Arkhangelsk region in brief

1. Historical information, geography, population and climate

The Arkhangelsk region is situated in the North of the European part of Russia. Its coasts (3 thousand kilometres length) are washed by the cold waters of the seas of the Arctic Ocean: the White, Barents and Kara seas. On the ancient maps this territory is presented as Biarmia and Dvinskaya Zemlya. In 1708 under the order of Peter I it was rearranged into Arkhangelskaya Gubernia, since September 1937 it is called the Arkhangelsk region.

The territory of the region is 587,4 thousand sq. km. As of January 1, 2002 the population is about 1 mln. 428,9 thousand people, out of which 1 mln. 068,3 thousand inhabitants are urban population.

The region consists of 20 administrative districts, 14 cities, 38 working settlements, about 4 thousand villages. It also incorporates the islands - Novaya Zemlya and Franz Joseph Land and the Nenets Autonomous Area. In 1992 the Arkhangelsk region and the Nenets Autonomous Area got the status of the subjects of the Russian Federation.

The Administrative centre of the region is the city of Arkhangelsk. It was founded by the order of Ivan the Terrible on March 5, 1584 in the mouth of the Northern Dvina river. The largest cities are Severodvinsk, Kotlas, Novodvinsk, and Koryazhma.

The climate of the region is strongly influenced by its situation close to northern seas and oceans so it is characterized as transitive between sea and continental. The influence of the Arctic Ocean and the Barents seas explains the temperature rises in winter, and in spring and summer the effect is opposite. Winter is usually long (about 250 days) and cold, with average low temperature down to -26 degrees and strong winds. At this time of the year all the territory of the region is covered with snow. Spring comes to the southern districts in April, to the Northern - in May. The average temperature in summer is about +15 degrees.

The region has superfluous water resources. There are 70 thousand large and small rivers with total length of 275 thousand km. Four largest rivers (the Northern Dvina, the Pechora, the Onega and the Mezen) flow into the seas of the Arctic Ocean. The wide and deep Northern Dvina gives favourable conditions for navigation, therefore being the main water transportation channel.

The national structure of the population of the Arkhangelsk region is rather homogeneous. Russians are 92,1 %, Ukrainians - 3,4 %, Byelorussians - 1,3 %, Nenets - 0,5 %, Komi - 0,5 %, other nationalities - 2,2 % (Tatars, Tchuvashs, Mordva, Kazakhs, Jews and others).

The density of the population is 2,5 men per 1 sq. km. 74,0 % of the regional population live in cities, 26,0% - in village districts. The average age of the population is 36 years. The able-bodied population constitutes 59 % of this number.

2. Natural resources

The Arkhangelsk region has significant wood resources: woods occupy about 296 thousand sq. km., which operational stock is estimated at about 2453,8 mln. cubic metres. The structure of wood fund consists mainly of coniferous breeds, including: fur-tree - 55,7%, pine - 26,6 %, the group of foliage wood: birch - 16,3 %, aspen -1,1%.

The region is also rich in mineral resources. Owing to the efforts of geologists the Arkhangelsk region has a significant base for producing and processing oil, gas and coals (the estimated total recoverable reserves are 3,7 billion tonnes). About 300 thousand tonnes of bauxites are mined every year.

Diamond reserves of the Arkhangelsk diamond province are estimated as 832,5 mln. carats.

There are also numerous deposits of limestone, dolomites, cement materials, plasters and anhydrites, sand, gypsum, building stones, underground waters, manganese, copper ores, zinc, lead, amber, jewellery agates and other minerals in the region.

3. Regional economy branches

More than 19 thousand enterprises and organisations of all patterns of ownership and managing are registered on the territory of the region. Most of the enterprises (82 %) are in private sector of the economy.

Economic development is based on traditional industrial branches such as timber industry complex, fish industry, building industry and advanced commercial port infrastructure, including the Arkhangelsk seaport which is the Northern gateway of Russia providing essential part of cargoes transportation in the region.

Industry

Timber industry complex.

The timber industry complex is a traditional leader of the regional economic potential. A great number of sawmills, woodworking enterprises and pulp-and-paper mills representing the large opportunities for the investment activity are concentrated in the region.

More than 200 woodcutting enterprises harvest wood now. The amount of wood harvested in 2001 has reached 8950 thousand cubic meters. The attainable volume of woodcutting in the rated area is 23 mln. cubic metres per year.

