The article discusses changes in the industry of the Kaliningrad region of the Russian Federation since the beginning of the 1990s that occurred under the influence of the FEZ/SEZ. Its implementation, in turn, was primarily due to the changed geopolitical and geo-economic situation in the region. The main result of these changes was the restructuring of the regional industry, which caused import-substituting industries to play a major role (including those that previously either did not exist or were poorly developed). On April 1, 2016, customs concessions of the SEZ will no longer be valid (while tax breaks will be preserved until 2031). This fact together with Russia’s accession to the WTO makes the continued existence of the SEZ mainly in the mode of import substitution difficult, if not impossible. In this regard, this paper discusses the prospects for further development of the industry of the Kaliningrad region under the changed and changing conditions.

Key words: Kaliningrad region, industry, manufacturing, free/special economic zone (FEZ/SEZ).

By the end of the 1980s the level of the industrial development of the Kaliningrad region was slightly below the national average (in 1989 the region accounted for 0.6% of the population of the RSFSR, but its share in the total Russian industrial output was lower – 0.55%) [1, P. 121].

In the structure of industry three sectors played the key role – mechanical engineering, fishing and pulp and paper industry (Table 1).

Table 1

Industrial structure in the Kaliningrad region in 1989, % of the total

Source: [1, P. 119].

The share of the Kaliningrad region accounted for 10% of the food fish production in Russia, 11% of the cellulose production and 3% of the paper production (1992) [1, P. 121]. In mechanical engineering, the main role was played by companies related to the fishing industry (production of instruments, equipment, construction of small fishing vessels, ship repair), military shipbuilding, electronics and electrical engineering, railway coach manufacturing.

Industry in the region had a high degree of participation in the national division of labour and at the same time was heavily dependent on external supplies of raw materials, fuel and energy and the stability of the industrial relations.

In addition to the general problems of the Russian industry in transition, two interrelated factors substantially affected the further development of the Kaliningrad industry:

The conversion of the Kaliningrad region into an exclave of the sovereign Russia, separated from it by territories of foreign countries (not the union republics, as before);

The creation of the free economic zone (FEZ) in 1991 and of the special economic zone (SEZ) in 1996. The zones were largely seen as mechanisms of compensation for the isolated geographical location of the region.

The collapse of the Soviet Union and the transformation of the region into an exclave of Russia led to the complex and costly transport links with the main part of the Russian Federation, disintegration of production chains, which included Kaliningrad enterprises (especially mechanical engineering) within the division of labour in the Soviet Union, breaking of the economic ties with Lithuania, Latvia and Belarus, that were established during the Soviet period, complicating conditions of the pulp and paper industry, located 1500 kilometres away from sources of raw materials in the North of Russia. The former branch structure of the region’s economy because of its spatial isolation from the main territory ceased to comply with the changed economic conditions to a greater extent than in other regions of Russia.

The fish production sector, which formed the basis for the Kaliningrad region industry, was additionally negatively affected by the termination of state subsidies and the rise in the cost of fuel (which previously formed more than half of the cost of production). This led to the decrease of ocean fishing, sale of vessels and a sharp decline in production volumes.

The FEZ/SEZ regime impacted the industry in the Kaliningrad region in 1992-1998 in two ways.

On the one hand, following the adoption in 1996 of the law on special economic zones in the region, there began to appear new import-substituting enterprises (for example, in May 1997, was commissioned the first phase of the “Avtotor” company’s factory to assemble Korean cars KIA). On the other hand, duty-free imports further contributed to the decline in industrial production (primarily in the food industry and in the production of consumer goods), that did not withstand foreign competition.

Ultimately, the decline in industrial production in the Kaliningrad region in 1992-1998 proved to be more profound than in the whole of Russia. Industrial production in 1998 decreased by 6 times compared to 1990 (Fig. 1).

Figure 1. Dynamics of the industrial production, % of 1990.

Percent, Russian Federation, Kaliningrad region

Compiled based on: [2, p. 396; P. 396; 3].

The region’s economy was deindustrialized. The available production capacities were taken out of the production and skilled workers would change professions or became unemployed. The greatest damage was incurred by the industry sectors mainly in the domestic (regional and nationwide) market (machinery, local food processing, building materials industry, consumer goods industry). The good bargain compared to them had those sectors that benefited from a sharp increase in domestic prices of their products (electricity, fuel industry), increased export of products (pulp and paper industry and to some extent the fishing industry) due to the regime of the FEZ/SEZ and the general liberalization of foreign trade or used a combination of both factors (oil industry). In these industries, the decline in production was less than the industry average.

