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Press-Service of the Head of the Government of the Republic of Karelia

Prognosis of the Republic of Karelia Development for 2002

What are the guidelines of the development of the Republic of Karelia in 2002? The Karelian government sitting, held on August 23, was focused on this important issue. The next year republican budget is to be based on the prognosis, and the more exact the prognosis is the more exact are the numbers of the would to be financial document of the republic.

Sergey Katanandov, Head of the Government RK pointed out that last year prognosis proved to be highly efficient.

Ivan Shurupov, Deputy of the Head of the Government RK, Minister of economy, said in his report that the indices of the expected prognosis had been worked out, given the social and economic tendencies, the prospects of largest enterprises development, specificity of the economy structure of the republic in general and municipial formations in particular. The most important conditions of the functioning of the economy of the Republic of Karelia in the near future are the following: first, keeping conjucture stable for the main republican exporters; second, increasing of investments on the account of enterprises' means; third, resrtucturization of inefficient buisnesses under the governmental participation.

"Given the dynamics of industrial production, a conservative prognosis of the economy development had been made. Growth rate of physical volumes of prduction is expected about 102-103%," I.Shurupov pointed out.

In forest-industrial complexthe index of physical volume is forseen about 103-104% in 2002.

In pulp and paper industry the indices, close to the above mentioned, are being planned.

The mining-industrial complex of the republic is being developed , but there are specificities in the enterprises' activities.

Production of iron-ore granules at JSC "Karelian granule" is evaluated as 6600 thousand tons in 2002 (6708 in the current year). The strategic trend for 2002 is to restore the iron-ore base and to make preparation for mining the Korlangsky deposit. That's why production development is oriented on the minimum volume in the near future.

The second largest enterprise of ferrous metal production is Vyartsilya metallurgic factory. The financial situation is very unstable at the moment, but the measures planned might give five times growth of production.

JSC "Nadvoytsky aluminium factory", producing non-ferrous metal, is quite profitable, and its financial economic situation could be characterized as quite stable. In 2001 aluminium production is to be increased by 1,5%, and in 2002 is expected to be kept at the same level.

Volume growth of ruble production ( by 110% comparing to 2000) is connected with the growing ruble demand for the highways construction in Moscow and St. Petersburg, and also in the Republic of Karelia.

The largest machine making enterprises - JSC "Onega tractor plant" and CJSC "Petrozavodskbummash" influence the situation in machine making The objective of the Government RK is to look for new resources and stimulate production growth.

CJSC "Petrozavodskbummash" is planning to increase the volume of all kinds of products, and also go on making new products and restore the ones that had been put out of production. The situation is stable here. Gasification of CJSC will be continued in 2002. One of the most challenging issues for the enterprise is lack of qualified staff. The production volume, expected in 2001 is 650 mln rbl, in 2002 - 700 mln rbl.

The main objective for JSC "Onega tractor plant" is keeping the production volume at the same level. Gasification of the enterprise is also is to be done.

900 trailor tractors are expected to be produced in the current year, and 1000 ones - in 2002. The stability of financial situation depends on a new Federal target program.

Gasification of the JSC "SZ Avangard" will allow to decrease cost of the electricity for consumers. In 2001 the volume of production is expected to be made about 105 mln rbl, and in 2002 - about 153 mln rbl.

Given that agricultural enterprises are to be assissted from the budgets of all levels, it is supposed that volume growth sale will be more than last year by 3,8%. According to prognosis, the growth by 2-3% is expected in all branches of agricaltural industry next year.

Measures taken by the Government of the Republic of Karelia to increase investment attraction of the republic create real conditions to revive the republican economy.

Answering the journalists' questions, I. Shurupov agreed that "the prognosis for the next year is rather tough." He told the journalists that it was a challenging task to convince the regional leaders in the necessity of planning increased production volumes.

The Government of the Republic of Karelia approved of the prognosis of the republican development for 2002, but Sergey Katanandov highlighted two points. First is to decrease the expence part of the budget of 2002. Second is to try to ask for financial support of the Russian government, but the attempt might not be crowned with success.

"Apparently, we should drop off all illusions," S. Katanandov said. "The next year is going to be tough for the republic. "We have to save every rouble and live economically. We should cut our clothes according to our cloth."

Natalya Volkova

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Created: 24 August 2001. Last updated: 27 August 2001.
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