Investments, Business and the Team. Big Interview of Acting Governor Alexander Avdeev

Alexei Shlyapuzhnikov, publisher of the ProVladimir news agency, spoke to the Acting Governor

On June 19, in the Patriarch’s Garden in Vladimir, Acting Governor Alexander Avdeev gave an exclusive interview to Alexei Shlyapuzhnikov, publisher of the ProVladimir news agency. In the course of the hour-long conversation, questions were raised about the economic prospects of the Vladimir region, tourism, staffing shortages, the “rust belt” and the “Avdeev team”.

Alexander Alexandrovich, good morning. Let’s try to talk about serious things right away. In February of this year, events occurred after which a great deal has changed in Russia, in the world, in the economy, and in geopolitics. This has had a strong influence on the Vladimir region as well. How deep do you feel the crisis is? Won’t we lose jobs and budget revenues because of it all?

− I must say that it’s too early to make such long-term conclusions after three months. What can we do in the short term? First: the crisis is a kind of repetition of the sanctions pressure that began in 2014. In the eight years that have passed since the sanctions were imposed on a number of sectors, we can see that the economy has not actually stopped overall in the country, and all regions have shown decent growth rates. By and large, these eight years have allowed us to learn to adjust to the changing environment and look for some new options for international logistics and reliance on some segments in which to look for our partners.

What may be loudly called the pivot to the East, to the Middle East, is one of the mainstream for the country as a whole, but it is also mainstream in the global economic ocean. Actually, 4.5 billion people in Southeast Asia out of seven billion people in the world. Accordingly, the main sales and consumption markets and the main developing capacities are concentrated there.

What product from Vladimir can we supply to Southeast Asia?

− Let’s talk about this… This is a global trend. All technological innovations, from smartphones to serious equipment, are produced in Southeast Asia: Japan, Taiwan, China, India. For textiles, Vietnam, Bangladesh, Indonesia, and so on. And they are also huge consumers of industrial products, products of the oil and gas sector. In eight years, the bias in this direction has given us a good opportunity to restructure logistics and see how we can interact with it.

If we talk about the crisis after February 24, I don’t think it will be a stopping point. In fact, we are quickly enough reshaping ourselves, we are quickly learning how to find new markets, and our enterprises are a very good example of that.

If we talk about the Vladimir region, we certainly do not have such a serious dependence on import-export operations that the regions have where oil and gas are produced, where metals are processed, fertilizers are produced. Or as in the south of the country, in the Krasnodar and Stavropol Territories, in Voronezh, grain. Nevertheless, our economy is quite even and balanced. It may not be as dynamic as we would like it to be. But at the moment this is more of a plus than a minus. Some regions that had more serious interconnections with international markets or more serious interconnections with foreign investors will now experience temporary difficulties. This is indeed the case.

But many investors have left Russia anyway, including the Vladimir region.

− Who has left the Vladimir region?

Ferrero is leaving.

− Ferrero hasn’t left the market. They froze investments in the next phase of construction. Mondelēz has frozen construction of the next phase. In fact, our companies with foreign capital, we know them, I won’t list them now, they are unfortunately under double control. Instead of quitting the market, they only increase the pace because they have received additional orders for domestic production. Not a single enterprise in our country is closing down. They have suspended investments – that’s true. But on the other hand, another Russian-Dutch company, De Hoos, is planning to build an additional plant. A branch of McDonald’s – you know what happens to it. It has been transformed into a Russian chain with a buy-back over 15 years with the hope that the situation will stabilize.

So, fortunately, we have no such facts when we have enterprises declaring their withdrawal from the market. On the contrary, there is an understanding from those enterprises that are our “domestic”, that they are ready to occupy the niches that foreign enterprises used to occupy. For example, one of the directions – they were going for it for a long time, but the crisis prompted it – is “Murommashzavod” with electric steering and steering rack drive, in fact it replaces Bosh. Now they are assembling the new KAMAZ model, where up to 30-50% of units used to be localized from Mercedes. Units from Bosh, Siemens, Mercedes, and some other companies. Now Murommashzavod is ready to replace some of the key mechatronics components. I saw it with my own eyes. They signed an agreement with KAMAZ, and KAMAZ signed an agreement with our Avtopribor. So Mercedes cooperation gave the cab design, convenience, units, engines, standards. Now we are taking a step or two back, but the localization in Russia will reach 100%.