As a result, in current prices, the share of the fuel and energy sector in the industrial structure of the Kaliningrad region has increased considerably due to rising prices for fuel and electricity (from 3.5% in 1990 to 30.6% in 1998) with a sharp drop in the share of industries of the “upper floors” (the final stages of manufacturing) – particularly machinery, consumer goods industry and building materials industry (Table 2).

Table 2

Changes in the structure of the industrial production of the Kaliningrad region, 1990-1998, % of the total industrial production

Compiled based on: [4, P. 15].

Since 1999, the economy of the Kaliningrad region, as well as throughout Russia, gradually began to emerge from the crisis. Production growth was particularly strong in industry, where since 2000 it has been significantly higher than the average Russian indicators (Table 3).

Table 3

Dynamics of indices of the industrial production in the Kaliningrad region and the Russian Federation as a whole, 2000-2007, (% of previous year)

Compiled based on: [3, 5].

In 2007, the volume of the industrial production in the Kaliningrad region exceeded the level of 2000 by nearly 3.6 times (on average in Russia by almost 1.5 times) (current prices) (based on [3]). In 2000-2012 the share of the Kaliningrad region of the industrial production of the Russian Federation increased from 0.3% to 0.96%, which was 1.75 times higher than in the late 1980s [1, 6, 7].

The following factors contributed to the rapid industrial growth:

• The development of import substitution industries due to the regime of the free customs zone[1]and tax benefits[2];

• The devaluation of the Ruble in 1999-2000;

• Increased demand on the Russian domestic market, associated with the growth of incomes of the enterprises and the public;

• Increased attention to the area of the Federal Center, which was one of the most important factors in attracting investment to the region from other regions of Russia (mainly from Moscow and Saint Petersburg);

• Proximity to foreign sources of raw materials, components and semi-finished products.

A characteristic feature of the industrial growth, as noted above, was import substituting. This was reflected in production of goods using foreign raw materials, semi-finished products and components for the national market. This is evidenced by the increase in the export of goods produced in the SEZ in the Kaliningrad region to the rest of Russia from 0.42 billion Dollars in 2000 to 6.5 billion Dollars in 2008 [9].

At the same time the largest share in the total export of production into other regions of Russia accounted for cars, canned meat, TV-sets, canned fish, self-propelled vehicles and cranes, frozen fish, carpets and floor coverings [10, P. 21].

The SEZ regime contributed to the emergence of new industries in the region operating on the national market. There appeared whole new industries that did not previously exist (e.g., car manufacturing, production of TV-sets and other consumer electronics, etc.). Sectors that had previously been represented relatively weakly, significantly increased (furniture and meat-packing industry). For a number of new industrial products the Kaliningrad region became recognizable and even evolved into one of the leaders in the Russian Federation. At the same time, it continued to occupy a prominent place for the production of some of the traditional industrial products (food fish production (including canned fish), fish and seafood, pulp and paper, vodka and beverage products, and others).

Before the crisis in 2009 about 75% of all Russian TV-sets were produced in the Kaliningrad region [11]. Other types of home appliances included vacuum cleaners (84% of Russia’s total volume in 2006 [12 P. 14]), microwave ovens, DVD-players, etc. The main plant for the production of TV-sets – the Kaliningrad “Telebalt” LLC – at that time was the largest engineering company in the region in terms of the volume of production. The largest manufacturer of vacuum cleaners was “Radioimport-R” LLC (Kaliningrad). In 2003 in Chernyakhovsk the Moscow holding “Polar” opened the plant “Televolna” LLC with the annual total capacity up to 2.5 million units of equipment (TV-sets, washing machines, vacuum cleaners, microwave ovens).

JSC “Avtotor” (Kaliningrad), founded in 1997, that collected Korean cars KIA, in 1999 additionally began to assemble German cars BMW, and in 2004 – American cars by General Motors. In 2008, the company brought the car production to 108.5 thousand cars, thus becoming the largest manufacturer of foreign cars in Russia [13].

In Gusev in 2007 the Russian corporation General Satellite (now – GS Group) for the first time in our country hosted in leased premises domestic production of receivers for receiving satellite and terrestrial television. Later Gusev was chosen by the company for the creation of an innovation cluster “Technopolis Gusev” (from August 2012 – “Technopolis GS»).

