PRESS: Russia to suspend establishment of special econ zones

MOSCOW, Jun 9 (PRIME) -- Russia will suspend establishment of new special economic zones and dismantle existing inefficient zones, business daily Kommersant reported on Thursday, citing a presidential order to the government and letters of federal authorities.

The Kremlin says that out of 33 existing zones, 10 can be shut down.

President Vladimir Putin heard of the issue of budgetary funds spending inefficiency in November 2015, when a representative of movement All-Russia People's Front told him that government’s funds are put on deposits with banks to earn a yield by state enterprise Special Economic Zones rather than being spent on production and infrastructure.

Putin ordered an investigation and according to a report made by Konstantin Chuichenko, head of the control department of the presidential administration, out of 186 billion rubles spent on special economic zones since 2006, 24 billion rubles have been left unspent, the zones created 18,000 jobs out of 25,000 planned by January 2016, and each new job cost the budget 10 million rubles, which is an average wage a Russian gets over 25 years.

A source in the Economic Development Ministry said that the ministry is indeed working on investment optimization but he thinks that Russian zones are “quite competitive.”

As of January 1, there were nine industrial, six innovation, three port and logistics, and 15 tourist zones, according to the daily.

(64.6797 rubles – U.S. $1)

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