It is clear that it will not be the same KAMAZ from 1975, but it will not be the Mercedes we depend on either. This is the direction in which most of our enterprises are developing.

84% of entrepreneurs, according to VCIOM, said that they felt the sanctions pressure. Logistics chains have broken down, “cheap money” in the form of loans in the West has become impossible. And this is not only in Russia, but in the Vladimir region in particular. 84% – this is the Central Federal District. During these three months, has the Vladimir region administration taken any measures to support entrepreneurs so that they could either make up or compensate for the losses?

− Everyone felt it, but you know, as they say, with a bit of humor – they got off with a scare. If we talk about rates, we saw that in order to bind liquidity, the Central Bank raised the refinancing rate. So as not to wash everything out of the circulation sphere under mattresses and pillows. Now rates are back to pre-crisis levels. That’s the first thing. Second, in spite of everything, we have recorded four months of economic growth. So even for the Vladimir region, it is more than 8%. Quite flat growth. In fact, some show a slight decline. For example, our glass industry was tied to exports and they are not growing now, unfortunately.

But a number of other fields, excuse me, defense industry: Murommashzavod, Avtopribor, and a number of other enterprises show a growth of 20 to 30%. We have a small aluminum foundry in the Petushino Region. It got 10 times more orders because there are less spare parts from abroad. All in all, the growth is more than 8%. This is, so to speak, the “average hospital temperature,” but on the other hand, it can’t help but be happy, because everything in the Central Federal District is not developing so evenly. Including, for example, the Kaluga and Moscow regions will feel these issues of the outflow of personnel and the shutdown of production, and so on.

As for what we are doing: we have adopted two packages of support measures. They are somewhat different in orientation. The first package is a general one, an insurance package against rate hikes. It included tax deferrals, lease payment extensions, and extensions of investment and loan projects that were about to expire in 2022. In the second package, we decided to support small and medium-sized businesses in terms of agriculture. For example, we increased the amount of funds that small family farms can receive. They can buy equipment and pay half of it through regional assistance and grant support. That is, we are finding the forms that the business itself pointed out to us. In April and May we had many sessions of negotiations with agrarians, with builders, with representatives of tourism industry.

The tourism industry is very important to us. Now, after the pandemic, there are requests to set up accommodations – campsites, hotels – it’s going up. For a second, about small businesses. Our tourist flow has quadrupled in four months compared to last year. It is clear that last year is no indicator, because the base is low [because of the coronavirus]. Nevertheless, now 800,000 people in four months, and this is still not the summer months, it’s already a very good bid for this year. So one of our support measures is that we subsidize or help to build campsites, accommodation, we give full benefits for the development of private museums and a number of other grants that help businesses somehow start or restart a business in the HoReCa [hotels and catering] segment.

So the conversations that we’ve had with small and medium-sized businesses, they’re paying off. What people paid attention to, we tried to direct the vector of budgetary efforts there.

With Vladimir’s business in general it is clear. But the task of the region is to attract more active and dynamic businesses in competition with other subjects. Now a lot is spoken about special economic zones. And here there are two polar opinions. Some people say that it is an empty shell, which is recognized only for the purpose of business to avoid taxes and pay less to the state, while others say that it could be a driver of attracting business. What is now with the special economic zones in Vladimir, will any new ones appear or will these ones be closed? Our well-known “Kameshkovo”, “Dobrograd”…

We have several such sites that are already operating, and we would like to organize another special economic zone in the territory of the so-called “rust belt” – areas where there were large enterprises, and due to changes in the technological situation, they left there or reduced the number of people employed. As a result, there are people there who have nowhere to work. We have the Kolchuginsky district, Kirzhach, Strunino, Karabanovo. Where there were linen factories, where there was processing of non-ferrous metal. There are still buildings, power plants, roads, people, but there is not enough work. For us it is important to give this territory additional impetus for development.

