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STARTED WITH 4 MAJOR

INVESTORSVolkswagen, PSA joint venture, Samsung Electronics and Volvo Trucks

A stream of others followed

Only Greenfield projects: property rights still insufficiently protected

 

 

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SPILLOVERS

Real estate investors (housing construction boom)

Residence and Entertainment Parks Entry of investors from many countries

South Korea, Russia, French, Swedish Foreign retail chains

 

 

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RESULTS

Regional Industrial Output Grew by 63% from 2006-2008

Particular in automotive industry Foreign investment skyrocketed Retail sector grew

Public sector funded a new Development Corporation to look for more funds

 

 

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PARTNERSHIPS

Federal level industrial policy: High duties on imported cars

Allows foreign automotive investors to bring in parts duty free

Local production required for 30% of total cost

 

 

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EXPLOITING PROXIMITY TO

MOSCOWTransportation infrastructure allows close communication

As Moscow grows more expensive, Kaluga is attractive alternative for investors

 

 

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PROBLEMS

Corruption continues

There are high costs—construction Financial crisis struck Kaluga

Debt rises (result of borrowing) Budget income fell by 4% (nominal)

However, federal transfers rose by 14%

 

 

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SUCCESSFUL REGIONAL PROJECT

 

 

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TECHNOLOGICAL AND INVESTMENT ORIENTATION

Technologies that foster economic, social and technological dynamism, participation

Outcomes must include learning, changing

Reconciliation of winners and losers

 

 

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DIFFUSION OF GOVERNANCE

CAPACITYFoundation is the law at the Federal level

But there are intangibles to be produced by regional policy-making:

By delegating: find creative solutions

By localizing stimulate learning and participation

 

 

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