Threats and opportunities in Russian-Finnish economic cbc - Euroregion Karelia by Dr. Valery A. Shlyamin

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Threats and opportunities in Russian-Finnish economic cross-border cooperation by the example of Euregio Karelia

Trade representative of Russian Federation in Finland

Dr. Valery A. Shlyamin

Joensuu,20.11.2013

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Russia

1st place in the Finnish foreign trade

14.2% share

Finland

15th place in the Russian foreign trade

2,3% share

Source: Federal customs service of the Russian Federation, National Board of customs of Finland, 2013

Kainuu

North Karelia

Northern Ostrobothnia

Republic of Karelia

Euregio Karelia

Agreement signed on the 24th of February 2000

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Trade between Russian cross-border regions and Finland, mil. USD

2769

302298517548482

217

420

242252

1009821419880

7580

280

239

1158

842639

10621139938802

727

330

16921636

1856 2368

2998

1664

3967

459

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2000 2005 2006 2007 2008 2009 2010 2011 2012

Source: Rosstat

Republic of Karelia Murmansk region Leningrad region Saint Petersburg

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Finnish investments to Russian cross-border regions, mil. USD

0,3 0,0 0,0 0,0

9029

53

16333414

128 40

189213

83169

40

139

128

267

4

0,00,00,2 0,0 0,1

439

480

171

173

149

267233

0,0

100,0

200,0

300,0

400,0

500,0

600,0

2000 2005 2006 2007 2008 2009 2010 2011 2012

Source: Rosstat

Republic of Karelia Leningrad region Murmansk region Saint Petersburg

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2000 2005 2006 2007 2008 2009 2010 2010 to 2000

Change, %

2000 Whole

country = 100

2010 Whole

country = 100

Russia*5 402 9 867 12 455 14 029 16 625 15 532 16 400 304% 100% 100%

North-west region* 5 543 10 274 12 721 14 541 17 408 17 393 17 968 324% 103% 110%

Republic of Karelia 5 266 8 869 9 950 11 316 12 280 11 270 12 393 235% 97% 76%

Leningrad region 4 545 9 581 12 446 13 086 15 817 17 523 18 376 404% 84% 112%

St. Petersburg 5 440 11 134 13 817 16 865 20 956 21 234 21 546 396% 101% 131%

Murmansk region 8 083 12 300 15 060 16 747 18 459 17 458 18 445 228% 150% 112%

Finland*22 419 26 691 28 770 31 635 33 469 31 141 31 842 142% 100% 100%

Pohjois-Karjala 16 354 19 660 21 544 22 990 24 048 22 454 23 331 143% 73% 73%

Kainuu 14 410 17 764 19 915 21 847 23 822 20 746 22 700 158% 64% 71%

Pohjois-Pohjanmaa 19 712 24 712 25 322 28 481 29 797 25 666 27 223 138% 88% 85%

ВАЛОВОЙ РЕГИОНАЛЬНЫЙ ПРОДУКТ НА ДУШУ НАСЕЛЕНИЯ по ППС, долл. США

GROSS VALUE ADDED AT BASIC PRICES PER CAPITA, PPP, USD

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2000 2005 2006 2007 2008 2009 2010 Growth 2010 / 2000

Russia* 24% 37% 43% 44% 50% 50% 52% 214%North-west region* 25% 38% 44% 46% 52% 56% 56% 228%Republic of Karelia 23% 33% 35% 36% 37% 36% 39% 166%Leningrad region 20% 36% 43% 41% 47% 56% 58% 285%St. Petersburg 24% 42% 48% 53% 63% 68% 68% 279%Murmansk region 36% 46% 52% 53% 55% 56% 58% 161%

Finland* 100% 100% 100% 100% 100% 100% 100% 100%Pohjois-Karjala 73% 74% 75% 73% 72% 72% 73% 100%Kainuu 64% 67% 69% 69% 71% 67% 71% 111%Pohjois-Pohjanmaa 88% 93% 88% 90% 89% 82% 85% 97%

Comparison of gross value added (at basic prices per capita, PPP, USD) of the regions in North-West Russia and Finland’s regions

 Finland’s GDP PPP=100%

Соотношение уровней ВРП на душу населения по ППС, долл.США регионов СЗФО и приграничных регионов Финляндии (ВРП по ППС Финляндии принят за 100%)

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Levels of cross-border cooperation between Russia and Finland

1.Cross-border cooperation of Russia-EU (ENPI programmes, ENI)

2.Russian-Finnish intergovernmental commission on cross-border cooperation (in accordance with Agreement on assisting cross-border cooperation between Russia and Finland, 13.04.2012).

3.Regional cooperation.

4.Cooperation between municipalities, including border cities and communes.

5.Business-level – direct conccetions between enterprises, cross-border trade of goods and services.

6.Cooperation of NGO’s (совокупность гуманитарных связей).

7.People-to-people contacts.

Threats and opportunities in Russian-Finnish economic cross-border cooperation

THREATS• the slow growth of the economies

of Russia and Finland; • increasing international and inter-

regional competition;• increasing regional disparities

inside cross-border regions in Russia;

• decline of Finland's share in foreign trade of Russia and its cross-border regions;

• decline of Finland's share in Russian cross-border regions total investments.

OPPORTUNITIES• deepening of investment

cooperation;• enlargement of innovation interaction

of business communities;• increase of trade in services;• industrial and scientific-industrial

cooperation of enterprises;• participation of Finnish companies in

modernization of the Russian economy;

• exploiting advantages resulting from Russia’s WTO accession;

• making use of the economic potential of the "Northern Dimension“ policy,the Baltic, Barents and Arctic cooperation;

• making use of the strong growth of passenger cross-border traffic between Russia and Finland.

Passenger cross-border traffic between Russia and Finland

Border crossing point

Passengers Passengers Growth

2007 2012 %

Raja-Jooseppi – Lotta

58 000 128 000 120,7%

Salla – Salla 67 000 221 000 229,9%

Kuusamo – Suoperä

 16 000 44 621 178,9%

Vartius – Lyttä

450 000 502 000 11,6%

Niirala – Värtsilä

919 000 1 501 000 63,3%

Imatra - Svetogorsk

930 000 2 225 000 139,2%

Nuijamaa – Brusnitchnoje

1 635 000 3 380 000 106,7%

Vainikkala – Buslovskaya

399 000 484 000 21,3%

Vaalimaa – Torfjanovka

2 720 000 3 495 000 28,5%

Total 7 194 000 11 981 000 66,5%

Euroregion “Karelia” in new conditions

1. Need to update the Euroregion " Karelia" concept, taking into account the new realities (partnership of Russia and the EU, the accession of Russia to the WTO, new challenges and opportunities in the economy and social sphere of the regions).

2. Need to develop a new program of cross-border co-operation of the Republic of Karelia and neighboring areas with an emphasis on the development of joint ventures and the establishment of cross-border network of joint projects, including joint projects in education, health and culture.

3. Saving a unique model of the Euroregion "Karelia" as a harmonious combination of the features of multi-level cross-border cooperation.

4. Marketing of updated model of the Euroregion "Karelia" at the national and international level.

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Thank you for attention!

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