The Official Karelia
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Economic development of the Republic of Karelia in 2005

  Results of 2005

  Economic Policy

  Productive Industry

  Tourism

  Foreign-Economic
  Activity


  Inter-Regional Cooperation

  Natural Resources
  and Ecology


  Conclusion

Foreign-Economic Activity

Development of economics of the Republic of Karelia is impossible without consecutive integration into the system of international and inter-regional economic relations. A key element for creation of favorable conditions for foreign trade development is Russia's joining the multilateral system of regulation of international trade within the limits of the World Trade Organization on conditions acceptable for Russia.

Karelian enterprises successfully master practice of implementation of foreign trade operations under the open economics conditions. The competition to foreign companies, both on internal, and on the foreign market becomes a more significant factor for them, which defines decisions in the field of production and sales.

The foreign trade turnover of goods of the Republic of Karelia for the expired four years was characterized by dynamical growth, in 2005 it has made $1245 million, it has exceeded parameters 2001 by 58%. Export of the enterprises of the republic had advancing rates of growth, in 2005 it has reached the level of $1045 million, having exceeded parameters of 2001 by 62%. The basic gain was achieved due to increase in the export prices of iron-ore pellets (3.4 times), saw-timbers (1.5 times), unalloyed aluminium (by 44%), kraft (by 44%), raw timber products (by 39%). As positive processes in the structure of the Karelian export it is necessary to note escalating of volumes of export of new kinds of production of processing branches. The most dynamical growth was observed in volumes of export deliveries of ferrous metals and articles made of them - 6.2 times (Wärtsilä Hardware Plant Joint-Stock Company), electric equipments - 4.7 times (AEK, Ltd.).

Import of goods in 2005 has made $200 million (141% to 2001), more than 40% of them fall on goods of investment purpose. Enterprises of the republic actively modernized their factory in recent, entered new production facilities that has caused 3.8 times growth of import of electric equipment, and growth of industrial equipment by 93%.

Orientation to export of industrial production leads to essential influence of external factors on development of economics of the republic. Considering that more than 50% of production of Karelian enterprises are exported, one of the strategic purposes of economic development of the republic is creation of conditions for mutually advantageous development of foreign trade activities, diversification of export of Karelian enterprises both from the point of view of commodity and branch structure, and geography of export streams.

Within the period from 2002 to 2005 the Government workd on registering contracts on export of timber products. Within the stated period it has been registered 2540 export contracts and price examination for them was made. As a result it is possible to ascertain, that the level of the majority of kinds of raw timber materials' average contract prices grows.

Traditional direction of work with participants of foreign trade activities is organization of seminars, which basic purpose is preventive maintenance of infringements of the currency and customs legislation.

Problems of export efficiency were considered at the Economic Council at the Head of the Republic of Karelia with participation of the exporting enterprises and customs bodies.

Customs and tariff politics of Russia renders essential influence on efficiency of foreign trade activities. The government of the Republic of Karelia is accomplishing active work with the federal center on decrease in profoundly processed production export duties and cancelling of process equipment import duties. In 2003-2005 kraft, paper sacks, plywood, newprint, cellulose export duties were cancelled, and saw-timbers export duties were lowered. It has allowed enterprises of the timber industry complex of Karelia to cut down timber export expenses by almost $58 million.

The Government together with exporting enterprises annually applies for participation in The Best Russian Exporter All-Russian competition. By results of the competitions ranks of The Best Russian Exporter were appropriated to Wärtsilä Hardware Plant Joint-Stock Company, Karelsky Okatysh (Karelian Iron-Ore Pellets), Inc., and Segezha Pulp and Paper Mill, Inc.

The priority task in work of the Government of Karelia is preparation of enterprises, organizations, and authorities of the republic for introduction of Russia into the World Trade Organization. The basic accent is made on increase of knowledge of authorities and business about conditions and consequences of this joining, professional training of personnel acquainted to the WTO problematics, increase of competitiveness of Karelian products, expansion of commodity markets.

For evaluation of the level of preparation of enterprises of the republic to introduction of Russia into WTO, industrial and agricultural enterprises have been questionnaired. Its results testify to the fact that on the majority of enterprises (64%) introduction into WTO will not render essential influence, since even now they work under conditions of the open market and severe competition.

The Government of Karelia constantly works on rendering assistance to enterprises in expansion of commodity markets of production, search of potential investors, including investors abroad. This direction of work is the realized most effectively through carrying out of trade fair and exhibition actions. Support of the trade fair and exhibition activity by the Government of the RK is considered one of tools in the system of state support of marketing research and stimulation of commercial activity of enterprises of the republic.

At the support of the Government of the RK enterprises of the republic within the period from 2002 to 2005 have taken part in 27 international exhibitions.

The most significant international exhibitions and presentations organized at participation of the Government of the RK where the republic has been presented by the regional stand were the following:

  • presentation of the Republic of Karelia in Germany, Austria, Italy, the USA, in the Consulate General of Canada;
  • specialized timber industry exhibitions Ligna in Germany, and Sasmil in Italy;
  • many specialized tourist exhibitions.

Active participation of enterprises of the republic in international exhibitions promotes attraction of foreign investments into economics of the region, and development of foreign trade communications.

Technical support
Created: April 12, 2006. Last updated: April 17, 2006.
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