About a hundred of small and medium-sized enterprises for the production of furniture were created in the region. They would supply their production to more than 40 cities of Russia, as well as for export to the CIS, the European Union (Germany, France, UK, Belgium, Denmark, Austria), Israel and the US. They accounted for about 6% of the sales of furniture in Russia [14].

There were about 160 meat processing plants (mainly operating on imported raw materials). For the production of canned meat the Kaliningrad region ranked first in Russia (22.6% of all Russian canned meat in 2006) [15].

However, import-substituting industries, working on imported raw materials and components, were heavily dependent on the stability of supplies from abroad, and on the volume of demand on the national market, which is the main focus of their production.

Despite a significant decline compared to the beginning of the 1990s, the fishing industry maintained its national significance.

At the same time, the pulp and paper industry found itself in a difficult situation. Due to the remoteness of the raw material base (North-West of Russia), it could thrive only based on export. However, the demand for pulp in the world market is very volatile and could not guarantee stable operation. In addition, the companies used environmentally hazardous obsolete technologies for chlorine bleaching of pulp and had no effective treatment facilities contrary to Russia’s obligations on protection of the marine environment of the Baltic Sea in the framework of the Helsinki Convention. As a result, in 2004, the former pulp-and-paper combine TsBK-1 was stopped in Kaliningrad (JSC “Darita”), in 2007 – the former pulp-and-paper plant TsBZ-2 (Closed joint stock corporation “Cepruss”) in Kaliningrad.

Increased production of certain types of industrial products was also caused by exports. For example, JSC “Baltic Shipyard “Yantar”” (Kaliningrad), that previously had been building almost exclusively warships, set up production of civilian ships for customers from Germany, the Netherlands, Norway. JSC “Baltkran” (Kaliningrad) exported cranes into Finland, Denmark, Norway, Germany, the Netherlands, France, Spain, Italy, China, Japan and other countries. Sewing enterprises of Kaliningrad and Sovetsk were working on give-and-take raw materials. The Kaliningrad ZAO “Cepruss” exported pulp. However, the export potential of the Kaliningrad industry has not been used to the full.

In the oil industry in July 2004, “LUKOIL-Kaliningradmorneft” LLC started oil production at Kravtsovskoye field (D-6), located on the Baltic Sea shelf. Field commissioning allowed to increase oil production in the Kaliningrad region in 2004-2007 by 1.76 times (from 0.83 to 1.45 million tonnes) [16, P. 77].

The higher-than-anticipated growth of production of the goods with advanced processing contributed to positive changes in the industrial structure. For example, the share of mechanical engineering in the structure of industrial production (at current prices) increased during 1999-2004 by more than 2.3 times, and it once again ranked first among industries [17, P. 2; 18, P. 131].

The transition from the SEZ in 1996 to the SEZ in 2006 almost coincided with another radical change in the geopolitical and geo-economic situation of the Kaliningrad region – extension of the European Union on 1 May 2004. Following the accession of Poland and Lithuania, the region became a kind of the Russian “island” within this integration group. The EU enlargement worsened conditions for the supply of the Kaliningrad production into other regions of Russia and thereby complicated the import-substituting economy of the exclave. After the accession of Lithuania to the EU on 1 May 2004 the cargo transit got more expensive by 1.3-1.5 times due to the phytosanitary and veterinary control, as well as due to other paid services, imposed by the Lithuanian side [19, P. 26]. The special agreement with the European Commission (EU Commission) and Lithuania, that was suggested by Russia, which would guarantee the stability of the regime and the conditions of transit and eliminate any possibility of their deterioration in the long term, has never been achieved.

In 2008-2009 the Kaliningrad region, like the rest of Russia, felt the effects of the global economic crisis.

The economic recession in the Kaliningrad region turned out to be more profound than the Russian average. In the industry and the manufacturing sector the recession was somewhat smaller (Table 4).

Table 4

The dynamics of the industry production in the Kaliningrad region and the Russian Federation as a whole, 2008-2009 (% to the previous year)

Compiled based on: [3, 5].

First of all, the crisis has led to a sharp decline in new import-substituting industries, which are the engine of the economic growth.

In 2009, the production of TV-sets declined by more than 70%; of microwave ovens by 80%, digital laser players – more than 80%, vacuum cleaners – more than 85%. The number of employed in the TV cluster of the Kaliningrad region by the end of the first quarter of 2009 decreased from 12 to 2.5 thousand people [11]. “Avtotor” in 2009 although remained the largest producer of foreign cars in Russia, but the production of cars in 2007-2009 decreased from 106.7 to 60.3 thousand cars [20]. Production in the furniture industry in the region by the summer of 2009 had decreased by about half compared to the previous year; about 8% of jobs were cut [14].

