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THE ROLE OF CITIES IN MODERN ECONOMY
NATIONAL URBAN POLICY IN RUSSIA AND THE EUROPEAN EXPERIENCE
O. V. Kuznetsova
Federal Research Centre Computer Science and Control of the Russian Academy of Sciences 44/2 Vavilova ul., Moscow, 119333, Russia Immanuel Kant Baltic Federal University 14, A. Nevskogo ul., Kaliningrad, 236016, Russia
Received 01.09.2021
doi: 10.5922/2079-8555-2021-4-1
© Kuznetsova, O. V., 2021
This article analyses the features, shortcomings, prospects, and limitations of Russia's national urban policy (NUP) and similar initiatives abroad to formulate proposals for further development of the Russian NUP. To this end, the study examines international (particularly German) documents and publications on NUP and the Russian regulatory framework. The COVID-19 pandemic has drawn attention to the resilience of cities to crises and the development of urban green spaces. Germany's current NUP, adopted in 2007, stands out for its complexity and congruence with regional policy. The principal NUP document in Russia is the Spatial Development Strategy. However, it overlooks some issues essential for the development of the city system: the federal authorities support only selected types of towns, such as single-industry municipalities, and the NUP is not comprehensive as it pays little attention to the economic dimension. A feeble information framework and largely powerless municipal authorities impede further development of the NUP. A transition to a comprehensive and well-designed NUP in Russia is proposed, which includes counteracting the concentration of population and economic activity in Moscow and establishing Saint Petersburg as a centre of economic growth. There is also an urgent need to understand the economic development prospects of smaller towns.
Keywords:
national urban policy, regional policy, Germany, Spatial Development Strategy of Russia
Introduction. Problem setting
The socio-economic development of Russian cities has received increasing attention in the country, especially as part of the federal policy on regional de-
To cite this article: Kuznetsova, O.V., 2021, National urban policy in Russia and the European experience, Balt. Reg., Vol. 13, no 4, p. 7-20. doi: 10.5922/2079-8555-2021-4-1.
BALTIC REGION ► 2021 ► Vol.13 ► №4
velopment. The Strategy 2025 for the Spatial Development of Russia has set a significant landmark in this sphere. Adopted at the beginning of 2019, it emphasized the socio-economic development of larger urban agglomerations as the key to faster economic growth and to boosting research and development.1
The COVID-19 pandemic has foregrounded the problems of cities, which first fell victim to the outbreak because of their many international contacts and high population density. Cities have also been affected the most by the pandemic-related restrictions imposed on some industries. As a new challenge to cities, these circumstances have provoked discussions on the future role of cities in the national economy and settlement system.
At the same time, new visions of urban development are emerging in Russia: the foundation of new cities in Siberia or a million-strong city in the Far East.
All the above indicates that cities are becoming the focus of the federal socio-economic policy, whilst the need for a comprehensive urban policy, akin to the regional one, is growing. Both as a term and real-life phenomenon, the urban policy has existed for decades in Russia and abroad. Yet, the international literature, including OECD 2017 — 2021 reports, describes the national urban policy as a relatively new phenomenon, even when the most developed countries of the world are concerned.
This situation gives rise to the questions discussed below. One of them concerns international practices of devising national urban policies. Of particular interest are EU countries keeping a close eye on spatial development. The other questions help assess the Russian situation from an international perspective and establish what the country can learn from the international experience, in other words, which best practices are to be borrowed and what policy elements should remain nation-specific. The primary comparative focus is on Germany — part of the Baltic region, it is the undisputed leader in national urban policy.
National urban policies across the world, in the EU and Germany: a literature review
Many countries are actively developing national urban policies (NUPs). A comparison of OECD (or joint OECD and UN-Habitat) reports on NUPs in OECD countries and across the world testifies to this fact. In 2017, five out of 25 OECD members did not have a NUP; 15 had a well-articulated urban policy; the policy of another 15 states was not comprehensive; today, all the countries have some form of NUP. Although, as experts stress, definitions of NUP vary from country to country, the term generally stands for a coherent
1 Order of the Government of the Russian Federation of 13 February 2019 No. 207-r. Consultant Plus legal research assistance system.
set of decisions through a deliberate government-led process of coordinating and rallying various actors towards a common vision and goal promoting more transformative, productive, inclusive, and resilient urban development for the long term.
