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Russia » Economics

Kaliningrad region: Marooned on the island

23.12.2013
 

By Justinas Valutis 

Kaliningrad region: Marooned on the island. 51803.png

On those rare occasions when western Europeans examine the political map of their continent, their eyes tend to freeze for a second or two over a tiny spot in the north - the eastern part of Europe. Although this 'Terra Incognita' is marked in the same colour as is the Russian Federation, which stretches a bit further to the east, it takes some time (and a fair bit of web browsing) before people get answers to the question of what this "mysterious little country" is.

The territory in question is Kaliningrad Oblast, or region. It is today not only the westernmost part of Russia but also its only exclave with the population of just under 1 m people. This Russia's 'window to Europe' is sandwiched between Poland and republic of Lithuania but it has a free access to the Baltic Sea.

The current geopolitical situation in the Baltic region means that the residents of the former German province of East Prussia can travel visa-free to the rest of Russia only by air or sea routes, while travelling by train through the Republic of Lithuania requires a transit visa.

Despite Poland and Lithuania being member states of the so-called Shengen Zone, visiting these two countries, especially Poland, for people of Kaliningrad Oblast became somewhat less complicated in recent years. The latter introduced a simplified system of permissions to visit, and, as a result, Russians are flocking to nearby Polish towns to see local attractions and search for better deals when it comes to shopping.

Having said that, the exclave currently faces some serious external and internal challenges.

 

Although it is separated from the rest of the country, Kaliningrad is still covered by the same umbrella of stereotypes which are generally associated to Russia.

And that means corruption, connections, mafia and so on. No doubt that these nasty things have a negative effect when it comes to foreign investment. But the internal problems, namely the need to import raw materials, weak local demand and low innovating activity also do not help the local economy.

However, regardless of some restrictions, the region's seemingly awkward geographical location may be a blessing in disguise. People of Kaliningrad may feel as if they are marooned on the island. However, their 'island's' infrastructure is relatively well developed and is connected to the surrounding countries by an extensive network of roads, railroads and pipelines as well as seaport and an international airport.

Thus mixing key components such as geographical location, educated society, infrastructure and economic incentives can bring about the desired results. The question remains, what concrete steps will local and federal governments take in order to continue developing this Russian outpost. Without a shadow of doubt the potential for growth in Russia's 39th region does exist and the development of an automotive industry clearly proves that.

Tourism industry is another key economic factor which must not be ignored, if prosperity is an objective.

At the moment, there is a feeling that the authorities in Kaliningrad are not promoting their region internationally actively enough. True, there were some steps to link the waterways of the exclave with those of neighbouring republics but the results of those projects are yet to justify the effort.

According to official data, in 2012, around 500,000 tourists visited Russia's westernmost region. The regional government estimates that during the last several years, the flow of visiting tourists was increasing by around 8 percent annually.

These figures, however, can be much higher if the authorities could play more proactive role. There is no need to be shy - the region is home to very unique tourist attractions.

Take, for example, the Curonian Spit - a truly impressive natural wonder. This UNESCO World Heritage Site could be a prized destination to many tranquillity seekers if proper infrastructure were in place.

Amber mining could potentially be another strong pull factor as the region is known to possess around 90 percent of world's amber reserves.

But without a doubt, the crown jewel of the region's tourism industry is its Prussian heritage. Forts, strong points and other German military installations of Kaliningrad alone could overshadow all of Western Europe's WWI and WWII sites combined.

The above facts indicate that the Kaliningrad Oblast today is a land with plenty unused opportunities and a lot of room for improvement, both economical and cultural. However, the changes for the better will not happen overnight, it will take some time to improve things. After all, this land and its people are still in a process of forming a truly unique identity, where the Russian soul blends with European pragmatism.

Justinas Valutis  

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