If we talk about “Dobrograd” – this special economic zone is developing, and it is an example of advanced development, first of all, of infrastructure, and later of the placement of production facilities there. Now it is still a small resort town, but this year the construction of several production enterprises will begin there. In total, five factories with multibillion investments are being put into operation now, two of them [will start working] by the end of 2023. In total, the volume of investment, I think, is about 30 billion over five to eight years. That’s why we are investing there in roads and infrastructure.

The second zone we have is Stavrovo. And it is developing very well. The number of residents is already more than 30. The funds we received for the site’s development and the development of the buildings where the residents move in and the surrounding infrastructure all show that the site is in demand and, what’s more, there are additional requests for development.

The third site is the Oka industrial and technical park. There we have Murommashzavod and a number of other enterprises that really demonstrate the potential for growth. We intend to invest there more than 600 million rubles in order to create new opportunities for placing enterprises and creating jobs.

The problem area is Kameshkovo. There is one enterprise there so far. There are operating production facilities there, such as “Voyage”, but there is only one in the economic zone itself. Why has it not been possible to settle? Well, such, I would say, is the subjective-objective picture. At first we spent a couple of years building the infrastructure, then there was a political shift and two years of covids. Now February 24th… This is not a good time.

But other territories were growing at that time, and in the covids were growing. But Kameshkovo was not.

Nevertheless, Stavrovo, and “Oka”, and Kirzhach began to grow earlier, there were already applications from investors. Here everything has fallen through the cracks… Let’s not dig into the past. The task for today is to artificially attract investors there. Where it is most interesting – along the M-7 highway, along the M-12 highway, where the logistics are better (in Kameshkovo it is not the best), I would gently say that in a year or two we will see new industries there.

The new economic zone, which is important to create, is Kirzhach, Alexandrov district, and maybe some part in Vladimir, for example, on the basis of “Tochmash”. What is the purpose of a special economic zone? What is the role here in the competitive environment of the regions? The fact is that the one who earlier started attracting investments, working with companies, who earlier created the infrastructure, established all the work on logistics, is now in more favorable conditions. This work began 15 years ago, and we know that a number of regions have made great progress in this direction. And it is clear that new investors are much easier to choose a site that is already developed. Where there are stable political and economic conditions, because the cooperation within the placed enterprises gives a synergistic effect. The one who was late, who did not create – unfortunately, it must be stated that the Vladimir region [among such regions] – has to work twice as hard and pay twice as much money. We have a number of advantages – M-7, M-12, proximity to Moscow, a large labor market, but we are already far behind.

And what regions do we compete with?

Well, for example, we have one of the Chinese companies ready to move in, but they have a choice and an invitation from a special economic zone with understandable tax benefits. There are regional, and then there are federal ones, which give advantages to pay off the project. Let’s say a Chinese or Turkish company says: “We can come to Kazan, Elabuga, we can come to Yaroslavl Economic Zone, to Dubna near Moscow, and we already have everything there: roads, gas, electricity and all the tax benefits. And what do you have?”

Well, yes.

We are still only in the application for a special economic zone, we do not have a ready proposal. A good economic zone or industrial park is like when you come to the office, you have everything. You set up a machine and you work. If they tell you, “It’s a beautiful place. We’ll build a road now-that’s a year, then we’ll get electricity-that’s six months,” then time is running out. [The investor responds,] “We need to get settled quickly and pay off quickly, then we’ll be grateful that you’ve given us those conditions. That’s the kind of environment we need to create. And if you look at the regions that are really in the lead… Just now at the St. Petersburg economic forum, the leaders in the regions’ ratings for the quality of business environment were: Moscow, Tatarstan, and the Moscow region. Kursk, Lipetsk, Kaluga, and Yaroslavl region. Ivanovo region entered the rating at a good position. Some of them started working 20 years ago, while others have been improving in the past few years. We, unfortunately, have to go this way. Create attractiveness for investors. Both domestic and imported.

