Economy
Igor Orlov: Businesses should be compensated for their additional expenses in the North
© RIA Novosti. Anatoly Medved

Igor Orlov: Businesses should be compensated for their additional expenses in the North

Businesses in Russia have to be compensated for the northern [additional] allowances they pay to their staff working in the North to create a competitive environment, said Arkhangelsk Region Governor Igor Orlov at a Federation Council meeting, RIA Novosti reported.

According to Orlov, since Soviet times, the entire Arkhangelsk Region has been referred to as a territory either lying in Russia's Extreme North or areas given a similar status. Currently, 59 percent of the region's territory lies in Russia's Arctic zone, and 57 percent of its population, or 650,000 people, live in the Arctic.  

"However, northern allowances and privileges have put us at a disadvantage," Orlov said. "They are an additional burden for businesses and the budget, and they also often put off investors, so standard conventional tools to develop northern territories and promote business in this region often don't work."

The region's authorities have come up with proposals, which, if approved, will, at least, help create a competitive environment in the North and take a differentiated approach to management across the country.

"First, we suggest that the insurance premium that businesses pay to extrabudgetary funds should be lowered to compensate businesses for the payment of northern allowances," Orlov said. "It's also [necessary] to introduce a system of weighting factors to be used for determining the amount of financing under the federal state program developed for the Arctic regions."