March 17, 1999
AUTHOR: ALEXANDER KANSKY, COMMERCIAL ASSISTANT, US CONSULATE, ST. PETERSBURG.
INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 1999. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.
1. The Pskov region is located in the Westernmost region of Russia with borders on Estonia, Latvia and Belarus. The region covers a territory of 55,300 kilometers and has a population of 827,100. Pskov is divided into 24 administrative districts and has two major economic centers, the city of Pskov in the central part of the region (pop. 206,000) and the city of Velikiye Luky to the South (pop 117,200). Over two-thirds of the industrial products of the region are manufactured in these two cities. The region's geographic location on the Western border of Russia plays a key factor in the economic activity of the Pskov region, which serves as a major transit route for Russian exports and imports with the Baltics and Eastern European states. In addition, Pskov lies on the main transportation route linking St. Petersburg and Northwest Russia with Kiev and Southern Russia. Railways connect the Pskov region with the ports of St. Petersburg, Murmansk, Kaliningrad, Tallinn and Riga.
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Natural Resources
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2. The primary natural resources of the region are timber (reserves of 250 million cubic meters); peat (proven reserves of 300 million tons) and raw materials used for the construction industry (ceramic clay, limestone, gypsum, molding sand, sand for glass manufacture, non-ore construction materials). The dense network of rivers and lakes yield 6,000 - 7,000 tons of fish annually for industrial processing. Local authorities expressed willingness in attracting investors for developing natural resources.
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Industrial Profile
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3. There are 163 major and medium-sized industrial enterprises in the region, primarily in the following industries: electric power production; light industry; machine-building and metal-working; timber, wood-processing, pulp and paper production; construction materials; and food-processing. The region is a major producer of low-power electric motors for household appliances as well as mechanization and automation devices. Local production also includes automotive aftermarket products; settings for automatic welding of large diameter gas and petroleum lines; as well as household consumer goods such as irons, juice-squeezers and tape-recorders.
4. The Russian financial crisis of 1998 had a severe impact on Pskov enterprises. Local companies are suffering from lack of capital, outdated technologies and equipment, and inefficient management. Most payments are made through barter agreements. One positive result of the crisis has been that locally made products have become more price-competitive in the Russian market. According to Pskov officials, privatization in the region was completed in 1995; currently almost all of the companies in the Pskov region are private firms. Despite these changes, authorities in Pskov acknowledge that local enterprises have been slow to adapt to the changes in the marketplace and produce quality goods which can respond to customer needs. Regional officials attribute this weakness to a lack of local entrepreneurship and infrastructure to foster a market economy.
5. The telecommunication infrastructure of Pskov is well developed. Telephone communication is available to other regions of Russia and with all foreign countries. There are two cellular telecom companies operating in the region providing communication in GSM-900 and NMT-450 standards. Internet is also available in major towns of the region.
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Agriculture
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6. Sixty percent of Pskov region inhabitants live in rural areas. There is considerable agricultural activity in the region, primarily in meat and milk production as well as the cultivation of flax, potatoes and other vegetables. The efficiency of local agricultural production is poor due to shortages of farm machinery and equipment, spare parts, fuels and seeds. Cattle breeding is significant in the agricultural sector, and flax growing and processing is growing in importance. Poultry production is showing signs of recovery after a deep decline during 1993-1996. The production of fuel and farming peat is also a promising sector. Pskov Government officials and local businesses have a joint project with the U.S. firm, Ocean Spray, to grow cranberries in the Pskov region using U.S. technology.
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Tourism Potential
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7. The Pskov region has substantial undeveloped tourism potential to the point that the Lonely Planet tour book calls it a "worthy alternative" on the way from St. Petersburg to Tallinn, and draws "surprisingly few tourists". The city of Pskov dates back to the tenth century and has one of the largest collections of old Russian church architecture. In the region as a whole there are over one hundred ancient monuments, including a riverside Kremlin in Pskov, several fortresses, the Mirozhsky Monastery, churches such as the Trinity Cathedral with its 17th century frescoes, and the estate-museums of famous Russian poets and composers. In addition, the surrounding countryside is relatively unspoiled with clean lakes and rivers. These sites are accessible to major cities such as St. Petersburg (3 hours drive), Tallin and Moscow. At present, the region lacks a tourism infrastructure, with Western class accommodations, restaurants and related services. Authorities recognize the potential of the tourism industry, and are seeking ways to attract investment in this sector.
