Modernization of Peripheral Region's Economy in Implementing

Geostrategic Priorities

Vladimir D'yachenko

and Viktoriya Lazareva

Economic Research Institute of Far Eastern Branch of the Russian Academy of Sciences, 153 Tikhookeanskaya St.,

Khabarovsk, Russia

Amur State University, 21, Ignatievskoe Highway, Russia

Keywords: Modernization, Peripheral Territory, Geostrategic Territory, Regional Periphery, Regional Policy, Economic

Space, Transport System, Far East.

Abstract: Economic modernization has recently become an integral part of regional policy. Along with that, the expert

community consider solving tasks of modernizing peripheral regions' economy, including the Far East, to be

one of the tough problems. In giving new impetus to the modernization of the regional economy, an important

role is assigned to spatial transformations, for which the Strategy of Spatial Development of the Russian

Federation until 2025 identifies geostrategic territories, within which the state uses a wide range of tools. This

paper doesn't consider the determination of geostrategic territories as an element of a selective regional policy

aimed at using the potential of the federal centre for implementing the goals of integrated regional

development, but primarily as space within which conditions are created for implementing economic projects

that ensure achieving state geostrategic goals. As a result, less-developed peripheral regions become centres

of economic activity of large economic entities. For the Far East, one of the most important geostrategic goals

is the creation of an export transport infrastructure that ensures integration into the Asia-Pacific Region. As

part of this work, an attempt is made to assess the dynamics of processes taking place as large transport

investment projects being implemented. The Amur Region, which has all the peculiarities of the regional

periphery, was chosen for the research. Particular attention is paid to the remaining problems, including

significant limitations in transport accessibility, a high deterioration of the transport infrastructure.

1 INTRODUCTION

The main target of regional strategies is economic

recovery, modernization and improvement of the

structure of the economic complex. However, after

assessing the findings one can come to a

disappointing conclusion that a regional state policy

is not clear, and the problem of modernization of the

archaic spatial organization of the economy and

society as a whole is still not solved. As noted by

academician P.A. Minakir: "there is no practical

sense in these constructions, the simultaneous desire

of all territorial subsystems to build some ideal

economies in the complete absence of real resources

only indicates designing a virtual additive system

parts of which are not connected to each other either

https://orcid.org/ 0000-0002-4661-0328

https://orcid.org/ 0000-0001-9181-9393

hierarchically or by cooperative interactions"

(Minakir, 2015).

Therefore, one of the main issues in determining

the spatial development strategy is to assess the

potential of internal (endogenous) and external

(exogenous) growth drivers. It seems to us that during

such an assessment two aspects, based on an analysis

of existing practices, should be taken into account.

First, the actual investments are spatially

distributed primarily according to sectoral and

corporate interests, so only a very small number of

regions with certain market advantages can rely on

exogenous growth drivers. Accordingly, the rest of

the regions can only rely on endogenous drivers,

focusing their attention, when developing strategies,

on finding ways to use them most effectively.

Dyachenko, V. and Lazareva, V.

Modernization of Peripheral Region’s Economy in Implementing Geostrategic Priorities.

DOI: 10.5220/0010588101930198

In Proceedings of the International Scientiﬁc and Practical Conference on Sustainable Development of Regional Infrastructure (ISSDRI 2021), pages 193-198

ISBN: 978-989-758-519-7

193

Secondly, the analysis of the accumulated

experience of the regions, which are forced to rely

only on internal growth drivers, shows that without

the help of the centre, they can hardly count on high

positive results. Various forms of "ethno-economy"

replace investment resources due to their lack,

thereby forming powerful mechanisms of inertia and

counteracting modernization (Popov, 2010).

The peripheral regions are in a particularly

difficult situation. The ongoing regional polarization

increases the economic weakness of regional

outsiders, the instability of territorial evolution and

financial and investment dependence on the federal

centre. Thus, the opportunities to modernize the

regional periphery's economy at the expense of

endogenous drivers are significantly narrowed, not

allowing counting on high positive results. Lacking

the market advantages that make the region attractive

to large corporations, most of the peripheral

territories cannot rely on external drivers of economic

growth and modernization.

