The Role of State Policy in Attracting of Foreign Direct Investment to the Far East of Russia

In recent years (since late 2013) the federal government has intensified the policy of foreign investors attracting to the Russian Far East, proclaiming the need to integrate this macro-region in the Asia Pacific region and creating development institutions of the Far East, as well as preferential conditions for investors – the territories of priority socio-economic development, free port of Vladivostok. Investors are given massive tax preferences, regime of free customs zone, a number of other preferences. However, from the point of view of foreign investors many instruments of state investment policy – rather its lack, than advantage. Investment policy of regional authorities in the Far East is currently ranked low, in the National ranking of investment climate in subjects of the Russian Federation Far East regions, with the exception of Khabarovsk Krai, located in the second half. By the volume of foreign direct investment (FDI) stock Sakhalin oblast stands out among the Russian Far East regions, occupying on this indicator the second place among all subjects of the Russian Federation due to the action of agreements on production section, which appeared in 1990- ies. The shares of other Far Eastern regions in the FDI stock in Russia is still small. The state’s efforts in recent years to attract FDI to the Far East led to some increase in the volume of FDI stock in the macro-region, but not in all subjects of the Russian Fed eration. Preferential regimes are increasingly attracted domestic rather than foreign investors. Among the projects with participation of foreign capital projects focused on the domestic market of the Far East (agriculture, services) and the use of macro-region natural resources dominate. Projects on creation of manufacturing industries which products can be delivered beyond the Far East, including for export, yet few. The prospects for improvement, given the existing experience of the gradual development of new regions by foreign investors, but it requires improvement of the state investment policy both at federal and regional levels.

foreign direct investment stock, the Far East, the Asia-Pacific region, agreements on production sharing, territories of priority socio-economic development, free port, development institutions

1. Gonchar K., Marek P. (2013). Naturalresource or Marketseeking FDI in Russia? An Empirical Study of Locational Factors Affecting the Regional Distribution of FDI Entries. IWH Discussion Papers, (3). 41.

2. Ivanter V., Kozhemyako O., Kuvalin D. (2013). Long-term socio-economic development of the Far East and Transbaikalia: problems and tasks. Problemy prognozirovaniya, (4). 3-14.

3. Kashina N.V. (2016). Advanced special economic zones: the new instrument of investments attraction to the Far East of Russia. Ekonomika regiona, 12 (2). 569-585.

4. Korzhubaev A.G., Eder L.V. (2010). R Foreign investments role in oil and gas industries of Russia. Problemy ekonomiki i upravleniya neftegazovym kompleksom, (12). 10-15.

5. Kryukov V.A., Kuleshov V.V. (eds.). (2017). East of Russia: problems of development – overcoming space. Novosibirsk: Izdatel’stvo IEOPP SO RAN. 484.

6. Kuznetsov A.V. (2007). Internationalization of Russian economy: Investment aspect. Moskva: KomKniga. 288.

7. Kuznetsov A.V. (ed.). (2016). Optimization of investment relations of modern Russia. Moskva: IMEMO RAN. 120.

8. Kuznetsova O.V. (2016). Special economic zones: effective or not? Prostranstvennaya ekonomika, (4).129-152.

9. Leonov S.N. (2017). Instruments of the state regional policy in the Far East of Russia. Prostranstvennaya ekonomika, (2). 41-67.

10. Makarov I.A., Morozkina A. (2015). Regional Dimension of Foreign Direct Investment in Russia. Drivers of Regional Integration: Value Chains, Investment and New Forms of Co-operation. Johannesburg. 45-71.

11. Minakir P.A. (2014). New development strategy for the Far East of Russia: assessment and prospects. Kontury global’nykh transformatsii: politika, ekonomika, pravo, 7 (4). 6-14.

12. Minakir P.A. (ed.) (2017). The Russian Far East on the way to the future. Khabarovsk: IEI DVO RAN. 395. The Far East: mechanisms for supporting investors. (2017). 24. URL: http: //investinrussia.com/data/file/ru-en-far-eastsupport-mechanisms-for-investors.pdf (Accessed: 15.01.2018)

13. The Impact of Foreign Direct Investment on the Socio-Economic Development of the Far East of Russia. (2013). Moscow: CEFIR. 110.