Feel the difference

In his annual message to the Federal Assembly President Vladimir Putin declared the necessity to create special centers of priority economic development in the Far East and Eastern Siberia.

“New enterprises situated on those territories should have a five-year tax holiday for income tax, mineral extraction tax (except oil and gas as those are profitable areas), land tax and reduced insurance fees rate, which is especially important for high-tech industry,” the president explained.

It is significant that in Ukraine similar idea appeared much earlier. In 2002 it was suggested by the secretary of the National Security and Defense Council Yevhen Marchuk. The strategy he developed provided for the creation of the so-called sociopolises meaning social-economic structures, indissolubly related to a certain territory and making fundamentally new socialized economy with a particular legal status. It was supposed to combine the advantages of a free economic zone of intellectual type with a complex strategy of priority economic, humanitarian and social development.

They even started implementing this idea. Ten years ago in the town of Reni (Odesa region) they started a pilot project to implement the idea of sociopolis in a “digital” city.

“I supported Marchuk’s idea since I considered and still consider it progressive and right,” mayor of Reni Serhii Kolevych told in his interview to Den. “I decided to implement one of the components of the sociopolis theory – the ‘digital’ city. First of all, using this model we managed to solve the main problem, to ensure the energetic security of the town. Secondly, we solved the problem of heating. The third achievement of sociopolis idea implementation was the privatization of housing.”

“Despite all the achievements we did not manage to implement everything,” the mayor continued. “First of all, because of the corruption. Corruption restrains everything. The second obstacle is manual budget handling the whole country suffers from. Besides, to make the idea of sociopolises work 10 to 20 Balcerowiczes are needed in the government or, at least, one Prime Minister Balcerowicz who would launch unpopular reforms in the country and accomplish them.”

Unfortunately, such cases have not become widely spread in Ukraine. What is the reason? Why did the Russians suggest the progressive idea and Ukraine that had this chance a long time ago did not use it?

“In Ukraine, as well as in Russia, it is very difficult to do that since the government is too centralized,” director of the center “Institute of the City” commented to The Day. “If city mayors had the real power, they would be able to invite investors, create tax incentives, involve different sources to projects, but now everything is decided in the center. The experience proves that such projects cannot be implemented without bribes. The only exception might be local small projects with the participation of the community and international investors. However, they do not make difference and cannot create the favorable climate throughout the country. The idea itself is clear, it is good and correct: giving a push to a certain region, making some preferences. But it is very difficult to implement such progressive ideas in Ukraine ten years ago and in Russia now.”