There is an opinion in the business community that instead of attracting external investors, it is better to give money to our own, so that they can develop. And when they talk about new investors coming from other regions and countries, one often hears the following: “Now they will buy up the region for cheap, but it won’t do anything for the region”. People are brought to the special economic zone, given capacities and opportunities.

Have you seen such examples?

No, I’ve heard such opinions.

Well, I would love to talk to these people. We would dream that someone would come and buy it up. We’d even pay money. There’s no such thing. Even in a special economic zone, even with mega-interesting conditions, it’s very difficult to lure an investor. He cares about land and benefits, he cares about stability and the market for which he will work. Unfortunately, there is no such thing in any region as someone coming in and buying up. That’s a fear – it’s in vain. All 85 regions are struggling for an investor to come and settle down, maybe for free at first, so that in five years there would be a return. Although the payoff starts much earlier, with the income tax, which is paid on the territory – the regional and municipal tax.

You said yourself about the “rust belt. And in general, the Vladimir Region is an old industrial region.

An industrial region. Somewhere there are technologies that are outdated. For example, the old weaving mills. We have them, but of them we have one or two that work. Unfortunately, the enterprises in Vladimir that have lost their competitiveness, such as the Tractor Plant, could not stand up to the competition a decade and a half ago. This, of course, is a problem for the city of Vladimir. The problem for Kolchugino is that Elektrokabel’s processing volume is much lower than it was at Tsvetmet. The problem of such cities as Karabanovo, Strunino… And earlier technologies were changing, only they were in effect for 100 years. Now everything is much faster. As in the environmental process, we understand that production will become obsolete. Our task is to make sure that new enterprises are born faster than the old ones die out. And to do that, we need to create an environment, to know global trends in technology, economics, and logistics, which would allow us to adapt faster.

The dying out of technology is inevitable. It’s important that business owners understand that, and they shouldn’t wait for technology to die out on its own, it happens. They need to modernize, buy new equipment, and invest. If we’re talking about re-industrialization, it’s an ongoing process, and it’s important to have it in place. The fact that there is a post-industrial society … It is such a necessary thing, and for many at the same time it is a trap. “Let manufacturing be somewhere over there, not right next door to me, and we’ll only bring up programmers and computer scientists here, there will be services and tourism”-no. The entire history of Europe, America, the USSR and Russia proves that the wealth of a nation is in industrialization.

The production of our own goods, the processing of our own products, is something without which no society can develop in harmony. And it is necessary to use these opportunities: position, land, forest, working hands and engineers who own the technology in the DIC and processing. This needs to be restored. The task for Tochmash – let there be not one large enterprise, but 20 to 30 medium-sized ones. In Soviet times, there were giant plants. The giant died, and that was it, and a thousand people were out of work. If we have 20 – 30 medium-sized enterprises, if there is any change in them, conventionally speaking, two died, two were born – there will be a constant process. The buildings that are gaping holes of broken windows need to be slowly repopulated with small and medium-sized businesses.

What about the national debt of the region. Now there was news that it somehow went up a lot. Many people, when they hear about government debt, don’t understand that it’s different from a consumer loan. How much does it cost to service the debt and who will pay it back?

There’s a lot of speculation on this topic. It seems that debt is all bad, and they start to manipulate in harsh words about it. Debt management is just as much a tool of economic policy. Quite primitively, it’s like a hammer. You can use it to build a house, but you can also use it to destroy something. This is why public debt must be managed very skillfully. The national debt among the regions of the Central Federal District is not very large, amounting to approximately six billion rubles. This is basically free money, with the interest rate of 1% – loans from the Ministry of Finance. We have no commercial credits.

The question is how to use the national debt. If you look at different regions, they built up the debt in different ways. If you take debt to “spend it down,” to build things that do not generate income – hospitals, sports complexes … Not only did we spend on them to build them, but they then require money for maintenance. This is rather the wrong policy; sometimes it leads to a stalemate. The right policy is when government debt is taken on something that will then bring in revenues.

If you take out a loan to buy a machine that will produce, you will pay back the debt and you will still have income. If you spend to buy a house or a car, you will have to repay that debt from other income. Our job is to invest in things that either save us money or generate income. Debt management is a tool. If you use it properly, the region will benefit, even if the debt grows.

