Report - UNDP Russia

industrial region of the Urals – Sverdlovsk Region –are also major producers of electric power.The fuel & energy industries play animportant role in regional economies, creatingwell-paid jobs and providing large revenues forregional budgets. However, domination of suchsegments and formation of single-industryregional economies increase development risksdue to instability of fuel prices and depletion ofnatural resources in the long term. Singleindustryoil & gas regions include Tyumen andthe Nenets Autonomous District and, in the pastlast few years, Sakhalin Region (Figure 2.1). In 8-9 other regions contribution of the fuel & energysector to regional industrial output is higher thanthe national average. The Republic ofBashkortostan, Samara Region and Perm Territoryshould also be included in the list: these regionsare specialized in primary processing of oil & gasas well as having sizeable extraction industries,so that total contribution of the fuel & energyindustry to their economies is higher thansuggested in Figure 2.1. Moscow is includedamong oil & gas producing regions because ofthe statistical eccentricities mentioned above. Oil& gas production in Arkhangelsk and TyumenRegions is concentrated in their constituentautonomous districts.Specialization in oil & gas productionhelped these regions to survive the 1990s crisiswith much less serious industrial recessionscompared with the Russian average. TheRepublic of Udmurtia, where the defenseindustry dominates the economy, was anexception. Coal-mining regions were not sparedthe privations of the transition period. The coalindustry has undergone restructuring and masslayoffs, particularly in traditional mining areas,where many mines had been loss-making for along period (Rostov, Tula and Chelyabinskregions, Perm Territory), and in the northern andeastern territories where costs of coal mining arehigh due to harsh climate and remoteness.The period of economic growth, whichlasted for a decade (1999–2008), saw highestgrowth rates in two oil & gas producing regions,where development of new deposits started atthat time: the Nenets Autonomous District(industrial output quadrupled compared with1990) and Sakhalin Region (output rose by 1.8times compared with 1990). These results areshown in Figure 2.2. Tatarstan also enjoyedstrong growth of industrial output in 1999–2008(by 1.3 times) thanks to large governmentinvestments. Nearly all other regions with asizeable fuel & energy sector only approachedlevels of the end of the Soviet era or, at best,slightly surpassed them. Oil & gas production didnot provide strong and consistent economicgrowth in these regions after 2000. Tomsk Regionand Yamal-Nenets Autonomous District showeddeclines of industrial output from 2004. TheFigure 2.1Share of fuel resource extraction in regional industrial output in 2007, %10090807060504030201009890 88 88776448 47 4542 38 3631 27Nenets Autonomous DistrictKhanty-Mansi Autonomous DistrictSakhalin RegionYamal-Nenets Autonomous DistrictTyumen RegionChechen RepublicTomsk RegionArchangelsk RegionKomi RepublicOrenburg RegionKemerovo RegionRepublic of UdmurtiaRepublic of TatarstanChita RegionAstrakhan RegionRussian Federation2419 17 15 1413 12MoscowPerm TerritoryRepublic of Sakha (Yakutia)Republic of BashkortostanSamara Region29