Regional socio-economic development in the Northwestern Federal District in the context of the COVID-19 pandemic: economic potential assessment

Abstract

Aim. The presented study aims to assess the economic potential of the Northwestern Federal District (NWFD) to demonstrate the sufficiency of resources in terms of the ability of regions in the specified district to recover from the crisis in the context of the pandemic.Tasks. The authors analyze the economic development of the NWFD regions, determine the indicators of regional economic potential utilization efficiency; develop a draft system of indicators for assessing the economic potential of the NWFD regions in the context of the COVID-19 pandemic.Methods. The object of this study is the regions of the Northwestern Federal District; the subject is the approaches and methods of developing a system of indicators for assessing the level of socio-economic development of the regions in this district in the context of the pandemic. The theoretical and methodological basis of the study is the works of domestic and foreign scientists on regional socio-economic development. The authors use theoretical and empirical methods as well as methods of economic and statistical analysis. The empirical part is based on the analysis of statistics on the development of the NWFD regions in 2018–2020. The study uses the systems approach, comparative method, and general scientific methods — analysis and synthesis, juxtaposition and comparison, systematization and generalization of data.Results. The decline in regional investment activity coincides with the causes that are characteristic of the country as a whole, including the extension of sanctions, the emergence of risks associated with inflation, lack of financial resources and qualified personnel capable of operating and maintaining high-tech equipment, and the end of the implementation of major investment projects. The profitability of fixed assets has decreased in each of the regions due to decreasing profits in almost all constituent entities of the Russian Federation that are part of the NWFD and the increasing share of fixed assets of socially oriented non-profit organizations (SO NPOs). The return on assets is decreasing accordingly, and the capital-labor ratio is obviously increasing in each region. Tax returns have also increased across the board, except for a few regions where the decrease in tax revenues can be explained by decreased tax rates relative to income and property taxes, especially in the territories of the Arctic zone. In terms of productivity, all regions show an increase. At the same time, the low growth of this indicator can be explained by the general reasons for the decline in the country’s economic growth such as sanctions, slowing domestic demand, fluctuations in exchange rates, a decline in mining, construction, and some other industries in the context of the pandemic crisis. The increase in wage returns is detected in almost every region, except for the two where the growth of the wage fund occurred faster than the growth of the gross regional product (GRP) — hence the lowest increase in productivity.Conclusions. The assessment of the economic potential of the NWFD regions shows that regional economies have enough resources to overcome the pandemic crisis. The authors believe that a more objective investigation of the problems of regional socio-economic development requires an expanded list of indicators for assessing the economic potential utilization efficiency of the region and a unified assessment methodology.