8. Pskov is accessible by car, rail and air. A car ride from St. Petersburg takes about four hours and approximately the same time from Riga and Tallinn. Pskov can also be accessed by train from St. Petersburg (4.5 hours) and Moscow (12 hours). Pskov's small airport has daily flights from St. Petersburg and Moscow and several per week from Kiev.
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Development Priorities
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9. In recent discussions with CS and other Consulate staff, the Pskov regional officials displayed a candid, down-to-earth approach to the issue of economic development and attracting investment. The authorities stated to the Consulate representatives that they had been "left behind" by Moscow and St. Petersburg, their traditional sources of industrial support, and that the process of restructuring the local industry would be a long and painful process. They realistically do not expect to attract massive investment, particularly foreign, over the near term in these enterprises. Instead, their strategy is to support the development of a local market economy by building on their strengths as a border and transit region, together with their tourism potential. Consequently, local officials listed the following as priorities targets for attracting private investment (both Russian and foreign): development of the transportation infrastructure, development of Western-quality business and tourism services; and modernization of agricultural industry in the region.
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Opportunities for U.S.
Firms
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10. The Pskov region may be considered by U.S. firms interested in following activities in Russia:
11. Following are key contacts for American firms interested in
exploring
trade and investment opportunities in the Pskov region:
(A) The Pskov Region Administration
Evgeny Mikhaylov
Governor
23 Nekrasova Street
Pskov 180001
Russia
Telephone: 7 (8112) 162203
Fax: 7 (8112) 160390
Vadim Laptev
Chairman of the International Relations Committee
The
Pskov Region Administration
23 Nekrasova Street
Pskov 18001
Russia
Telephone: 7 (8112) 168724
Fax: 7 (8112) 160660
Vladimir Kushnir
Vice-Governor
Head of the State Property
Committee
The Pskov Region Administration
23 Nekrasova Street
Pskov
180001 Russia
Telephone: 7 (81122) 24593
Fax: 7 (81122) 23210
Lyudmila Vasilyeva
Senior Specialist
International Relations
Pskov
Region Administration
23 Nekrasova Street
Pskov 180001
Russia
Telephone: 7 (8112) 162366
Fax: 7 (8112) 160660
(C) Business Contacts
Svetlana Zhuravleva
Director
Pskov Enterprise Support Center
(TACIS-sponsored)
35 Sovetskaya Street
Pskov 180001 Russia
Telephone: 7
(8112) 164778
Fax: 7 (8112) 164778
E-mail: Lpcpskov@ellink.ru
Vladimir Zubov
President
The Pskov Chamber of Commerce and
Industry
15a Sovetskaya Street
Pskov 180001 Russia
Telephone: 7
(8112)163883
Fax: 7 (8112) 160052
Vladimir I. Nazarov
Head of the Customs Committee of Pskov
6 Rabochaya
Street
Telephone: 7 (81122) 241-49
Fax: 7 (81122) 216-87
Vasily Ignatyev
General Director
KROM (Pskov Electro-Mechanical
Plant)
27 Oktyabrsky Prospect
Pskov 180600 Russia
Tel: 7 (81122)
23154
Fax: 7 (81122) 39682
Evgeny Sorokin
General Director
Lubyatovo
30 Zonalnoe
Shosse
Pskov 180014 Russia
Tel: 7 (8112) 183182
Fax: 7-(8112) 183182
Natalya Alexseeva
Chief Engineer
Slavyanka
40 Rizhsky
Prospect
Pskov 180016 Russia
Tel: 7 (8112) 461841
Fax: 7 (8112)
460881
E-mail: fslav@ellink.ru
Updated: March 1999
This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)