OVERVIEW OF AMURSKAYA OBLAST

Author: Andrei Vasenyov, BISNIS representative in Khabarovsk,

General Information

Amurskaya Oblast is a 361,900 sq. km. territory in the southern part of the Russian Far East, north of China. It borders with the Chitinskaya Oblast on the west, Khabarovsk Krai and Jewish Autonomous Republic on the east, Sakha Republic (Yakutiya) on the north. The total length of the state border with China is 1,243 kilometers. The prevailing part of the Amurskaya Oblast lies in the basin of the Amur River. The climate is continental with monsoon features.

As of January 1, 2005, the population of the Amurskaya Oblast’s was 887,700 people; 66 percent of the population live in cities and towns, 34 percent – in villages. Blagoveshensk – the Oblast’s administrative center lies 7,985 kilometers from Moscow by railroad. The other large cities are Belogorsk, Svobodniy and Tynda. The Oblast is divided in to 20 administrative districts.

Infrastructure

Railroad transport is traditionally a primary choice for passenger and cargo transportation in Amurskaya Oblast. The two major railways that traverse Amurskaya Oblast and link it with the eastern and western regions of the Russian Federation are the Zabaikalskaya section of the Trans-Siberian railway with the outlet to the sea ports of Nakhodka, Vostochniy and Vladivostock and Baikal-Amur Railway (BAM) with the outlet to Vanino and Sovgavan sea ports. The total length of the railway network in the region is approximately 3,000 km.

The total length of the automobile roads in the region is approximately 11,563 km. Amur highway (Chita-Khabarovsk) a section of the Moscow-Vladivostok Federal highway traverses Amurskaya Oblast and links it to the other regions of Siberia, Russian Far East, etc. The total length of the automobile roads in the region is approximately 11,563 km.

The Blagoveshensk city airport has an international status. It serves transportation of passengers and cargo to 15 towns in Amurskaya Oblast, 24 cities in the Russian Federation as well as international flights to Japan, Korea and China.

The total length of the Amurskaya Oblast’s waterways is estimated at about 1,963 thousand km. Blagoveshenskiy, Poyarkovskiy, Svobodniy and Zeya river-ports operate six months of the year and ensure the outlet of vessels down the Amur and Zeya rives to the Sea of Japan. The Blagoveshenskiy and Poyarkovskiy river ports serve carriage of exported and imported cargo to China and other Pacific Rim Countries.

Natural Resources

The Amurskaya Oblast is reach with mineral resources. The region’s estimated economic potential for mineral reserves is US$400 billion. Coal resources are estimated to be 70 billion tons. Over 90 deposits of brown and bituminous coal have been discovered in the region, including 6 explored deposits and 4 deposits under exploitation. Svobodnenskoye deposit of brown coal is very promising due to its favorable location near Trans-Siberian railway. The deposit’s estimated reserves are 1,876 million tons of coal. Amurskaya Oblast currently ranks sixth among the gold-producing regions in Russia accounting for over 8 percent of the country’s gold mining. The most promising deposits are Bamskoye (46 tons) and Malomyrskoye (45 tons). The region is also rich with such mineral resources as silver (3,000 tons), platinum (100 tons), iron (2,000 million tons), copper (10 million tons), titanium (40 million tons), zinc (400,00o tons), apatite (30 million tons), zeolite (100 million tons), tufa, kaolin (100 million tons), limestone (100 million tons), phosphatide, chalcedony, dolomite and other construction materials. Oblast timber resources exceed 1.8 billion cubic meters including 956 million cubic meters of ripe and over mature wood.

main indusries ovrview

The region’s economy is diversified and based on industry, agriculture, transport and construction – 4 percent. The Oblast’s major industries are electric power (42.8 percent), ferrous metallurgy (15 percent), food industry, timber and wood processing (6.2 percent), machine-building and metalworking industry, fuel industry and construction materials industry.

