Position of the Company in the Industry
Region Included in the Company Area of Service – Leningrad Region
In comparison with the majority of Russian regions, the Leningrad Region shows a higher degree of resistance to current economic conditions, thanks to its favorable geographical position near St. Petersburg and on the basic transit routes between Russia and EU.
In general, the year 2010 became successful for the Leningrad Region6 in all industries of the economy and in the social sphere. The growth of GRP unlike many other regions of the Russian Federation, the index of industrial production, essentially exceeding the average Russian indicator7 , and the volume of investments into fixed capital were noted. The level of incomes on the consolidated budget, which is yet remaining social-focused, was exceeded. Also, in 2010, a bonded loan issued by the Government of the region made in 2003 was successfully repaid, which confirmed the reliability of the region as a business partner confidently coping with its commitments.
Throughout the long period the Leningrad Region has been one of the most rapidly developing regions of Russia with great investment potential. According to the Ministry of Regional Development, the region takes second place in investment appeal among all subjects of the Russian Federation after the Tyumen Region. There are more than forty projects with a volume of investments exceeding USD 100 mln in the investment portfolio of the region. In parallel with work to attract major investors, a series of measures to support entrepreneurship and the development of small and medium-sized business was implemented. Taking into account the interests of development of the regional economy, among the most perspective spheres of capital investments are the fuel-energy complex and the development of power-consuming industries, high-tech technologies, tourism and tourist infrastructure, and a number of others.
As a whole, there is improvement in a number of indicators of development of regional economy relative to the previous reporting year, although the Leningrad region failed to reach the pre-crisis level of economical development to the full in the reporting year. The growth of trade turnover was observed in the region (thus, trading balance is positive). The change of real monetary incomes is also positive.
The Leningrad Region went on with intensive industrial development in 2010: the basic direction of the economy, which is the key source of filling the regional budget. The index of industrial production exceeded the level of the last reporting year. Processes of re-structuring of industrial enterprises through various funding mechanisms and sources, including a line of credit of the International Bank for Reconstruction and Development to the Government of the Russian Federation (total USD 85 mln) have proceeded.
In addition, there have been good results in the construction industry of the Leningrad Region. Rates of house building in the region for 2010 increased by 1%, which testifies that the industry overcame the negative consequences of the financial and economic crisis. On the indicator of commissioning of general floor space put in operation in the North-West Federal District, the Leningrad Region is in second place among the subjects of the NWFD. Stable rates of development in 2010 were also kept by agriculture.
Among the main negative trends in the economy of the region is the growth of consumer price index. Its value has reached 111.1%, which exceeds both the level of the last reporting year (by 1 percentage point), and the nationwide CPI (by 2.3 percentage points).
Actions of the Government of the Leningrad Region, aimed at further development of the regional economy and overcoming the consequences of the financial and economic crisis in 2010, were reflected in the Program of competition development in the Leningrad Region in 2010-2012. The program includes a range of activities designed to be an effective tool for improving the competitive environment in all fields of activity of economic entities in the region. It aims to develop the regional competitive environment, the stabilization of prices for socially significant goods and services, increase competitiveness of economic entities in the Leningrad Region, provision of food safety, the prevention and elimination of consequences of the crisis on key commodity markets, support of socially vulnerable population and increase of the public welfare level.
6 According to materials of the official representative of the Leningrad Region
7 The industrial production index of the Russian Federation for 2010 constituted 108.2%
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