The current European NUP originated in 2007 when the Leipzig Charter for a Sustainable European City was drawn up (Germany's NUP appeared the same year). The updated New Leipzig Charter has been in effect since 2020.2 Another NUP framework document is the New Urban Agenda adopted in 2016 at the UN Conference on Housing and Sustainable Urban Development (Habitat III) [4].
The novelty of NUP is very much nominal: the OECD reported on Germany's NUP as early as 1999 [5]. Moreover, in 2005, Yakov Silin defined the policy very similar to the one quoted above3 (Russian works viewing NUP in this light are few; see [7; 8]). Basic studies into urban policy also appeared at the time [9]. In other words, urban policy is not a new phenomenon, but it took on its contemporary form quite recently. In its current incarnation, NUP has several important features that Russia should take into account.
— Urban policy is, on the one hand, a collaboration of authorities of different levels (in federal states, these are federal bodies, regions, and cities [municipalities]); on the other hand, there is a need for a clear national-level vision of urban development prospects and the national funding of urban policies (this component of Germany's NUP has been demonstrated in [10]).
— Urban policy is an essential part of regional policy (in the EU, it is included in the so-called cohesion policy [11; 12]). NUP is a vision of cities aimed to satisfy their needs and ensure a balanced spatial structure of the country.
— NUP concerns a wide range of areas; any urban policy is comprehensive.
NUPs differ considerably across countries, even within Europe [13].
Based on a study of 86 countries, The Global State of National Urban Policy 2021 report [2] identifies the following NUP goals (the number of countries pursuing the goal is given in brackets):
— balanced territorial and urban development (47);
— a coherent vision of national urban development (38);
— policy coordination across sectors (27);
— productive and competitive cities with job opportunities (24);
— decent and affordable housing (20);
2 Netzwerk und Wissensplattform für integrierte Stadtentwicklung, 2021, Nationale Stadtentwicklungspolitik, available at: https://www.nationale-stadtentwicklungspolitik.de/ NSPWeb/DE/Home/home_node.html (accessed 02.08.2021).
3 He described it as a deliberate official activity of international, national, regional or local authorities of all levels and other actors (non-profits, parties, alliances, corporations and citizens), having a legal and institutional framework that exerts a regulatory impact on the development of cities and their system to attain the goals set out [6, p. 96].
— basic urban services and infrastructure (19);
— less urban sprawl, more compact and connected cities (17);
— urban and rural connectivity (11);
— adaptation to climate change (9);
— social cohesion (8).
Overall, the increasing attention to urban issues seems to have two causes: the importance of cities as centers of economic growth (they have considerable innovation potential) and urban problems that even the most affluent cities must deal with, such as the consequences of distinct social stratification and the influx of migrants (urban development is discussed in many works, see [14—17]). Thus, disadvantaged city districts and the growing complexity of urban development were the two central themes of the Leipzig Charter 2007.
Adopted on 30 November 2020, the New Leipzig Charter had to embrace the COVID-19 challenges to NUP (the influence of the pandemic is examined in [18; 19]). The new document once again stresses the need for urban policy to be comprehensive, its three primary goals being "the green city", "the just city" and "the productive city". Special attention is drawn to the crisis resilience of cities4 and empowering local authorities to handle impending social, economic and environmental problems. Digitalisation is mentioned as an indispensable tool for solving urban problems.
The Global State of National Urban Policy report from the OECD and UN-Habitat [2] sets similar NUP goals; cities must strive to be resilient, green, and inclusive.
In the wake of the COVID-19 outbreak, one must mention a contribution by renowned regional studies experts and urbanists [25]. They argue that while the pandemic will not drastically change the roles of cities in national economies, it will impose new requirements on cities and especially urban green spaces.
