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One of the investment policy’s priorities of the Government of the Leningrad Region is the creation of the appropriate conditions for attracting investment and further developing the investment process. The main aspects of the Leningrad Region's investment policy are listed below:
- Establishment of regional investment legislation and a legal base for business support;
- Making the region open from the information viewpoint;
- Establishment of a special market infrastructure to help the investment process;
- Restructuring of enterprises in order to increase their investment attractiveness.
Investment Potential
The total need of the Region in the investment resources today is not less than 10 billion US dollars.
With the needs of the local economy taken into account, the most promising sectors for investments are follows:
- Development of energy complex and power-consuming industries. Leningrad region is one of nine regions in Russia Federation with an energy surplus, and electrical costs for industrial consumers in this region is one of the lowest in the country;
- Development of thorough wood processing. The Government of the Leningrad Region is ready to lease to potential investors forest areas that will allow them to lay in and process about 5 million cubic meters of wood in a year in additional to the volumes stocked at present moment;
- Realization of transport and telecommunication projects. Raising year by year transit of cargo via Saint Petersburg and Leningrad Region will have to increase at not less then 100 million tones in a year according to “Transit” program worked out after the Edict of Russian Federation President that was signed on June 6, 1997. That will ensure rapid increase of transport capacities. It will include development of seaports and river-ports, automobile and railroad highways, airports and pipelines, and their exploitation will be profitable both for investor and Russia.
- Development of tourism. It would be a great mistake not to attempt to attract to the Region additional financial resources via the development of tourism activity. Leningrad Region possesses extremely picturesque nature, monuments from old times etc.
- Development of science consuming and higher technology industries. Enterprises of the Region has accumulated rich experience in this direction. Both production and personnel potentials are saved in the region, and they are continuously “fed” from scientific center and institutes of Saint Petersburg.
Restructuring of Industrial Enterprises
The reason for a restructuring program for enterprises is that, whereas the regional economy has become financially stable and highly liberal, the slow process of reforms at the level of certain enterprises remains one of the main obstacles to economic growth. The process of structural changes includes the following aspects:
- Liquidating reputedly unprofitable enterprises;
- Updating product assortment;
- Developing anti-crisis programs for certain enterprises;
- Optimizing the cash flows and reducing the maintenance costs for unprofitable production capacities.
The government uses several kinds of financial schemes and resources for the restructuring process. These include a bank line of the World Bank for Reconstruction and Development. Its total volume is US$85 million. Enterprises can get medium -- term loans under privileged terms for the purposes of updating their work with the help of foreign and Russian consultants and increasing their business and investor attractiveness for a wide circle of potential investors.
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