The woodworking industry is one of the oldest branches of the regional economy and it consists of 26 sawing and woodworking enterprises, which are basically located in the cities of Arkhangelsk and Onega. The annual volume of the saw-timber manufacture is about 2 mln. cubic metres. Employment of the industrial capacities for timber production is 66%.

Chemical processing is carried out by Arkhangelsk, Kotlas, and Solombala integrated pulp-and-paper mills. In 2001 they produced 711,0 thousand tonnes of pulp, 300,7 thousand tonnes of paper, 627,5 thousand tonnes of cardboard.

Every third cubic meter of Russian export saw-timber and one fourth of Russian pulp are produced in the region.

Deep wood processing is a priority now. The region is also interested in attracting investment in development of forest areas and building infrastructure in far, difficult of access areas.

Fish industry.

Fish industry is the major industry of the Arkhangelsk region. The volume of the annual fish production is 169 thousand tons, the processed fish and canned fish output is about 67 thousand tons. The significant part of fish production is intended for export. Besides, fishery enterprises conduct hunting coastal sea animal, salmon fishing and seaweed farming. Seaweed is a unique natural material for pharmaceutical and food industries. A seaweed plant, the only one in Russia and CIS, is situated in Arkhangelsk.

Defensive industry.

The industrial military complex of the Arkhangelsk region is a unique one in the Russian Federation, it has powerful industrial, scientific and technical potential. The State Russian Centre for Nuclear Shipbuilding is located on the regional territory. The enterprises of Sevmash and Zvyozdochka are the main ones in this Centre. The project being realised as part of conversion programme for industrial military complex is of great interest for effective investing. This project provides constructing ice-resistant oil production platforms for their use in the areas of continental shelf of the Barents sea, and also building trawlers.

The Plesetsk space vehicle launching site, the only one in Europe is situated in the region. More than 40% of all apparatuses, launched from the Earth, were brought to the orbit from this Russian site. According to the new programme, called Angara, technologies of commercial flights using environmentally friendly fuel are worked out and introduced in Plesetsk.

Mineral resources complex

The increasing attention is paid now to the development of the Russian northwest oil & gas complex. 78 deposits of oil and gas are reconnoitred in the Northeast of the region, in the Nenets Autonomous Area.

With the development of the exploratory-prospecting works on the White, Barents and Pechora seas' shelf there appeared excellent prospects for oil and gas sea deposits exploitation. The reserves of the Shtockman gas-condensate field are 121 mln. tons of gas condensate and 3 trillion cubic meters of gas.

The Timan-Pechora oil-field region (ÒPR), based on the developed in the Nenets Autonomous Area oil and gas deposits is attractive for the investors. It should also be noted that this deposit is recognised as fourth in the world according to its oil field. Solving of this prospective task proves to give a new boost to the development of the whole economy of the North-West of Russia. The Mesen syneclise in the East of the Arkhangelsk region is very prospective for search and exploration of hydrocarbon deposits.

Today construction of the gas pipeline Nuksenitsa - Arkhangelsk is in progress. This pipe will provide gas transfer to the region. The realisation of this project is of great significance for the whole economy of the region. Taking into consideration prospective development of Shtockman gas-condensate deposit this highway could become a transport line for export and internal gas deliveries. Transfer of the regional energetic system to consuming gas will lead to a significant decrease of prime costs of goods and to more favourable ecological situation. In order to create a complete cycle of gas processing, construction of methanol plant began in Arkhangelsk.

In 2002 the construction of Mining and Treatment Complex was started at the diamond deposit named after Lomonosov. It is planned that it will start operation with capacity of 5 mln. tonnes of ore in 2005. Overall amount of investments is estimated as 414 mln US dollars.

The report with calculation of reserves as well as feasibility study of conditions for the deposit named after V.P. Grib were approved in December 2001. Ore mining can start from 2005. The estimated investments are $ 344 mln US dollars.

There are two operating enterprises that deal with diamond cutting in the region - in Koryazhma and Severodvinsk.

Electric power industry

Recently large attention has been paid to the Arkhangelsk region on power and energy saving. Arkhangelsk is included into the list of cities of Russia for the reception of the investments from the World Bank for Reconstruction and Development under the energy-saving program. The Arkhangelsk region was chosen to be the “pilot region” to introduce Kyoto Protocol programs and the United Nations Convention about Climate Change. The following projects are being realized: reconstruction of heating system, introduction of modern energy saving technologies, some power stations start using wood waste instead of fuel oil. Wood waste is cheaper and environmentally friendly fuel.

