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ABOUT SOME INDICATORS OF SOCIO-ECONOMIC DEVELOPMENT OF THE REPUBLIC OF DAGESTAN for January-December 2016
Gross regional product
Index of output of goods and services by basic types economic activity for January-December 2016 increased compared to the corresponding period in 2015 and amounted to 107.8% (January-December 2015 - 105.9%).
Industrial production
Industrial production index for January-December 2016 to the corresponding period in 2015. amounted to 136.3%, against 105.2% in January-December 2015. The growth of industrial production compared to January-December 2015. influenced by an increase in: production of machinery and equipment - 2.5 times (JSC Dagdizel), production Vehicle and equipment - by 1.8 times (JSC Concern KEMZ), production, transmission and distribution of electricity - by 44.9% (Dagestan Branch of JSC RusHydro) and production of food products, including drinks and tobacco - by 5.7 % (OJSC Kizlyaragrokompleks, OJSC Derbent Brandy Factory, OJSC Rychal-Su). At the same time, there is a decrease in the production of fuel and energy minerals - by 7.6% (JSC NK Rosneft-Dagneft), production, transmission and distribution of steam and hot water - by 12% (JSC Makhachkala Teploenergo ", LLC "Caspian Heat Service", LLC "Dagestanenergo").
Agriculture
The volume of agricultural production of all agricultural producers (agricultural organizations, peasant (farm) enterprises, population) in January-December 2016 is estimated at 112,454.6 million rubles in current prices, and amounted to 104.7% (including crop production - 104. 7%, livestock - 104.6%,) compared to the corresponding period in 2015, against 105.2% in January-December 2015.
Construction
The volume of work performed in the “construction” type of activity for January-December 2016 amounted to 133,440.1 million rubles and increased compared to the corresponding period previous year by 4.0%. Large and medium-sized construction organizations completed work worth 8,841.6 million rubles in January-December 2016, which amounted to 121.0% of the level in January-December 2015. Housing commissioned in January-December 2016 with total area 1844.8 thousand sq. meters, which is 1.9% more than in the corresponding period of the previous year, including individual residential buildings - 1579.3 thousand square meters. meters, which is 12.5% more.
Trade and services
Retail trade turnover in January-December 2016 amounted to 671,214.4 million rubles, which in comparable prices is 1.9% more than the same period of the previous year. The increase in the growth rate of retail trade turnover in January-December 2016 was due to an increase in the physical volume of sales in the markets by 3.9% compared to the level of the corresponding period of the previous year. In the structure of retail trade turnover, the share of food products in January-December 2016 amounted to 52.4%, non-food products – 47.6%. The volume of paid services provided to the population of the republic through all sales channels in January-December 2016 amounted to 116,440.3 million rubles, which in comparable prices is 1.6% more than the corresponding period in 2015.
Finance
Finance. In January-November 2016, balanced financial results(profit minus loss) of organizations in current prices amounted to 3,750.2 million rubles of loss. Accounts payable of the surveyed organizations of the republic amounted to December 1, 2016. 80517.6 million rubles, including overdue – 28027.1 million rubles or 34.8% of total amount(as of December 1, 2015 – 32.4%). Accounts payable decreased by 3% compared to the previous month, and from same period of the previous year - increased by 13.9%, and its overdue amount, respectively, decreased by 3.5% and increased by 22.3%. Accounts receivable as of December 1, 2016 amounted to 30,085.9 million rubles, of which overdue – 6,631.4 million rubles or 22% (as of December 1, 2015 – 18.3%). Accounts receivable decreased by 2.1% compared to the previous month, and decreased by 1.5% compared to the same period of the previous year, and overdue accounts decreased by 7.9% and 13.4%, respectively.
Social issues
Average per capita cash income for January-December 2016, according to estimates, amounted to 28,634.4 rubles. Real disposable cash income (income less mandatory payments, adjusted for index consumer prices), according to preliminary data, amounted to 102.6%. Average monthly nominal wage for January-November 2016 amounted to 19,446.9 rubles and increased by 3.4% compared to the corresponding period of the previous year. Real wages for the same period compared to the corresponding period in 2015. decreased by 2.8%.
The Republic of Dagestan is one of the most economically developed regions of the North Caucasus Federal District. In 2011, the volume of gross regional product Republic amounted to 327 billion rubles; over the past 7 years, the volume of GRP has increased more than 3 times. As part of the total volume of the gross regional product of Russia, the Republic of Dagestan, the share of GRP also tended to grow from 0.02% in 2005 to 0.3% in 2011. Russian Federation In terms of GRP, Dagestan ranks 37th, among the regions of the North Caucasus Federal District - 2nd, second only to the Stavropol Territory.
