Foreign Economic Activity in the Krasnoyarsk Krai,

Foreign Economic Activity in the Krasnoyarsk Krai, Russia

Prepared by Azim Mamanov, BISNIS Network Representative in Novosibirsk.

Krasnoyarsk Krai is one of the few Russian regions where the foreign economic sector plays a key role in the local economy. According to the methodology developed by the Regional Investigations Center and the Institute of USA and Canada of the Russian Academy of Sciences, Russian Regions can be classified into four groups:

- largest in terms of industrial production;
- largest in terms of imports;
- largest in terms of exports;
- regions where the local industry significantly depends on the world market.

Out of 35 major regions, only five are included in all four groups: the Krasnoyarsk Krai, Kemerovo, Perm, Samara, and Chelyabinsk Oblasts.
Nine regions, namely the Bashkortostan Republic, Moscow, Irkutsk, Murmansk, Nizhny Novgorod, Orenburg, Sverdlov, Tyumen Oblasts, and Khabarovsky Krai, are included in one or more of the three groups. Almost all other regions out of the 35 significantly depend on either imports or exports. Other Russian regions are mainly oriented in toward the Russian market.

Foreign trade dominates the foreign economic sector of the Krai's economy. Foreign trade amounted to US$3,386.1 million in 1998. The share of imports for foreign trade was 80.3 percent, and the share of exports was 19.7 percent. In 1998 the foreign trade balance was S$2,051.3 million (US$2,523.3 million in 1997).

The August crisis in 1998 affected the foreign economic activity of the Krai. The number of companies involved in foreign economic activity was 797 in 1998, 6.6 percent less than 1997.

Exports

Traditionally, the Krai is the largest exporter of all the Russian regions, and its share of Russia's foreign trade constantly increases. Its export volume totaled US$2,452.7 million in 1998.

The main products exported from the Krai are raw materials, particularly non-ferrous metals (aluminum - 36.7 percent, nickel - 19.2 percent, and copper - 18.7 percent), and timber (4.6 percent). Timber is mainly exported to Japan, Turkey, Italy, and Egypt. Other products exported are ferrous metals, oil and oil products, coal, fertilizers, and mechanical and electrical equipment.

The Krai's foreign trade activity is mainly oriented towards West and Central Europe, Asia, and America. The largest country to import goods from the Krai is the Netherlands, mainly due to the fact that non-ferrous metals exported from the Krai are shipped through the Netherlands sea ports. The second largest is witzerland,
and the third is the United States.

The leading enterprises involved in foreign trade in 1998 were the JSC "Krasnoyarsk Aluminum Smelter" (37.3 percent), JSC "Norilsk Mining Plant" (36.5 percent), "Electro-Chemical Plant" (13.6 percent), and JSC "Norilsk Mining Plant" (2.6 percent). Other exporters are the Krasnoyarsk Coal Company, "Yenisei" Chemical Plant, and the KraMZ trading company.

Imports

In 1998, the Krai imported US$641 million worth of products. As a result of the financial crisis in August 1998, the import volume decreased in September through November, and in December it started to increase.
Products of the oil and chemical industry, particularly inorganic chemical products, and plastic and plastic products, were mainly imported (48.2 percent) in 1998. The importation of products for the machine building industry was 32.2 percent of the volume of overall imports, 1.6 percent more than in 1997.

Industrial products are mainly imported from the U.S, Germany, Austria, and Sweden. Imports of fuel industry products were 4.2 percent of the overall import amount, while the other imported products were food products (meat, flour, vegetables, fruits, and confectionary).

The major countries that export into the Krai are Ukraine, Kazakhstan, Germany, Ireland, China, USA, France, and India.

The leading enterprises that imported goods into Krasnoyarsk Krai in 1998 were JSC "Krasnoyarsk Aluminum Smelter" (44.6 percent of the Krai's imports), JSC "Norilsk Mining Plant" (11.2 percent), "Electrochemical
Plant" (9.0 percent), JSC "Cement" (6.2 percent), and Coca-Cola Krasnoyarsk Bottlers.

Krasnoyarsk Krai was the leading region in the East Siberian Territory in the last quarter of 1998 for foreign trade activity, and contributed 46.6 percent of the total export volume, and 39.6 percent of the total import volume, for the Territory.