1. Economic Development of IMEMO RAS, Moscow, UPMF, Grenoble
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Economic Development of
Kaliningrad Oblast
presentation by
Evgeny Vinokurov
IMEMO RAS, Moscow, UPMF, Grenoble
E.Vinokurov Economic Development of Kaliningrad Oblast

2. E.Vinokurov Economic Development of Kaliningrad Oblast

3. E.Vinokurov Economic Development of Kaliningrad Oblast
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Kaliningrad: general information
territory – sq. km (0,1% of the Russian Federation)
population – (0,6% of the Russian Federation)
Exclave of Russia / semi-enclave of the EU
part of North West Federal District (total 11 regions in it)
nominal GRP in 2002 – appr. USD 1100 mln.
E.Vinokurov Economic Development of Kaliningrad Oblast

4. E.Vinokurov Economic Development of Kaliningrad Oblast
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Kaliningrad: general information
History (the 750th anniversary of Königsberg in 2005)
Special Economic Zone (SEZ) regime
Federal Task Programme for Kaliningrad Oblast development up to 2010
E.Vinokurov Economic Development of Kaliningrad Oblast

5. E.Vinokurov Economic Development of Kaliningrad Oblast
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SEZ regulations
Free custom zone – no import taxes
no taxes for outflows into Russia, if:
- for electronics and household appliances - 15% VA + changing TN code’s 5th digit;
- for other goods - 30% VA + changing TN code’s 4th digit (+ extra criteria for automobiles, tractors, etc.)
import quotes in 35 groups - meat imports most sensible. Attempt to defend local producer.
E.Vinokurov Economic Development of Kaliningrad Oblast

6. E.Vinokurov Economic Development of Kaliningrad Oblast
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Shadow economy
Input-output matrix (Tatarinov) – 55% from the official economy
Household income survey (Fedorov) – real incomes 47% in excess of officials ones
Delphi method (Samson, Elisseeva) – 60-95% from the official economy
70% of SE are non-illegal activities
E.Vinokurov Economic Development of Kaliningrad Oblast

7. E.Vinokurov Economic Development of Kaliningrad Oblast
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Main economic sectors
fuel industry
machine building
food industry
agriculture
trade and catering
E.Vinokurov Economic Development of Kaliningrad Oblast

8. E.Vinokurov Economic Development of Kaliningrad Oblast
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Kaliningrad GRP
E.Vinokurov Economic Development of Kaliningrad Oblast

9. E.Vinokurov Economic Development of Kaliningrad Oblast
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Most dynamic sectors
food industry (Russian markets)
trade and catering
communication
transport (European-Russian trade)
light industry
furniture (SEZ success story)
machine building
E.Vinokurov Economic Development of Kaliningrad Oblast

10. E.Vinokurov Economic Development of Kaliningrad Oblast
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GRP (PPP)
PPP comparison Lithuania-Kaliningrad made by I.Samson group (based on 2001 data)
PP 95% from Lithuania (not taking into account investments and state budgets)
Final estimation – 90% from Lithuania, close to Warminsko-Mazurskie Voevodsvo, 75% from Poland
further research needed
E.Vinokurov Economic Development of Kaliningrad Oblast

11. E.Vinokurov Economic Development of Kaliningrad Oblast
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GRP by sector in 2000
E.Vinokurov Economic Development of Kaliningrad Oblast

12. E.Vinokurov Economic Development of Kaliningrad Oblast
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Employment structure in 2000
E.Vinokurov Economic Development of Kaliningrad Oblast

13. E.Vinokurov Economic Development of Kaliningrad Oblast
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Industrial production growth
E.Vinokurov Economic Development of Kaliningrad Oblast

14. E.Vinokurov Economic Development of Kaliningrad Oblast
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Consumer price indices
E.Vinokurov Economic Development of Kaliningrad Oblast

15. E.Vinokurov Economic Development of Kaliningrad Oblast
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Investment dynamics
E.Vinokurov Economic Development of Kaliningrad Oblast

16. E.Vinokurov Economic Development of Kaliningrad Oblast
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Foreign investments, tnd. USD
Investment boom in Kaliningrad in was generated by investments from mainland Russia (estimations 5-10 times more than FI).
FDI comparisons with neighboring countries are thus incorrect.
E.Vinokurov Economic Development of Kaliningrad Oblast

17. E.Vinokurov Economic Development of Kaliningrad Oblast
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Trade flows, 2000, mln.USD
E.Vinokurov Economic Development of Kaliningrad Oblast

18. E.Vinokurov Economic Development of Kaliningrad Oblast
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Foreign exports and imports
E.Vinokurov Economic Development of Kaliningrad Oblast

19. Exports and imports per sector
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Exports and imports per sector
1. Return to highest levels reached in , 2. Exports of raw and semi-finished goods. 3. Imports of food products (consumption and food processing) as well as machinery for modernizing industries.
E.Vinokurov Economic Development of Kaliningrad Oblast

20. E.Vinokurov Economic Development of Kaliningrad Oblast
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Main trade partners
Export: led by Poland – 27,5% (mainly raw oil), then Germany and Lithuania
Import: led by Germany – 25%, then Poland and Lithuania
70-75% of foreign trade is realized the EU and accession countries.
5,8% fall on CIS countries except Russia.
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21. E.Vinokurov Economic Development of Kaliningrad Oblast
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Trade with mainland Russia
In 2001 outflows grew up to 619 mln. USD (min. estimation) and outweighed exports.
Trade flows with mainland Russia grew rapidly and constantly since 1999.
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22. E.Vinokurov Economic Development of Kaliningrad Oblast
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EU enlargement and Kaliningrad economy
“EU and Kaliningrad” Communication of the Commission (2001): Enlargement will be favourable for Kaliningrad because accession countries will apply Common external tariff
Lower import tariffs of new EU members (most important Poland and Lithuania) – present export structure does not let use this advantage; non-tariff barriers remain/increase
Little changes on local markets
Lower Russian import tariffs may lead to lower price competitiveness of Kaliningrad goods on the Russian markets ( due to lower barriers for CEEC goods and lower costs of production for Russian enterprises) + СAP for accession countries
Visa problem
Energy problem
Cargo transit problem
Lower volumes of shuttle trade – especially important for small border towns
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23. E.Vinokurov Economic Development of Kaliningrad Oblast
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WTO accession and Kaliningrad economy
Specifics:
Compatibility of Kaliningrad SEZ regime and WTO regulations in question
May lead to abolition of regional quotes on imports
No anti-dumping measures against Kaliningrad producers yet – less relevant than for other Russian regions
Possible increase in European-Russian trade would render positive effects on the region
E.Vinokurov Economic Development of Kaliningrad Oblast

24. E.Vinokurov Economic Development of Kaliningrad Oblast
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People’s perceptions and desires for the future
What option suits you the best?
21% - Oblast will have with equal rights with other Russian regions
38% - Oblast will remain Russian region, but it will have a special status
19% - Oblast will remain Russian region, but it will act under its own laws (China – Hongkong model)
5% - Oblast will become independent state
3% - Oblast will be returned to Germany
14% - found it difficult to choose
Practically no separatism
Wide support for special rights and status
E.Vinokurov Economic Development of Kaliningrad Oblast