1. Vladimir Yakushev: “We are not going to give up our ‘oil needle’.”

Vladimir Yakushev: “We are not going to give up our ‘oil needle’.”

26.10.2012

Governor Vladimir Yakushev of the Tyumen Region dwells on the state of affairs in various sectors of industry and social sphere of the 72nd region, as well as expresses his opinion about Russia’s accession to the WTO, and a would-be economic crisis.

Now the Tyumen Region is not only proud of its crude hydrocarbons extracted from beneath the Siberian soil, but also, what is more important, it even tries to overcome this dependence. Why?

Don’t put the question so stringently that today we are trying to free from our oil dependence. Actually this dependence is not so bad. We clearly understand that oil industry is one of the fundamental sectors of the economy which replenishes the budget seriously. The question is that in addition to the development of everything which is connected with the production of hydrocarbons we must develop other industries. We are not going to give up our “oil needle” since in the nearest future the industry will remain no less promising from the viewpoint of both, swelling the tax base and creating jobs. Besides, oil and gas production is one of historically formed directions of development of the Tyumen Region.

Annually the extraction of crude at the oil fields of the Uvat group grows by 20-27%. This year oil production is expected to increase by 12%. We hope that new oil fields of this group will be discovered. By 2015 we can produce up to 10 million tons per year using the oil fields of the group. Most oil fields were discovered in 2009-2010, it enabled the region to survive the crisis and neutralize the downfall in other sectors of the economy due to the development thereof.

In the coming years the regional budget will lose the mineral tax and oil rent, how serious it is for the Tyumen’s treasury?

The shortfall of incomes due to the abolishment of the mineral tax is a substantial amount for the Tyumen Region. In 2009 mineral extraction tax proceeds accounted for almost one third of the regional budget incomes. Those areas of the economy which are developing in the region now will hardly compensate for mineral tax incomes in full. Nevertheless, the region places its stake on the intensification of oil production, as well as on several major industrial enterprises of not only a municipal and regional, but also of the Russian national level.

First, it is the petrochemical complex which is being built in Tobolsk. There are good prospects for the project development. Construction progresses at a rather dynamic pace, there are no reasons to think that the complex won’t be commissioned in 2013. Antipinsky Oil Refinery is another major project on the territory of the region. Its third phase is under construction. The enterprise will produce Euro-5 standard fuel. It is the first refinery on the territory of the former Soviet Union which has been built from scratch and where hydrocarbons will be refined using new technologies. And according to Rospotrebnadzor (Russian Federal Consumer Rights Protection and Human Health Control Service) it complies with all required environmental standards.

UGMK-Stal company is finishing the construction of the electric furnace steelmaking plant. This December the plant plans to deliver its first output. The new industrial enterprise creates more than one thousand jobs and is a permanent taxpayer.

The Tyumen Region is reach in forests, so the projects related with wood processing are being implemented there. Wood reserves are great, now only 25% of the volume which could be used annually is cut in the region. We are working at attracting investors to the processing of such kind of raw materials and pin high hopes on this industry.

What cities of the Tyumen Region will become special economic zones?

We have filed an application to the Ministry of Economic Development. Such zone needs to be established on the basis of the giant petrochemical complex in Tobolsk. Because material which today is imported will be produced there. Industrial production is aimed at import substitution. Many companies using polypropylene may open directly in the vicinity of the petrochemical plant. We need a free economic zone which will make it possible to create a great number of jobs.

According to the requirements of the Ministry of Economic Development there must be more than one site, so we have offered two sites in Tobolsk and one in Tyumen. By developing this area we could attract serious investors ready to come to the region and create a great number of jobs.

How do you manage to develop the agro-industrial sector under severe climatic conditions when temperatures are too low in winter and too high in summer?

We are intensively developing our agro-industrial sector, including plant growing, vegetable production, diary and meat cattle farming. We have made definite progress in all industry sectors. Naturally it means jobs, employment of people who are now living in the agricultural area. Last year climatic conditions in summer were favorable and the Tyumen Region gathered a bumper harvest. Many people even said that the price for grain was low, there was much grain and there was excess of grain. This year the situation has changed to the contrary due to a torrid summer and, in all appearances, farmers will face serious losses. If grain prices go up meat prices will go up too. Of course, we will evaluate the damage actually incurred by farms and take decisions of support. As for potatoes, this year a good crop will be harvested. However, the prime cost of potatoes is high because of artificial watering. But there will be no price fluctuation if we adjust the processing of potatoes.

Our president has said that differentiation of incomes is great in Russia. To what extent it is topical for your region?

The problems typical for the Russian Federation are typical for our region as well. The income gap shrinks but I cannot say that we have solved the problem… I suppose this is far from it. For this purpose we need to develop economy, create effective jobs so that people could receive worthy salaries. We need to work all together in this area, jointly, pool efforts of the federal, regional, and municipal authorities. Civil society should also take an active part in this process. Of late we have spoken too much about personnel training, professional ability to fulfill these or those tasks. That is why the problem is of comprehensive nature. The average salary in the Tyumen region amounted to 24,700.00 rubles in 2011. According to our estimates in 2012 it will exceed 20,000.00 rubles. This figure is growing from year to year, we have reserves.

What is going on in the Tyumen Region in the area of high-technology medicine?

The key project of the Tyumen Region in the sphere of public health is the creation of the so called medical city. The project provides for the placement on one and the same site of different clinics specialized in various areas of medical assistance. It includes the Federal Neurosurgical Center, Regional Clinical Hospital No. 1, and Medical Sanitary Station “Neftyanik”.

How much does one square meter of residential space cost in the Tyumen Region?

Unfortunately, housing has become much more expensive, depending on the district its value varies from 40 to 60 thousand rubles per 1 square meter. Demand is too high. Probably, it is connected with the fact that the citizens of Tyumen would wish to somehow protect their savings. That is why people buy flats actively and there is a sense of deficiency on the housing market. We have released a lot of programs aimed at the acquisition of housing for different categories of population. Now we are carrying out activity for the purpose to considerably increase the number of offers on the market next year.

Which industries of your region need investments most of all?

Just as in other Russian regions, mechanical engineering industry and agro-industrial sector need investments. Small and medium-sized business wouldn’t mind investments, too. We can say that there is some progress in attracting investments and creating a favorable investment environment in the region. But to say that we have solved this problem in full and there is no deficiency of investments would mean to overestimate the situation.

How would you comment on Russia’s accession to the WTO?

Of course, it is necessary to begin speaking about the competitiveness of goods produced by any industries. As well as about subsidizing. As for the agro-industrial sector, for instance, it is necessary to take all measures to be competitive, and the government authorities must protect producers. In general, Russia wins as a result of its accession to the WTO. Though there are some difficulties in the agro-industrial sector and automotive industry we have advantages in metallurgy. One needs to understand that this process was inevitable. But now we have an opportunity to develop.

What do you think about a would-be economic crisis?

No matter how hard we try to avoid it Russia depends on oil price fluctuations. When oil prices drop the economic growth slows down. In addition to that the federal government must have anti-crisis programs. The fact that the government behaved in a right way enabled us to overcome the 2008-2009 crisis. We ‘climbed out from the pit’ rather quickly. Since that time the economy of Tyumen increased by 20%, and this year we add 16%.

Itogi. Federal Press.

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