September 24, 2004 Helsinki, Finland Electronic presentation of the Report of the Trade Representative of the Russian Federation in Finland Mr. Shlyamin V.A. September 24, 2004 Helsinki, Finland

Main Economic Indicators of Russia 2002 2003 (1-6) 2004 est. GDP, % 4,7 7,7 7,3 7,4 6,7 GDP, bln. 345,7 192,1 433 259,4 553 Industrial output, % 3,7 6,8 7 Agricultural output, % 1,5 -0,3 -1,2 0,7 Gross fixed investment, % 2,8 11,8 12,5 12,6 11 Retail turnover, % 8,4 9,5 11,1 9,9 Exports, bln. USD 107,3 62,8 135,9 77,7 158,8 Imports, bln.USD 61 33,9 75,4 42,2 92,5 17 November 2018 Trade Representation of Russian Federation in Finland

a) OPTIMISTIC SCENARIO Forecasts for the development of Russia’s economy: a) OPTIMISTIC SCENARIO 17 November 2018 Trade Representation of Russian Federation in Finland

Trade Representation of Russian Federation in Finland Forecasts for the development of Russia’s economy: b) PESSIMISTIC SCENARIO 17 November 2018 Trade Representation of Russian Federation in Finland

DEVELOPMENT TRENDS OF RUSSIAN ECONOMY The average annual GDP growth in 1999-2003 was 6,3%, mainly due to the favorable foreign markets situation. - State policy for rising competitiveness of Russian industry, updating of industrial enterprises (liberalization of tax and customs policy, states help to high technology production, state support of exports). - Diversification of Russian economy. 17 November 2018 Trade Representation of Russian Federation in Finland

TRADE BETWEEN RUSSIA AND FINLAND An important trend in strategic cooperation between Russia and Finland is a dynamically developed trade, rates of growth of which are higher than the growth of trade between Finland and EU. 17 November 2018 Trade Representation of Russian Federation in Finland

Trade Representation of Russian Federation in Finland In the period of January – June 2004 Russia was on turnover the third foreign trade partner of Finland after Germany and Sweden. Its share in the Finnish foreign trade turnover is 10,6% and the dynamic of growth of trade is the highest in comparison with Finland’s other leading trade partners. 17 November 2018 Trade Representation of Russian Federation in Finland

NEIGHBOURING AREA ECONOMIC COOPERATION Neighbouring area trade – is an important element of multilevel Russian – Finnish transboarder cooperation which forms the zone of trust in the North of Europe and serves for the development of all–European integration processes on the regional level. Neighbouring area trade makes a real contribution to the forming conditions of boarder “transparency” between our countries and actively contributes to the economic development of neighbouring areas. Russia and Finland are equally interested in the elaboration of the Joint Plan of Actions for the neighbouring area cooperation in the medium-term perspective for the purpose of the attraction of additional investments in the development of infrastructure, manufactures and services on the neighbouring territories. Concept of the neighbouring area cooperation in Russian Federation (approved by the Government of RF on 09.02.01,. № 196-р) Finland’s Government Strategy on cooperation between neighbouring areas for the period of 2004 – 2007 (approved by State Council on 22.04.04) Joint Plan of Actions for the neighbouring area cooperation in medium-term future 17 November 2018 Trade Representation of Russian Federation in Finland

STRUCTURE OF RUSSIAN – FINNISH TRADE STRUCTURE OF RUSSIA’S EXPORTS TO FINLAND The main item of Russian exports to Finland is raw materials: the share of raw materials amounts to 89%, 64% of which are fuel and energy. The share of machinery and equipment is 1,4%. The raw materials structure of Russian exports is a serious obstacle for the future development of Russian – Finnish trade. 17 November 2018 Trade Representation of Russian Federation in Finland

STRUCTURE OF RUSSIAN IMPORTS FROM FINLAND In Russia’s imports from Finland the share of manufactured goods amounts to 75,9%, the share of raw materials - 24,1%. 17 November 2018 Trade Representation of Russian Federation in Finland

INVESTMENT COOPERATION - Other investments - USD 466 mln. Investment cooperation is one of the perspective trends of the strategic cooperation between Russia and Finland Russia’s share in the whole volume of the accumulated outward Finnish investments in 2003 was less than 1%. At the beginning of 2004 the volume of accumulated Finnish investments in Russia totaled USD 1,02 bln., of which: - Direct investments - USD 540 mln. - Portfolio investments - USD 17 mln. - Other investments - USD 466 mln. 17 November 2018 Trade Representation of Russian Federation in Finland

Trade Representation of Russian Federation in Finland Trends of Russian – Finnish economic cooperation, which could positively change the structure of mutual trade: Development of different forms of industrial cooperation between enterprises, including subcontracting of the SME business and first of all, in the neighbouring areas. Establishing in Russia, particularly on the neighbouring territories, high-tech parks and business incubators with the participation of interested Finnish universities and firms. Cooperation in informatics, bio and medical technologies taking into account the potential of North Western and European parts of Russia. Improving cooperation in the forest sector towards rising the efficiency of use of forests, establishing joint-stock pulp and paper mills, woodworking works. Widening of cooperation in the construction of arctic class vessels (icebreakers, lifeboats and oil spill boats, tankers) Joint implementation of ecological projects in the Baltic sea region. Widening of cooperation in energy sector (construction of gas pipelines, updating of electric power lines and electric power stations, hydro power stations, boiler-houses using bioenergy, including small heat stations). Getting advantages from European - Asian transit. 17 November 2018 Trade Representation of Russian Federation in Finland

Trade Representation of Russian Federation in Finland 17 November 2018 Trade Representation of Russian Federation in Finland