An important consequence of economic weakness

is a high dependence on external influences

(Eskelinen and Snickars, 1995), which often makes

peripheral regions' strategic programs a pile of

sectoral and corporate decisions, changes in which

determine the need for the documents fixing the

strategic guidelines to be systematically revised. As a

rule, there are virtually no attempts to analyze the

problems and prospects of growth in a new light.

Thus, the question of responsibility for the initially

accepted obligations loses all meaning.

A new attempt to implement institutional

innovations in regional development was the

determination of geostrategic territories, the priority

of which is characterized by their essential

importance for ensuring sustainable socio-economic

development, territorial integrity and security of the

Russian Federation

(Strategy of Spatial, 2019).

In recent years, attempts have been made to find

out if belonging to geostrategic territories can be used

to improve regional strategies (Buchwald and

Valentic, 2019; Mitrofanova et al., 2019). The

analysis carried out only allowed identifying

additional arguments in favour of the conclusion

made by P.A. Minakir, who noted that "geostrategic

territories" could be considered objects of spatial

strategizing, "if they did not occupy almost half of the

entire area of the Russian Federation". The result is a

situation where "there is simply no real object of

strategic planning for this area" (Minakir, 2018).

Determining geostrategic territories doesn't

practically involve so much achieving the goals of

integrated regional development, but rather isolating

them as space within which conditions are created for

implementing economic projects that ensure reaching

state geostrategic goals. Expanding the backbone

infrastructure and implementing major transport

infrastructure projects are some of the priorities of

national importance for the Far East to be developed.

For this purpose, new institutions were introduced.

They were designed to create the most favourable

conditions for large corporations to invest in projects

implemented as part of integration into the Asia-

Pacific Region (territories of advanced development

(TAD); free ports; some tariff preferences) (Ivanov

and Buchwald, 2019; Gudkova, 2016).

In these conditions, it makes practical sense to

analyze the state and dynamics of transformations

taking place in a region's transport complex, it will

allow judging the course of a region's socio-economic

development, implementation of decisions and their

effectiveness.

This research attempts to assess the

transformations taking place during the transport

system modernization in the Amur Region, one of the

most economically weak regions of the southern Far

East that has significant growth prospects.

2 RESEARCH METHODOLOGY

The development level of the route network in a

region and its condition are the most important factors

in the development of other types of economic

activity. The volume of transport services is in turn

contingent on the FEA structure of the region and the

economic situation in it. They determine the demand

for the services of the transport complex. Thus, the

main results of transport activity reflect the economic

trends in a region's economy.

Besides, it should be taken into account that the

state of the transport system significantly affects the

current situation in a region, revealing and limiting

the availability of goods and services and thereby

affecting the differentiation of territorial localities.

A region's route network is important to observe

because modernization taking place in it is the result

of the economic activity of different types of

economic entities that differ in many ways, which

creates conditions for assessing their regional

modernization potential.

ISSDRI 2021 - International Scientiﬁc and Practical Conference on Sustainable Development of Regional Infrastructure

194

3 RESEARCH RESULTS

3.1 Characteristics of the Amur Region

as a Regional Periphery

The Amur Region is a typical representative of the

regional periphery in many of its characteristics

(Novotný et al., 2015; Marada and Chromý, 1999;

Kaibicheva, 2018; Chromý and Jančák, 2005). Along

with that, the combination of some qualities makes

the region a unique object that has specific features

distinguishing it so significantly that using general

patterns for developing regional periphery cannot be

correct with it in making management decisions and

determining the prospects for socio-economic

growth.

Among the issues that deserve attention in this

regard, it is necessary to assess both the general and

special characteristics of the region as a peripheral

one. The importance of such a detailed analysis has

been repeatedly emphasized in ongoing research

(Granberg, 2009).

Among the most significant characteristics of the

situation in the region, there is its low population,

dispersion and small-scale settlement, significant

territorial spaces equated by natural and climatic

conditions to the Far North, limited significantly on

their economic growth and not considered as a place

of permanent residence (Burlayev at el., 2018).