The curtailment of the pulp and paper industry continued. In May 2009 the “Neman Pulp and Paper Mill” LLC was declared bankrupt.

At the same time, commissioning of new enterprises in the period of 2008-2009 continued. For example, in 2008 in Chernyakhovsk the “Arvi NPK” LLC, which is part of the Lithuanian group of companies ARVI, launched the only plant in Russia, engaged in production of complex mineral fertilizers using the unique American technology of steam granulation; a high-tech fish-canning complex “Roskon” LLC was opened in Pionersky. In 2009, the Russian Corporation “General Satellite” (now – “GS Group”) launched the project “Area of scientific and technological development – Technopolis Gusev” and opened two plants – JSC NPO “TsTS” (production of digital set-top boxes for the reception of terrestrial and satellite television) and “Prankor” LLC (production of cases of TV set-top boxes and satellite dishes). In the same year, the corporation “Soyuz” has commissioned a plant for processing of edible oil in Kaliningrad and “Hipp” LLC, owned by the German company Hipp Gmbh&Co, opened a production facility for the production of baby food in Mamonovo.

The economic growth in the Kaliningrad region, as well as throughout Russia, resumed in 2010. However, already in 2012, the growth rate slowed down and this slowdown continued in 2013. In the industry in 2013 there was even a small decline in production compared to the previous year (Table 5).

Table 5

The dynamics of the industry production in the Kaliningrad region and the Russian Federation as a whole, 2010-2013 (% to the previous year)

Compiled based on: [3, 5].

Manufacturing remained the economic growth driver in the post-crisis period. Production of transport vehicles (automotive and shipbuilding industries) (production growth by almost 5 times) had the largest growth rate. Its share in the structure of the volume of shipped goods of own production, work and services by own means for the manufacturing industry for 2009-2013 increased from 30.4 to 57.1%. Due to the commissioning of the plant for the production of mineral fertilizers and the facility for production of polyethyleneterephthalate (PET), the volume of shipped goods of chemical production in the period of 2009-2012 increased by nearly 7 times. Its share in shipments of manufacturing industries for the period of 2009-2013 increased from 0.8 to 2.5% [21, P.89-90; 22 P, 19].

The resumption of the economic growth was based both on the post-crisis recovery of production at existing facilities, and the commissioning of new enterprises encouraged by the preferential conditions envisaged under the SEZ. For example, the following facilities were put into operation in industry in 2010-2014:

• “House-Building Plant “White key”” LLC (Gusev) – production of cottages of individual planning (2010);
• “The Fifth Element” LLC (Belkin, Krasnoznamensky District) – production of ceramic bricks and blocks (2010);
• “Group of companies “Atlantis””(near Ladushkin) – processing of fish and seafood (2010);
• “AMEKO-Kaliningrad” LLC (Mamonovo) – production of baby food (2010);
• “Food products” LLC (Gusev) – production of canned meat (2010);
• “Alko-Nafta” CJSC (Pregolsky) – the largest plant for the production of polyethyleneterephthalate (PET) in Russia and Eastern Europe with a nominal capacity of 220 thousand tonnes per year (2011);
• “The first cardboard factory” (Gusev) – production of corrugated packaging (2011);
• “National Product” LLC (Pravdinsk) – production of prepared and preserved products of meat and poultry meat, meat by-products and blood of animals (2011);
• “GS Nanotech” (Gusev) – production of complex hybrid microcircuits using the technology “System in Package” and “Flip Chip” and modern crystals from the advanced chips from the world’s leading producers (2012);
• Company “Avtotor” (Alexander Kosmodemyansky) – the complete production cycle of KIA Sorento cars (2013);
• “Siberian Delicacy Kaliningrad” LLC (Kotelnikovo, Zelenograd district) – production of meat products, including semi-finished products and sausage products (2013);
• “Kaliningrad delicacy” LLC (Kaliningrad) – production of meat and sausage products (2013);
• “BaltAgroKorm” LLC (Dobrovolsk, Krasnoznamensky District) – production of compound animal feed (2013);
• “Wallpaper factory “Prima Italiana”” LLC (Kamenka, Zelenograd district) – production of wallpaper (2013);
• “Infamed-K” LLC (Bagrationovsk) – production of the antiseptic “Miramistin” and eye drops “Okomistin” on its base (2014);
• “Technoservice” LLC (to the west of the village of Novoye Lugovoe, Guryev urban district) – production of gas silicate blocks (2014).

