Special economic zones as a mechanism for territorial development ensuring national security in the context of sanctions restrictions

Starovoitov Vladimir Gavrilovich ORCID: 0000-0002-7595-6379 Doctor of Economics Professor; Department of Economic Security and Risk Management; Financial University under the Government of the Russian Federation Chief Researcher; Institute of Economic Policy and Problems of Economic Security; Financial University under the Government of the Russian Federation (Financial University) 125993, Russia, Moscow, Leningradsky, 49/2, office with a note – Institute of Economic Policy and Economic Security Problems vladstar1953@yahoo.com Other publications by this author

Krupnov Yurii Aleksandrovich ORCID: 0000-0002-9524-3747 Doctor of Economics Leading researcher; Institute of Economic Policy and Problems of Economic Security; Financial University under the Government of the Russian Federation (Financial University) 125167, Russia, Moscow, Leningradsky, 49/2, office. marked – Institute of Economic Policy and Problems of Economic Security yukrupnov@mail.ru Other publications by this author

Introduction

According to the global sanctions monitoring database Castellum.ai As of August 2, 2024, 22,230 sanctions restrictions have been imposed on the Russian Federation by many countries and international organizations.

In this regard, the inflow of foreign direct investment to Russia has significantly decreased ^[1].

Due to the accepted restrictions, problems arise in a number of sectors of the Russian economy, in the financial, budgetary spheres, etc. Russia's access to modern technologies, innovations and investments, and modernization of industrial production is difficult^[2].

At the same time, ensuring the economic and national security of the country requires accelerating the growth rate of investments in fixed assets, stimulating the use of internal and external sources of financing for investment and innovation projects ^[3].

As international and domestic experience shows, in the context of globalized markets and growing competition, countries are forced to use complex organizational and economic tools to support and develop their economic systems^[4]. One of these tools is the special economic zones (SEZ). SEZs include territories allocated by the state that have a special legal status and a special business regime in the form of tax benefits, special customs regulations and prepared infrastructure.

Currently, under the conditions of severe sanctions restrictions, the Russian economy is undergoing a structural transformation based on domestic resources and domestic capital. In this regard, special economic zones with developed infrastructure and preferential economic conditions are becoming a key tool for using this resource and capital to restart the investment cycle in the country^[5]. They help to increase import substitution, strengthen technological independence, and explore new niches and markets^[6].

SEZ as a mechanism of territorial development is primarily:stimulating the economic development of individual regions and the state as a whole, attracting investments, providing employment, and creating new jobs. The incentive is provided through tax preferences, customs privileges and preferential rental rates for land plots. Reducing the cost of creating a new production facility is ensured by the infrastructure created at the expense of the state budget, etc.

The SEZ as a mechanism for ensuring national security in the context of sanctions restrictions is, in addition to economic growth, acceleration of import substitution and localization of production in industrial-production and technical-innovation-type SEZs; export growth, production of new, competitive products, accelerated introduction of new technologies and innovations, increasing the technological sovereignty of the country, etc.

There are examples of successful creation and functioning of special economic zones in the Russian Federation^[7]. The analysis of the formation process and the activities of such zones is of interest to representatives of state and municipal management structures and businesses^[8]. The article presents the results of an analysis of the phased formation, formation and dynamic development of the new SEZ "Vladimir" and defines the role of the main participants in this process. The recommendations developed in the study can be used by the authorities in addressing issues of supporting the Russian economy and ensuring national security in the context of sanctions restrictions^[9]. This determines the relevance of the study.