An important geopolitical feature of the south of

the region is its bordering on China. In the initial

period of the region's development, the border

position, the presence of a unique settlement

development on both banks of the Amur River

directly opposite each other, were an important

advantage, ensuring the active development of

foreign economic relations, the penetration of

Russian capital into the border areas of China and the

wide opportunities for using Chinese labour in

economic activities in the border areas of Russia. As

inter-country relations were getting more

complicated, the growing tension in the border area

has largely become a determining factor in deterring

the deployment of large industrial enterprises,

primarily of the military-industrial sector, on the

territory of the region. Nowadays, the tendency of

returning to a situation where bordering contributes to

developing positive economic trends in the region is

becoming more relevant (Dyachenko, Lazareva,

2018).

3.2 Development of the Amur Region

as an Element of the Geostrategic

Territory

In the structure of the gross regional product, the

largest share is occupied by transport and

communications - 16.3%, mining - 15.8%,

manufacturing - 3.4%, agriculture, hunting and

forestry - 8.0%, wholesale and retail trade - 11.0%.

The structure of industrial production has energy and

raw material orientation (Amur Statistical Yearbook,

2020).

Over the past two thousand years, the funds of

mining and quarrying organizations have increased

annually in the total value of basic assets in the region

(from 1% in 2005 to 5.4% in 2018) (Basic Assets,

2020).

The region has recently implemented such major

transport projects as building the Eastern Siberia-

Pacific Ocean oil pipeline, the Amur and the Lena

federal highways (within the federal target program),

the construction and reconstruction of rail transport

facilities (the access track to the Elginsky coalfield,

bridges over the Zeya and Bureya Rivers), building

the Power of Siberia gas pipeline in the region, and

the construction of the Chinese-Russian highway

bridge Heihe – Blagoveshchensk. In "electric-power

industry", construction of the Bureyskaya HPP and

the Nizhne-Bureyskaya HPP, electric and gas

distribution networks in the region; in "mining and

quarrying", the "Pokrovsky mine" and "Berezitovy

mine" facilities, the "Olekma" processing plant, the

ore mining enterprise of the Kuranakhskoye field,

"Malomyrsky Mine" Ltd. The Amur Oil Refinery

Plant for oil refining and transportation of petroleum

products, gas processing and gas chemical complexes

were built.

3.3 General Characteristics of the

Route Network in the Amur Region

The transport complex is one of the economic sectors

in the Amur Region, which occupies a leading place

in the region's GRP structure.

The development of the route network is

determined by its transit functions, the location of

production facilities, and the economic specialization

of territorial localities. Due to the region's bordering

position, an increasing role in its transport complex is

played by the route network elements that ensure the

development of international transport and economic

relations, thanks to which pipeline has been registered

in the region, the highway infrastructure of

Modernization of Peripheral Region’s Economy in Implementing Geostrategic Priorities

195

international transit is being built up, and

international transportation by water is conducted.

The Amur Region's transport complex includes

infrastructure facilities of railway and highway

transportation, inland waterways, and civil aviation

facilities (Table 1).

Table 1: Length of communication routes, km.

2015 2016 2017 2018 2019

Railwa

tracks 3,134 3,123 3,113 3,112 3,110

hwa

s, includin

17,09917,397 17,147 17,32017,171

paved roads, among

the

12,64712,936 12,851 12,92312,992

roads of federal

significance 1,483 1,483 1,494 1,494 1,494

roads of regional or

inter-municipal

nificance 6,072 5,698 5,678 5,713 5,709

roads of local

significance

4,801 5,318 5,259 5,242 5,302

Inland waterways,

includin

2,572 2,572 2,572 2,572 2,572

with guaranteed

track dimensions 1,923 1,923 1,923 1,923 1,923

The significant investments made in the

development of the region's transport system were not

aimed at increasing the length of roads but at their

modernization, improving the quality through repair

work. Along with focusing on the condition of roads

in agglomerations and between main settlement

centres, significant efforts were directed to improving

those parts of transport routes in the worst condition.

The region's transport system was modernized

under the State Program "Development of the

Transport System of the Amur Region for 2014-

2020" and the National Project "Safe and High-

Quality Highways", which includes the regional

projects "Road Network", "System-Wide Measures

for the Development of the Road Facilities" and the

implementation of a comprehensive plan for

modernization and expansion of the backbone

infrastructure. Among the most important tasks of the

program is to promote the activation of updating basic

assets and increase the length of highways that meet

regulatory requirements.