Projects connected with the usage of alternative energy sources are also prospective. The Arkhangelsk region is rich in peat deposits, use of which will allow to refuse from the imported power resources, especially in the sphere of small-scale power engineering. Two peat-bricking plants were built in the region, in the towns of Solvychegodsk and Shenkursk.

The power supply program for separate far areas in the extreme North is developed. It provides the construction of wind power stations and other alternative energy sources. Construction of the first sample of floating nuclear power station will be started at Sevmash in Severodvinsk during the next years.

The Arkhangelsk region is included in the federal investment programme for the development of Russian nuclear power system. It is planned to build the first energy block by 2010.

Agriculture

The Arkhangelsk region is situated in the risky agricultural zone; therefore regional agriculture basically specializes in milk & meat livestock rising, and in reindeer breeding in the Nenets Autonomous Area. The Kholmogory cow breed is widely known in the world among breeders. The total number of cattle as of January 1, 2002 is about 128,2 thousand heads. In 2001 about 12140,3 tonnes of grain, 410,5 thousand tonnes of potatoes, 87,3 thousand tonnes of vegetables, 31,0 thousand tonnes of livestock and poultry meat, 166,7 thousand tonnes of milk, 184,9 mln. of eggs were produced in the region.

Transport

The transport complex of the Arkhangelsk region includes all types of transport: sea, river, railway, air and automobile.

The Arkhangelsk transportation complex is very well organized. It is the headquarters of the Northern Sea Route, which reduces the distance for transporting cargoes from Europe to Japan and South-Asian countries by more than 40%. This is reached by cargoes transportation via Arctic seas, not via Suez Canal.

The sea transport plays the main role in the external trade communications and in the service of coastal regions and islands of the Arctic Region. The basic cargo ports are Onega, Mezen and Naryan-Mar.

The Arkhangelsk seaport is the first commercial port of Russia. It was founded in 1584 and nowadays it is the second in the world (after London) on berthing line extent.

The port coordinates the efforts for handling merchant vessels, oil tankers, trawlers and other kinds of vessels. It has its own ice-breaking fleet that provides all-year-round steering of Russian and foreign vessel companies' ships. Fright traffic of the port is about 1 mln. tonnes, but it could be increased up to 8 mln. tonnes and it is of universal kind (containers, metal, cardboard, pulp, oil-products etc.). The constructing of processing complex is planned.

The development of the Arkhangelsk port is a complex task connected with both modernising the structure of the port itself with creating conditions for large-tonne transit container transportation and the more active involving of the port into the transport infrastructure of the Northwest of Russia. From this point of view the task of the construction of the Karpogory-Vendinga railroad is strategically important because it should connect the Arkhangelsk port with the central parts of Russia.

The construction of this railroad and modernisation of the port will allow transforming Arkhangelsk into one of the largest cargo centres of the Northwest of Russia. This railway should connect the Arkhangelsk region with the Ural industrial area and also should become the transport cargo artery for large mining, iron and steel industry enterprises.

The following main railroads function: Arkhangelsk-Konosha-Vologda-Moscow, Kotlas-Konosha-Vologda, Arkhangelsk-Obozerskaya-Murmansk, Kotlas-Kagrodogu-Êirov, and Arkhangelsk-Karpogory. The density of the lines is 3 kms. per one thousand sq. km.

In order to develop transportation complex, construction of Karpogory-Vendinga railroad will be continued. It will connect the port of Arkhangelsk with Central Russia and Siberia.

The motor transport carries out the bulk of domestic freight and passengers' transportation. Arkhangelsk - Moscow highway (dimension Ì-8) plays the important role for the regional economy, it provides automobile transport with an access to the roads of central Russia and other states. The density of highways is 11,4 km per thousand sq. km.

The river navigation mainly provides inter-regional traffic. The extent of exploited waterways is about 4000 km.

The air transport basically carries out the passenger transportation, urgent cargo delivery to the geologists and forest protection. There are more than 60 cities and settlements of Russia and a number of foreign countries on a regional route map.

Guests of the Russian North are always welcome at the airport “Arkhangelsk”. In the airport everything is made in the way that the regular formalities take minimum time of the passengers.

Technical-economical grounds for reconstruction of the airport are being developed. The reconstruction provides creating the system meeting the highest world standards. After the reconstruction the airport will be able to accept and handle Russian and foreign airliners of all types including the heavyweight ones up to 400 tonnes. The successful realisation of the project will contribute to opening new intercontinental flights and increasing passenger and freight traffic.

The joint-stock company “Artelecom” carries out the various types of communication service in the Arkhangelsk region. The company provides telegraphic and telephone communication, radio and television broadcasting in the region. It embodies almost 800 enterprises of communication with their divisions, which deal with the clients.