It should be noted that after the appearance of Federal Law No. 116-FZ dated 07/22/2005 "On Special Economic Zones in the Russian Federation" and the formation of the first SEZs, a significant amount of research was carried out that affects various aspects of the creation, functioning and development of special economic zones^[10]. Among foreign and domestic scientists who have devoted their scientific research to the problems of the formation, functioning and development of special economic zones, including under the conditions of sanctions restrictions, Sonnenfeld J., Tian S., Sokolowski F., Virebkowski M., Kasprowicz M.^[1], Erickson J.L. ^[2], Shin G., Choi S.-U., Luo S. ^[3], Marianats, Drazen, Alfirevich, Anna ^[4].Novikov T. V., Goryacheva I.I.^[5] Shuleiko D.Ch. ^[6];Rubtsova L.N., Chernyavskaya Yu.A.^[7], Peshkova G.Yu., Mikhalchuk K.M.^[8], Bulavko O.A. ^[9]; Drobot E.V., Makarova I.N. et al. ^[10] ; Arskaya E.V., Kravchenko L.N., Usatova L.V. ^[11], Vasilyeva O.N., Polgar T. ^[12]; Yarkova T.M. ^[13], Pukhova A.V.^[14], Kalashnikova N.P., Pavlova O.K. ^[15], Iskindarova D.Z. ^[16], Bakumenko M.A. ^[17], Demidova, I. A. ^[18], Plunket B. ^[19], Van Noorden R. ^[20].

At the same time, the above articles do not take into account the unprecedented level of anti-Russian sanctions that had developed by the middle of 2024, therefore, the analysis performed, as well as the successful work on the formation and establishment of the Vladimir SEZ in such conditions, is an increase in scientific knowledge in relation to what was previously reflected in scientific publications.

Formation and establishment of the Vladimir Special Economic Zone

On December 14, 2022, Mikhail Mishustin, Chairman of the Government of the Russian Federation, signed Resolution No. 2299 "On the establishment of an industrial-type special economic zone in the Territories of the Municipalities of Kirzhachsky District and Alexandrovsky Municipal District of the Vladimir Region."

The total area of the SEZ was 143.47 hectares. The Technopark of Engineering, Climate Systems and Electronics (IKSEl), Rusklimat IKSEl, became the fundamental structure of the created special economic zone.

The Rusklimat IXEL technopark has been formed since 2014 on the basis of the property complex of the former city-forming enterprise of the Kirzhachsky district, the Avtosvet plant. It should be noted that in 2011-2013, regional and municipal authorities managed to preserve this property complex as a single whole. This made it possible for the new owner to organize successful production and business activities in a short time.

In 10 years, Rusklimat IXEL Technopark has become one of the largest industrial complexes in Russia. It has become an infrastructural site of a special economic zone, created in record time.

The residents of the Technopark are high–tech enterprises producing heating, ventilation and climate systems. Rusklimat IXEL Technopark has become a city-forming enterprise for the municipality. Every fifth able-bodied resident of the Kirzhachsky district is employed at its factories.

The Technopark has become a leader in many product areas not only in Russia, but also in the world.

The company produces almost all types of heating systems and a wide range of climate control devices. It is home to the world's largest production of sectional radiators and Russia's largest factory for the manufacture of steel panel radiators. The Russian Convector company manufactures indoor floor convectors, and the VentComponent company manufactures heat exchangers.

In 2021, Rusklimat IXEL Technopark became the eighth interregional industrial cluster included in the register of the Ministry of Industry and Trade of Russia and the first association of enterprises producing heating, ventilation and climate technology. The cluster includes 13 industrial enterprises of the Vladimir Region and Udmurtia, as well as Vladimir State University and Izhevsk State Technical University. The inclusion of the main universities of the regions in the "cluster agglomeration" allows attracting promising young specialists to the real sector of the economy, as well as developing competencies in the field of innovation and science. The cluster development program provides for the implementation of joint projects until 2026 aimed at import substitution and localization of production in Russia. As a result of the implementation of the cluster approach, the regions and cluster members have received a significant development boost.

The creation and dynamic development of the Rusklimat IXEL Technopark, as well as its transformation into an Interregional Industrial Cluster, predetermined the formation of the Vladimir special economic zone in 2022.

During the second half of 2022, the Regional Administration, represented by the Governor of the Vladimir Region and the management of the Rusklimat Trade and Production Holding, held numerous negotiations with representatives of government and business structures, organized the work of a group to prepare a package of documents for submitting an application to the Government of the Russian Federation for the creation of a SEZ. During the development of the documents, advisory support was provided by the Association of Clusters, Technoparks and Special Economic Zones of Russia (AKIT RF), as well as various ministries and departments.

The signing of the Decree of the Government of the Russian Federation on the creation of the SEZ in December 2022 was preceded by a visit to the Rusklimat IKSEl Technopark by a government delegation headed by the Prime Minister of the country.

