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Hinterland WP 1 Meeting Karelia

REPORTOn the expert work

POTENTIAL AND POSSIBILITIES EVALUATION IN DECLINE TERRITORY

REPUBLIC OF KARELIA

Karelian Research Centre of the Karelian Research Centre of the Russian Academy of ScienceRussian Academy of Science

Project part-financed by the European Union

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KARELIA AS A PILOT NERRITORY OF HL PROJECT

Karelia is a part of North-west federal district of Russian Federation. More than 700 km of Russia-EU(Finland) borderIs a part of European region «Karelia»

Area – 180,5 th. sq. m.Population – 703,1 th. people.Density of population – 3,9 person/m2.Labor recourses – 399,4 th. people.

Olonetch district

Sortavala

Lahdenpohia district

Project part-financed by the European Union

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PILOT TERROTORY CHOOSING KRITERIA

• Unclear strategic priorities of territory development and absent development strategy

• Low incomes of inhabitants• Geographic potential (transit, close to the border, other)• Poor and low economy• Absence of alternative employment for the inhabitants• Unfavorable demography and migration outflow• Degradation of agricultural lands and landscapes • Loss of cultural values

Project part-financed by the European Union

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APPROVE OF THE CHOOSEN PILOT TERRITORIES

Most of the municipal districts in Karelia were viewed when choosing the pilot territories. The following territories were chosen according to the criteria:

Municipal district Settlement

Olonetch districtIl’insloe village settlement

Mihailovskoe village settlement

Sortavala district Helula city settlement

Lahdenpohia district Miinalskoe village settlement

The chosen pilot territories are approved by the Ministry of economical development, with the state committee of the RK for development of local self-government and local municipal administrations.

Project part-financed by the European Union

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PRACTICAL USE OF THE PROJECT FOR THE PILOT TERRITORIES

• Preparation of the practical propositions aimed on stopping the decline

• Creation of the territory development strategy• Creation of propositions to grow the competitiveness of the

territories based on their unique features• Formation of the competitive brand of the territory• Preparation of the investment folio for the territories• Propositions on using the territory’s potentials• Organization of the dialog with the potential investors

Project part-financed by the European Union

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CONTENT OF THE WORK ON THE PROJECT

1. Choosing and approval of the characteristical and potency indicators of the territories

2. Evaluation on the current social-economical situation and of the scale of decline of the territories:2.1. Evaluation of demography and migration2.2. Evaluation of economical potentials, level and quality of life2.3. Social sphere characteristics 2.4. Evaluation of social infrastructure development

3. Presence of the strategical documents of the territories and their link to the regional strategies and programs

4. Research of investment potential and investment projects within the pilot territories

5. Organization of the work meetings with the representatives of the territories to discuss the possible directions of development

6. Evaluation of territory potentials and possibilities of using them for stopping the decline

Project part-financed by the European Union

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EVALUATION OF THE TERRITORY POTENTIALS

1. Transit potential and transport infrastructure development

Increase of the cargo and good flows, development of near road infrastructure and services

3. Natural-resource potentialDevelopment of processing productions based on the local resources

2. Touristic potentialAttracting the tourists, development of infrastructure and services

4. Agricultural potential Development of agriculture

5. Cultural potentialRebirth of cultural traditions as a basis for tourism development

6. Industrial and energetic potential

Development of energetic sector as a basis for starting of production

3. Labor potential Attracting the productions and development of services

Project part-financed by the European Union

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EVALUATION OF TRANSIT POTENTIAL

• 7 active “simplified” border crossing points• 3 active international motor border crossing

points («Niirala – Vyartsikya», «Luttya – Vartius», «Souperya – Kortesalmi»)

Within the pilot territories there are 3 cross points: 1 – international, 2 – simplified

Project part-financed by the European Union

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EVALUATION OF TRANSIT POTENTIAL

Transport zonesin Karelia:

1. Northern zone2. Southern zone

The pilot territories are in the Southern zone, the international transport routs lie on the territories, connecting saint-Petersburg, Petrozavodsk, inner regions of North-West Russia and border regions of Finland

Project part-financed by the European Union

Севернаятранспортная зона

Южнаятранспортная зона

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DEVELOPMENT POSSIBILITIES FOR NEAR RAOD

INFRUSTRUCTURE

According to the Regiobal program «Development of near road infrastructure in

Karelia»

Project part-financed by the European Union

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EVALUATION OF LABOR POTENTIAL

Project part-financed by the European Union

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EVALUATION OF INDUSTRIAL POTENTIAL

Project part-financed by the European Union

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Large and medium enterprises, placed on the pilot territories belong to the following industries:

OlonetchOlonetchdistrictdistrict

• Wood harvesting and processing – 2

• Food production – 1• Polygraphic – 1• Road repair – 1• Construction materials –

1• Transportation – 1• Communal sphere – 1• Agriculture – 7

Sortavala citySortavala city

• Metallurgy – 1• Construction materials

– 2• Food production – 2• Transportation – 1• Fish production – 1• Road repair – 1• Communal sphere – 2• Agriculture – 3

LahdenpohiyaLahdenpohiyadistrictdistrict

• Wood harvesting and processing– 2

• Food production– 1• Transportation– 1• Communication – 1• Road repair – 1• Communal sphere – 4• Agriculture– 3

