General Characteristics of the Region’s Economy

A very favourable geographical position in the south of Russia, between the European part of the CIS and the Caucasus Mountains, has encouraged the dynamic development of Rostov Region. The abundance of also has played an important role in the region’s economic advancement.

 

Share of various industries in the GRP    (2004)

The Gross Regional Product Dynamics

Industry

By its level of development and the variety of branches, the production industry in Rostov Region is one of the leading industries in the Russian Federation.

The greatest share belongs to machine-building, food, ferrous and non-ferrous metals and the power generation industries.  Many enterprises in the Russian Federation are of state importance by being the only or the biggest producers of certain kinds of goods in the country.

The region’s enterprises produce 100% of the main-line electric locomotives made in the Russian Federation, 94% of the sewing machines and more than 60% of the grain harvesters. The region’s enterprises that produce heavy helicopters, navigation systems for ships, boiler heat exchange and water heating units, oil equipment and tractor cultivators also occupy a leading position in the country. The products of the largest companies in the food industry – OJSC “Yug Rusi”, OJSC “Baltika-Don” and OJSC “Donskoy Tabak” cover 11% to 18% of the consumer market in the country.

The coal anthracite extracted in the region has various unique qualities.

Agriculture

The main wealth of Rostov Region is in its soil resources. The chernozem constitutes almost 65% of the general structure of the soil, with the thickness of the fertile layer reaching up to one and a half meters.

The agricultural enterprises of Rostov Region produce almost 15% of the gross regional product; they make use of 17% of the total amount of main production funds and employ 15% of the total number of people engaged in all industries in the region.

More than 62.5% of the gross output of agriculture is contributed by the plant-growing enterprises.

Grain growing occupies a leading position in the structure of agriculture; it takes up more than one-half of the total area of all the sown areas. The region holds fourth place in the Russian Federation in the amount of grain crops produced. Winter wheat is the main kind of grain. Growing corn, soy, rice, millet, buckwheat and other groats is also quite wide spread.

Sunflower seeds are the leading industrial crop in Rostov Region. Rostov Region’s production output of sunflower seeds constitutes more than 20% of the total production volume of all the Russian regions. The region holds first place in this area among the regions of Russian Federation.

The gardening and grape growing has been put on an industrial scale. By the amount of produced vegetables, the region ranks fifth in the country.

The products of the industry are sold to the consumers both in the region and far beyond.

The cattle-breeding companies in Rostov Region specialize in the following areas: milk- and meat-cattle breeding, sheep breeding, horse breeding and poultry farming. All the poultry and cattle are concentrated in five climatic and soil zones in the region: northwestern, northeastern, eastern, southern and central-Azov. The region ranks seventh in the Russian Federation in the output of meat production.

Investments

The main objective of the regional investment policy is to create favorable conditions for attracting investment into economically effective and competitive enterprises and into activities that are capable of creating the region’s own investment potential and assisting in the other industries’ adaptation to the market-economy environment.

Legislation in investments is being formed in the region aimed specifically at providing the necessary stimulation to attract national and foreign investment in the economy. The core of the investment legislation of Rostov Region is being formed by the following regional laws: “On Supporting the Investment Activity in Rostov Region”, which defines the procedures of supporting investors, and “On the Development Budget of Rostov Region”, which outlines the main aspects of the formation and spending of the funds of the regional budget allocated for investments.

The development of the economy in the region is stable and substantially results in the regional budget surplus. More than 50% of the budget of the region is directed towards tackling social issues. The region enjoys one of the lowest levels of registered unemployment (0.8%) and has an absence of social conflicts.

Innovations

The stimulation of innovation in all areas of Rostov Region’s economy – enterprises, companies and organizations – and the gradual formation of an innovative economy on the Don are the two main objectives of the regional economic policy.

The “ Concept of Innovative Policy” and the “Regional Target Program for Development of Innovation Activities for 2004-2006”, which have recently been created, are aimed at forming a system of legal and socioeconomic tools for stimulating the structural and technological changes in the main areas of development of the innovative industries in the region. The documents are also geared toward supporting the integration of business and science, synchronizing the innovation processes in the defense industry and in the civil industrial areas, and actively involving the potential of the innovation research conducted in the higher educational institutions and at the large and medium-sized business enterprises in technical re-equipment of the industry.