Dynamics of the volume of gross regional product by region of the North Caucasian Federal District, billion rubles.
GRP production for the period from 2005 to 2011 had a steady trend towards active growth: GRP (in comparable prices) in 2011 increased by 26% compared to 2009, and by 3.6 times compared to 2005. However, in the period 2007-2010. there was a trend towards a reduction in the real GRP of the Republic of Dagestan, the largest drop of which occurred in 2010 (the index of physical volume of GRP was 103.6%), however, starting from 2011, there was an increase in the index, exceeding similar indicators on average federal district and the Russian Federation as a whole.
GRP physical volume index, %
Per capita, the volume of gross regional product produced in Dagestan increased by 3.3 times compared to 2005 and amounted to 111.9 thousand rubles. in 2011, which corresponds to 3rd place among the regions of the North Caucasus Federal District. In the Russian Federation, Dagestan ranks 74th in terms of GRP production per capita. In terms of per capita GRP, the republic is comparable to Ivanovo region, North Ossetia, Tyva and Kabardino-Balkaria.
Gross regional product per capita by regions of the North Caucasus Federal District, thousand rubles.
IN sectoral structure of the formation of gross added value of the Republic of Dagestan relative to similar indicators in the federal district and Russia as a whole, distinctive features can be identified that allow us to characterize the economy of the region as an agrarian-industrial one:
The share of the agriculture, fishing and fish farming sector in the region's GRP is 15.1% (NCFD - 14.6%, Russian Federation - 4.5%).
The share of industrial products in GRP is 6.5% (NCFD - 14%, Russian Federation - 32.6%).
The share in the GRP of the construction industry is 19.4% (NCFD - 12.3, Russian Federation - 6.9%).
The share of wholesale, retail trade and personal services in GRP is 27% (NCFD - 22, RF - 19.4%).
The share in GRP of transport and communications is 9% (NCFD - 8.7%, Russian Federation - 10.5%).
Share of commercial financial services, real estate transactions, as well as the service and tourism sectors is 6.9% (NCFD - 7.3%, Russian Federation - 13%).
The share of non-market services in GRP is 16.1% (NCFD - 21.1, Russian Federation - 13.1%).
Industry structure of gross value added in 2010, %
Greatest contribution“wholesale and retail, provision of household services to the population,” the share of their added value in the economy increased by 1.1% over the year and in 2011 amounted to 27.3% of the total GRP (in 2005 – 19.8%). The growth was achieved mainly due to an increase in the turnover of the activity " wholesale"2.3 times. Retail trade turnover and provision of services to the population increased during the study period by 12.9% and 10.2%, respectively; real value added also increased by 10.1%. The contribution of the activity “wholesale and retail trade, provision of household services to the population” to the region’s GRP is constantly growing, and compared to 2005, its share increased from 19.8% to 27.3%, in actual current prices the increase was almost 5 times , from 17.9 billion rubles in 2005 to 89.3 billion rubles in 2011.
Structure of gross regional product by type of economic activity in 2011, %
The second most important sectors for the economy of Dagestan are the construction and agricultural sectors, providing 18.8% and 15.2%, respectively, in the formation of the gross regional product. Compared to 2010, the share of agriculture in the structure of GRP increased by 0.1%, while at the same time there was a slight drop in construction by 0.6%. During the period 2005-2011. the influence of these sectors of the economy has also changed significantly, if in 2005 the construction sector formed 12.6% of GRP, then already in 2011 - 18.8%; agriculture, on the contrary, decreased its influence from 23.6% in 2005 to 15.2% in 2011. At the same time, the real volume of added value created in the construction industry and agriculture compared to 2010 increased by 0.3 % and by 2.4%, respectively. Comparing 2011 with 2005, the real volume of added value decreased from 108.1% to 106.3% in agriculture and from 145.8% to 108.3% in construction.
