"Look at our youth! The young do not fear the government as the generations of the past. Our youth wants to live as free citizens of Russia. Thus they are interested in what is really happening in our society."

These are the words of the Head of the Government of the Republic of Karelia, S. Katanandov, two years ago. He thinks that the rise in enthusiasm during the period of his term is much in debt to the general activity of the habitants.

There has been change in the attitude towards work. In Karelia, people no longer think of themselves as poor relatives of Russia. The Government of Karelia chooses to rely on itself and not wait for the help from the Federal Government. People have started to believe in themselves. In the regions and villages of Karelia people no longer sit around waiting for some kind of miracle from Petrozavodsk. Mr. Katanandov noticed the changing attitude of people in the villages, who no longer ask for donations: "Give us!quot;, He says that it would be strange if there was starvation in Karelia, because the land here is fertile and the lakes are full of fish. This is what Mr. Katanandov often repeats in his traveling around the region. The time will show how permanent are the positive changes are, however there are results right now as well- the substantial rise in the economy.

Goal - 'Large Forestry Factory

The Republic of Karelia lives by forestry. The increase of the exported forestry products twice and an increase in production of cardboard by 1.5 times can bring in a large revenue.

The Government of the Republic wants to process timber on the site, instead of exporting the raw material. This will increase the revenue of the Republic, as well as, it will increase the Federal budget. The development of our own production needs large investments that is why we have asked for help from the Finnish Government and Stora Enso, says Mr. Katanandov. Our goal is to build a new wood factory on the Ladoga Lake in the region of Sortovala, where Stora Enso has a joint enerprise, Ladenso.

The worries of the ecological organizations pertaining to the destruction of old forests are groundless, says the Head of the Government.

There will be no forest-cutting in the areas which are included in the Red Book of Karelia and Russia, where there are rare plants or animals. On the territory of the Republic there are 977000 hectares of guarded territory. That is 57% of the total territory. There will be national parks created in the regions of Kalevala, Tuuloksa, Koitoeki- their area being 200000 hectares, almost all is forest, says Katanandov.

In his opinion, not all forests should be excluded from the economy.

Support of the Agriculture

The agriculture of Karelia has been decaying since the fall of the Soviet Union.

The level of prices for the agricultural products is low, when comparing it to the expenditures spent on production. The investment into the agriculture should be coming from the federal, Republic's and regional budgets. Besides that, the manufacturer himself should be concerned about the production. Which means that we need to develop our credit system with low interest rates, says Katanandov.

In the program, an agricultural unit, state or private, can receive financial help from the Government.

An area can be rented, and the forest can be cut. Starting entrepreneurs receive the initial capital.

New Projects for the Pre-Bordering Territories

To solve agricultural and other issues the Republic of Karelia initiates the joint work in p-re-border territories.

Mr. Katanandov stressed that the border should not divide people. Thus, we have composed a project according to which Karelia and three Finnish provinces collaborate in the arenas of culture, economy, tourism, ecology.

Mr. Katanandov is sure that if Euro-region Karelia is a success, the similar regions can be organized in other parts of Russia, such as Murmansk, Leningrad districts, etc.

A New Weapon against Drugs<

The task of Euro-region Karelia is to make a barrier towards drugs, organized criminal activity, illegal emigration though the border.

We have worked out some important projects to prevent the dissemination of drugs, mentioned Mr. Katanandov.

According to Mr. Katanandov there will not be the destruction of old forests in the pre-border territories, the so called "Green belt". "Green belt" is very important for ecological tourism as well.

Foreign Currency is Flowing to Karelia

Foreign investments started at the beginning of Katanandov's activity.

The law is adopted in RK that regulates the legal issues with foreign partners. Questions of taxation are being worked out too. 400 joint ventures are registered in Karelia. The largest among them are: Staro Enso Ladenso, American Intercontinental Lumber Sales, Canadian Jesco Star Gkond and British Illingworth Morris.

Last year the RK got 15,2 million dollars of foreign investments, that is eight times higher than the previous year. Foreign investment equal to 35 million dollars and 150 million roubles in the turnover. The share of Finnish capital is 19,6% of total foreign investments.

Many people need help

Joint ventures employ more than 22000 inhabitants of the RK.

According to Mr. Katanandov, in spite the economical growth, the RK does not refuse from the humanitarian aid that influence on well-being of people. The major part of this aid comes from Finland: clothes, food, medical equipment for hospitals, boarding schools, children's houses.

The results in paper and pulp industries are very positive. Total industry growth is 20%, that influences on the prosperity of the inhabitants of Karelia.

"Venajan Aika"

The Head of the Government of the Republic of Karelia: Position