Governor boasts Arkhangelsk economy

“We have growth all over”, Governor Igor Orlov told President Vladimir Putin this week. However, a closer look at the regional economy shows a different picture. 


The meetings between Putin and his regional governors usually say little about the actual situation in the respective region. So also in this week’s meeting with Igor Orlov, the man who has headed Arkhangelsk Oblast for the past 3,5 years.

The main issue in the meeting was Orlov’s bid for another term as regional leader. That bid was successfully supported by Putin, and governor’s elections are due in September.

However, the two men also touched upon the economic situation in the region. Asked by Putin about the trends in regional salaries and the Gross Regional Domestic Product (GRDP), Orlov responded that Arkhangelsk has “growth all over”. Only the situation in the regional housing sector was presented as “not yet solved”, a press release from the Kremlin reads.

True, Arkhangelsk Oblast has under the reign of Governor Orlov remained stable with positive trends on several parameters. However, a broader look at the region reveals a more troubled economy with moderate, and in some cases negative, growth.

In 2013,  the region had a per capita GRDP growth of 3 percent, which was significantly higher than the federal average. Also in 2015 Arkhangelsk recorded solid growth (5,1%), figures from the Russian statistical service Rosstat show. The figures do not include the Nenets Autonomous Okrug, the neighboring region which is partly integrated in Arkhangelsk.

Meanwhile, industrial production has fluctuated over several years. In 2014, regional industrial output, excluding the Nenets AO, fell as much as 29,1 percent compared with 2013. As illustrated by figures from Patchwork Barents, also 2011 and 2012 saw a major drop in industrial production. Figures for 2015 show that industry is slowly recovering, but will hardly make up for last year’s downturn.

The fluctuations have been the most dramatic in the regional construction industry where significant growth in 2013 was followed by a 41,4 percent drop in 2014. Figures from 2015 again show a major growth in regional construction.

Arkhangelsk city downtown experiences a surge in investments, while other parts of the region remain economically weak. Atle Staalesen

According to a 2015 social-economic statistics report for Arkhangelsk, positive trends were recorded in regional agriculture, fisheries and transportation.

Also in the job market, the situation in Arkhangelsk appears positive. In 2014, official unemployment figures show that 6,2 percent of the regional workforce is without a job, a slight increase from 2013. People get less money for their work, however. Patchwork Barents figures show that the salary level for the first time since the crisis year of 2008 dropped.

Traveling in the huge territories of Arkhangelsk Oblast reveals major regional differences. While the countryside remains under-developed and weak, the regional capital center of Arkhangelsk and the neighboring city of Severodvinsk have in the period of Igor Orlov boosted both private and federal government investments. According to the governor, investors are lining up for developments in Arkhangelsk.

“We are really taling about development, about confidence from a whole row of investors and companies which are coming to us to build their plans for the future”, he told President Putin.