Electric power

The Electric power sector remains the leading sector in the region economy with a 42.8 percent share in the overall industrial production. Amurskaya power system is represented by the three RAO EES Rossii (Russian Unified Power Systems JSC) affiliates: Amurenergo, Zeiskaya Hydropower Plant (1,330MWatt) and Bureiskaya Hydropower Plant (2,000 MWatt).

Timber

Since 1999 the Oblast timber sector experienced production growth largely attributed to the favorable situation on the international markets. Currently, the share of timber and wood processing sector in the Amurskaya Oblast economy is 6.2 percent. Oblast administration seeks to encourage timber enterprises to introduce highly effective modern logging equipment and processing lines as well as new technology for production of sawn goods.

Mining

Although less than 5 percent of the region’s mineral potential is being developed, mining sector accounts for considerable 15 percent of the regional gross product falling slightly bellow power engineering. The sector is largely based on production of coal, gold and construction materials. 62 enterprises are currently engaged in gold mining activities in the Amurskaya Oblast. However only 4 of them produced over 500 kilograms of gold while the other 36 accounted for less than 100 kilograms. According to the Department of Nature Exploitation and Mining Complex production of gold as of May 1, 2005 totaled 1,645.5 kilograms. This is the 692.3 kilos increase to last year’s performance; during the corresponding period of 2004 production was 960.2 kilos. The Amurskaya Oblast coal industry is largely based on the development of Raichikhinskiy, Arkharo-Boguchanskiy and Erkovetskiy brown coal deposits. The volume of coal extracted in 2004 by Amurskiy Ugol JSC was 3,106 thousand tons, which is 19.4 percent more than in 2003.

Agriculture

The Amurskaya Oblast is one of the major producers of agricultural products in the Russian Far East. The region accounts for 57 percent of the Russian Far East region’s arable land (1,371.17 thousand hectares). It one of the largest producer of grains and soybeans in the RFE. In 2004, Oblast agricultural enterprises enjoyed an overall profit of 103.5 million rubles (US$ 3.7 million) compared to 78.4 million rubles (US$ 2.8 million) in 2003.

Food Processing

During the 2004 the enterprises of food and food processing industry produced 3,280.1 million rubles (US$ 117.1 million) worth of food stuffs (26.8 percent increase to 2003 performance). Large and medium sized enterprises enjoyed an overall profit of 50.2 million rubles (US$ 1.8 million). The share of profitable enterprises was 75 percent.

Consumer Market & Trade

In 2004, the Amurskaya Oblast’s retail sales turnover was 23,591.6 million rubles (US$842.6 million). During the first six months of 2005 the sales turnover grew 16 percent compared to the corresponding period of 2004. 78 percent of consumer goods are soled at stores; 22 percent at markets. The share of foodstuffs in the retail sales turnover is 52 percent. The average nominal monthly wage of the employed population in 2004 totaled 7,469.7 rubles per month (US$ 267). The greatest average wages were in the banking and insurance industry, electric energy, ferrous and non-ferrous industry and transport industry (railroad and aviation).

Foreign Trade and Investment

Amurskaya Oblast’s 2004 international trade turnover was US$ 164.4 million (grew 46.0 percent), with exports of US$ 103.0 million (increased 35.3 percent), and imports – US$ 61.4 million (66.9 percent increase). The region trades primarily with the Pacific Rim Countries as well as other foreign countries and 8 NIS countries. During January-March 2005 the Oblast’s foreign trade turnover grew 1.3 times compared to the corresponding period of 2004. Export volumes grew 1.3 times, import – 1.2 times. The share of exported products was 67 percent, import – 33 percent. China accounted for the prevailing 83 percent of the foreign trade volume.

The share of the Amurskaya Oblast in the overall amount of foreign capital invested in to the economy of the Russian Far East is less than 1 percent. As of April 1, 2004, the region possessed a total of US$19.8 million of foreign investment.