Economic Development of

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Economic Development of Kaliningrad Oblast
presentation by
Evgeny Vinokurov IMEMO RAS, Moscow, UPMF, Grenoble
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Kaliningrad general information

• territory 15 100 sq. km (0,1 of the Russian
  Federation)
• population 943 500 (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.

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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

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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 codes 5th
  digit
• - for other goods - 30 VA changing TN
  codes 4th digit ( extra criteria for
  automobiles, tractors, etc.)
• import quotes in 35 groups - meat imports
  most sensible. Attempt to defend local producer.

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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

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Main economic sectors

• fuel industry
• machine building
• food industry
• agriculture
• trade and catering

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Kaliningrad GRP
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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

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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

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GRP by sector in 2000
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Employment structure in 2000
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Industrial production growth
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Consumer price indices
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Investment dynamics
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Foreign investments, tnd. USD

• Investment boom in Kaliningrad in 1999-2001 was
  generated by investments from mainland Russia
  (estimations 5-10 times more than FI).
• FDI comparisons with neighboring countries are
  thus incorrect.

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Trade flows, 2000, mln.USD
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Foreign exports and imports
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Exports and imports per sector
1. Return to highest levels reached in 1995-97,
2. Exports of raw and semi-finished goods. 3.
Imports of food products (consumption and food
processing) as well as machinery for modernizing
industries.
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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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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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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) ?AP 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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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

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Peoples 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