And these six billion, did we “spend it out” or invest it?

It was accumulated over several years. Most of the regions accumulated a debt when the inter-budgetary relations were not leveled, and there was a need to equalize the situation with salaries in the public sector. The regions had to increase their debts in order to increase spending on social services and infrastructure. It is important that the state refinanced – replaced commercial loans with state ones. And now it gives an opportunity to write off the debt, if the region does not pay off the debt, but invests in infrastructure and development of new projects. This is what we did. In other words, the state encourages us not to accumulate new debts but to invest in the projects which will bring us income.
Unfortunately, we can say that the distribution of taxes in the “tax pie” is not the most correct, in my opinion, from the point of view of the regions. Half of the income is taken by the federal budget, 30% by the regional budget, and the rest by the local ones. Here, of course, the proportion would have to be changed. On the other hand, the state offers a number of support programs from the federal center. But we have to fight for them as well.

The successful operation of enterprises is not only about money, but also about human resources. The Vladimir region is located between Moscow and the Moscow region on the one hand, and Nizhny Novgorod on the other. And these three regions suck personnel out of the Vladimir region like a vacuum cleaner. Very often in business and in government agencies there is a serious staff shortage. What can the Vladimir region offer people so that they do not leave? In Moscow, salaries are higher and social security is better.

I looked at the results of the census statistics. Strange as it may seem, Nizhny Novgorod region is developing better than we are, but its depopulation is worse than ours. People are leaving there, too, despite the fact that salaries are higher, businesses are more interesting, and the population is larger. Nevertheless, there are only a few regions in our country that are really growing: Moscow, the Moscow Region, Kaliningrad, Saint Petersburg, the Leningrad Region, and the Krasnodar Territory.
Technology is changing, fewer people are needed for production, and people are moving to places where new facilities are being created.

Indeed, we have to admit that we have an outflow of personnel. We also feel this in the area near Moscow: Alexandrov, Kolchugino, Kirzhach – everyone goes to Moscow and the Moscow region. That is why we say that jobs must be created there, otherwise people will quietly buy apartments in Balashikha or Reutovo, and so on. What should we do? We have to create new jobs with higher wages than our neighbors. It is very difficult to do, but, as the experience of several regions shows, it is real. But it is only an escalator that runs downhill fast, and in order to stand still, you have to take a brisk step upwards. And if you want to be faster than others, you have to run up very fast. And the escalator goes down very fast. Technology is changing, people are leaving anyway, neighbors are running faster, and our job is to create new jobs and make the areas livable.

We have businesses asking – give people. We are ready to hire. People from the surrounding area drive 40 kilometers to work at Rusclimate in Kirzhach. Our task is to create jobs and an environment they would like to live in. Where they do not need to be brought, but where they could choose. Comparing Kirzhach with other cities, they said, “It’s a good place to live. It’s safe, there’s a place to walk around, the lights are on, public transportation works, there’s a school, the hospital is more or less normal, the entertainment zone [is there]. Then people will stay.

Will the state invest in all this?

That’s our job. If we don’t do that, we will lose people. This is the first component. And it is desirable to develop industries that give more added value and higher wages. And the way to do this is as follows: unfortunately, although we are quite well equipped industrially, the level of average wages in our economy is far from ideal. We are in the last five regions of the CFD, losing to most regions – Moscow, the Moscow region, Kaluga, Yaroslavl, Voronezh … Maybe we win only with Kostroma and Smolensk.

What does it mean? Low wages. And going back to the fact that there are presidential decrees that salaries in the social sector [are tied to the average in the economy]. Let’s say the salary of a doctor is 200% of the average for the economy. A teacher’s salary is 100-150% of the average. If you have a low base, then salaries in the public sector will be lower than in other regions. This is why we have a huge shortage of doctors. Our staffing level in medicine is … well, it’s very difficult. Many have left for the neighbouring regions. And we are now reviewing our approach to attracting specialists. But we need to give the base – to raise people’s incomes, stimulate the growth of demand for real estate, for the sphere of consumption, increase the tax base of the budget, and through this stimulate the social sphere.

