European Regional Science Association
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European Regional Science Association
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The abstract for paper number 425:
Vladimir Didyk, Kola Science Centre Russian Academy of Sciences, Apatity, Murmansk region, Russia
Structural Changes in the Murmansk Region’s Economy: Tendencies and Prospects
Russian economy is experienced the deep transformation process towards the market-oriented system. One of the consequences of the process is acceleration of its structural changes that are reflection of the influence of such new factors as price liberalization, competition, rapid institutional changes. Obviously, every region has its own peculiarities and therefore different speed and scope of the changes, which to a high extent determine the level of economic development and, as a result, living standards of people.
Peculiarities of the Murmansk region (province, or oblast’ in Russian) economy are connected with harsh natural and climatic conditions of the extreme north, abundance of natural resources, especially minerals and fish, availability of a deepwater ice-free harbour and other factors which determine formation of its production specialization (based on exploitation of the natural resources) with high export share. However, despite preservation of the mentioned economic orientation for a long period earlier and in the foreseen future, the specialization degree fluctuates.
In the paper to be presented at the Congress, the tendencies of structural changes in the region’s economy during the period of market reforms, main factors determining the changes, policy measures of regional government as well as scenarios of future development will be discussed. The author, as a participant of the Finnish-Russian research project “Economic Monitoring of North-West Russia”, will use results of the study. One of the findings, presented in the first report within the project (“Murmansk province in the 90s”), in particular, was that the degree of predominance of industrial sector in the structure of economy tended to grow due to substantial increase of export volumes abroad, especially by enterprises of non-ferrous metallurgy and mining industry. The situation has a negative side of increasing dependency on fluctuation of world prices. Periods of unfavourable market situation negatively influence both enterprises-exporters and the local population due to decreasing profits and tax collections by the regional and municipal budgets.
The common for most countries tendency of growing service sector due to rising labour productivity in production sector could be noticed in the region’s economy. However, the positive tendency is still slow and not so profound as it is in more advanced economies.
There are a lot of challenges regarding future development of the region’s economy. Among the most important is the necessity to find solutions for the problems of depletion of mineral resource deposits and related increase in extraction costs, environmental pollution, expiring of the projected term of exploitation of the Kola Nuclear Power Station capacities built in the earlier 1970s. Huge investments are needed for industrial restructuring, introduction of modern technologies, and diversification of the economy. Economic policy of the regional government should stimulate such investments and pay more attention for development of human capital as a major factor of positive, based on innovations, structural changes in the region instead of relying on expectations related to the oil and gas mega projects.
Unfortunately full paper has not been submitted.