3.4 Analysis and Evaluation of the

Activities of Sectoral Transport

Complexes in the Amur Region

3.4.1 Railway Transport

Railway transport plays a leading role in providing

international and interregional communication. The

location of the region between the main economic

centres of the Far East and the central regions of the

country determines the high importance of the

region's transit function. The modernization of the

railway network in the region is carried out by

"Russian Railways" JSC under the Strategy for the

Railway Transport Development in the Russian

Federation until 2030.

In recent years, significant investments have been

made in the development of railway transport in the

region. Thus, according to the government of the

Amur Region, in 2020, Russian Railways invested

almost 34 billion rubles to develop the capacity of the

BAM and Trans-Siberian Railway (Transport and

Communications, 2020). This allows increasing the

traffic volume to 180 million tons by 2024. For

comparison, 114 million tons of cargo were

transported in 2019.

Commuter rail service continues to play a primary

role in ensuring the citizens' mobility in the region

while remaining accessible through state regulation

of tariffs. The subsidies provided in 2018 from the

regional budget to compensate for lost income,

resulting from the fixed tariffs below the

economically reasonable level, amounted to 144,301

million rubles. A subsidy of 4,053 million rubles was

provided for preferential travel for students and a

certain category of citizens. In 2018, commuter rail

service in the Amur Region was carried out on 13

routes, including between localities where this type of

transport is main and non-alternative.

The main problems of the development and

functioning of railway transport in the region include:

 - insufficient carrying capacity, limiting the

ability to use the country's railway network in

providing international transit;

 - high deterioration of funds, primarily of

rolling stock, track facilities, repair facilities, as

well as low safety of movement and

transportation of rolling stock.

3.4.2 Road Transport

Highways are the most important component of the

industrial and social infrastructure of the region. The

development of the region's economy, the expansion

of markets for goods and services, and the expansion

of inter-municipal relations expand the scope of truck

transport, increasing the importance of highways in

the socio-economic development of the region.

The development of road communication was

active throughout the entire period of development.

Only in the period from 2010 to 2018, the length of

public roads increased from 8,464 km to 16,462 km.

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196

Of the total length of public roads, the length of paved

roads has increased from 7,795 km to 12,927 km

(Transport and Communications, 2020). The most

significant step in the region's transport development

was the construction of the "Amur" federal highway,

thanks to which a through highway service became

available connecting the south of the Far East and the

western regions of the country.

At the same time, the level of road infrastructure

development in the region is characterized as low.

Unpaved roads, the condition of which depends on

weather conditions, make up 24% in the region, about

half of the roads (51%) are gravel (slag) roads and

require frequent repairs.

The road network is unevenly allocated about the

region (Table 2) (Transport and Communications,

2020).

Table 2: Proportion of local public roads with improved

pavement in the length of paved roads

2015 2017 2018 2019

Total by region 24.0 25.6 26.6 26.7

Bla

oveshchens

59.2 58.3 58.3 58.5

Belo

ors

41.7 64.5 64.7 64.8

Zeya 57.1 57.1 63.1 63.1

Raychikhins

26.9 26.9 26.9 26.9

Svobodniy 100 100 100 100

nda 100 100 100 100

Shimanovs

100 100 100 100

urban-type settlement of

Progress

100 100 100 100

Arkharinsk

11.0 11.6 12.2 11.8

Belo

orsk

21.6 - - -

Bla

oveshchensk

20.4 19.3 19.8 19.7

Bureysky 20.1 21.0 21.7 23.7

Zavitinsky 21.9 18.7 41.1 38.2

7.2 7.2 7.2 7.2

Ivanovsk

12.0 28.4 28.4 28.0

Konstantinovsk

38.0 42.0 44.5 40.6

Magdagachinsky 23.2 10.1 9.0 8.9

Mazanovsky 9.3 8.2 8.2 8.2

Mikhailovsk

- 9.3 9.3 9.2

Okt

abrsk

- - 36.5 38.8

Romnensk

5.1 5.0 5.0 5.6

Svobodnensk

- 100 100 100

Selemdzhinsky 8.3 3.1 3.1 3.3

Seryshevsky 19.3 14.2 14.2 14.6

Skovorodinsk

3.8 4.6 4.5 4.6

Tambovsk

44.5 43.1 43.1 43.1

nsk

- - - -

Szymanovsky 9.8 9.8 17.2 17.2

The highest density of the road network is in the

southern part of the region and it is concentrated

around the regional centre and major cities. The road

network in the north and north-west of the region is

much less developed.