In December 2024, two years have passed since the beginning of the formation of the SEZ "Vladimir", it is necessary to conduct a chronological analysis of the formation and activities of the SEZ, summarize some results and draw conclusions.

In January-February 2023, in accordance with the order of the Ministry of Economic Development of the Russian Federation No. 39 dated 30.012023 and the Agreement dated 08.02.2023 No. s-8-DV/D14, the authority to manage the special economic zone was transferred to the Government of the Vladimir Region.

In March 2023, by Order of the Governor of the Vladimir Region, the authorized bodies for the management of the SEZ were identified - the Ministry of Economic Development and Industry of the Vladimir Region and the Ministry of Architecture and Construction of the Vladimir Region. These bodies maintain the register of SEZ residents, monitor the execution by residents of the agreement on the implementation of industrial and production activities, and also perform the functions of the state customer for the preparation of documentation for the planning of the territory within the boundaries of the special economic zone and the creation of engineering, transport, social, innovative and other SEZ infrastructures at the expense of the federal budget, the budget of the Vladimir region, local the budget.

By Order of the Government of the Vladimir Region dated 03/07/2023 No. 120-r, the expert council of the Vladimir industrial-type special economic zone was established.

The SEZ "Vladimir" has created favorable conditions for conducting and developing business.

The special tax and customs regime of the Vladimir SEZ is presented in Table 1.

Table 1 – Special tax and customs regime of the SEZ "Vladimir"

Source: [Official Internet portal of the Ministry of Economic Development and Industry of the Vladimir Region [Electronic resource] URL: https://economy.avo.ru/mery-podderzki-rezidentov (accessed 02.12.2024)]

As can be seen from Table 2, the payment of corporate income tax to the federal budget by SEZ residents is carried out in accordance with the requirements of the Tax Code of the Russian Federation – 2%.

In addition, taxpayers with SEZ resident status have reduced corporate income tax rates payable to the regional budget: 0% for 7 tax periods, 5% for the eighth to twelfth tax periods, and 13.5% from the twelfth tax period during the SEZ regime.

Also, residents of SEZs in the region are provided with benefits for transport tax for 10 tax periods and land tax for the first 5 years, and corporate property tax for 10 years.

At the same time, each resident of the SEZ "Vladimir" is obliged to make an investment contribution, including through capital investments, of at least 120 million rubles in the implementation of industrial and production activities. These financial resources are used to ensure the functioning and development of the SEZ.

12 new residents were registered in the Vladimir SEZ during 2023-2024 (see Table 2 (as of 10/16/2024))

Table 2 – Register of residents of the Vladimir industrial-type special economic zone and type of products

Source: [Official Internet portal of the Ministry of Economic Development and Industry of the Vladimir Region [Electronic resource] URL: https://economy.avo.ru/rezident-oez-ppt-vladimir (accessed 12/01/2024)]

According to the SEZ development plan, at the first stage in 2023-2027, investments will amount to 18.8 billion rubles, and by 2031 they will exceed 30.87 billion rubles, which makes it possible to create about 6 thousand new jobs in the region.

During 2023-2024, for the purpose of engineering the special economic zone at the expense of the federal and regional budgets, work was carried out on the construction of gas supply networks, roads, electricity, water supply and sanitation networks.

The Kirzhachsky district municipality has allocated and registered land plots with an area of 290 hectares for the development of the SEZ.

On October 9, 2024, the opening of a new plant for the production of industrial refrigeration and ventilation equipment "Shaft Technology" took place, and on October 16, a resident of the SEZ "Vladimir", LLC "Kirzhach Milk", laid a time capsule in the foundation of a new dairy production plant (the Governor laid a time capsule in the foundation of a new plant in Kirzhach//The regional newspaper Krasnoe Znamya [electronic resource] URL: https://kr-znam.ru/inova_block_issueset/273/90621 / (date of request: 12/22/2024)).

(Russian President Vladimir Putin has launched a new Shaft Technology plant in Kirzhach via the Russian Aerospace Forces //The regional newspaper Krasnoe Znamya [electronic resource] URL: https://kr-znam.ru/inova_block_issueset/273/90521 / (date of request:05.12.2024)).