Dynamics of indices of physical volume of gross value added,%
| Branch of the economy | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 |
| Agriculture | 108,1 | 105,2 | 105,2 | 103,3 | 104,4 | 103,9 | 106,3 |
| Fishing and fish farming | 76,8 | 80,3 | 101,1 | 169,8 | 132,9 | 100,4 | 96,3 |
| Industry | 81,4 | 98,6 | 106,2 | 94,2 | 110,1 | 103 | 100,5 |
| Construction | 145,8 | 127,8 | 130,1 | 126,5 | 115,6 | 108 | 108,3 |
| Transport and communications | 109,3 | 119,1 | 105,9 | 116,2 | 97,8 | 94,2 | 109,9 |
| Trade | 132,6 | 124,2 | 133,2 | 114,6 | 116,5 | 101,6 | 111,7 |
| Services in the field of finance, real estate, services and tourism | 28,6 | 89,1 | 86,3 | 81,4 | 65,5 | 114,7 | 85,7 |
| Off-market services | 109 | 105 | 105,8 | 98,6 | 103,8 | 101,8 | 102,3 |
Agriculture, construction and trade together form 57.7% of added value in the region, the share of other sectors and their contribution to the formation of the economy of the Republic of Dagestan in the context of types of economic activities is not so significant and ranges from 8.8% (“transport and communications” ) up to 0.1% (“financial activities”). During the period under study, the share of these industries was not subject to significant deviations, which indicates a stable economic situation.
Structure of the gross regional product by type of economic activity (as a percentage of the total)
| Index | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| including by type of economic activity: | |||||||
| Agriculture, hunting and forestry | 23,5 | 19,8 | 15,8 | 15,4 | 15,0 | 15,0 | 15,1 |
| Fishing, fish farming | 0,1 | 0,0 | 0,0 | 0,0 | 0,1 | 0,1 | 0,1 |
| Mining | 1,9 | 1,1 | 0,9 | 0,6 | 0,4 | 0,5 | 0,5 |
| Manufacturing industries | 5,8 | 3,9 | 4,7 | 3,2 | 3,7 | 4,3 | 4,2 |
| Production and distribution of electricity, gas and water | 2,1 | 1,8 | 3,8 | 3,4 | 1,7 | 1,7 | 1,9 |
| Construction | 12,6 | 15,8 | 17,0 | 19,7 | 20,1 | 19,4 | 18,8 |
| Wholesale and retail trade; repair vehicles, motorcycles, household products and personal items | 19,8 | 21,4 | 25,3 | 23,6 | 26,7 | 27,0 | 27,3 |
| Hotels and restaurants | 1,6 | 1,8 | 2,9 | 3,9 | 3,3 | 3,8 | 4,6 |
| Transport and communications | 14,2 | 13,9 | 8,5 | 11,0 | 10,3 | 9,0 | 8,8 |
| Financial activities | 0,0 | 0,0 | 0,0 | 0,0 | 0,2 | 0,2 | 0,1 |
| Operations with real estate, rental and provision of services | 2,6 | 2,9 | 3,8 | 2,9 | 2,0 | 2,9 | 2,6 |
| Public administration and ensuring military security; mandatory social Security | 4,1 | 6,3 | 6,4 | 5,9 | 6,0 | 6,1 | 6,1 |
| Education | 5,7 | 5,6 | 5,3 | 4,9 | 5,0 | 4,9 | 4,8 |
| Health and social service provision | 3,6 | 3,8 | 3,9 | 3,9 | 4,0 | 3,9 | 3,9 |
| Provision of other utility, social and personal services | 2,4 | 1,9 | 1,7 | 1,6 | 1,4 | 1,2 | 1,2 |
In the structure of areas of GRP use, its main share falls on final consumption expenditures - in 2012, 70.2% of the total volume, of which 75.4% falls on final consumption of households. In general, for the period 2005-2012. There was a steady increase in the use of gross domestic product for both final consumption and gross capital formation. 15
Dynamics of the use of gross domestic product, billion rubles
On December 1, the Moscow House of Nationalities hosted IV Forum “Dagestan. A View from Moscow”, organized by the Political Club “Dignity”. A teleconference between the Moscow and Makhachkala branches of the club brought together Dagestanis who are not indifferent to the fate of their native land. The forum was moderated by public figure Khadzhimurad Gadzhiev, who noted that the club unites experts, social and political figures and everyone who wants to change life in Dagestan for the better.
Expert economist Hadji-Murad Abashilov presented a report “Assessment economic situation in the Republic of Dagestan”, which “MK in Dagestan” publishes today. We will tell you more about the forum in the next issue.
Tightrope balancing with numbers or inflated indicators
My last year’s report, dedicated to assessing the socio-economic situation of the republic, was devoted to indicators that were achieved or published in official sources. Doubt about their reliability, pointing out the complete dependence of the figures on political will, and not on economic processes, then caused a violent negative reaction.
Bubbles are inflating in many sectors of the economy, including agriculture. The number of additions to the number of livestock in livestock farming and the overestimation of the amounts of expenses to be reimbursed for crop production cannot even be calculated by an auditor. Managing industries comes down not to achieving new heights, but to balancing numbers and mastering budgets.