Germany's NUP provides a prime example of a comprehensive NUP complete with vertical and horizontal coordination tools (vertical coordination concerns authorities of different levels, whilst horizontal coordination relates to areas of socio-economic policy.) A website devoted to national urban policy (Nationale Stadtentwicklungspolitik)5 provides a platform for project ideas and promotes dialogue on national and international urban development. It also contributes to the interdisciplinary discourse on urban development and encourages knowledge exchange.
4 The concept of resilience (shock resilience) of territories has been studied abroad since the 2009 economic crisis [20 — 22] with an emphasis on city resilience [23; 24].
5 Netzwerk und Wissensplattform für integrierte Stadtentwicklung, 2021, Nationale Stadtentwicklungspolitik, available at: https://www.nationale-stadtentwicklungspolitik. de/NSPWeb/DE/Home/home_node.html (accessed 02.08.2021).
The fact that the country has a Federal Institute for Research on Building, Urban Affairs and Spatial Development (Bundesinstitut für Bau-, Stadt- und Raumforschung) under a federal ministry points to the rapt attention of Germany's federal authorities to NUP.6 The website of the institute abounds with publications on the implementation of NUP in Germany and on spatial development in general, including the Regional Planning Report (Raumordnungsbericht [26]).
The state of national urban policy in Russia
This section examines the state of NUP in Russia by analysing relevant laws and regulations. In international practice, NUP is either made explicit in dedicated documents or embedded in less specific policy papers on spatial development. Russia has adopted the second approach: in 2021, the OECD named the Spatial Development Strategy of Russia (SDS) an NUP document [2], while in 2018, OECD experts stated that no information on an NUP in Russia's was available [1]. No Russian document before the SDS resembled an NUP. There are at least two reasons for the belated emergence of an NUP in Russia (it was introduced at the beginning of 2019).
The first reason is the late introduction of the nationwide regional policy. It provides the foundation for an urban policy through establishing a national framework of spatial development regulation. Some factors, above all the overly liberal state regulation of the economy, delayed active work on a federal policy on regional development until the 2009 economic crisis, which triggered the search for new opportunities to ensure national and regional progress [27].
The second reason is that the few regional policy measures that existed before 2009 were aimed solely at regions, whilst municipalities (and most Russian regions, except three federal cities, are ones) attracted little attention from the federal authorities. This situation, in its turn, was a product of the lack of statistics to back administrative decisions. Although municipal statistics is still not perfect, the municipal reform7 and digital transformation, which started in the late 2000s, facilitated the creation of the municipal database now available on the Rosstat
6 Stadt- und Raumforschung, 2021, Bundesinstitut für Bau-, available at: https://www. bbsr.bund.de/BBSR/DE/startseite/_node.html (accessed 02.08.2021).
7 The municipal reform started with the adoption of federal law No. 131-FZ of 6 October 2003 On the General Principles of Local Self-government Organisation in the Russian Federation. Most of its clauses came into effect on 1 January 2006, but the period of transition to the new rules lasted until the end of 2008. An important novelty was the harmonisation of spatial frameworks for local self-government in Russian regions. A well-nigh unified system of territorial units for statistics emerged as a result.
website.8 The availability of municipal statistics, albeit imperfect and incomplete, made it possible to analyse national spatial development and laid the groundwork for the SDS.
Being a part of the national strategic planning system, the Spatial Development Strategy was designed as a viable framework for an NUP. I believe, however, that the SDS in its current form cannot support a comprehensive NUP since it does not solve the fundamental problems of urban development and urban policy.
Firstly, it does not look at ways to reduce the concentration of population and economic activity in the mammoth Moscow agglomeration; nor does it strive to develop other cities with a population of over a million as alternative growth poles. It is still unclear whether St. Petersburg should become an alternative growth pole or rapid development will turn it into another behemoth. Nor is there an answer on whether the proposed measures should apply exclusively to million-strong cities (absent in the Far East).
The strategy's disregard of the need to decentralise Moscow has an obvious — political — reason. Spatial development priorities have never been identified, and the SDS contains mere declarations with no effect. More than half of Russia's regions, 51 out of 85, have the status of geostrategic territories: all border regions are identified as such along with traditional geostrategic areas (the Far East, the Arctic and the North Caucasus, Crimea, and the Kaliningrad region).