Interaction of regional and municipal government bodies with the SEZ "Vladimir".

The emergence of the Vladimir Special Economic Zone is a new stage in the economic and social development of the Vladimir Region. We are talking not only about additional jobs and increased tax revenues to the budget, but also about the growth of industrial potential, expanding opportunities for small and medium-sized businesses, improving infrastructure and people's quality of life.

The dynamics of the volume of shipped goods of their own production at the enterprises of the Kirzhachsky district is shown in Figure 1.

Figure 1 – Dynamics of the volume of shipped goods of the Kirzhachsky district Municipality in 2013-2024 in billions of rubles.

Source: [The official Internet portal of the Administration of the Kirzhachsky district of the Vladimir region [Electronic resource] URL: https://kirzhach.su/econom /?base=32 (accessed 12/01/2024)]

As can be seen from the graph, the volume of shipped goods of its own production increased significantly after the arrival of the IXEL Technopark on the territory of the municipality in 2014. The largest increase in this indicator is noted after the transformation of the Technopark into an interregional production cluster and into the Vladimir special economic zone in 2022-2024.

The growth of production was ensured by the influx of direct investments into the economic facilities of the Municipal Area.

Table 4 provides information on the volume of investments in the economy of the Kirzhachsky district in 2013-2024.

Table 4 Investment volumes in the economy of the Kirzhachsky District municipality in 2013-2024

Source: [The official Internet portal of the Administration of the Kirzhachsky district of the Vladimir region [Electronic resource] URL: https://kirzhach.su/econom /?base=32 (accessed 12/01/2024)]

As can be seen from Table 4, in the period 2013-2024, the average annual volume of investments in the economy of the Municipality amounted to 1 billion rubles.

To date, the number of employees in the SEZ has exceeded 4,000 people.

It should be noted that there is practically no unemployment in the Kirzhachsky district (see table 3 (as of 05.12.2024)).

Table 3 – unemployment rate in the municipality of Kirzhachsky district in 2000-2024

Source: [The official Internet portal of the Administration of the Kirzhachsky district of the Vladimir region [Electronic resource] URL: https://kirzhach.su/econom /?base=32 (accessed 12/01/2024)]

Currently, enterprises included in the SEZ are forced to hire (over 800 people) residents of the neighboring districts of the Vladimir region and the Moscow region.

It should be noted that in recent years, the tax base of enterprises located in the Kirzhachsky district municipality has increased significantly, and revenues to the federal, regional and local budgets have increased. For example, in 2015-2023, residents of the IKSEl Technopark transferred 7.6 billion rubles to the budgets of all levels. For many years, the percentage of own income in the consolidated budget of the Kirzhachsky district has been one of the highest in the region (from 50 to 80%), that is, it is characterized by a high level of "budgetary self-sufficiency."

Today, the average monthly salary in Kirzhachsky district is the highest in the region (more than 73 thousand rubles), in the special economic zone 97 thousand rubles. Due to the increase in income and the increase in the number of employees, the percentage of deductions to the local budget of personal income tax (personal income tax) has increased significantly, which forms 60% of the revenue side of the municipal budget.

In accordance with the National Security Strategy, the preservation of the Russian people and the development of human potential are among the most important strategic priorities of the Russian Federation. Sustainable natural population growth depends on many factors, including an increase in real incomes due to the creation of attractive, well-paid jobs, improving living conditions of citizens, increasing the availability and quality of housing, creating a comfortable living environment, etc.

The study analyzes the population dynamics in the municipalities of the Vladimir region and the region as a whole for the period 2019-2023, which are presented in Table 3.

Table 3

Population of the Vladimir region by year (2019-2023) total and by Municipality (people)

Source: [Electronic resource] URL: https://33.rosstat.gov.ru/storage/mediabank/население (5).htm?ysclid=m4brm3u51f112554907 (accessed: 30.09.2024)

As can be seen from the table, there has been a decrease in population in almost all municipalities and in the Vladimir region as a whole over the years. A stable demographic situation has developed only in two municipalities, Kirzhachsky and Suzdal districts. And if this situation in the Suzdal region is explained by the significant historical and cultural potential and attractiveness of one of the most visited cities in Russia, Suzdal, and the development of domestic tourism in recent years, then in the Kirzhachsky region the main reason for the stabilization of demography is the dynamic development of the economy and the availability of attractive well-paid jobs, including at SEZ enterprises."Vladimir."

