Money Focus: Special economic zones not a solution

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MOSCOW, August 24 (RIA Novosti, commentator Peter Lavelle). The government has announced that $1.8 billion is to be allocated to the Federal Agency for Special Economic Zones, to be overseen by the Ministry of Economics and Trade, for the second half of this year. To date, the government has received 30 applications from regions seeking permission to create zones.

The government's interest in creating special economic zones is not new. The first attempt was quietly abandoned a couple of years ago in favor of bringing regions under a more uniform tax regime.

The most recent incarnation of special economic zones envisions two types: industrial production, and technology (a third could include a tourism-oriented zone).

It remains to be seen whether these zones will be successful. The concern, many believe, is that the focus on creating special economic zones may draw attention away from more important issues such as improving Russia's overall business and investment climate.

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