This mechanism cannot be repaired. It can only be broken by breaking all the vicious connections within it. We can appreciate this using the example of the capital. The complex system of city management under the leadership of Said Amirov, tied to personal connections and a corruption mechanism, after his arrest suffered critical failures in all directions - life support systems, the financial and budgetary sphere, utilities, and transport spheres fell into collapse more than once.
We can only proceed from the question: will individual parts of the republic’s creaky state administrative system be changed or will a new mechanism be built? And we again come to the conclusion that the economy is controlled by politics. 2017 was marked by a major political step that dramatically changed the disposition. We will not analyze public reports with unproven figures and look for further inconsistencies in them. Let's try to assess what the economy of Dagestan is and in what direction it should move?
The state of the economy of Dagestan
Official statistics say that from January 1 to October 2017 there was an increase in almost all areas. We present data on the turnover of organizations for 10 months of 2017, and on the balanced financial result - for 3 quarters of 2017.
Agriculture- 15.5% of the gross regional product. The turnover of organizations shows an increase of 118%, and the financial result excluding small businesses shows an increase of 173%.
Mining- 0.4% of GRP with negative dynamics in its structure. In terms of turnover of organizations - an increase of 108.5%, in terms of financial results the dynamics are zero.
Manufacturing- 3.9% of GRP. In terms of turnover of organizations - an increase of 112.7%, in terms of financial results - an increase of 104.4%.
Energy- 2.0% GRP. In terms of turnover of organizations - an increase of 104.8%, in terms of financial results - an increase of 102.1%.
Construction- 15.8% of GRP. In terms of turnover of organizations - an increase of 112.6%, in terms of financial results - an increase of 116.5%.
Transport and communications- 7.5% of GRP. There is no data on the turnover of organizations; on financial results there is a decrease to 92.1%.
Government sector- 6.4% of GRP. In terms of turnover of organizations - an increase of 116.6%, in terms of financial results there is no point in assessing this sector.
Trade- 28.5% of GRP. In terms of turnover of organizations - an increase of 103.5%, in terms of financial results - a decrease to 92.8%.
These figures mean that Dagestan is an agricultural, trade-oriented republic with small industrial production, mainly in the construction and energy sectors. According to the reported indicators, the dynamics in 2017 averaged 108% compared to last year’s indicators, which indicates incredible success!
However, in the section “Financial results of organizations” of the Rosstat technical report for the Republic of Dagestan it is stated: “In January-August 2017, the balanced financial result (profit minus loss) of organizations (excluding small businesses, banks, insurance and budgetary organizations) in current prices amounted to 3,048.9 million rubles of loss. For the same period of the previous year, the net result was a loss of 2,855.5 million rubles.”
Organizations are massively at a loss. Small businesses (a key sector in the republic) are not even assessed - they only worsen the statistics. That is, statistics are once again playing with numbers, but the economy is not growing.
Reasons for the weakness of the Dagestan economy
1. Investment climate , which has developed over the past 4 years. Investment demand is strained by state investments and state guarantees to organizations close to the leadership of the republic, and is not geared towards long-term investment, but to receive subsidies and benefits from the state, which is perfectly demonstrated, for example, by agriculture. The entire increase in agricultural volumes is due to an almost multiple increase in subsidies in specific areas of activity - viticulture, livestock farming, for which several areas of state subsidies operate simultaneously. Everything related to private investment without government participation is dead.
2. Deficiency of own finances republics. Annual discussion of the topic interbudgetary transfers leads to another tug-of-war between the constituent entities of the Russian Federation in the struggle for subsidies. 75% of the republican budget is made up of subventions, subsidies and, most importantly, subsidies. About 23 billion. own income out of almost 100 billion expenses with a really positive increase dynamics tax revenue and fees are a true measure of budget balance.
In Dagestan, the market is represented by Sberbank and Rosselkhozbank, operating according to established schemes. We will find out what the rest of the Dagestan banks are doing when the Central Bank once announces that “this credit organisation failed to meet capital requirements and engaged in questionable, unsubstantiated financial transactions.”
3. Huge debt, artificially hung on key elements fuel and energy complex of the republic. The debts of gas and energy workers will wander from year to year in a frightening arithmetic progression with insane figures of 35 billion rubles. as of 2017. The annual increase in debt by more than 10% requires political intervention by the leadership of the republic and a tough position on the settlement of debt obligations.
