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Kaliningrad 2020 Kaliningrad 2020: Its future competitiveness and role in the Baltic Sea economic region Ed. by Kari Liuhto Contents Foreword 1 Kari Liuhto Professor & Director, Pan-European Institute Keynote address: Kaliningrad – the region of cooperation 2 Vladimir Egorov The former governor, The Kaliningrad Region Keynote address: Kaliningrad 2020 3 Gerhard Lohan Head, Unit Russia, European Commission Managing asymmetric interdependence: A comparative approach on the Kaliningrad policies of core actors 5 Hanne-Marget Birckenbach & Christian Wellmann Professor, Justus-Liebig University Giessen & Deputy Director, Schleswig-Holstein Institute for Peace Research The role of Northern Dimension in developing cooperation between the European Union and Russia in Kaliningrad 41 Hiski Haukkala Researcher, The Department of Political Science, University of Turku and The Finnish Institute of International Affairs The enclave-specific vulnerability of Kaliningrad 56 Evgeniy Yuryevich Vinokurov Senior researcher, The Russian Academy of Sciences Modern terms and future competitiveness of the Kaliningrad Region’s economy 75 Vitaly Zdanov Head of Primary Department for Economic Development and Trade, Kaliningrad Regional Administration Kaliningrad after the EU enlargement but before the legislative change concerning its special economic zone 91 Kari Liuhto Professor & Director, Pan-European Institute, Turku School of Economics and Business Administration Future vision on the Kaliningrad economy in the Baltic Sea region 122 Artur Usanov Doctoral Fellow, Pardee RAND Graduate School Kaliningrad as a Pilot Region in the EU-Russia relations: Scenario exercise 141 Sergei Medvedev & Alexey Ignatiev Professor, State University Higher School of Economics & Head, Association of International Experts on the Development of the Kaliningrad Region Foreword The Kaliningrad region with less than a million inhabitants, just 0.6% of the Russian total population, plays a significant role in EU-Russian relations. This Russian exclave became almost completely surrounded by the European Union due to the EU membership of Lithuania and Poland in May 2004. Even if Kaliningrad has been almost completely surrounded by the Union, several authors of the book suggest that the Kaliningrad economy has not suffered from the EU’s enlargement. On the contrary, its economy continues to grow faster than the Russian economy as a whole. Furthermore, the region’s external economic relations continue to expand. The major explanation for such a positive development is not the EU enlargement itself but Kaliningrad’s special economic zone (SEZ), which is already expected to experience a legislative change in the near future. It is perhaps a paradox, but the future development of the SEZ can be even more crucial for the future development of the Kaliningrad region than was EU enlargement. It seems evident that the Kaliningrad region continues to have a special place, not only in Russia’s domestic policies but also in EU-Russian relations. The implementation of the road maps, particularly the Common Economic Space, would probably reflect positively in the movement of factors of productions between the EU and Russia. The Kaliningrad region is obviously one of the major beneficiaries of the practical implementation of these road maps. Since Peter the Great, St. Petersburg has been Russia’s window towards Europe. Similarly, one may conclude that Kaliningrad has become Europe’s window toward Russia. Open windows are needed for creating a true partnership between Russia and the EU. The editor of the book gratefully acknowledges the financial support from the Finnish Paulo Foundation (Paulon Säätiö), which has made it possible to carry out the research to its current extent. Turku, October 4th 2005 Kari Liuhto 1 Keynote address: Kaliningrad – the region of cooperation The region of cooperation – this is how Kaliningrad oblast is most often referred to. Understanding this word in the broadest possible sense, we associate all our plans and programs with it. Today the Kaliningrad region has undertaken a very important and honorable mission to become in a way a bridge of friendship and partnership between Russia and the uniting Europe. According to the President of the Russian Federation Vladimir Putin, for Russia Kaliningrad is “a strategically important territory, the future of which is directly linked with the national interests of the country”. Implementing this strategy, we are aiming at the development of good relations with the neighboring countries and extension of interregional contacts with other subjects of the Russian Federation, development of efficient economic relations, as well as a large-scale cultural and humanitarian exchange. These particular ideas create a basis for