resources from the periphery and thereby receives additional opportunities for successful development. Moreover, it is possible to distinguish the "center" and "periphery" both on a national scale – the capital, as the "center", and the city from the province, as the "periphery" (Moscow and Kazan), and on the scale of intra–country regions - the administrative center and the provincial settlement (Kazan and Nizhnekamsk, or Nizhnekamsk, etc.G.T. Kamskie Polyany).

The presence and development of depressed regions is an urgent problem in modern Russia. The Russian Federation since the entry into force of Federal Constitutional Laws No. 5-FKZ dated 04.10.2022 "On the Admission of the Donetsk People's Republic to the Russian Federation and the Formation of a New Subject of the Donetsk People's Republic in the Russian Federation", No. 6-FKZ "On the Admission of the Luhansk People's Republic to the Russian Federation and the Formation of a new Subject of the Luhansk People's Republic in the Russian Federation Republic", No. 7-FKZ "On the admission to the Russian Federation of the Zaporozhye region and education in the Russian Federation of the new subject of the Zaporozhye region", No. 8-FKZ "On the admission to the Russian Federation of the Kherson region and education in the Russian Federation of the new subject of the Kherson region" has 89 subjects ^[6]. But back in 2021, when there were 85 subjects, only 23 were donor regions, while the remaining 62 were recipients ^[16] Mainly the problem of regional inequality is shown by comparing the socio–economic indicators of Moscow and the Moscow region with other regions of the country. Moscow, Moscow Region, St. Petersburg, Khanty-Mansiysk and Yamalo-Nenets Autonomous Okrugs provide almost half of the revenues to the federal budget of Russia. In 2021, their contribution to the consolidated budget amounted to 17 trillion in absolute figures. rubles, which amounted to about 46.4% of the budget ^[5].

Depressed regions include: Adygea, Altai Territory, Kalmykia, Karelia, Kurgan Region, Mari El, Pskov Region, Altai Republic, Tuva and Chuvashia ^[10]. One of the main problems of such regions in Russia is the outflow of population. Due to the lack of social guarantees, the desire to get a decent level of education or a well-paid job, citizens migrate to more progressive regions. Moscow is the most attractive region for internal migration of the Russian population. According to statistics from Rosstat, migration outflow of the population was observed in many regions from 2018 to 2020. Thus, in the Yaroslavl, Tver and Vladimir regions bordering the Moscow Region, the migration decline in 2020 amounted to: 1961, 177 (although almost 3,000 people left the Tver Region in the previous year) and 3024 people, respectively ^[12]. In the Ministry of Defense, the migration population growth from 2018 to 2020 totaled 266.9 thousand people, excluding natural population growth due to newborns ^[22]. This is one of the clearest indicators that developed centers attract the labor force of the periphery. In addition to Moscow and the Moscow region, some regional "centers" are also the centers of attraction for the population. For example, in St. Petersburg and the Leningrad Region, population growth due to migration in 2021 amounted to 26 thousand people ^[12].  Kazan also consistently demonstrates an increase in the number of citizens to 1 million 257 thousand in 2020, including due to the influx of residents from neighboring regions and CIS countries ^[21]. These examples demonstrate to us the inability of the periphery to maintain the standard of living of the population at a sufficient level to contain the outflow of population to the center of the country or regions.  

Another problem contributing to the maintenance and development of the asymmetry of Russian regions is the excessive concentration of resources in the capital of the Russian Federation. An example is the concentration of head offices of large companies and their registration with the Moscow tax authorities, which gives enormous income to the Moscow budget, for example, Rosneft, Lukoil ^[18]. Despite the fact that their activities are conducted in other regions, for example, in the Khanty-Mansiysk Autonomous Okrug, taxes on campaign profits go to Moscow, since taxes from companies go to the budget of the region in which the company is legally registered.  This problem can be solved by allowing income tax funds to remain in the regions where mining takes place, as this in turn will provide an incentive and opportunities for the development of the region. As an example, Gazprom's move from Moscow to St. Petersburg in 2021 can be cited. Gazprom brings in about 160 billion rubles in taxes. This dynamics with an increase in city budget revenues can be traced in the laws on budgets of St. Petersburg for the 2020 budget year and for 2021 ^[8]. The relocation of the company contributed to an increase in the budget of St. Petersburg and made it possible to spend more money on the development of the city. In addition to tax revenues from Gazprom to the budget of St. Petersburg, the corporation also spent about 18 billion rubles on the development of the city, about 9 billion was spent on the development of sports culture in the city ^[7]. The transfer of the head offices of companies operating in the regions from Moscow to the administrative centers of the respective regions would have a positive impact on the stabilization of the socio-economic situation and the development of the relevant subjects, increasing the investment attractiveness of the cities where the headquarters of large campaigns will be located.

