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Kremlin announces big plan for Karelia

In times of recession, President Putin still says he will give priority to the economic development of Karelia.

The regional GDP will be boosted by 62 percent over the next six years and the crisis-ridden Nadvoitsy aluminum plant will be saved and developed, President Putin announces.

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The Russian president brought a string of big promises to the northwest Russian regions during a visit last week. According to Putin, the Nadvoitsy plant, an aluminum melter owned by Rusal, will be revived and production restructured. In a meeting devoted to the development of socalled mono-towns, Nadvoitsy was included in a priority list of five Russian towns in extreme need for economic diversification. The town will be granted about 430 million roubles of federal money for the development of new economic initiatives, Karelian Governor Aleksandr Khudilaynen said after his meetings with Putin and his administration.

As previously reported by BarentsObserver, Rusal has over the last couple of years prepared for the closure of the Nadvoitsy plant following declining demands and plummeting revenues. Now, Governor Khudilaynen appears to have got the Kremlin’s support for the overturning of the Rusal plans.

Included in the new development plans for Nadvoitsy is the reorientation of production to aluminum foil. If successful, the revival plans for the local industry will develop along the lines of Kandalaksha, the town in neighboring Murmansk Oblast where Rusal is reorientating its local plant to the production of aluminium wires.

Putin paid a visit to the Kalevala wood processing plant during his trip to Karelia.

Putin brought good news to Karelia not only with regard to the aluminium melter. He also annnounced a major economic recovery package for the region. In a separate meeting with regional leaders and lawmakers, Head of the Russian Security Council Nikolay Patrushev confirmed that the Kremlin is ready to give its full support to a major social and economic development plan for the region. The plan, outlined in a development program for the period until year 2020, includes major investments in regional mining and metallurgy, energy, transportation, industry, agriculture and tourism.

According to the Karelian government, the plan will help boost the regional GDP by 62 percent by 2020. Similarly, industrial production will in the same period increase by 47 percent and agriculture production by 19 percent. Major upgrades will be made with regional roads. As many as 28 thousand new jobs will be created. About 70 percent of the planned investents will come from non-budgetary sources, the regional government press service informs.

Commenting on the ambitious plans, Governor Khudilaynen says that ”not many Russian regions can brag with this kind of attention”.

”The president supports the republic and its efforts to improve the situation for the better”, the governor says in a press release. ”The republic is now among special priority regions, which are given exclusive attention by federal authorities, the president and the federal government”, he adds.