The Minister of the North-Caucasian district invited the European investors to the North Caucasus Federal district

AEB presentation of Lev Kuznetsov

The development of the North Caucasus (North Caucasus Federal district) has exhausted the path and now seeks to attract private investment for further development, – said Lev Kuznetsov, the Minister of the Russian Federation for the North Caucasus, to the members of the Association of European Businesses at his briefing on 15 November 2016. He also invited foreign investors to consider specific investment projects on conditions of public-private partnerships (i.e. with the participation of public funding).

  1. Agriculture

Agriculture is a priority for the region from the point of view of participation in the import substitution of vegetables and fruit, seed and sheep breeding. For example, for apples potential is estimated at 1 million tons. Special direction of agriculture in the region is Halal (created according to Muslim traditions – approx. ed.) production.

Лев Кузнецов, Министр СКФО на брифинге в АЕБ

Also, in addition to the domestic market, there are opportunities for export to Southeast Asia, China, the middle East. In addition to regional preferences there are special investment zones, where the state provides investors with the per-hectare support, compensates the direct costs. Work in this direction is already in process, companies from Slovenia, Italy and other countries work in Caucasus.

  1. Туризм

Лев Кузнецов отметил, что наиболее перспективной сферой направления является горнолыжный отдых, известный сегодня в качестве таких известных представителей особых экономических зон, как Архыз, Ведучи, Матлас и Эльбрус. Направление туризма курирует специально созданная компания “Курорты Северного Кавказа”, работающая на государственном уровне. На развитие направления выделяется около 13 млрд руб из госбюджета. Благодаря принимаемым мерам, ежегодно количество туристов в регионе растет на 20-30%.
«Мы понимаем, что здесь должна увеличиться доля частных инвестиций», – сказал Л. Кузнецов. И указал, что в планах правительства «развивать средний и малый бизнес, стимулируя проживание на традиционной территории».

  1. Medical cluster

Niche for the development of medicine in the region is import substitution, because at the moment more than $1 billion per year Russians spend for treatment in Israel and China. At the same time, the project of the medical cluster is based on an integrated approach: new quality of education (especially in balneology – treatment with mud and salts), scientific knowledge and the development of therapeutic processes. Accordingly, the region requires investors engaged in science, management and education.

The participation of the state in this case represents an investment in the University, the hospital and infrastructure, the rest – private investments.

  1. Other projects

In addition to the above promising areas, there is possible consideration by the region and other interesting projects. For example, in the development of light industry, energy, development of tungsten deposits, deliveries from Europe through Iran to India and China.

According to Lev Kuznetsov, today, the Russian government pays special attention to the development of the North Caucasus region, and this affects his current position. In the Caucasus, contrary to common trends, we see a stabilization of cooperation,” he said.

Investors in Caucasus enjoy advantages, such as geographic location at the crossroads of trade routes (especially the Silk Road), and demographic (labor surplus).

There are also disadvantages, such as a small amount of natural deposits, bad reputation, thanks to which it has investments primarily from the state, aimed at social needs (education, health, etc.). Also investors have serious doubts about the safety and solvency of the region, therefore, the amount of foreign investment in the region is minimal.

Source: Association of European Businesses