3.4.3 Air Transport

Air transport is an important part of the integrated

transport system in the Russian Federation and the

Amur Region.

Blagoveshchensk Airport is an airport of federal

significance, used for domestic and local

communications. It is connected by transit and direct

airlines to the central regions of the country and has

access to international air transportation services. The

northern remote settlements of the region are served

by airports located in the cities of Zeya, Tynda and

the village of Ekimchan.

Most airports located on the territory of the region

have a low level of equipment, the condition of

runways and other ground infrastructure does not

meet up-to-date requirements. The requirements for

flight safety and the quality of public services are also

increasing. To ensure sustainable passenger air routes

and the safety of passenger transport, the state should

actively participate in the reconstruction and overhaul

of airport complexes and ground infrastructure.

3.4.4 Pipeline

Pipeline facilities are included in transport facilities

besides road, rail and air ones.

Adding the Eastern Siberia - Pacific Ocean oil

pipeline to the region's route network with access to

China of the Selemdzhinsky District and the Power of

Siberia gas pipeline gives not only large-scale export

opportunities but also prospects for developing gas

processing and oil refining. Currently, the capacity of

the gas pipeline is being expanded, which will allow

starting full-scale gasification works in the region.

The total level of gasification of the Amur Region is

planned to be raised from 0% to 11.6%.

4 CONCLUSIONS

Using the region's transit potential as a territory of

geostrategic importance gave rise to its transport

system in developing the Far East backbone transport

network, providing access to the countries of the

Asia-Pacific Region.

Among others, the priority task is to develop the

backbone infrastructure, the main elements of which

include the Trans-Siberian and Baikal-Amur railway

lines, which are a key link in ensuring transport

communications between Europe and Asia, realizing

the railway transit potential of the Russian

Modernization of Peripheral Region’s Economy in Implementing Geostrategic Priorities

197

Federation, and developing international transport

corridors. Measures for railway infrastructure

development, oriented to increasing the volume of

cargo and passenger traffic, include the elimination of

"bottlenecks", the construction of second and third

tracks in the main directions.

Large-scale results have been achieved in the

development of road transport in recent years. The

most significant step in the region's transport

development was the construction of the "Amur"

federal highway, thanks to which a through highway

service became available connecting the south of the

Far East and the western regions of the country. At

the same time, highway service in the region is not

sufficiently developed. In the regional settlement

system, there are still significant limitations in

transport accessibility. One of the main problems of

the transport infrastructure is a high deterioration of

the main production assets of road transport, which

limits their carrying capacity and requires a constant

inflow of investments for repair work. Among the

acute problems in the route network of the region,

there is a low technical condition and poor

development of the route network of local

significance. In general, the existing transport

infrastructure does not correspond to the current

trends in passenger and cargo transportation

Important elements of the transport infrastructure

in the region are bridges and overpasses, facilities for

improving road safety, gas stations, etc. Many of the

artificial structures are in poor technical condition,

including a bridge crossing connecting the regional

centre with the southern districts of the region.

The bordering position of the region creates

conditions for expanding international cooperation,

increasing the volume of export-import and passenger

traffic. In 2020, the border bridge crossing of 1.3 km

in length over the Amur River in the area of

Blagoveshchensk (Amur Region) and Heihe was

brought into service. To further increase the foreign

economic potential of the region's transport system, it

is necessary to significantly increase the logistics

centres that meet domestic and international

standards.

In the region's transport complex, despite the

large-scale transformations, there are still systemic

problems that indicate the necessity to eliminate the

infrastructure limitations in the region for socio-

economic development and performance of transit

functions in interregional and international

communication.

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