Investor Presentaiton
14 Leonid B. Vardomskiy
people, or 80 people per 10'000 residents. In 1998, 2,699 new residents immigrated
(21 per 10'000 residents); in 1999, this figure went down to 2,011 (15 per 10'000 res-
idents), and in 2000, only 1,167 people wanted to immigrate to Ryazan (9 per
10'000 residents). In 2000, Ryazan was significantly less attractive to migrants
than the neighboring oblasts of Moscow, Nizhnii Novgorod, Lipetsk and
Vladimir. Migration is exclusively from the countries of the CIS, primarily from
Kazakhstan, Uzbekistan and Ukraine. Ryazan's population balance derived from
inland migration has been consistently negative. 6 This is evidence of another seri-
ous threat to the oblast - the transfer of skilled entrepreneurial specialists to other
regions, primarily to Moscow.
Another threat to the security of the oblast is the widespread poverty. In
1999, 680'300 people or 52.4% of the population had incomes below the minimum
wage of 802.90 rubles per month. In the third quarter of 2000, the share of
popu-
lation with income below the minimum wage of 840 rubles was 39.9%.8
One of the causes of poverty is rampant unemployment. In 1999, the num-
ber of jobless reached 74'600, or 12.4% of the economically active population. But
even employed residents collect below-average wages.9 The nominal income was
1'340 rubles at the end of 1999, which was 55% of the average Russian level. The
demographic problems and the shrinking migratory attractiveness of the oblast
are to a large extent due to the poverty of the population.
The average salary reached 1'646 rubles in November 2000. However,
employees of credit and financial institutions were paid 5'364 rubles on average,
and employees of the fuel industry (Ryazan PPP) had an average salary of 4'789
rubles. The other extreme in terms of salary can be found in the agrarian sector
(average wage 898 rubles), the cultural sector (837 rubles), and education (835
rubles).10
Poverty is linked to professions, and can therefore be seen as an expression
of regional determinants. Rural regions of the oblast and small cities without
industrial enterprises, which could generate competitive production, are among
the most poverty-stricken areas.
The growing polarization of the oblast along fault lines related to income
represents one of the most serious threats to social stability. The budget should be
able to counter this tendency. However, the oblast cannot ensure normal imple-
mentation of the budget and its spending part on the basis of its own income. The
sectors that depends the most on the budget (education, culture, public health),
6
7
8
9
Sotsial'no-ekonomicheskoe polozhenie Riazanskoi oblasti v 2000 g. (Socioeconomic Situation of
Ryazan Oblast in 2000). Ryazan 2001, pp. 104-106.
Riazanskaia oblast' v 1999g., Op. cit., pp. 78-79.
Sotsial'no-ekonomicheskoe polozhenie Riazanskoi oblasti v 2000 g. Op. cit., pp. 92-102.
Riazanskaia oblast' v 1999g., Op. cit., p. 49.
10 Sotsial'no-ekonomicheskoe polozhenie Riazanskoi oblasti v 2000 g. Op. cit., pp. 98-99.
Foreign Economic Relations of Ryazan Oblast 15
and those depending on budget subsidies (agriculture) are characterized by the
lowest incomes. In the period from 1995 to 2000, all oblast budgets, with the
exception of the 1998 budget, were implemented with deficits. In the budget
adopted for 2001, the upper limit of budget deficit was set at 9.9% of the oblast
income. In the budget income projection for 2001, 46.3% is provided by direct sub-
sidies from the federal budget. In 1999, this portion was 30.9%; in 2000, it
amounted to 23.5%. The income of the consolidated oblast budget, including free
subsidies from the federal budget, calculated per capita, reached 76% of the aver-
age Russian figure in 1998, and 58% in 1999.
Under proposed expenditures, the resources appropriated for the municipal
structures for the purpose of equalizing the budgetary support make up approx-
imately 32%.11 However, that sum is not sufficient to counteract the growing
polarization within the oblast.
The chronically low level of the budget income threatens to destroy the cul-
tural and scientific-educational potential of the oblast. The low income is due to
the low profitability of the economy, the high share (40-50%) of unprofitable
enterprises, and the drain of part of the profit out the oblast through corporate
channels. For example, to judge by the results of eleven months in 1999 and 2000,
the petroleum-processing industry (mainly the Ryazan PPP) lost money consis-
tently, regardless of the increased volume of petroleum processing and the rising
prices for petroleum products. 12
Detoriation of technological equipment and the infrastructure presents a
serious threat to the oblast. The results are decreasing competitiveness of the
economy and subsequent income cuts, budget deterioration, as well as a worsen-
ing ecological situation as a result of accidents, water and air pollution, and accu-
mulation of waste products. The oblast is characterized by a low investment
volume in capital assets. In 1997-1999, per capita investment in capital assets was
2-2.5 times lower than the average figure for Russia.
11 "Biudzhet 2001g. - k ispolneniiu" (Budget of 2000 - On the Way to be Implemented). Priok-
skaia gazeta, 16 March 2001, p. 2.
12 Sotsial'no-ekonomicheskoe polozhenie Riazanskoi oblasti v 2000 g. Op. cit., p. 78.View entire presentation