Giving people money to take to the economy.

That’s absolutely right. That’s why we say the economy is at the base. We need to restart the old businesses as well. Not that we need to restart, we’re living in a new way, we need to attract new companies. Let our new enterprises, which see niches, develop. If they are willing to accelerate development, we need to help them. They get into a market with higher added value. For example, restoring Avtopribor is a great joy for us. If the enterprise had collapsed completely, we would not have had a chance to take advantage of the current market conditions. And now Avtopribor is concluding contracts with domestic manufacturers.

Now the Unified State Examination and school examinations are coming to an end, and future students will choose their university and specialty. Considering that in four years they will enter adult life as professionals with an education, what specialties would you advise them to choose today?

There is a shortage of medical and engineering specialties. And in all fields. To say that now you can choose one specialty and be sure that it will support you throughout life, is not necessary. I advise everyone to be prepared to get a good basic education, and then learn constantly and retrain every three to five years. Life will force it. Even programmers are forced to work in different areas, not to mention specialists in engineering professions, who start with one technique, and then there are new machining centers, modeling. And even in the construction sphere, the transition from classic construction technologies to more modern ones is already underway. So now the economy needs all kinds of personnel. There is no specialty in which people are not in demand.

We have a glass industry in Gus-Khrustalny and Gorokhovets, but at the moment we cannot even adjust our vocational education system so that they train specialists for the industry. Now we are going to change this approach. We train more accountants and lawyers but not specialists in basic production technology, at least in the glass industry. For example, we have a cluster of climatic equipment. But we don’t train specialists, starting with plumbing engineers and climate engineers, either on average or at the highest level. It is important to create such a center, and perhaps it will be a competitive center in the country. All of our buildings now have serious infrastructure, and it can be controlled through computers and smartphones: it’s a ‘smart house’ and the calculation of wear and tear, pressure, all these complex systems. It’s no longer at the level of a wood stove. Any direction and any taste now gives you confidence that you’ll be with a job tomorrow. Sometimes there are illusions that programmers make the most money. But those who choose programming should understand that they should have a strong understanding of mathematics, of object-oriented programming, of creativity…

Nevertheless, doctors, engineers, digital spheres, services are very relevant to the Vladimir region. Tourism, if it works properly, is a sector of the economy.

You twice named physicians first among the specialties. Nevertheless, no one is training doctors in the Vladimir region.

No, we have colleges.

Colleges, it’s understandable, but still specialists-doctors.

I always ask the audience, how many years experts raised the topic of the medical faculty, remember?

About eight years.

Ten years for sure. Had the hand not wavered 10 years ago, today there would have been four or five graduates. An academic school would have been formed. It is not only important to put up a sign, but also to have an academic base and school. There should be specialists in the profession and in science. If we create the Faculty of Medicine now, and this is the task I set, then we will see the first serious results in six years. But in two years, we will get the first results. The fact is that first- and second-year students fill the niche of nursing staff, becoming nurses and paramedics. By building up the base, after a while we’ll be able to create a system to train our own personnel, and not depend on other regions.

The thing is that we send them there by target recruitment, but they are watched. They are stolen from there before they even reach their diploma. Some get married, some stay after traveling around the regions. And vice versa, if we create a medical school here… Whoever wants to leave the region will leave anyway. And those who are attached, internal homebodies, have parents and family here, and they will study here. And among them, the chances that they will stay here are much higher. We have sent 100% of them to study at medical schools outside the region. The chances of them coming back are 50%. And the local ones, 90% will stay.

We are late in making this decision, but it’s better to be late. Otherwise we will be stuck in this vicious circle.

The second topic is tourism and HoReCa. When they talk about the region, they remember “Golden Ring of Russia”, Suzdal, Vladimir. We talk about tourism, but to see something in Vladimir, it takes two and a half hours, and then we move on. All this is managed by a rather archaic structure of the Vladimir-Suzdal Museum-Reserve, which is not a business and which is not aimed [primarily] at making profit. And in general, all that is visible is Vladimir – a cathedral, a few churches. That’s all. Who needs to come to tourism to make it a real sector of the economy?