EVALUATION OF INDUSTRIAL POTENTIAL(LARGE AND MEDIUM ENTERPRISES)

Project part-financed by the European Union

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According to the Strategy of development of KArelia to 2020, Sortavala city Lahdenpohiya and Pitkyaranta districts are the centers of creating of the Priladozie zone of intensive economical developmentPriladozie zone of intensive economical development:

Development of industry is connected to perspectives for creating of production-service cluster in Priladozie district

Mining complex, wood processing, pulp production, transit and custom services, tourism

Sortavala city Lahdenpohiya and Pitkyaranta districts

Production, services and trade-storage, transport, touristic-recreational

Cluster type Position Specialization

EVALUATION OF INDUSTRIAL POTENTIAL

Project part-financed by the European Union

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100 th./year

7%

Potential touristic capacity in the touristic activity regions

Usage of the touristic potential

7%

31%

4%

3%

12%

26%14%

100 th./year

260 th./year

320 th./year

100 th./year

780 th./year

390 th./year

650 th./year

EVALUATION OF TOURISTIC POTENTIAL

• Overall capacity for hosting tourists – about 980 places (persons). 300 places more are planed to be built in 2006-2007.

• It will allow to host more than 650 th. of tourists per year.

• The usage of this potential is only 14% (about 90 th. persons.).

• After developing new touristic products and marketing them Karelia can host more than 1 mln. tourists per year.

Project part-financed by the European Union

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Olonetch district

Possibilities of development

• Using the pasture lands and complex processing and agricultural production

• Development of tourism and recreation• Revival and national crafts• Production of alternative fuel (dry peat, fuel granules, pellets of

the wood processing wastes)

Evaluation of decline (territory problems)

• Migration outflow (youngsters mainly)• Reduction of agricultural land• Growth of unemployment in villages• No alternative sphere of work• Degradation of cultural potential

• Agriculture (agricultural lands)• Historical and cultural potential• Oloniya – goose capital• Favorable conditions for trout farming

Local potential

Project part-financed by the European Union

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Evaluation results: Il’inskoe village settlement

POPULATION

+40Migration result

-18Natural growth, persons.

1460Number of families

4050Population:

5Services institutions

1Health care institutions

1Cultural institutions

4Education institutions

SOCIAL SPHERE

3743Agricultural land, hectares

26Small enterprises

6Large and medium enterprises

7Farms, ед.

ECONOMY

4Heat stations

Gasification

+Cell operators

+Centralized water supply

+Electrical transmission lines

+/+Motor road/railway

INFRACTRUCTURE

Project part-financed by the European Union

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Evaluation results: Mikhailovskoe village settlement

POPULATION

-7Migration result

-Natural growth, persons.

293Number of families

649Population:

1Services institutions

1Health care institutions

1Cultural institutions

1Education institutions

SOCIAL SPHERE

93Agricultural land, hectares

7Small enterprises

170Tourists per year

5Farms, ед.

ECONOMY

1Heat stations

Gasification

+Cell operators

+Centralized water supply

+Electrical transmission lines

+/+Motor road/railway

INFRACTRUCTURE

Project part-financed by the European Union

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Sortavala Municipality

Possibilities of development

• Development of tourism• Development of transit potential and near road infrastructure• Researching the Ladoga seal

Evaluation of decline (territory problems)

• Migration outflow (youngsters mainly)• Growth of crime• Growth of unemployment and no new spheres of employment• Degradation of cultural potential• Reduction of social sphere effectiveness, high wearing of

communal real funds

• Touristic-recreation potential• Architectural and archeological monuments• Transit potential• Rout to Valaam island• Unique animal – Ladoga seal

Local potential

Project part-financed by the European Union

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Evaluation results: Helula city

POPULATION

-5Migration result

- 25Natural growth, persons.

1492Number of families

2742Population:

3Services institutions

1Health care institutions

3Cultural institutions

1Education institutions

SOCIAL SPHERE

550Agricultural land, hectares

22Small enterprises

6Large and medium enterprises

3Farms, ед.

ECONOMY

3Heat stations

Gasification

+Cell operators

+Centralized water supply

+Electrical transmission lines

+/+Motor road/railway

INFRACTRUCTURE

Project part-financed by the European Union

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Lahdenpohia dictrict

Possibilities of development

• Development of tourism and recreation• Development of woodprocessing• Development of farms• Development of near road infrastructure

Evaluation of decline (territory problems)

• Migration outflow • Move of the economical activeness to S-Petersburg• Continuing process of tearing away from Karelian economy• Growth of unemployment in villages• Increase in resource specialization• Reduction of social sphere effectiveness

• Touristic-recreation potential (S-Petersburg recreation zone)• Agricultural potential (pasture lands)• Architectural and archeological monuments• Transit potential, closeness to S-Petersburg

Local potential

Project part-financed by the European Union

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PROBLEMS FACED WHILE WORKING ON THE PROJECTS AND SOLUTION PROPOSITIONS

• Absence of or unaccessible data on the specific settlements and their potentials• Differences of EU and Russian statistic systems• Not understanding of the settlements profits from the project by local

administrations

Problems

• To coordinate the approach to decline districts within the project• To match the indicators to the accessible data• Strengthening the practical use of the projects results – determined investment

projects, search for investments (in Vorderlands)

Solutions

Project part-financed by the European Union

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Thank you!

And welcome to Karelia!

Project part-financed by the European Union