the celebration of the 60-th Anniversary of victory in the Second World War, the 750-the Anniversary of Kaliningrad and the 60-th Anniversary of the Oblast foundation, which take place in 2005- 2006. We are open to cooperation and prepared to take part in all good will undertakings that lead to progress, sustainability, economic growth and social consent. Vladimir Egorov The former governor of the Kaliningrad Region 2 Keynote address: Kaliningrad 2020 The future development of the Kaliningrad oblast has been of high interest for the EU long before May 2004 when Kaliningrad became surrounded by new EU Member States. The EU got progressively involved as the enlargement date approached. As early as November 2002, Russia and the EU adopted a Joint Statement on Transit between the Kaliningrad Region and the Rest of the Russian Federation, laying the ground for the transit regime for persons which is now in operation since July 2003 to the entire satisfaction of both sides. Kaliningrad also received high attention at the moment of EU enlargement, when the EU and Russia adopted a Joint Statement on EU Enlargement and EU-Russia Relations. On this occasion, the focus was on transit of goods and related issues such as in the field of customs cooperation. The jointly decided actions were all implemented during the following months, leaving the normal task to further improve the functioning of the system in practice. Overall, therefore, the achievements made during the recent past can be considered as a success story. However, from the EU point of view, cooperation on Kaliningrad should not stop there. We face a number of challenges in the region for which developments in Kaliningrad will be important, ranging from water pollution in the Baltic Sea to the spread of communicable diseases such as HIV/Aids. And there are plenty of opportunities to be seized as well, for increasing prosperity in the region as a whole. For these to be fully available, good infrastructure connections, a regulatory framework compatible with the relevant international rules such as from the WTO, and as many links as possible in the field of research and education are needed – just to mention a few of the prerequisites. Responsibility for Kaliningrad lies of course primarily with the Russian government. But the geographic, economic, and social proximity with the EU, along with the fact that Kaliningrad’s borders are now part of the EU external border, call for close cooperation. 3 Political leadership on Kaliningrad-related matters is important on both sides, while progress on the ground crucially depends on better understanding and coordinated action at expert level. The existing EU-Russia cooperation structures offer a number of mechanisms for specific discussions on Kaliningrad, such as the Cooperation Committee, which held a special meeting in Kaliningrad itself, and formal consultations under the Partnership Cooperation Agreement have also taken place. The Commission will continue to make its contribution at all levels. The EU and Russia have recently launched discussions on the future of the Northern Dimension, which establishes a framework for cooperation at local level in the Baltic Sea area but also for the regional organisations such as the CBSS and BEAC. Since many years, technical assistance has been provided to the Kaliningrad region from the Tacis budget; a new special programme of € 20 million has recently been launched. In addition, coordination with assistance projects inside the EU will improve on the basis of the so-called Neighbourhood Programmes. The wide range of common interests and on-going activities as described above may, however, conceal the fact that here like in other situations governments may focus too much on the short-term needs and pay less than appropriate attention to the long-term prospects. Better understanding of the driving factors and likely developments in the Kaliningrad region should be of great help in early identification of future needs for action and the most appropriate ways of tackling them. This is why the long-term view offered by the Pan- European Institute should be of vital interest to all those working on the future development of Kaliningrad. I wish it a broad readership and recognition as a major reference point for policy-making. Gerhard Lohan Head of Unit Russia, External Relations Directorate-General, European Commission 4 Managing asymmetric interdependence: A comparative approach on the Kaliningrad policies of core actors1 Hanne-Margret Birckenbach Professor, Justus-Liebig University Giessen and Christian Wellmann Deputy Director, Schleswig-Holstein Institute for Peace Research 1. Introduction It has been stated countless times and surely is true: the Kaliningrad Oblast of the Russian Federation2
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