Residents of the Vladimir SEZ are active participants in the ECG rating of Russian enterprises.

The results of the activities of special economic zones should have not only a positive economic, but also a social effect.

To systematize and support activities in the field of business social responsibility development, the government has developed an ECG rating. ECG (ecology, personnel, government). He evaluates the business reputation of companies, implemented environmental and charitable projects, the volume of social investments in the regions of presence, the quality and accessibility of the social package for employees.

Since February 1, 2024, the ECG rating has become the national Russian standard. GOST R 71198-2023 is a national standard that establishes a methodology for assessing business entities in three areas: "Ecology". The degree of environmental impact, the use of the best available technologies and the implementation of environmental projects. "Cadres". Salary level, own social and demographic programs, charity projects.

"The State." The company's tax history, business reputation, social investment in the regions where it operates, and interaction with business associations.

Source: [Electronic resource] URL: https://ya.ru/search /?text=ecology+personnel+state+standard&lr=10735&clid=2270453&win=558 (accessed: 11/30/2024)]

The first region to approve the model law "On the Development of responsible Business conduct" based on the ECG rating was the Vladimir Region - the region was selected as a pilot territory for the introduction of new standards for companies.

As part of this pilot project, all enterprises operating in the region are assessed on the basis of environmental performance indicators, wages, corporate benefits and compensation, as well as on the timeliness and completeness of tax payments to budgets of all levels. According to all these parameters, the enterprises of the technopark and the SEZ received the highest scores.

As a result of the ECG program, ordinary employees receive safer and more environmentally friendly jobs, an increased income level and a comfortable social infrastructure.

The ecology and safety of production is achieved by modernizing the production and technological base, as well as measures to reduce harmful emissions and reduce the burden on the environment.

Due to the improvement of corporate governance methods, the average salary of residents of the Rusklimat IKSEl technopark in the city of Kirzhach, Vladimir region, is 20% higher than the average salary in the region. Rusklimat Trading and Manufacturing Holding has provided an expanded voluntary health insurance package for all its employees. Since August 2024, more than 7,500 employees of the holding have been receiving high-quality medical care in leading medical clinics in Russia.

As part of a pilot program to create a comfortable living environment, the first employees of the technopark in 2023 received apartments in the Greenlight complex within walking distance from the enterprise for free from the holding. Currently, Rusklimat Housing and Communal Services has begun construction of another residential complex with 100 apartments, as well as a cottage settlement with 500 houses.

For housing construction, the products of Domus Mobile, a resident of the SEZ "Vladimir", are used, which produces modular prefabricated residential buildings made of composite materials with an energy efficiency index of the building at the "A++" level.

The Holding also actively cooperates with local authorities in the field of integrated territorial development. For example, he actively participates in a large-scale renovation program of one of the city's neighborhoods, implemented by local authorities as part of the federal program "Creating a comfortable Urban environment."

On December 10, 2024, a modern fitness center and a martial arts school opened on the territory of the technopark. Moreover, as part of corporate social responsibility programs, the Hospital Passage, a part of the urban area before entering the technopark, was completely reconstructed.

Assessment of the activities of the Rusklimat IKSEl Technopark and the Vladimir SEZ

On October 17, 2024, the Association of Clusters, Technoparks and SEZs of Russia, with the support of the Ministry of Industry and Trade and the Ministry of Economic Development of Russia, summed up the results of the X national rating of technoparks of the Russian Federation. According to the rating, the Rusklimat IXEL Technopark entered the TOP 5 best technoparks in Russia for the first time, along with the Elma, Technopolis Moscow, Zhiguli Valley and MORION DIGITAL technoparks.

Source: [Electronic resource] URL: https://akitrf.ru/news/akit-rf-podvela-itogi-kh-natsionalnogo-reytinga-tekhnoparkovrossii /?ysclid=m4q4jlqftz751780905 (accessed 12/15/2024)

The evaluation criteria are economic indicators, innovation activity and the effectiveness of the management company.