4. Lack of developed industrial production . The flagships of the republican economy, such as Azimuth, Aviaagregat, Elektrosignal, KEMZ and Dagdizel, regularly subsidized by defense orders, on Russian market absolutely invisible. The lack of our own production base creates dependence on external manufacturers for the smallest ranges of parts for agriculture, construction and trade.
5. High shadow component of the economy . This area can be assessed, albeit rather roughly. For example, as a result of a whole range of inspections initiated by the city leadership together with tax authorities, more than 3,000 entrepreneurs were identified who carried out their activities without registering. But few people work “in the black” anymore - the entire business is mainly focused on “gray schemes”. Tightening administrative control and the constant increase in tax rates, fees, and contributions encourage people to go “in the shadows,” which is especially typical for small businesses.
6. Administrative and law enforcement press . This is the most difficult indicator to evaluate, which directly correlates with the first point and is inversely proportional to it. He is transcendental. The number and scope of inspections by various control bodies, initiation of criminal cases for the slightest reason with the qualification of “fraud”. Interesting fact- in 2017, the Ministry of Agriculture and Food of the Republic of Dagestan simultaneously inspected 5 (five!) controlling organizations. The endless verification process destabilizes the work of any institution and eliminates the meaning of its activities.
Politics is a concentrated economy
According to Vladimir Lenin’s definition, the economy is determined by politics and political will. The new leadership of Dagestan publicly announced a paradigm shift - not to “work a little for yourself,” but to strictly follow the law, especially in terms of anti-corruption legislation. Rules and their observance are important for the economy. You need to choose key areas and focus on them without scattering yourself.
1. Resolving the issue of gas and energy debts. The republic cannot enter the electricity production market with investment sites for the extraction and sale of mineral resources with a bankrupt reputation. Conducting negotiations with key creditors, fixing the republic’s obligations with real discounting, setting a strict repayment schedule for up to 5 years with a maximum payment volume of no more than 1% of GRP per year.
2. Creation of a regional bank. This is precisely a political issue of solving a financial and economic problem, which lies within the sphere of supervision of the Central Bank of the Russian Federation and under the strict supervision of the Ministry of Finance of Russia. Without operating with extra-budgetary sources of funding, any steps taken by the regional authorities have little chance of being implemented. Regional bank cannot be created directly by the government bodies of the republic, therefore this form must be developed jointly with the leadership of the above-mentioned federal bodies. Or, under the strict leadership of the TU of the Central Bank of the Russian Federation for the Republic of Dagestan, the consolidation of the remaining regional banks was carried out in order to form such commercial bank regional significance.
3. Definition of agriculture as a locomotive sector of the economy. Solving problems associated with the collection, storage, sorting and transportation of crops, creating conditions for the year-round cycle of most sub-sectors. Abandon the form of state guarantees, as this creates unhealthy competition between large and small producers. It is in this area that the economic multiplier will work due to the expansion of construction large quantity associated elements - warehouses, sorting centers, vegetable storage facilities, mini-canneries and so on.
5. Refusal of direct financing and provision of state guarantees in investment project, not related to agriculture . Exorbitant estimates and unrealistic prospects for each individual project in all cases turned out to be nothing. Within the framework of strict budgetary parameters, it is necessary to observe a minimum of politeness in relation to industrial production, which in reality is far from the best multiplier, but it responds very quickly to changes in the economy, which is immediately reflected in its indicators.
6. Sequestration budget expenditures in terms of public administration expenses . To optimize municipalities and districts of the republic in order to reduce the ineffective management apparatus. Expenditures from settlement budgets on salaries for managers sometimes amount to more than half of the entire budget, which defeats the whole purpose of the existence of these budgets. The same applies to district budgets, which need to be combined under specific quantitative parameters, taking into account, of course, the national-historical aspect. This will provide significant savings budget funds released for social or investment expenses.
7. Development of the capital of the republic into an agglomeration, the prototype of a modern metropolis. The merger of Makhachkala and Kaspiysk with the addition of territory for industrial and housing construction will create investment potential for the breakthrough development of the capital as a powerful educational, industrial and financial center.
Makhachkala needs transformation - a new transport paradigm, territorial planning and zoning, expansion of budgetary potential in order to form a key basis for the development of the republic, its central financial, personnel and organizational component. Economies of scale in in this case will play a huge role, although it is too early to talk about specific numbers. The question is a strategic solution to a problem that cannot be solved by simply optimizing costs or fighting to increase income.
Here we again face the question of the quality of the state apparatus and the level of officials. Any economic decision in the republic will have an effect only if there is political will and an effective, motivated team. We are waiting and preparing!