Foreign-Economic Activity

Foreign-economic activity of the republic in 2003 was characterized by significant growth of parameters of foreign trade. The volume of the foreign trade turnover of goods has made $870 million, that is 18.1% more than in 2002. Positive balance of the foreign trade has made $486 million that has 10.6% exceeded the parameter of 2002. In 2003 was noted for the highest parameters of volumes of commodity export-import transactions for last 10 years. In the volume of the foreign trade turnover 78% falls to export. In 2003 more than 50% of the cost of volumes of industrial output was made by enterprises of the republic for export.

In 2003 export of goods has made $678.2 million, that is 15% or $89,8 million higher, than in 2002. Due to the fact that more than 60% of Karelian goods were exported to the operative range of euro, strengthening of the European currency has considerably affected growth of export prices, on a number of positions of Karelian export improvement of conjuncture of the foreign markets is observed. The most essential growth of the export prices in 2003, in comparison with 2002, is marked for fish and fish products (32.7%), raw forest products (22.7%), processed forest products (20.0%), craft-paper (18.8%), aluminium (12.4%), and iron-ore pellets (10.8%).

Positive processes occur in Karelian export. In 2003 process of replacement of round wood export by export of saw-timbers. This fact is proven to be true by the given customs statistics on 124,5 thousand cubic meters reduction of physical volumes of round wood export (3.4%) in comparison with 2002, and corresponding 11.3 cubic meters growth of volumes of export of saw-timbers (3.9%).

The Government of the Republic of Karelia has paid especially steadfast attention to aspects of efficiency increase of export of Karelian goods, work with the federal centre on perfection of customs and tariff regulation of the Karelian export. Conjuncture and prices of commodity markets of foreign countries of the basic nomenclature of the Karelian export has been traced quarterly; the significant part of contracts on export of forest products passes price examination, timber expeorters receive the information on average contract prices of forest products in the republic monthly. Questions of decrease of profoundly processed wood products' export duties repeatedly were raised by the Government of the Republic of Karelia in the face of the federal centre at high meetings, including during the visit of the President of Russia Vladimir Putin to Petrozavodsk in July of 2003.

In 2003 rates of newprint and saw-timbers export customs were reduced, craft-paper, plywood, and paper bags export duties were cancelled. It has made possible $4.2 million (130 million roubles) reduction of expenses of Karelian enterprises at timber export in 2003.

Import of goods 2003 in cost expression has made $192 million that has 29% ($43,3 million) exceeded parameters of 2002. Cost of import has increased mainly due to the increased deliveries of pulp-and-paper and machine-building production in the Republic of Karelia. Growth of import of the industrial equipment (57%), trucks (29%), tractors (66%), nstruments and devices (32%) testifies to processes of modernisation of enterprises of the republic. Rise in price of the European currency has also affected volumes of import, since more than 70% of import deliveries were carried out from the countries of EU.

Due to tasks on attraction of foreign investments in economy of the region, increase of efficiency of export of Karelian goods, formation of international image of the Republic of Karelia, the great attention is paid to representation of potential of the republic and its enterprises at international fairs and exhibitions. In 2003 the Government has organized participation of enterprises in the collective stand of the Republic of Karelia during three international exhibitions.

Realization of Foreign Relations

In 2003 the Republic of Karelia continued to cooperate with administrative-territorial units of Finland, Sweden, Norway, and cooperation with the prefecture of Ilia (Greece) has begun. Cooperation within the framework of Baltic and Barents regions, initiation and support of projects by the European Union remain priority orientations of international cooperation. Nomination of the republic testifies to the international recognition of success of this work in Karelia as the European Region of 2003. Priority directions of international cooperation were the public health services, social protection, preservation of environment, education, and culture.

By all programs in 2003 external financing under 84 projects, including 21 new project, to the total sum of $3 622,4 thousand has been involved.

Among the largest projects it is possible to mention the project on construction of system of waste-water treatment facilities in Sortavala completed in 2003 (total amount of external financing for the period of realization of the project made €4,5 million).

The most significant events in the field of foreign relations were Days of Karelia in Finland and Days of Finland in the RK, roller-skiing race in the section of the Northern transport corridor (the city of Oulu - the Republic of Karelia - the city of Archangelsk) and The Train of Culture from Archangelsk to Petrozavodsk through Oulu and Joensuu, organized within the framework of celebrating the 300th anniversary of Petrozavodsk.

Within one year the republic carried on active dialogue with the federal centre on aspects of international activity, frontier cooperation, arrangement of the Russian-Finnish border. The republic participated in working groups and sessions of the Council of Heads of subjects of the Russian Federation at the Ministry of Foreign Affairs of the Russian Federation. Offers of the Government of Karelia on Conditions and Tasks of Legislative Regulation of Frontier Cooperation of Subjects of the Russian Federation were prepared.

Permanent maintenance, arrangement and uninterrupted functioning in the interests of enterprises and frontier areas of border check points, including points of simplified admittance was conducted. The number of working points of simplified admittance has been increased from 7 to 8. The Government of the RK has achieved acceleration of signing of the Memorandum on construction International motor transportcheck point Suopera between the Government of the Russian Federation and the European Commission and development of the project and budget documentation at the expense of means of the federal budget.

Actions for improvement of the system of customs bodies in the RK were realized: Segezhsky customs post has become subordinate to Petrozavodsk customs house instead of Kostamuksha customs house, customs posts Prionezhsky and International motor transportcheck point Suopera were created.