SBS Consulting (Moscow) worked out the Strategy of social and economic development of Sevastopol till 2030 in cooperation with International Center of Regions Development. In December 2016, the Strategy was approved and de facto accepted after public hearings and discussions in Administration and Legislative Assembly of Sevastopol, Agency for Strategic Initiatives and Ministry of Industry and Trade of the Russian Federation.
While developing the Strategy the prior acts of strategic planning (The Concept of strategy development of Sevastopol till 2030, Federal Special Purpose Program “Social and economic development of Republic of Crimea and Sevastopol till 2020”, Federal Act №377 “On development of Crimean Federal district and free economic zone in Republic of Crimea and city of federal status Sevastopol”), materials of the workshop devoted to the problems of the city (took place in August 2016), state programs of Sevastopol and the project of the site plan of Sevastopol were taken into account.
According to the previous experience, for being implementable the Strategy should contain not only future structure of the economy but also forces of economic changes and reliable sources of financing (private, public etc.) determined by specific features of the region.
The integral part of the Strategy is Plan of action that should coordinate efforts of society and all branches of government from the start of Strategy realization. Success of the start determines success of the whole Strategy.
The analysis showed that reconstruction and rapid development of ship repair facility of Russian Navy can be the driver of economic changes in Sevastopol. The reasons are becoming of Sevastopol the base for the stationing of the Navy and recent changes in the world and Russian external policy. However, the Strategy does not suggest ship repair to be the main economic activity in Sevastopol even in case of signing up export orders.
Sevastopol has been an open city for more than 20 years attracting large tourist traffic. In particular, the city became one of the most popular centers of war and patriotic tourism in Russia.
The city is also the center of science and education in southern Russia providing training of specialists and solving problems in seamanship and forming new advanced activities, for example, development of information technologies. In the future, the importance of Sevastopol as a center of science and education will continue to increase.
Today Sevastopol has all the opportunities for rapid growth of instrumentation manufacturing industry.
Quality of soils in Sevastopol allows to grow grapes of premium quality, produce excellent wine, cultivate other crops and develop seafood industry. All these factors create a base for food industry including supplying its products to other regions inside the country and abroad.
Also, due to its geographic location Sevastopol can become the business and transport hub in Black Sea region.
All the areas of development of Sevastopol economy mentioned above were declared in the Concept 2 years ago, but in the Strategy they are further elaborated.
The specific feature of the Strategy is calculation not only of target indicators of economy development but also of corresponding revenues of Sevastopol budget. These calculations show that there is an opportunity for significant increase in fiscal revenues by means of collecting regional taxes and other cash receipts. By that, dependence on federal support will decline gradually. As a result, in 5-7 years Sevastopol will be able to plan its development and rapidly increase its comfortability for city residents and visitors relying on tax and non-tax revenues.
The Strategy will be realized in 3 stages.
The first stage (2017-2018) focuses on lifting administrative restrictions, decreasing risks of carrying on business, overcoming infrastructural barriers (energetics, transport), solving problems of urban economy and arrangement of necessary conditions for full realization of projects of Federal special purpose program, integration of municipal legislation into Russian legal environment and construction of effective system of public administration. At this stage, it is necessary to take an action in major reconstruction of corporate property accounting, enumeration, and changes in migration policy to increase (not decrease) cultural, educational and creative potential of residents. Economic priorities at this stage are fleet service, instrumentation manufacturing, agriculture, fisheries and aquaculture sectors including raw materials processing, transport and logistics and tourism. At the same time, as it was already mentioned, changes in internal and external policy allow to consider ship repair, modernization and refit of Black Sea Navy Fleet as an accelerator of fruitful changes in urban economy.
The second stage (2019-2024) considers qualitative improvement of integration of Sevastopol enterprises in carrying out orders of Russian Navy due to increase in ship repair volumes. The plan is to increase investment attractiveness of the civilian sector of the economy. Active industrial (investment) policy requiring high level of involvement of regional and municipal administration should be realized using public private partnership. The target indicator of the second stage is increase in the share of tax and non-tax revenues in the budget by 20-24% compared to 2015-2016.
The third stage (2025-2030) considers optimization of city economy structure, significant enhancement as a center of trade and business in Black Sea region, integration in transportation chains of Black Sea region, creation of new technologies and new productions with high value added based on intellectual component.
Multifaceted development of Sevastopol economy will enable to increase sustainability of municipal budget system. In 2016 personal income tax formed 2/3 of tax revenues in the city. Contribution of other taxes – corporate income tax, property tax – was significantly lower than in other regions and in Russia on average. As a result, tax and non-tax revenue of the municipal budget account for significantly lower proportion of fiscal revenues and budget is unsustainable and dependent on federal transfers.
After realization of the Plan of action the proportion of tax and non-tax revenues will be more than 70%. Taxes by industry type will change significantly. The share of taxes from productive sectors will increase by 1,5-2 times. The share of public administration and other non-productive sectors will decrease by 1,3-1,4 times. In prospect, Sevastopol will finance social services and urban economy basically using its own tax and non-tax revenues.
SBS Consulting was founded in 2006 and is the leader of Russian strategic consulting in the middle price segment. Today more than 20 largest Russian companies, federal executive authorities and some Russian regions are the clients of SBS Consulting. 90% of clients keep cooperation with SBS Consulting after the first project.
Specialization of SBS Consulting:
• development of strategy and business plan of a company;
• improvement of company’s management system and business processes;
• optimization of fixed assets construction system;
• increasing energy efficiency;
• consulting of federal authorities.
The company provides services in the following industries:
• metals and machine building;
• oil, gas, chemicals;
• construction and real estate;
• public sector;
• Institutes for development.