Russian gov't details work of economic zones

Special economic zones meant to provide IT industry support have turned into a driving force behind general economic development in Russia and were highlighted at a recent conference aimed at showcasing investment opportunities of the zones.

The economic zones represent a new pattern of public-private partnership, receiving presidential approval in January 2005 during a conference in Novosibirsk on IT industry development issues.

Maksim Bystrov, deputy head of the Federal Agency for Special Economic Zones Management within the Economic Development Ministry, has described these special areas as major growth centers that can show investors how well Russia's economy can perform when unrestrained by various hurdles.

Currently, there are three different types of special economic zones. The Law on Special Economic Zones adopted in July 2005 introduced the notion of industrial and technology implementation areas. The amendments made to this law in July 2006 also introduced tourism and recreation zones. The legislation on special economic zones will see further development, with the Russian parliament Duma expected to consider more amendments that will introduce special port areas.

Every time new special economic zones are introduced the initial competition is among the Russian regions. Once a zone has been located, businesses move in and competition starts among companies. Currently, there is no rush of businesses to the special zones, according to Bystrov. However, since the number of places available is limited, the special economic areas will eventually run out of space.

"So far the residents selection process has not been restricted by space availability. However, this will inevitable change as more residents move in," Bystrov said.