Which Russian regions are competitive?

While the republics of Karelia and Komi, as well as Murmansk Oblast have entered the number of Russian regions with medium level competitiveness, Arkhangelsk Oblast together with the Nenets Autonomous Okrug is among the regions with a low level of competitiveness.

The so-called IRPEX rating is based on studies of 83 Russian regions.

Arkhangelsk Oblast

According to the analysts, Arkhangelsk oblast is the least competitive region in Northwest Russia taking the 63rd position in the rating. The experts note that economic development of the region is negatively influenced by the deficit of the regional budget caused by tax reductions. A high level of unprofitable enterprises, low level of capital investments and old material and technical basis are the main weaknesses of the region. The IRPEX experts advice that innovative activities are stimulated, thus promoting economic growth.

Arkhangelsk oblast takes the 5th place among the 10 regions of NW Russia. The region has a relatively low level of unemployment which is caused by the deficit of labor resources and low level of competition among the business companies. The insufficient competitiveness is reflected at the social welfare of the population: 20 percent of the inhabitants have incomes lower than the official minimum wage limit.

Murmansk Oblast

Murmansk oblast takes the 6th place among the subjects of Northwest Russia and its development generally corresponds to the average trends of the region. The regional diversified economy has a balanced development with innovative orientation. The regional budget proficit and high credibility of the banking system create a fundament for economic success. Severe natural and climate conditions stimulate population out-flow. The absence of efficient migration policy can bring a demographic crisis which in a longer perspective cause reduced of economic growth.

Republic of Karelia

The Republic of Karelia takes the 38th place in the IRPEX rating. The progressive development of Karelia is secured by a unique territorial potential of capitalization, something which serves as the most important factor of competitiveness. The financial system of Karelia is still in the beginning of the process of strengthening and this fact restrains economic development, however, the researchers say. Stable economic growth is provided by the development of the innovative potential. Development of technology is provided by means of introduction of new methods of territorial organization: establishing of special zones of intensive economic development. However, social and health indicators are still much lower than average and this may bring negative economic consequences in the future.

Komi Republic

The Komi Republic takes the 5th position in the North-West Russia and the 31st place in Russia. The economic growth of the region is secured by a high level of investment activity. Undeveloped transport infrastructure restrains growth and diversification of export flows from the region. Very high unemployment caused by mono-profile economy creates a high population out-flow. The competitiveness advantages are not supported by low quality of educational system and low integration of scientific products in the economy. The financial system and territorial potential make strong advantages for competitiveness level of Komi Republic but social indicators weaken these positions sufficiently. This correlation does not support long-term sustainable development of Komi creating a strong dependence from the inner and outer state of markets.

Source: IRPEX