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Although the Urals region has immense industrial potential, foreign direct investment in the region is not high and in some areas has dropped noticeably, President Vladimir Putin said at a meeting on social and economic development in the Urals Federal District.

What stands out is that growth is a lot stronger in some of the district’s regions than in others, and also that industrial capacity is excessively concentrated in a handful of economic centres. Some 40 percent of companies in the machine-building sector operate at a loss, and there is a more than 10-fold difference in per capita budget revenue between the regions that make up the district. Small business development declined noticeably in 2004.

These are all signs of fundamental problems in the way the district’s authorities are going about resolving the most pressing tasks at hand.

Making full use of the Urals region’s huge potential requires principally new approaches and attractive, promising, new projects, expanding opportunities and looking for new sources of growth for the regional economy.

The Urals Federal District’s economic potential should be based on free movement of capital without internal barriers – both local capital and investment from other regions and other countries.