Aspiring economic growth poles, divided into several types, are located in all Russian regions. These are 95 cities and urban agglomerations of various sizes, 27 territories specialising in resource extraction and agriculture and 20 regions with proven potential for research and academic excellence. Although this approach is tenable as it outlines development prospects for all the territories, it fails to address the most pressing spatial development issues, including the extreme concentration of population and economic activity in Moscow, which harms the city itself.
In other words, the SDS does not explicitly call for the establishment of larger urban agglomerations as alternatives to Moscow, and this prospect has never been part of the discussion on spatial development. Attention is paid instead to rural areas and small towns, but, important as they are for the settlement system, they cannot provide an alternative to Moscow. At the same time, second-largest cities have received increasing attention recently in European countries [28].
The SDS does not specify the role of St. Petersburg in national spatial development either. As mentioned above, a considerable concern is that becoming an alternative to Moscow may make the city as overly dominant as the Russian
8 Municipal database, 2021, Rosstat, available at: https://rosstat.gov.ru/storage/media-bank/ykmb3eKg/munst.htm (accessed 17.08.2021) (in Russ.).
capital. Another issue is whether the geographical position of St. Petersburg can make it a major centre of international cooperation in the Baltic and beyond. Unfortunately, the SDS tends to ignore the involvement of Russian regions and cities in international trade, which is a principal development area for St. Petersburg [29].
The second significant shortcoming of the SDS seems to be its failure to discuss the prospects of the entire system of Russian cities or the place of cities and towns of different sizes in the country's socio-economic makeup. The SDS considers several problems of national spatial development. The first one is the lack of comfortable urban design in most cities, even the larger ones. The lethargic business activity in many small and medium-sized towns is the second problem. The third is the poor environmental quality in most industrial cities or those with over half a million population. Thus, the gravest concerns are social, economic and ecological. Yet, spatial development goals focus only on social and partly on environmental issues: the strategy highlights the need for a housing stock overhaul, better public utilities and transport infrastructure, balanced residential development in cities, environmental action, etc. Small and medium-sized towns are mentioned only in the context of supplementary measures to accelerate the socio-economic development of single-industry towns (economic diversification), naukograds9 (enhancement of research and development facilities) and historical settlements. Overall, small and medium-sized towns are seen as inter-municipal service centres for rural areas, and resources for their development will be allocated after new regional poles of economic growth have been created.
On the face of it, this is a sensible approach. The economic problems the country is facing make aspiring growth poles, rarely small and medium-sized towns, likely rescuers. Germany's experience testifies to the viability of this strategy. After the reunification, the country concentrated on supporting the main cities of the new states (including Berlin) and establishing transport links between them. The logic behind that decision was similar to that found in the SDS: larger cities would provide the fastest return on investment. And even if they did not become growth poles for the surrounding areas, they would bring in revenues to increase the national budget and thus provide resources for developing the periphery.
Nonetheless, limiting the discussion about the development of small and medium-sized Russian towns to urban space enhancement may bring about more problems than it solves: even in the best living conditions, the lack of jobs will cause out-migration. A comfortable urban space is a key to urban development, but it is not sufficient. If a comprehensive approach targeting both social and
9 Literally, "science city" (Russian).
economic development issues of small and medium-sized towns is not taken from the start, investment in infrastructure may become tantamount to funding dead loss.
This kind of discussion on the prospects of economic development of small and medium-sized towns will require acknowledging the lack of potential investors willing to revitalise the periphery, on the one hand, and the inevitability of people migrating to areas with a high population density, on the other. Then, the question will arise as to how the national settlement system should be transformed. Yet, as many experts and public officials have stressed, the SDS links system stability to its conservation.
