Commodities and Services Market
In 2002 the Government of the Republic of Karelia has declared attraction of investments and further improvement of investment climate the main priority in the field of economic policy.
Investments in the fixed capital keep the tendency to grow. In 2002 on a full circle of enterprises and organizations of the republic their volume has made 10,9 billion roubles, or 126% to the level of 2001 (on the operative information).
The basic investments were allocated to the following branches: pulp-and-paper industry, logging industry, woodworking industry (Segezhsky Pulp and Paper Mill, Kondopoga joint-stock company, Medvezhiegorsk industrial forestry); railway transport, highway facilities, pipelines; housing and communal services; communication.
The foreign investments received by enterprises and organizations have made $20,4 million (in the view of rouble investments counted in US dollars). Last year foreign investments were allocated basically to timber industry, logging industry, and pulp and paper industry (64.4%), food-processing industry (15.1%), trade (6.2%), public health services, physical training and social security (3.0%). Investments came mainly from Cyprus, Norway, Sweden, Estonia, Finland, the USA and Belize.
The Government of the Republic of Karelia develops the program "Investment policy of the Government for 2003-2006" which realization provides realization of complex actions for increase of investment appeal of the republic. The steps assisting attraction of direct investments in economy of the republic, first of all, for modernisation of enterprises and development of manufactures, providing complex processing of wood are undertaken.
Negotiations (with participation of administration of local self-governments of Pitkaranta and Pitkarantsky district) with STORA ENSO joint-stock company (Finland) on construction of timber factory in Ladoga lakeside were renewed. Construction of the first starting complex on manufacturing of 100 thousand cubic meters of saw-timbers per year was started in August 2002 in the settlement of Impilahti of Pitkarantsky district. It is planned to finish construction in July 2003, the volume of investments will make 8,6 million euros. Support of the given project is carried out.
Negotiations with IKEA concern (Sweden) on construction of furniture board factory and of furniture factory in Karelia have begun. Volumes of investments at the first stage can make 12-15 million euros. Negotiations with some other principal investors interested in the republic are carried out.
In 2002 in the republic realization of tens of investment projects is continued. Th following are the most significant: reconstruction and electrification of Octabrskaya railway, construction of Petrozavodsk-Kondopoga gas-main, construction of Marcial Waters medical improving center, reconstruction of saw-mill of Medvezhiegorsk timber industry enterprise Open Company, expansion of capacities and introduction of the line on release of laminated plate at Kareia-Euroimpex chipboard Open Society, proceeding reconstruction on Segezhsky Pulp and Paper Mill Open Society and Kondopoga Open Society.
According to the republican investment legislation, in 2002 enterprises realizing highly effective investment projects received state support as budgetary credits, including at the expense of returnable means of the Fund of Development and Reconstruction of the Republic of Karelia and due to means of the bonded loan of the Republic of Karelia, granting of privileges under taxes (the tax to profit and the tax to property) regarding enlisted in the republican budget, and grantings of the state guarantees. By the decision of the Government of the Republic of Karelia N 52-P from April 16, 2002, "On the order of granting means of the republican budget for investment projects' financing selected on a competitive basis" the order of realization of competitive selection of investment projects for rendering state support is determined. According to the given executive legislation certificate in July and December of 2002 competitive selection of projects was held, and 7 enterprises became the winners.
Total amount of investments under projects makes 115,97 million roubles, including 87,67 million roubles of required state support as soft loans of means of the republican budget.
The Government of the Republic of Karelia and enterprises accomplishing investment projects completed investment agreements on granting the mode of investment preference as tax privileges.
The total amount of the given tax privileges under business plans of investment projects makes 21,4 million roubles.
One of the sources of attraction of investments is participation of the Republic of Karelia in realization of federal target programs and federal address investment program. In 2002 in the republic from 256 of 46 federal programs with total amount of more than 700 million roubles at the expense of all sources of financing were realized. The share of federal means has made about 50%. Per capita, on the specified source, the Republic of Karelia has the 4th place on Northwest federal district, conceding St.Petersburg, Leningrad and Kaliningrad regions.
Under the federal address investment program construction of 17 objects was carried out. All means from the federal budget, 171,86 million roubles, are allocated in full, growth has made 192% to the level of 2001. As a result of teamwork of republican ministries, within one year it was possible not only to master the allocated means completely, but also in addition to receive 16 million roubles from the federal budget on reconstruction of the building of the National Theatre and 20 million roubles for construction of academic-laboratory case of PetrSU.
In 2002 with attraction of means from the federal budget construction and reconstruction of the White Sea - Baltic channel, Vyg fish factory, National theatre, the museum of fine arts, the historical centre in Petrozavodsk, objects of Valaamsky archipelago, museum - reserve Kizhi, psychoneurologic hostel in the settlement of Nadvoitsy, academic-laboratory case of PetrSU, investigative jail-2, quay of Onego Lake in Petrozavodsk, and of some objects of education and public health services was carried out.
Under "Dwelling" federal target program 102 state housing certificates was received, grants to the citizens leaving regions of the Far North and districts equal to them were allocated, means for providing habitation for some categories of citizens were received. Besides within the framework of "Modernization of transport system of Russia" program construction and reconstruction of federal and republican motorways with annual amount of works of more than 800 million roubles was accomplished.
With a view of increase of efficiency of realization of substantive provisions of the Concept of social and economic development of the Republic of Karelia for the period of 1999-2002-2010 47 republican target programs of economic and social blocks are accepted and operate in the republic. In 2002 more than 1600 million roubles, including 245,5 million roubles from the republican budget (including means allotted for construction of federal and republican roads) was allocated for realization of republican target programs at the expence sources of financing. Significant part of means from republican and federal budgets is assigned for support of agriculture and fish industry, reproduction of woods, and also for realization of programs of social orientation: public health services, education, social security and assistance to employment of the population, development of culture, and housing construction.
By the order of the Government of the Republic of Karelia from 19.09.2002 N230p-P actions for performance of orders of the voters received during election campaign of the Head of the Republic of Karelia in 2002 were undertaken. In total 30 orders were included in the plan, 16 of them are from elective campaign of 1998 and demand long execution and significant charges.
Of 30 orders of voters 16 were realized in 2002. More than 240 million roubles was assigned for their performance , including 59,5 million roubles from the republican budget, 11,1 million roubles from the federal budget, 150,1 million roubles from the means of the enterprises, and 20 million roubles from territorial road fund. Besides in 2002 financing of orders received during elections of 1998 on which 30,1 million roubles was allocated from federal and republican budgets was carried out. Orders of voters in 2002 were 100% financed completely.
In 2003 execution of 25 orders will be continued, including 17 orders of voters included in the address investment program of the Republic of Karelia with volume of financing of 56,5 million roubles at the expence means of the republican budget.
On eight objects co-financing is provided from the federal budget in the volume of 8,5 million roubles within the framework of the federal address investment program.