“Avtotor” in 2012 increased its car production up to 265 thousand cars [23]. In October 2013 the company started the construction of full-profile cluster of automobile industries. It is planned to build 5 automobile plants of the full cycle with the capacity not less than 250 thousand cars per year (up to 20% will be used for export) and 16 plants for the production of automotive components, which will be used not only for own production, but also for other Russian and foreign markets [24, 25].

As of 1 January 2014, the register of the SEZ residents in the Kaliningrad region included 89 organizations. The volume of their stated investments was 73.6 billion Rubles. The average number of employees of resident enterprises at the stage of entering the full capacity production is estimated to amount to more than 15 thousand people [26].

At the same time, curtailment of the pulp and paper industry continued. In 2010, the “Soviet pulp-and-paper plant” JSC was declared bankrupt. Back in 2008 it had suffered from a serious fire and ceased pulp production. By 2014, the firm had almost ceased to exist [27]. The Neman pulp-and-paper combine periodically stops its operation, having ceased its production in some seasons in the period of 2012-2014.

The basis for the industries in the Kaliningrad region is currently manufacturing, which accounts for 22.2% of gross value added generated by all types of economic activities, and 11.3% of the value of fixed assets. In 2013, in the manufacturing sector there were employed 65 thousand people (20.6% of all employed in the economy of the Kaliningrad region) [21, P. 20, 36].

Most industrial enterprises are small. Only the “Avtotor” CJSC and the “Baltic Shipyard “Amber”” JSC have more than 3,000 employees. “Vichunai-Rus” LLC, “Milk” JSC, “Kaliningrad containerboard mill” JSC and “Food products” LLC have from 1000 to 1500 employees [28].

The manufacturing sector is dominated by food production and production of transport vehicles and equipment. They account for more than 3/4 of the volume of shipped goods of own production, work and services by own means for the manufacturing industry, 57.5% of the value of fixed assets of large and medium-sized enterprises and organizations of manufacturing industries and more than 45% of the average number of employees in factories and organizations in the manufacturing sector (Table 6).

Table 6

Structure of the manufacturing sector of the Kaliningrad region in 2013, % of the total

Compiled based on: [22, P. 20, 28, 30].

The industry in the Kaliningrad region remains mainly import-substituting, based on the use of the SEZ benefits (primarily customs benefits) and continues to work for the national market. The majority of import-substituting industries are characterized by a very low share of value added. In 2010, the share of value added in the production of automotive products accounted for only 5.8%, the production of electronic industry – 14.8%, food industry in its part designated for export outside of the region – 13-15% [29]. Innovation of the import-substituting enterprises, as well as Kaliningrad’s economy as a whole, is low. In 2013, the proportion of organizations engaged in technological innovation in the total number of organizations in the Kaliningrad region amounted to only 3.8%, which is almost 2.5 times lower than even extremely low national average (8.9%) [30].

A characteristic feature of the import-substituting industry, established under the SEZ, is its “fragility”, dependence on the world situation and the state of the national market. In addition, the enclave economy to a greater extent than in other regions of Russia depends on the relations between Russia and the EU, which has been illustrated by the sanctions and counter-sanctions in connection with the events in Ukraine. Medium- and long-term prospects of most kinds of the industrial economic activity in the WTO and termination of the transitional regime regarding the SEZ in 2016 are considered to be negative (with the exception of mining and generation, transmission and distribution of electricity, gas and water) [31].

The changing geopolitical and economic conditions also require new strategies of the development of the Kaliningrad industry. Previous import-substituting industries based on duty-free import of raw materials and components will lose their benefits on April 1, 2016. However, companies will receive financial support in accordance with the Order of the Government of the Russian Federation #1275 dated November 29, 2014 [32], but it will only soften the consequences of the abolition of customs privileges, but will not get them back together with related economic mechanisms. It seems that in this new situation the Kaliningrad industry should move towards increasing the share of products with high added value, improve the quality and competitiveness of products, and introduce innovative products and new technologies. At the same time, small and medium-sized enterprises could act as subcontractors of leading industrial companies in the region, at least partially replacing foreign supplies. The transition to the innovative development of the industry in the region will require greater integration of science (in particular, the science and technology park “Factory” [33], established in the Immanuel Kant Baltic Federal University) and production, creation of new industrial parks and development of mechanisms for technology transfer both within the region and from other regions of Russia and from abroad.

