Development ofKaliningrad Oblast for the Period prior to 2010
Federal SpecialPurpose Program Development of Kaliningrad Oblast inthe Period of up to 2010
Legal Grounds forProgram Development
Minutes of Decision# 11 made by the Government of the Russian Federation at its session on 22March, 2001
Contracting Party,on the part of the RF Government
Ministry ofEconomic Development and Trade, Russian Federation
Entities /Organizations Contracted to Design the Program
Administration ofKaliningrad Oblast, Institute of Economy in Transition
Primary Goal of theProgram
To ensure thatfavorable conditions are set for a sustainable development of KaliningradOblast in the social and economic areas, along the lines commensurable withthose of neighboring states and also to create an investor-friendly environmentin the region, thus bringing Russia and the European Union closertogether.
Major Tasks to beAccomplished under the Program
a) to secureRussia’sgeo-strategic interests in the Baltic Region by:
further developing the city of Kaliningrad as a largetransportation and communications hub in Russia;
seeing to it that power is uninterruptedly supplied tothe Oblast;
improving the environment and ensuring proper protectionthereof, in keeping with Russia’s commitments under international agreements;
b) federal tasks:
to transform the Region’s economic structure into apredominantly export oriented economy;
to improve performance of the Special Economic Zone inKaliningrad Oblast;
to improve and further develop the telecommunicationsinfrastructure;
to develop tourism and recreationalbusiness;
c) Regional tasks requiring government supportinclude:
to further integrated development of the agriculturalsector;
to develop the fishing and seafood-processing sectorindustry;
to upgrade the social sphere
The Program shallbe implemented in the time span between 2002 and 2010 in 2 phases:
Phase I , 2002 through 2005, includes activities andmeasures aimed at addressing the mist critical issues of economic and socialnature, improving the performance and increasing the efficiency of the SpecialEconomic Zone in Kaliningrad Oblast, including certain projects designed to setthe ground for the implementation of the region developmentstrategy.
Phase II, 2006 through 2010, provides for furtherimplementation of investment projects and social sphere related activities,with a view to consolidating the progress and positive changes in the economicand social spheres achieved during Phase I of the Program.
Entities to beContracted to Implement the Program
Enterprises and organizations ofKaliningrad Oblast. Contracts shall be awarded through a bidding process, inconformity with the Federal Law On Tenders to AwardContracts for Delivery of Goods, Performance of Works, Provision of Servicesfor Government Needs
Volumes and Sourceof Finance
The total volume offunding for the Program is RUR 93,049.74 M 2001 prices.
Sources of Finance (M, RUR):
Grand total in 2002 through 2010
% of TotalFunds
Funding under the Program, Total
Federal funds *
Kaliningrad Oblast’s funds **
Organizations’ and Businesses’ Own Funds
Loans Advanced by Commercial Banks
Other sources of Finance
* Subject to update and adjustment on ayearly basis, every time the laws on the Federal Budget and the FederalTargeted Investment Programs are drafted, contingent on federal resourcesavailable.
** Subject toupdate and adjustment on a yearly basis, every time the Budget of KaliningradOblast is designed, contingent on regional resources available.
ProgramImplementation Supervision and Monitoring System
The State Contractorand the Administration of Kaliningrad Oblast shall see to it that all Programrelated activities and projects are carried out in a timely ad completemanner.
Day-to-day financial supervision over howfederal and regional fundsare used under the Program shall be exercised by the authorized bodies of government. TheState Committee forStatistics of the Russian Federation shall keep records, on a regular basis, ofhow the Program is being carried out.
ResultsExpected from theProgram
An investor- andentrepreneur-friendly climate to be created in Kaliningrad Oblast, with a viewto attracting investments, stimulating export-oriented and import-substitutingindustries, increasing competitiveness of domestic manufacturers;
The living standards in Kaliningrad Oblast,to be brought in line with those in neighboring states;
The per capita gross regional product, togrow by 2.4 times, compared to the 2001 figure;
Revenues accruing to all levels ofgovernment, to grow by more than 2.7 times, or by over RUR 19 bn, includingthose accruing to the federal budget to go up by over 3.8 times, or by over RUR12 bn;
The amount of per capita budget share, tonearly double and reach almost RUR 7,000;
All the existing 17,155 jobs, to be preservedand 15,012 new jobs created.
1. Kaliningrad Oblast: Social and Economic Situation andDevelopment Strategy
Kaliningrad Oblast:Social and Economic Situation
Kaliningrad Oblast is the westernmost regionin the Russian Federation. Its territory is 15,100 sq. km, the population is948,700 people, of whom nearly 80% live in towns/urban areas.
The Oblast is completely separated from therest of Russia’sterritory by land boundaries with foreign states – Poland and Lithuania – and international waters.Geographic location of Kaliningrad Oblast and its economic situation featurethe following advantages:
close vicinity to the markets in Western and EasternEurope;
close vicinity to trans-European transportation routes and otherEuropean communications networks;
tourism-friendly nature and climate;
availability of never freezing portfacilities/compounds.
The region is abundant in most substantialnatural resources, including the only deposit in the world of commerciallyextractable amber with over 90% of world reserves of amber; also, there areprospected reserves of high-quality low sulphur oil, brown coal, peat,rock-salt, construction materials, and mineral waters with the mineral contentsof up to 50 g per liter.
Given its unique geopolitical position,Kaliningrad Oblast plays a special role in securing Russia’s national interests in the Balticregion and Europe as a whole.
Manufacturing industries make the foundationof the oblast’seconomy, or 30.5% of its gross regional product (data as of 1998). Next in lineis trade with its 16.3 % share in the Region’s economy, followed bytransportation business – 10.7 %, agriculture – 6.7%, and construction – 5%. In 2000 the average percapita gross regional product was USD 4,400.00, or 75 % of the RF average, 65%of that in the Baltic region, half the amount in Poland, and 5 – 8 times lower than in the rest ofEurope.
Gross Regional Product
2000 (preliminary estimate)
Gross RegionalProduct, M RUR
Index of GrossRegional Product Physical Volume, as % of preceding year
Per Capita GrossRegional Product, RUR
Over the last decade industrial output in theregion has declined to a larger extent than in the whole of Russia on theaverage: industrial output in 2000 was less than 40 %of the 1990 level, whereas the RF average figure was 54%. Table 2 reflects theabove dynamics.
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