Government support for regional economy in the context of modern turbulence

Abstract

Aim. The presented study aims to analyze the instruments of government support for regional development in the context of political and economic turbulence caused by anti-Russian sanctions.Tasks. Through the example of the Leningrad region, the author describes the directions and effects of the macroeconomic shock caused by external sanctions on regional economy and systematizes measures of government support for the regional economy in the context of political and economic turbulence.Methods. This study uses the methods of retrospective and comparative analysis, analogy and observation, expert assessments, scenario approach, and special methods of regional research.Results. The performed analysis indicates that the impact of the macroeconomic shock caused by anti-Russian sanctions (2022) on the Russian economy is multidirectional. The degree and nature of its impact vary significantly by region and type of economic activity. However, despite its generally negative nature, this impact has not yet become critical. The analysis results show that the regional economy is sufficiently resistant to crisis challenges. At the same time, the negative impact manifested as a general drop in production volumes or a decrease in real wages is gradually increasing. Therefore, the authorities should be proactive in combating crisis phenomena. In the Leningrad region, such measures are taken actively and efficiently. These need to be focused primarily on supporting import substitution programs and reducing the level of import dependence.Conclusions. In the context of unprecedented sanctions, reducing the risks of import dependence is one of the key goals of sustainable economic development. The successful solution of import substitution problems today, i.e. as quickly as possible, is important not only for quickly curbing crisis phenomena and restoring the Russian economy back to normal, but also from the perspective of changing the region's economic specialization. The observed turbulence is causing a structural shift in the economy driven by the macroeconomic shock. It is recommendable to ensure the progressivity of the structural shift in the Leningrad region as it will be much more difficult to do this after the transition process is complete. In the context of the transition to a new technological paradigm in the economy, this will limit the competitiveness of the region.