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The Barents Monitoring reports give you the economic trends and developments from the Russian part of the Barents Region. Both half-year and annual reports from Murmansk Oblast, Arkhangelsk Oblast, the Komi Republic and the Nenets Autonomous Okrug are published.
The Barents Monitoring is produced by the Russian offices of the Norwegian Barents Secretariat based on information from the regional statistics services.
Long way out of crisis for Arkhangelsk
Despite positive trends in industrial production, the serious economic setback in Arkhangelsk Oblast is now increasingly felt by the regional population. That could eventually results in growing popular discontent and social tensions, the latest Barents Monitoring report reads.
The report, which covers the whole year 2009, describes an increasingly troubled economic situation in the Northwest Russian region. Positive trends in industrial production was overshadowed by weak results in processing, by reduced budget revenues and subsequent cuts in budget spending, lower salaries and a strained labor market.
The report is written by the Arkhangelsk Office of the Norwegian Barents Secretariat
Industrial production
The regional industrial production index reached a positive annual result compared with 2008 results (+3,8%), thanks first of all good results in the oil and mining industries. However, the traditional locomotive in the economy, the paper, pulp and timber industry, continued its negative development with a seven percent reduction in production compared with 2008. That comes after a serious production drop also in 2008 (15%).
Regional budgets
The negative results in regional business and industry immediately affected the situation with regional budget revenues, which dropped more than 16 percent. That again resulted in a deficit in the regional budget of 6,7 billion rubles, or 12,6 percent of the own budget revenues including federal transfers.
The bad situation with regional finances was improved only thanks to massive federal transfers. In 2009 the share of different sorts of federal transfers made up 60 percent of the total regional and local budgets in Arkhangelsk Oblast, the report reads.
Prospects in 2010
The economic hardships are likely to continue in 2010. The profitability of local companies is unlikely to grow and federal authorities have already signaled significantly cuts in federal transfers to the regions. Coupled with stagnating and falling salaries and a more strained labor market situation, the region could this year also face increasing social discontent.
However, there are hopes for economic recovery and the regional administration is taking measures to stimulate new activities and attract investors’ support to the projected Belkomur railway, the Port of Arkhangelsk and projects associated with the Shtokman field development. It will not be easy, though. The fact that the 2010 regional budget was adopted with the maximum allowed deficit limit of 15 percent itself describes the situation.
Read more Barents Monitoring reports here
Barents Monitoring Arkhangelsk 2009