The fact that there are VSMZ is fine. It’s not their task to make a lot of money. Their task is to preserve cultural heritage and create attraction for the tourist flow. And the task for small and medium business is to string twigs on this axis, which bear fruit. People go to see the domes of temples, to dive into history. But they don’t just spend money on museum tickets, they spend money on festivals, hotels, restaurants, to buy something here, if we offer something. The challenge for the region is to look at it from this perspective: history and nature have given us these opportunities, our job is to build business models around it. And they’re adding up. There are 52 weeks in a year and in Suzdal there are 56 mass events a year. And it’s important that now these events are spread out not only on weekends, but also on weekdays. There’s overbooking [a rush demand for hotel rooms] on weekends, and weekdays it sags. We need to keep it going, and that’s what’s happening now. If there’s a festival, the gala concert could be on the weekend and people come on weekdays. The infrastructure around the events – you have to learn to see this as a sector of the economy.

I agree with the fact that the tourism industry is archaic, and we are still only looking for mechanisms of support or investment, interaction with business gave more return. We can see this in the example of Venice: the residents and authorities wanted to limit the volume of tourists, because they are already destroying everything there. The authorities of St. Petersburg, on the contrary, are increasing the flow of tourists by improving the facades, festivals and the number of creative groups. I was surprised to visit New Holland – a beautiful site of improvement. I am amazed. So many people, business is booming. These are jobs, albeit not big, but budget revenues, it’s an attraction zone that makes people live here and tourists come. That’s what we need.

We need to look at the best practices of international and domestic tourism, and there is a chance to compete, maybe not with Sochi and St. Petersburg, but at least with Veliky Novgorod.

There are theaters and concert halls in Veliky Novgorod. And our only drama theater, and it burned down.

We are renovating and repairing it. I hope it will be done by the end of 2023. Not easy work, as it turned out, a lot of hidden work, but the contractor is working. So we hope we’ll rebuild the theater. Not hope, but confidence. The money has been paid and the contract is being fulfilled.

Let’s talk a little bit about politics. “Avdeev’s Team. So, in a nutshell, who are these people? Locals, outsiders, people from Kaluga?

People often try to give advice on how to build a team, not in your case, but they do give such advice. Often these are people who have never built a team and have no idea what it is. It just seems that way to them. It’s a very complicated story – building a team.

Technically, there is a team with job descriptions and performance benchmarks. But the conventional wisdom, and it’s true, is that a team is different from a collective in that it has less formalized relationships. And there are things that cannot be written down in instructions: mutual assistance, extended competencies, creativity, the culture that drives the whole system, and shared values.
To form a team, you have to lay the foundations of a management culture, and it takes a very long time to form that culture. Unfortunately, the culture that has been formed here and changed several times has not been good for management.

We see it, unfortunately, in the problems of healthcare, construction, transport management, and digitalization. It takes time for this culture to form – a culture of trust and mutual understanding, results-oriented, supportive and informal approach.

Can this be created by co-opting a few people? Do you know how they form a soccer team for the World Cup? The best players are gathered together. They play and then go away. But this is a project thing, and we are dealing with a region, with a continuous cycle. We don’t just need to solve the problem of holding a festival or building a sports or medical center. Our task is to create a culture that is permanent.

Of course, relying on local people who know the local peculiarities, who invest personally. Not for a period, showing physical fitness, but showing moral qualities. That doesn’t mean there won’t be people with federal skills, connections, capabilities who can help in a certain situation. We don’t live in a vacuum, we also need those who know the situation from the outside. For example, it’s often said, “but what’s the strategy?” Any strategy starts with finding out who you’re competing with, and in general, what are your chances?