The SDS was approved at the beginning of 2019, but the first federal initiatives supporting urban development had appeared earlier. Most were aimed at towns and cities of selected types, similar to how SDS would later focus on naukograds or single-industry settlements. The programmes targeted cities whose economies were dominated by government-owned organisations. These included closed cities established back in the Soviet time, homes to the military or nuclear facilities. Before the municipal reform, the fiscal relations of the federal authorities with closed cities were different from those with the rest of the country. After the reform, closed towns became ordinary Russian municipalities, but they still retained dedicated financing from the federal authorities. This is also true of naukograds, which depend heavily on research and development carried out at government-owned institutions. The first document on supporting naukograds, a presidential decree, was signed in 1997; the federal law followed in 1999. This line of federal policy had two problems. Firstly, not all the existing naukograds had the formal status (and thus missed out on additional funding). Secondly, for a long time, federal funds were allocated to the improvement of the social and utility infrastructure rather than research and development [27].
The early urban development initiatives also targeted cities and towns plagued by socio-economic problems. These municipalities, especially mining towns, have been the focus of federal attention since the early 1990s. However, a fully-fledged national policy did not come about until 2009, with the economic crisis necessitating support for single-industry towns. The socio-economic situation in many such municipalities deteriorated as their dominant enterprises succumbed to the economic downturn. Towns whose principal employers had thrived before the crisis suffered the most. The federal authorities could not ignore social tensions building up there. There is now a strong regulatory framework for support for single-industry towns; its principal document being the outline of the 2016 — 2015 Comprehensive Development of Single-industry Towns priority programme.10
10 Russian state-supported programmes and projects are divided into national projects, federal projects and priority initiatives.
Only the federal policy on single-industry towns seems applicable to Russian regions lying in the Baltic (only one municipality in the area, Petergof, is a nau-kograd; this was the case in 2005 — 2010 [27]). The list of single-industry towns includes municipalities of the Kaliningrad and Leningrad regions (Yantarny in the former and Pikalevo, Slantsay and Syasstroy in the latter).11
Pikalevo has the status of a territory of advanced socio-economic development, which is essentially a variation of a special economic zone where those investing in projects stimulating economic diversification in cities and towns are provided with tax incentives. There are 321 single-industry towns in Russia, 95 of which are territories of advanced development, and it seems that the Baltic regions of Russia can benefit from this economic policy tool. In particular, the economic and geographical situation of the Leningrad region makes it more attractive to investors than many other Russian territories.
Improvement of urban spaces is part of the initiative A, Comfortable Urban Environment 2018 — 2024, of the Housing and Urban Environment national project. The project is supervised by the Ministry of Construction of Russia, which also oversees the Smart City project aimed at the digitalisation of urban economies (launched within the framework of the same national project). It is clear why the Ministry of Construction was charged with urban space development: this sphere has much in common with residential development and utility management, which was the remit of the Ministry of Regional Development of Russia almost throughout its existence (2004—2014) [27]. However, this way, urban space development becomes disengaged from the socio-economic development of cities. That being said, Russia has a success story in terms of comprehensive treatment of economic and social problems of cities — the 2018 programme for the social development of economic growth poles in the Far East.12 Generally, the federal authorities implement a vigorous Far East policy employing a variety of tools for supporting the territory; the measures embrace the full spectrum of possibilities.
Russia has a range of federal urban policy tools, but they lack cohesion and coordination between the ministries responsible for their implementation. This situation, however, is in full conformity with the clauses of the Spatial Development Strategy; this comes as no surprise since the document reflects the existing state of affairs.
11 Order of the Government of the Russian Federation of 29 July 2014 No. 1398-r On the Approval of the List of Single-industry Municipalities in the Russian Federation, as amended on 21 January 2020, 2020, Consultant Plus.
12 Resolution of the Government of the Russian Federation of 14 March 2018 No. 254 On the Approval of Rules for Other Intergovernmental Fiscal Transfers to Support the Measures of Social Development Plans in the Economic Growth Poles of Russian Regions in the Far Eastern Federal District.
The indispensability and limitations of national urban policy development in Russia
It seems that Russian national urban policy requires further development: there is a need for a comprehensive vision for the development prospects of the entire system of cities and towns across their different types — from metropolitan Moscow to small towns in the periphery. It is also essential to identify possible strands of urban socio-economic development and define the extent of federal participation in the process.
