Valentin Konovalov, a member of the Communist Party of the Russian Federation (CPRF) and head of the Republic of Khakassia, a constituent region of Russia located in the south of Eastern Siberia, made a speech at the economic forum in the city of Oryol, in which he showcased the achievements of the republic under his leadership. However, his words sounded to many people in Khakassia as if he were talking about some other territorial entity of the Russian Federation.
The Second International Economic Forum was held in the Oryol region in mid-March. Many noted that it looked like a summary conference of the CPRF. The event was attended by the entire leadership of the CPRF. In fact, Gennady Zyuganov was the host of the forum. Perhaps, it happened because Andrey Klychkov, governor of the Oryol region, is a communist and one of the functionaries close to Zyuganov.
Konovalov was one of a chain of speakers at the forum. Odd things began to happen at the very moment when he was introduced by Gennady Zyuganov. The latter stated that Konovalov was the head of the region, who had been “elected seven times.” “He was chased both by oligarchs and private security officers,” added Zyuganov. What he meant by that remains a puzzle.
In autumn 2018, Konovalov became head of Khakassia for the first time. Prior to that, he had worked one term as a deputy of Abakan city council and two and a half months as a deputy of the Supreme Soviet of the Republic of Khakassia. Notably, Konovalov himself did not correct Zyuganov’s mistakes. He talked for almost half an hour about how flourishing the republic was getting under his government. According to Konovalov, Khakassia had ridded itself of its “corrupt legacy” and made a breakthrough in the field of public-private partnership. It is working to cut down the tariffs for residents, to minimize costs and to increase incomes. “Now, business people know that fair competition exists,” said Konovalov.
However, those who have been following the economic and political news from Khakassia for the past year and a half have objections to almost every part of his speech. Not so long ago, last year’s results of investment operations in the republic were reported. Capital investments have been estimated almost in 22 bln rubles ($275,965,800.) In comparison with 2018, it fell almost 5%.
A sample survey of entrepreneurs showed that due to the impact of inflation, rigid regulatory framework, price fluctuations in the global energy market and expensive loans, investment activity is declining. At the same time, neighboring regions of the so-called “Yenisei’s Siberia” (Tuva and the Krasnoyarsk territory) are increasing their investment rates. Overall, in 2019, the volume of investments in fixed assets in Tuva exceeded 1 bln rubles ($12,543,900) which is more than twice as much as the progress made in 2018.
“At the end of last year, a number of bills were adopted to provide tax benefits for business,” Yevgeny Mamaev, head of the Khakassia’s branch of the All-Russia People's Front, told wek.ru. “At that time, it was presented as a measure that would facilitate mass re-registration of businesses from other regions in Khakassia. The inevitable fall of taxes collected from Khakassia’s businesses should have been made up by an inflow of taxes from re-registered companies and individual entrepreneurs. As a starting point let us take the number of legal entities registered for taxation as of September 2019. No wide-scale inflows are observed. Moreover, there was even a decline by 61 legal entities. There is no talking about any breakthrough. In December 2019, forty new companies were registered, and 178 companies were officially liquidated. In January 2020, twenty-seven firms were registered, and 35 ones were officially liquidated. As we can see, the number of liquidated companies is noticeably higher than the number of the new ones.”
The beginning of this year was not optimistic either. In January, the total investment rate rose by only a tenth of interest rates. The raw materials segment has sustained the biggest losses. While in January 2019 the indicator was 118.6%, now it is only 105.5%. Compared to the same time period of last year, two sectors, electricity, gas/steam supplies (104.2%) and water supply (102.7%,) displayed positive dynamics. In January, manufacturing industries also faced a crisis. Last year, this sector of the regional economy showed significant growth estimated at 109.4% while in January of this year it went down to 94.7%.
Also it should be recalled that Khakassia has a continuing government debt. Recently, it has requested financial assistance. The request was addressed to the Russian government. Moreover, there is a long-running conflict with the energy sector due to which many social facilities in the region are under constant threat of shutdown.
In addition, the CPRF also accidentally “exposed itself” at the Oryol forum. The Liberal Democratic Party of Russia quickly jumped at an opportunity the CPRF of violating quarantine measures in Russia for a PR stunt, saying the Communists had gathered hundreds of people from different regions of the country in one place, facilitating the spread of the coronavirus.
“During a pandemic, all people have to stay at home,” the LDPR press service said. “The CPRF does the opposite because its members don't care. We hope that Russian President and minister of justice will hear us. Oryol’s mayor should be dismissed, and the CPRF should be banned.”