4. Investment climate

The Arkhangelsk Regional Administration takes measures on the creation of the favourable investment climate in the region. The regional laws “On investment activity in the Arkhangelsk region”, “On state guarantees of fulfilling the obligations on the territory of Arkhangelsk region”, “On support of small business”, “On the state debt of the Arkhangelsk region” “On the sequence of use of the investment tax credit” were adopted in 1999-2001. The laws are directed, first of all, on the creation of legal and state guarantees and tax privileges for the realization of economically and socially significant projects in the priority branches of regional economy, for the realization of which the investments are attracted.

The laws determine the forms of state support and legal protection of the investment policy and the procedure of carrying out the investors' rights on privileges and state regional guarantees.

The regional administration and Regional Deputies' Council have marked the steps for the further development of legislation system in order to make the investment climate in the region more favourable.

In 2001 there were invested 15411 mln. roubles into social-economic development of the Arkhangelsk region. Out of the whole amount of the investments into the basic capital 8730 mln. roubles were used in the industry, 242 mln. roubles - in the electric-power production, 5908 mln. roubles - in fuel industry, 800 mln. roubles were invested into non-industrial spheres.

During the same period the regional economy received 50,5 mln. USD of foreign investments.

5. International relations

Today the proximity of Arkhangelsk Region to the industrially developed central regions of Russia and Scandinavian countries defines in many ways successful development of external trade and economic links. Mutually beneficial co-operation with the Barents Region partners is continued. Geography of contacts in economy, humanitarian sphere and tourism are extended within the European Union and the United States of America.

Today there are 251 companies with foreign share in capital. 91 companies of foreign ownership were registered in the region. Main spheres of their activity are logging and timber processing, forwarding, trade, international transportation, metalworking, fishing and agriculture, consumer goods production.

The Arkhangelsk region attracts by good relationships, established infrastructure, wide opportunities for the development of various manufactures and quiet geopolitical conditions.

Among the most successful EU countries' joint companies working on the territory of the region are Russian-German timber industry company “Holz Dammers”, Russian-Danish joint company “Shalakusha Wood Processing Industry”, Danish company “DLH Nordisk” branch and Russian-Norwegian enterprise “Solombala Shipyard” JSC.

A good example of positive long-standing Russian and Western oil companies' co-operation is an efficient 10 years period operation of the joint venture “Polar Lights Company”, established by American corporation “CONOCO” and “Arkhangelskgeologia” in January 1992. “CONOCO” investments into the Ardalin field development project, where first oil was extracted in 1994, are the largest western investments into Russian oil industry among joint projects. The financial support has been provided not only through the Foreign Private Investments Corporation, but through European Bank for Reconstruction and Development and World Bank as well.

The British company “Halliburton International” continues its successful operation in the Region. The company takes part in technical equipment of oil fields in the Nenets Autonomous District and actively co-operates with the conversion plants of State Atomic Shipbuilding Center in Severodvinsk - “Sevmash” and “Zvyozdochka”. Co-operation between “Zvyozdochka” and Norwegian oil and gas companies “Statoil” and “Norsk Hydro” is going on.

In the sphere of ship-building the Severodvinsk plants “Sevmash” and “Zvyozdochka” in Severodvinsk have established long-term relations with their foreign partners in the sphere of shipbuilding. Their main partners are big Dutch companies “Mammoet”, “Damen” and the Norwegian shipyard “Kimek”.

Arkhangelsk Region traditionally co-operates with the Western countries in sea shipping and transport communications development. The Sea Commercial Port of Arkhangelsk and the Northern Shipping Company keep long-standing business relations with enterprises in Hamburg, Bremen, Havre, Antwerp, Hull and Rotterdam.

The projects related to the use of alternative power resources also have prospects for the Region. Arkhangelsk Region together with Astrakhan and Kaliningrad regions was selected as a pilot region for the implementation of projects related to energy saving and energy-efficiency increasing. Arkhangelsk region is a participant of “Russia - EU” Energy Dialogue, actively works with Swedish and Norwegian companies in alternative energy resource of peat, biomass and wood utilization especially in the area of small-scale power engineering.

Arkhangelsk Region successful co-operation with the World credit institutions is demonstrated through an energy-saving project financing by the World Bank for Reconstruction and Development for the amount over 6 million U.S. dollars and at present the preparation for signing a 10 million Euro credit agreement with the European Bank for Reconstruction and Development for city of Arkhangelsk water-supply system reconstruction. Besides, in 1993 the European Bank for Reconstruction and Development allotted a credit to “Polar Lights Company” in amount of 90 million U.S. dollars for development of Ardalin oil field and US $500 thousand to the JSC ”Teplitchnoye”.