The problems tackled by the Russian NUP are not dissimilar to those addressed by its counterparts in economically developed countries, given the existing national specifics. In Russia, like everywhere else, the largest cities are centres for innovation and economic growth. They must look for optimal planning solutions (including the development of green spaces, which caused much discussion during the COVID-19 pandemic) and deal with social inequality, migrant adaptation, and transport and other infrastructural issues. Steps are needed to create a polycentric system of rapidly developing cities capable of becoming growth poles for their macroregions. Such cities will retain population in their part of the country, reduce socio-economic disparities at the macroregional level and draw population and businesses out of Moscow.
International practices and the current situation in Russia suggest that the implementation of NUP in the country will be impeded by problems having no direct bearing on urban development.
Firstly, Russia's information framework is too feeble to support NUP and spatial development in general. The country continues to use the urban-rural population dichotomy, although the boundary between the two has blurred, and this division is no longer used abroad. For example, Germany publishes data on the proportion of the population residing in areas with a high, medium, and low population density. Eurostat releases data on specially designed typologies of regions featuring a threefold division into predominantly urban, intermediate and predominantly rural regions; areas of the two latter types are further classified according to the presence of a city. Russian statistics, however, does not distinguish between towns comprising large urban agglomerations and those located on the distant periphery. This lack of distinction fills Russian urban development discourse with erroneous assumptions. Eurostat garners data on metropolitan areas, whilst Russia has made little progress in the debate on urban agglomeration development since the SDS was published. To what degree cities and urban agglomerations are objects of NUPs is a contentious issue [30].
Furthermore, Russia does not have a body that could assume the role played by the Federal Institute for Research on Building, Urban Affairs and Spatial Development in Germany, i. e. carry out analysis of national spatial development and build links between research and public administration. The need to organise
a centre for spatial analysis has been repeatedly emphasised in Russia, yet the idea of creating a ministry-led institute has never been articulated.
This state of affairs can be explained by a bulk of information on the regional component of the federal sectoral policy being restricted [27]. Before all else, harmonisation of different strands of industrial policy requires information on the industries.
Secondly, city authorities must participate in NUP. But to do so, they need fiscal independence and powers which Russian municipalities do not have ([8]; for a comparison of the fiscal situation of Russian and German cities see [31]).
All these problems have to be solved for the sake of urban policy and spatial development management in general.
Conclusion
As previously stated, national urban policy is a rapidly developing sphere of interest of various national authorities across the world. A new challenge to cities and urban policy, the COVID-19 pandemic, has accelerated processes in the area. Russia is keeping up with global trends, but its national urban policy has many problems still in need of solutions. The following initiatives will help remedy the situation:
— clear articulation of national urban policy as an area of responsibility of public authorities;
— transition from isolated measures to support cities towards a comprehensive urban policy congruous, and this is especially important, with the economic development goals of small and medium-sized towns;
— creation of a framework for a polycentric urban system with economic growth poles in different regions, accompanied by measures to offset the concentration of population and economic activity in Moscow;
— development of an information and statistical framework for administrative decisions commensurate with current challenges.
Attaining these goals is essential for Russia to remain competitive in the global arena and in the Baltic region. Since cities are the principal drivers for modern economic development, and neighbouring countries have created conditions to unlock their potential within national urban development policies, Russia must grasp its chance at developing its urban areas. All this applies to Russian Baltic regions, especially St. Petersburg. Like any other city with a population of several million, it has both considerable potential and numerous problems. Russian documents, however, do not contain a cogent policy on St. Petersburg and its agglomeration.
A national urban policy will contribute to the federal vision for the role of cities and towns of different types in the national spatial development and augment plans for supporting the socio-economic development in Russian cities in the Baltic and beyond.
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The author
Prof. Olga V. Kuznetsova, Senior Research Fellow, Federal Research Centre Computer Science and Control of the Russian Academy of Sciences, Russia; Professor, Immanuel Kant Baltic Federal University, Russia.
E-mail: kouznetsova_olga@mail.ru
https://orcid.org/0000-0003-4341-0934