Thus, the high assessment of the activities of the Rusklimat IXEL Technopark, the fundamental economic structure of the Vladimir SEZ, characterizes the success of the formation and development of the entire special economic zone at this stage.

It should be noted that this result was achieved largely due to the coordinated, joint work of federal, regional, and municipal management structures and the Rusklimat IXEL Technopark.

The results of the successful activity of the technopark allowed the regional authorities to justify to the federal authorities the expediency and effectiveness of creating a special economic zone, quickly draw up the necessary documents and submit an application to the Government of the Russian Federation. The federal authorities responsible for developing state policy and regulatory regulation in the field of creation and development of special economic zones (SEZs) promptly decided to establish a SEZ based on criteria approved by the Government of the Russian Federation.

Municipal authorities address a wide range of issues that determine the effectiveness of SEZ operations. These include the allocation of land, participation in the formation of infrastructure, as well as solving social, in particular personnel, problems of SEZs and their residents.

It should be emphasized that the Kirzhachsky district municipality has been actively engaged in creating favorable conditions for the operation and development of economic facilities for many years. Since the early 2000s, several large investment projects involving domestic and foreign capital have been implemented in the municipality. The support and preservation of the property complex and human resources of the city-forming enterprises Kirzhachshelk LLP and Avtosvet Plant OJSC were carried out in overcoming crisis situations. The municipality has prepared and equipped the necessary engineering infrastructure for investment sites.

Recommendations:

In order to activate the processes of creation and development of SEZs under the conditions of sanctions restrictions, federal, regional, and municipal authorities are recommended to ensure:

1. Using the economic and geographical competitive advantages of the territory for the implementation of investment projects corresponding to the specialization of the SEZ. Such advantages should include the proximity of SEZ product sales markets, the availability of unique natural resources, human resources, etc.

2. Active participation in the preparation and development of investment and innovation projects and identification of potential investors. The basis for such developments should be Strategic Plans for the development of regions and municipalities.

3. Preservation of property complexes of economic facilities and human resources in municipalities, for its possible use in the creation and operation of SEZs. This approach was implemented in overcoming the crisis situation at the city-forming enterprise JSC Avtosvet Plant and the establishment and development of the Rusklimat IKSEl Technopark and the Vlvdimir SEZ.

4. Compact and systematic creation of investment platforms. Each site should provide for the implementation of projects in one or more related fields of activity. This process should be supported both by budgetary funds and by the investor coming to the investment site.

5. Using the principle of "market self-organization" to create a special economic zone when an investor takes an active position. This largely determines the dynamics and effectiveness of SEZ creation and development.

6. Using the cluster approach in the selection of SEZ residents to increase the efficiency of the special economic zone. The cluster approach makes it possible to reduce the logistical and other costs of residents in the production of goods and services.

7. Support the reorientation of the financing system for the creation and development of SEZs from the state budget to private investment flows. In this case, public finances are saved and, as a rule, the efficiency of the tasks being solved increases.

8. Support and implementation of ECG programs, as well as the development and use of a Public-private partnership mechanism. This increases social responsibility and business development, and accelerates the resolution of emerging problems.

Conclusions

1. The analysis of the formation and operation of the Vladimir special economic zone under the conditions of sanctions restrictions shows that the territory (Vladimir region and Kirzhachsky district) has received a significant boost in its socio-economic development, which makes it possible to address many issues of national security. Among them: saving the people, developing human potential, improving the quality of life and well-being of citizens, sustainable development of the Russian economy on a new technological basis, protection of sovereignty, independence, state integrity, etc.

2. The Territory has been characterized in recent years by: significant growth in industrial production; creation of attractive well-paid jobs; attraction of investments and new technologies; improvement of working conditions and productivity; stabilization of the demographic situation; construction of new housing; landscaping; support for social facilities; improvement of health insurance conditions for employees, etc.

3. The results of the study of the formation and development of the Vladimir SEZ can be used by state and municipal authorities and business representatives to address issues of socio-economic development and national security of the Russian Federation, as well as be useful for representatives of academia and the public.

^[1] Russia Sanctions Dashboard // Castellum.ai . URL: https://www.castellum.ai/russia-sanctions-dashboard (date of request: 04.12.2024).