The taxation system also has a significant impact on regional asymmetry. Cities of federal significance are subjects of the Russian Federation, respectively, taxes, which are divided between the subject and the municipality as a percentage, are completely deposited in the city budget, which creates the potential for development at the expense of these funds ^[4]. A striking example is the personal income tax, which goes to the regional and local budgets in the ratio of 85% to 15%, respectively ^[4]. Moscow receives this tax entirely in its budget ^[4], which in turn is the reason for the excessive growth of the city of federal significance and the attraction of labor and educational migration.

Let's consider possible ways to reduce the gap in the level of socio-economic development between regions. Of course, carrying out any activities aimed at the development of the territory requires financial resources, therefore monetary support is one of the main tools for the regions to get out of the depression.

How can we ensure the availability of these funds? This can be facilitated by providing regions with the opportunity to keep part of the mining tax in their budget. At the moment, deductions for this tax go entirely to the federal budget ^[13]. A similar mechanism for supporting regions is used, in particular, in the Federal Republics of Germany, in article 106 of the Basic Law, which stipulates that federal lands have the right to keep a certain percentage of the tax on mining, which in turn will go to the development of a municipality or region ^[14]. This article also regulates income tax, and if the company is registered in Berlin and operates in Bavaria, then this region of Germany is entitled to a percentage of income tax. It is worth noting that the distribution of large companies in Germany is decentralized and they are scattered across all federal lands, which simplifies the work on land development and their alignment. The trend towards decentralizing the headquarters of large energy companies was clearly manifested in 2021 in the Russian Federation. On June 30, 2021, during a direct line, Russian President Vladimir Putin said: "In fact, I think that certain federal structures should be transferred to Siberia, or at least those of our large companies and head offices that operate in Siberia should be transferred there, and, unfortunately, the main taxes are paid in Moscow" ^[17], and on August 3 Gazprom was registered with the tax authorities of St. Petersburg ^[11]. This was followed by the initiative of Federation Council member Valentina Matvienko to move the offices of such large companies as RusHydro, Russian Railways and Rostec, Bashneft, Rosneft, Inter RAO to Krasnoyarsk, the Urals, Ufa, Siberia and Kaliningrad, respectively, which would help to increase the budget of the regions and make it possible to solve a lot of socio-economic problems.

Another tool for equalization is the system of subsidies to the regions, but such a policy helps to reduce the independence and initiative of the state bodies of the subjects. A striking example is the subjects of the North Caucasus, two republics from the North Caucasus Federal District in 2022 entered the top 5 most subsidized regions of Russia, so the Republic of Dagestan ranks first, receiving 80,181,662.5 thousand rubles, and the Chechen Republic - 36,833,108.8 thousand rubles ^[27]. The allocation of subsidies to them does not give tangible results, if we analyze the data for 2020 and 2021, we can understand that every year they are allocated a lot of money, which means that the republics cannot improve their situation at their expense. For example, in 2020 Dagestan and Chechnya received 72,892,420.5 and 33,484,644.4 thousand rubles, respectively ^[25], and in 20221 they were allocated 72,892,420.5 and 33,484,644.4 thousand rubles, respectively ^[26]. To date, they lead the anti-ratings on the subsidized dependence of the regions. Thus, in the rating of poor regions of Russia for 2021, which was conducted by the RIA Rating agency, according to the share of the population below the poverty line, three regions from the North Caucasus entered the top 10 in terms of the worst indicators, Ingushetia – 29.7%, the Karachay-Cherkess Republic – 22.1%, Chechnya – 19.9% ^[19].

