Murmansk struggling with economy
The region, which promises to become a power house for Russian Arctic developments, struggles to overcome the consequences of the financial crisis. The region experiences low growth and does worse than most other Russian regions on a number of key parameters.
Just five years before the planned grand opening of the Shtokman field and amid a surge in Russian and international attention on the Arctic, the most densely populated region in all of the Arctic seems to be unable to get its economy up and running. On several key parameters, among them industrial production and investments, the region was in 2010 well below the Russian average.
According to the Barents Monitoring report for 2010, practically all key sectors of the regional economy, with the exception of mining industry, experienced either negative or slightly positive growth in 2010. The report is written by the Murmansk Information Office, a branch unit of the Norwegian Barents Secretariat.
Murmansk Oblast, the region in Russia’s northwestern corner with a population of about 830 thousand, in 2010 had an industrial production growth of four percent. That is only half of the Russian federal average (eight percent). It also comes after the catastrophic year of 2009 when production figures plummeted as a result of the financial crisis.
Industry down
Only the regional mining industry showed solid growth (9,5%). Apatite concentrate production increased by 13,8 percent, while iron ore production shrunk by 3,6 percent, the monitoring report reads. The mining companies also had a solid increase in revenues (33,6%) following good prices on the international markets.
Other regional industries did worse. The processing industry was down 2,5 percent, and the important metallurgy companies produced 1,7 percent less than in 2009. The construction industry continued its downturn (-2,2 %) after the dramatic decline of 36 percent in 2009.
Investments and trade
Similarly, investments in the region were down with a major margin. Investments in the main capital from all sources of funding for all organizations amounted to 35 billion rubles, which is 21,8 percent less than in 2009 and significantly below the federal average of 6 percent. Also foreign trade showed only minor signs of revival. After the significant drop of 38% in 2009, the foreign trade turnover in 2010 grew by nearly 3,4% and amounted to 2,067 million USD.
Export in 2010 made up 90 percent of the foreign trade activity. Metals (62,5%) and mineral products (27,8%) remain the main goods for export. Nearly half of primary products are shipped to the Netherlands (47%), China (12,4%) and Norway (8,5%).
Fisheries doing better
However, the picture is not all negative. There are clear signs of revival in several sectors. Among them is the fishery sector, which saw a record-high fish catch in 2010. The catch was up nine percent in 2010. However, fish processing still decline (-3,2%).
Cargo transportation was a growth sector (10,4%). Also the construction of private houses saw a significant growth. A total of 27,8 thousands sq.m of residential properties were put in commission last year, which is a quarter more than in 2009.
Despite the troubled economic situation, Murmansk Oblast remains socially stable. That is supported by low unemployment figures. According to official figures, only 2,7 percent of the work force is without a job.
Read more Barents Monitoring reports here