You know what they say, “a fool is rich in thought.” It is important to have people who know what is going on outside the perimeter of the Vladimir Region, outside the perimeter of the industries, who know what is going on in the federal center, in Moscow, in the Moscow Region, and who have a certain vision. Such people are guides to opportunities outside the Vladimir Region. But otherwise, the reliance on internal resources. Energy must be sought from within. Selection is to find people with energy, let me tell you a secret. Who are willing to put that energy in. And sometimes my boss told me: “Look, he’s dead, but he’s still walking”. There are people who are burned out at work. The secret is to have energy in the team. And then there is the internal culture, trust, education, pulling up knowledge. Life goes forward. You can live by the letter of the budget code “on minimum wages,” as they say. There is a law – according to it we work. Gave money – good, no – we sit and wait. But we have to be proactive, to support entrepreneurs who are prompted here, to take part.

Forming a team by itself is not a quick thing. It’s not six months or a year. It usually takes a few years. A couple of years if there are no mistakes. There are times when a person is not the right fit, when he misunderstands a task. Sometimes it happens that the person is great, but as in LEGO – from another box. He just doesn’t fit. This does not mean that the person is bad and must be discredited. He will find a use for himself in another industry.

And now everyone in the Vladimir region administration is “out of the same box”?

All jokes are jokes, but I have parted with 15 people. 15. It doesn’t seem like a lot, but processes are taking place. Unfortunately, Alisa Biryukova [ex-director of the Department of Culture of the Vladimir region] has left. We are happy for her, let’s say. More precisely, we are glad when people grow up. For her a federal career is very important. I am sure that it will benefit the Vladimir region. We need our own people in Moscow too.
There will be more replacements, they will not be noisy, but they will be.

The Vladimir Region is characterized by perennial inter-elite conflicts.

There is such a thing in any society. On the question of knowing what is going on in the competition. For some people, this seems to be what life is all about. Well, yes, that’s what it’s all about, there’s no need to make a tragedy out of it.

Nevertheless, these conflicts greatly hindered the work of Svetlana Orlova, Vladimir Sipyagin and even Nikolai Vinogradov. And the feeling is that we have not public groups, but clans, and not along party lines, but within parties, from different parties, businesses, territories. And everyone is pulling the regional blanket in their direction. Do you think you can handle these conflicts?

You know, you may think that I underestimate the situation. But I’ll tell you, I’m not exaggerating the situation. I don’t see problems on the scale that you’re describing. There are always problems, there are always interests. In Suzdal, someone says we need to build a modern city, someone wants to leave it as it is, someone wants to support Dobrograd, and someone says, “Wow, why do you support a private city? Some say give to small farmers, some say give to big farmers. Still, everyone needs to be heard, everyone has their own motivation. To understand this motivation is the task of the authorities and my personal task. Every difficult question needs an answer. If you don’t find an answer for each side, the conflict will continue to simmer. If you find a compromise – opportunities arise for everyone to live peacefully, without getting into a scuffle. That is the task of the authorities – to find a compromise. Beginning with the budget process – we know perfectly well that not all roads can be built, not enough for all schools. But we find some kind of compromise, we talk with a wide range of people. That’s why I travel around the territories, asking, wondering what’s troubling.
If a conflict really comes to a head, and we have such conflicts, I try to resolve them at the highest level, all the way up to the Kremlin.

The last question. Regional government. Up to now, our regions are run by the administration, but there is a federal law that requires the regions to form their own governments according to a structure that matches the structure of the federal government. It seems like this process should have begun by July 1.

As far as I know, my colleagues are now preparing a package of documents that will form the structure of the government. I think we will come to this sometime in the autumn. My approach is that I am for the victory of substance over form. We do have a “government” or “administration” approach or whatever – a staffing schedule. Whatever it’s called, as long as it works. As Mao Zedong said: “It doesn’t matter what color the cat is, as long as it catches mice. And the essence of the fact that it will be the government, and somehow the leaders will change – in general [does not change at all]. What matters is how the content will change, and what it will be called is of secondary importance. Now they have decided that it will be the government, for God’s sake.

Will you lead the government or will there be a single person?

With a high probability it will be me. But then again, a package of documents is being prepared and we are still debating on the structure. This does not take away from the responsibility and the level of decision-making.

Thank you very much for the conversation; it was interesting. I hope that in a few months we can do it again.

Maybe sooner.

Maybe sooner. Thank you.

Original publication

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