It will be much more effective to create conditions in depressed regions for doing business and attracting investors. This practice is used abroad. Throughout the European Union, government agencies, the European Investment Bank and the European Union Strategic Development Fund, monitor statistics and direct investments to the most problematic points of the European Union. Such a policy is called a "cohesion policy" and implies the preservation by the state of a system of money transfers, the addressee of which is not the government of the region, but specific firms or government agencies doing business in the region. An example is the following agreement, on October 6, 2020, the European Investment Fund and Raiffeisenbank signed a guarantee agreement in the amount of 10 million euros to support small and medium-sized private and public enterprises in the cultural and creative sectors of Bulgaria ^[2]. Such a system is beneficial to entrepreneurs, since when entering a new region, subsidies cover possible losses at first at the expense of funds allocated to the pan-European budget by each country of the European Union. In addition, such a system will prevent inappropriate waste of funds, because the transfer will go to a specific institution that is accountable to government agencies.

In the 21st century, one of the main tools to attract the attention of potential investors to the region is the brand of the territory and its widespread use. One of the successful examples of branding the territory is Tatarstan. The brand of the republic, created by the Government of Tatarstan together with the Center for Strategic Communications "Apostol" is called "Heritage of Tatarstan". According to the brand's release, "this is the first brand in Russia that reveals the "cultural code" of the territory and sets the visual style for branding the Republic in relation to its historical and cultural heritage" ^[1]. – the brand's release says. Thanks to PR and competent branding, the republic has become one of the leaders in the field of domestic tourism in Russia, and the annual percentage increase in tourist flow varies on average around 11% [20 Each territory has developed its own brand, but at the moment not all regions of the Russian Federation effectively use this tool. Many regional authorities think that the brand is ready at the stage of creating a logo and slogan for the territory, but the brand of the territory is a broader concept. The brand needs to be promoted and illuminated. Saratov can be a striking example, the logo from the most famous designer of the country, Artemy Lebedev, did not bring the city either fame or distribution to the masses. The slogan sounds like this: "I love to visit Saratov", but there are no specifics or distinctive features, the same can be said about any other city in Russia [23].

N.V. Zubarevich, a specialist in the field of socio-economic development of regions, voiced her opinion on the development of the subjects of the Russian Federation in a lecture entitled "Can the whole country live like Muscovites?" ^[9]. In her opinion, it will be more effective to reduce not the economic inequality of the regions, but the social one, which implies an increase in the standard of living in the regions to the standard of living of residents of the capital of the Russian Federation. If successful, the problem of population outflow will be solved, a demographic crisis will be prevented, people will be motivated to work in their region, which will be able to meet their household needs, and they will begin to develop it. Thus, the economic disparity will gradually decrease. There are factors of "first nature" and "second nature". In a post-industrial society, for the development of territories, according to N.V. Zubarevich, it is more important to develop human resources, which will eventually affect the development of the subjects themselves.

V.M. Beloborodov, an expert in the field of economic and social geography, offers 4 ways to solve the problem of lack of human capital: the development of agglomerations; controlled compression of the periphery; promoting population mobility; establishing a system of interaction "government-business-population" in solving territorial problems ^[3]. All this will lead to the proper use of the region's resource base and stimulate municipalities, and, consequently, to the development of the region.

To summarize, it should be said that there is a large amount of typologization of regions. In this work, we relied on the principle, which in turn distinguishes 4 regions: depressed, pioneer, stagnant and program region. Depressive refers to a region that has shown high rates of development in the past, but is currently stagnating. The problem of disproportion is important and relevant, as solving it will help improve the standard of living of the population in each region of the country, increase the competitiveness of the regions and their investment attractiveness. These improvements will allow the regions to become independent and develop much more efficiently. At the moment, there are various measures for the development of regions in the Russian Federation. For example, the FFPR is the Federal Regional Support Fund, which is responsible for distributing subsidies by region. There is also an understanding in the highest circles of government about the need for the development of regions not only through the gradual development or technical improvement of existing mechanisms, but also through government initiatives. It is important to apply technologies used in other countries, because using existing and successful tools is much easier to integrate than starting all over again, you need to pay attention to practice abroad. As it was pointed out, there is a "cohesion policy" in Europe, the essence of which is to help specific companies so that they can improve the standard of living in the regions through their activities. Thus, regional inequality in the socio-economic sphere will decrease. Within the framework of a single country, this tool will work more optimally. It is worth paying attention to foreign experience, as well as to the competent integration of ideas into the Russian budget system, transformations should be deliberate and not cause rejection among the population.