Thanks to the financial support of the Norwegian state organizations and “Barents-region” program the great number of Arkhangelsk students are trained in Norway and Sweden. Thus, experts are educated for the enterprises with the foreign investments, intellectual potential is prepared for the development of the regional economy, the experience of future Russian specialists to operate at the western consulting-market is accumulated.

Lately one of the promising spheres of the regional economy is the development of the international tourism. The Solovki archipelago, the Kenozero national park, the city of Arkhangelsk, Pinega district are the prospective territories for the investments in the sphere of tourist business. Negotiations with investors concerning complex development of the tourist potential of the Solovki Islands, including reconstruction of the hotel-structure, creating of infrastructure, marketing activity, are in progress. The formation of new tourist networks in the Russian North will help to recover the economic life of the region and, in particular, to solve the economic and social problems of small towns, unemployment, development of small and average entrepreneurship.

6. Ecology

The condition of environment in the settlements has no significant changes. The basic sources of regional air pollution are electric power industry, oil processing, pulp-and-paper industry, and also vehicles.

The nature-reserved fund of the Arkhangelsk region is 3 462 459 hectares or 8,38% of its area. There is 1 reservation, 2 museum-reservations, 2 national parks, 34 regional animal parks on the territory of our region.

The administration of the Arkhangelsk region and Swedish and Finnish representatives of nature protecting organizations cooperate in the sphere of organization of especially protected natural territories, ecotourism development. Special attention will be paid to the creation of the national parks on the Onega peninsula and Belomor-Kuloy plateau.

7. Culture and tourism

The Russian North is a pure, inexhaustible spring of Russian national culture. The Arkhangelsk museum of fine arts possesses such a wonderful assembly of ancient northern icons and ancient pagan culture that many world museums can envy. The skilful works of the Holmogory ivory decorators are known abroad. The folk Northern song culture is preserving in Leshukonsky, Mezen, Kargopol and many other choruses. These collectives send talents to the famous State Northern Russian folk chorus. The whirlwind compositions of ensemble “Siverko” cause ovations in auditorium of all over the world. All jazzmen of the Europe come to Arkhangelsk for traditional jazz festivals.

There is the largest in the world museum of wooden architecture, tourist “Mecca” of the Russian North - “ Malye Karely” in our region. For the preservation of this unique wooden masterpieces more than hundred monuments were transported here in 1970s from all the remote settlements of the Arkhangelsk region.

Kargopol was founded in 1146. The sacred place of Kargopol is majestic Khristorozhdestvensky cathedral. It was built in 1562 when Russian Tsar Ivan the Terrible was at power. Blagoveshchensky cathedral was built at the donations of people and Peter I. It is decorated by the famous Kargopol stone pattern that is as beautiful as the outer decoration of Florence Renaissance palaces.

On the Southwest of the region there is taiga forest, lake territory, where the miracle kept the Ancient Russian untouched world. This is “Kenozero national park” - the most interesting and prospective reserved territory of Russia for the development of tourism, ecological programs and historical researches. Kenozero still combines in its elaborate unity the orthodoxy and the ancient pagan cultures.

There is a small archipelago in the White Sea - the Solovki Islands. It is the most attractive place for all the tourists. They come here to bow to a relic, to touch the “warm” stones of a history. In 1557 Uspenski cathedral and the famous Trapeznaya were built. And in 1558 the construction of the majestic Spaso-Preobragenski temple - the largest in Russia, started. This temple is a citadel with walls being up to 6-meters wide and underground passages still makes modern architects admire.

The Arkhangelsk region has the possibilities for recreation complex based on unique natural and historic-cultural monuments of the Russian North.

The Solovki state historic-architectural and natural museum is included in the UNESCO list of World Heritage. The landscapes of many other places of the region are also diverse and picturesque with their untouched flora and fauna.

There are over 200 thousand lakes in the region, rich berry and mushroom places, which give opportunities for successful hunting and fishing.

Introduction of new tourist objects such as Plesetsk Space Centre, Nuclear Shipbuilding Centre, the islands of the Russian Arctic is prospective for development of new kinds of tourism in the region, such as arctic tourism, space tourism, etc.

A Regional Tourist Info Center is being established. Via INTERNET any foreign tourist will be able to make a personal discovery in new point of destination - Arkhangelsk region.