It is necessary to encourage exports of industrial products, even more so that in connection with the fall of the Russian Ruble the Russian production including the Kaliningrad production has become more competitive in foreign markets in terms of price. For this purpose, in particular, it is necessary to bring production in compliance with international standards and provide certification for compliance with these standards.

The Kaliningrad region could become one of the Russian pilot regions of the so-called “third industrial revolution”, involving the introduction of advanced technologies, such as additive technologies, or technologies layered synthesis. For this purpose it is necessary to consider establishment of the Center for technological competence of additive technologies on the basis of one of the Kaliningrad enterprises with participation of Kaliningrad (and from other regions) universities and research centers.

Some steps in these directions have already been made. The Concept of Industrial Policy of the Kaliningrad region was approved on August 27, 2014 [7]. The following economic activities were identified as top-priority:

1. Production of food products, beverages and tobacco;
2. Chemical production (including pharmaceutical production);
3. Production of other non-metallic mineral products (construction materials, composite materials and products thereof);
4. Production of electrical, electronic and optical equipment (including production of TV devices and other consumer electronics);
5. Production of transport vehicles and equipment (automobile construction, shipbuilding and ship repair);
6. Other production (production of furniture, jewelry, items made of amber or with the content of amber).

The following main instruments of industrial policy are envisaged in the Concept of Industrial Policy:

1.         Programs for development of priority industrial clusters, industrial production chains;

2.         Formation of industrial zones and industrial parks in the Kaliningrad region;

3.         Support of priority investment projects;

4.         Reimbursement for exhibition and promotional activities;

5.         Subsidies for a part of the interest rates on loans, including those involved in infrastructure projects;

6.         Subsidies for certification and registration of trademarks;

7.         Subsidies for connection to the electric power system and energy supply devices;

8.         Subsidies for equipment leasing;

9.         Subsidies for training of production personnel;

10.       Subsidies for production (sale) of goods, work and services for the creation and development of the infrastructure of industrial and research parks;

11.       Organization of the exhibition and presentation activities to promote industrial products;

12.       Creation of trade missions in the Russian Federation and abroad;

13.       Creation of business incubators and research parks;

14.       Training of specialists;

15.       Implementation of the migration policy;

16.       Involvement of non-governmental organizations (associations) of industrialists and entrepreneurs of the Kaliningrad region in the implementation of industrial policy.

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1. Federal State Statistics Service. Central statistic database. URL: http://www.gks.ru/dbscripts/cbsd/dbinet.cgi?pl=9420108 (Accessed 17.03.2015).
2. Zhdanov V.P., Krasnyansky I.Yu., Paletskaya T.M. Assessment of the development of the types of economic activities in the Kaliningrad region in the WTO and termination of the transition period regarding the FEZ in 2016: Analytical reviews of the Russian Institute of Strategic Research. – M.: RISR, 2013. – #1(36). P. 13-36.
3. Order of the Government of the Russian Federation dated November 29, 2014, #1275 “On provision of other interbudget transfers from the federal budget to the budget of the Kaliningrad region to ensure support of juridical entities operating in the Kaliningrad region, and residents of the Special Economic Zone in the Kaliningrad region” // Rossijskaya gazeta. 3 December 2014. URL: http://www.rg.ru/2014/12/03/oez-site-dok.html (Accessed: 17.03.2015).
4. Science and technology park “Factory” // Immanuel Kant Baltic Federal University. URL: http://www.kantiana.ru/innopark/(Accessed: 17.03.2015).

Yury Mikhailovich Zverev  – Candidate of Geographical Sciences, Associate Professor, Head of the Department of Geography, Nature and Spatial Development, Immanuel Kant Baltic Federal University, Kaliningrad.

[1] Enshrined in the Federal Law FZ-13 “On the Special Economic Zone in the Kaliningrad Region” (1996) and extended by ten years till April 1, 2016, by the new Federal Law FZ-16 “On the Special Economic Zone in the Kaliningrad region and on amendments to some legislative acts of the Russian Federation”(2006).

[2] Set for the SEZ residents who started the implementation of investment projects with total capital investment of at least 150 million Rubles within a period not exceeding three years (since 2006 under the Federal Law FZ-16). Tax incentives contributed to the appearance of major investors in the region. At the beginning of November 2007, there were 47 residents of the SEZ with the declared sum investment of nearly 26 billion Rubles [8]. These are large industrial, construction and transport companies. The largest implemented investment project at that time was carried out by “Sodrujestvo Soya” CJSC near Svetly. It was the commissioning of one of Russia’s largest oil-extraction plants (processing of imported soybeans), combined with the marine terminal (2007).