Russian Government Dumps Business Zones

In today’s edition of, economist Vladislav Inozemtsev writes about President Putin’s decision to stop the expansion of special business zones and close some of the existing ones.  Management of the business zones, as well as their financing, will be transferred to respective local governments.  Russian Accounts Chamber, the government entity in charge of auditing state finances, reported that the central government spent 186 billion rubles (approximately USD 2.85 billion) on establishing business zones during the last 10 years, while the combined tax revenues generated by the zones amounted to mere 40 billion rubles.  The Government spent approximately 10 million rubles (USD 154,000) per job created in business zones.
After transferring the responsibility for business zones to local governments, Kremlin will still retain the management of the so-called Accelerated Growth Territories.

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