Making good on a mandate to rebuild and revitalize Moscow
RBTH sat down with the Dean of the Skolkovo Moscow School of Management and Sobyanin's top advisor on economic policy, Andrei Sharonov (at the time of this interview he was Deputy Mayor of Moscow for Economic Policy).
Russia Beyond the Headlines: At last year's Moscow Urban Forum you talked about the necessity of establishing a dialogue between government and business. Have you received positive feedback from entrepreneurs or the World Bank on your attempts to improve Moscow's business climate? What are you doing to make foreign investors feel comfortable?
Andrei Sharonov: This has been a major priority for the current mayor from the very beginning. We are trying to create comfortable conditions for both domestic and international investors – we don't separate the two. One of the ratings we look at is the Doing Business index prepared by the World Bank, in which we currently do not come out looking so great...
RBTH: According to that rating, Moscow took 30th place out of 30 Russian cities in the ease of doing business.
Andrei Sharonov was appointed Deputy Mayor of Moscow for Economic Policy following Mayor Sergei Sobyanin's election by the Moscow legislature in 2010. In this role, Sharonov was responsible for budgeting, industrial and city business development, as well as competition and public procurement policy, trade and services. Sharonov was also the head of a regional electricity tariff regulator, served as a Deputy in the Russian parliament and Deputy Minister of Economic Development and Trade, and was the Chairman of Troika Dialogue, one of Russia's largest private investment banks.
The Moscow Government’s priorities include reducing the cost of doing business, simplifying administrative procedures, expanding access to infrastructure, and developing the competitive environment. We`ve done a lot to improve the situation – the Business Support Council was created, which has solved some of the systematic problems. Moscow's largest electricity provider recently made the process for connecting to the electricity supply network transparent and understandable, thereby minimizing the potential for bribe-taking. This included releasing a brochure entitled “5 steps in 3 visits”, which is available digitally and in paper form throughout the city.
The problem with the World Bank study, we realized, is that they spoke to business owners who went through the analyzed procedures three or more years ago – during the tenure of the previous mayor – and could not speak about the situation on the ground now. We've taken steps to improve communication with the World Bank researchers responsible for the study.
We've also gone through a similar exercise in relation to simplifying and explaining the process for obtaining construction permits. Objectively, though, the process for obtaining a construction permit in Moscow will always take longer than in Ulyanovsk (which occupied first place in that rating) because it's a larger city and there are more factors to consider.
Moscow is a more expensive place to do business than other Russian cities, but it's also the most attractive place to do business. That's why in terms of direct investments it takes first place. I expect a lot progress by the time the next country rating comes out in October.
RBTH: City Hall has recently developed a lot of 'green zones' within the city, and I'm not just talking about the major parks. What changes should Muscovites expect in the future?
A.S.: Last year, New York Mayor Michael Bloomberg received the Singapore Lee Kuan Yew World City Prize for implementing his Green Spaces program, the aim of which was to ensure that that all New Yorkers had a park within 10 minutes’ walking distance. This has also been one of Moscow's priorities. That’s why in 2013, more than 16 billion rubles (over $500 million – RBTH) were allocated for the upkeep and development of Moscow’s major parks (14 in total).
In 2012 a group of Muscovites proposed the idea of launching “people's parks,” which we supported. The idea is based on Moscow having many vacant lots that are not in use – these are green oases, patches of grass situated approximately 10 minutes’ walk from residential areas. City Hall conducted a study and identified around two thousand hectares of such land available.
Many of these plots are already being used by ordinary people for picnics and recreation. Our idea is to encourage this further by providing some basic infrastructure.
The city also spent a lot of money on maintaining skating rinks during the winter. Some people are surprised we used costly artificial ice – yes, our winters are long, but we experience regular thaws that make ordinary ice unusable. Right now the city is trying to attract private investors to bring a sort of “infotainment” to the skating parks. If you've been to Gorky Park, you'll see people are not consuming alcohol but are still enjoying themselves. I've gone myself and had a great time.
RBTH: One of the major topics of the 2013 Moscow Urban Forum is the development of a city’s periphery, where many industrial zones are located. Please describe the city's plans for developing industrial plots of land and improving the overall condition of residential and commercial plots in Moscow.
A.S.: You are right – the topic of this year’s forum is “Megacities: Success Beyond the Centre”. We are analyzing the potential of the city periphery and compiling guidelines for action. By the way, not all industrial zones are located in the outskirts of the city – many can be found downtown. There are a total of 209 zones occupying 7,700 hectares. This is a huge territory offering major potential for construction, while avoiding the mistakes of the past such as building “living ghettos” on former industrial plots without any of the necessary infrastructure for jobs and social needs – hospitals, schools, kindergartens, cafes and shops.
This isn't our idea: it's called a mixed-use approach and involves creating a “mini-city” on any new plot of land, which includes residential areas, commercial plots, trade, recreation, education, culture and employment. So you've created the conditions for somebody to live, work and raise a family there. Our goal is to create fixed parameters for investors in order to help create this vision of the city, rather than just build as much as possible. We currently have about 35 zones planned like this, but it's too early to speak of actual success stories.
RBTH: The new mayor declared fighting traffic jams a priority when he assumed office. According to the popular news website Gazeta.ru, we are spending even more time in traffic jams now than three years ago. Why?
A.S.: There's no quick solution to the problem, but the basic goal is to improve the quality of public transportation.
A few facts: the number of cars in Moscow is growing disproportionately faster than the amount of roads being built. When Moscow's current districts were planned in the late 1960s, the planners based their work on having three cars in the city per 100 residents. Now we have 38 per 100; in Manhattan, there are 110.
Moscow has over 4 million cars registered (not counting the many more that pass through); experts say traffic comes to a standstill when there are 700 thousand cars on the road. If we imagine that it was somehow possible to double the amount of roads overnight in Moscow, you would get 1.4 million cars on the road (instead of standing in garages, as they are now) and face exactly the same situation.
We have a huge program for developing the Moscow Metro. In 80 years, 300 km (186 miles) of lines were built. In seven years we have to build another 160 km (99 miles) and 76 stations. But then we won't have to build for a while.
RBTH: Could the Metro become overcrowded? It's already quite full during rush hour.
A.S.: This is a problem. Moscow's Metro is currently the second busiest in the world after Tokyo's. The new Metro design will include a second ring that should unload much of the traffic. We are also redesigning and increasing the quantity of connecting stations, and developing commuter train lines within the city's outer limits. We have already constructed 240 km (149 miles) of suburban railway lines. They will be extended and will be equipped with new trains. The planned volume of passenger traffic on the suburban railway system is 1 billion per year, whereas currently this figure is 500 million passengers. Accordingly, we intend to double the volume of passengers by 2019.