The Baltic Region

2014 Issue №1(19)

International relations: Russia and the Baltics

Major infrastructure projects and the foreign policy of the Baltic states in 2010—2014

Abstract

At the current stage of social development, particular attention is drawn to studies that assess major infrastructure — and thus political — projects aimed at a qualitative breakthrough in the socio-economic development of the countries under investigation. The scheduled multi-billion investments into energy sector are of political rather than economic nature. The projects to develop alternative power grids and high-speed railways can result in large-scale economic downturns diminishing the prospects of balanced social development. The author addresses the classical concepts of the theory of regional economy and new economic geography and their interpretation of the interconnection between political and economic factors. The article aims to demonstrate the inconsistency between political and economic objectives of the development of the Baltics. The study contributes to a broader set of research into the issues of post-Soviet economic and political development. The Baltic States follow their own political and economic ways. The study proves the hypothesis of low efficiency of large infrastructure project and their political motivation. It is concluded that the disregard of the factor of mutually beneficial economic cooperation with Russia destabilizes the development of national economic of the Baltic States. The author believes that modern infrastructure projects in the Baltic Sea region should be integrated into both western and eastern dimensions.

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Russia-EU energy efficiency cooperation in the Baltic region: the untapped potential

Abstract

A stereotypical understanding of EU-Russia energy relations is often reduced to trade in oil and natural gas, which downplays the importance of energy efficiency cooperation. Such cooperation is promoted within the Energy Charter and its Treaty, Partnership and Cooperation Agreement, Energy Dialogue, Common Economic Space, Partnership for Modernisation. However, it lacks practical development, which relates to the instability of the legal environment in Russia, insufficient mechanisms of financial support for energy conservation projects and poor political support. Nevertheless, energy efficiency cooperation is capable of changing Russia-EU energy cooperation qualitatively: it offers a cheaper way to meet the needs of the EU, redefines interdependence between the parties, and introduces new elements of equality between them. Energy efficiency cooperation also transforms the patterns of the EU-Russia legal harmonization, creates new conditions for the convergence of regulations and the development of the middle class in Russia. Due to its specific features, cooperation in the Baltic Sea region becomes a locomotive of the Russia-EU energy efficiency cooperation, and, as a result, is capable of changing the quality of relations between the partners.

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Russian-Estonian relations: a medium-term forecast

Abstract

This article shows why the non-existent political dialogue between Russia and Estonia will hardly develop in the next five years and why Estonia can lose its significance for the Russian foreign policy rhetoric and Russian mass media. This conclusion is drawn from a medium-term forecast about the changing role of Estonia in Russian foreign policy. The forecast is based on the scenario methodology, which suggests that the modern means of political forecasting make it possible to make conclusions not about the future states of political phenomena, but rather about the trends of current states, which are called scenarios. The article describes the four possible scenarios of changes in the role of Estonia in Russian foreign policy that are evaluated from the perspective of the development of Russian-Estonian relations and factors affecting the probability of each scenario. It is shown that any change in the role of Estonia in Russian foreign policy depends not only on the specific actions of the Estonian elite, for example their readiness to change their position on the participation of Russian-speaking population in the democratic decision-making process or the evaluation of controversial events of the past, but also on the meaning that will be attached to these actions by the Russian elite.

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Development of the Kaliningrad region: challenges and perspectives

The development of Kaliningrad regional economy: A new stage of restructuring

Abstract

The Kaliningrad region is developing in complicated exclave conditions, which results in insufficient resilience of its economy to external impacts. There is a need for constant monitoring of the economic situation in the region and the adaptation of the regional strategy to changing conditions. This article sets out to evaluate the stages of regional economy development and the methods of its modernisation and restructuring in view of accumulated experience in reacting to changes in conditions of regional development. The authors analyse complex statistical data from 1990—2012 and the modern condition of the Kaliningrad regional economy compared to the national average. The article relies heavily on the results of the survey of specialists working in regional companies. Russian accession to the WTO and the abolition of certain customs privileges planned for 2016 form the basis for the import substitution manufacturing and will significantly affect the conditions of regional economy development. Implementation of the Strategy for the Socioeconomic Development of the Region will contribute to the innovativeness of economy, its export orientation, development through an increase in labour productivity, and cooperation with both Russian and international partners. It will reduce the dependence of production on imported raw materials and semi-finished produces, as well as its energy intensity. The formation of a new more stable economy will be facilitated through federal support and implementation of a number of regional programmes.

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Commodity flow model for an exclave region: Rent-seeking in the ‘transitional period’ of the special economic zone

Abstract

This article focuses on a commodity flow model for an exclave region (CFMER). The CFMER development is aimed at identifying aggregate proportions of the exclave’s economy in the transitional period of the special economic zone (SEZ) functioning. The key method of analysis is the comparison of data on the generation of gross regional product and regional foreign economic activities (including export and import of goods and moving goods from/into the Kaliningrad region to other Russian regions). It results in a conceptual CFMER, which is assessed as of 2011. The availability of additional — as compared to a regular region — data on commodity flows in the framework of the SEZ transitional period makes it possible to identify structural disproportions in the economy. It is shown that the introduction of the SEZ transitional period did not result in a change in the conceptual model of the regional economy’s functioning merely increasing the opportunities for rent extraction. The authors predict structural imbalances in the exclave economy at the microlevel, in particular, the article analyses the conceptual model of rent extraction in the SEZ transitional period. The CFMER can be used for forecasting the development of exclave’s economy under different scenarios of the evolution of SEZ in the Kaliningrad region.

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Measuring social well-being in the rural areas of the Kaliningrad region

Abstract

This article evaluates the social wellbeing of rural municipalities of the Kaliningrad region. The degree of social wellbeing is assessed on the basis of an analysis of statistical data and expert evaluations. Rural districts were identified in the Kaliningrad region on the basis of the following criteria: the share of population residing in the rural areas (threshold value of 50 %); the share of non-residential areas (threshold value of 75 %), the share of agricultural lands (threshold value of 50 %). Further analysis was based on the indices of geodemographic situation, investment potential, and production development. Rural municipalities were ranked according to these indices. The study showed that the best performing area are the suburban districts of Guryevsk and Bagrationovsk and the agricultural districts of Nesterov and Pravdinsk, whereas the worst performing ones are those of Gvardeisk, Krasnoznamensk, Ozersk, and Chernykhovsk. A comparison with the other constituent entities of the Northwestern federal district proved that the level of social wellbeing of Kaliningrad rural municipalities is rather high and most of them have made the transition from depression to sustainable development.

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Economic geography

Modern understanding of ‘geoeconomic position’ and the Saint Petersburg agglomeration

Abstract

This article presents a modern interpretation of the concept of ‘geoeconomic situation’ as applied to one of the most important centers of the Baltic region — the St. Petersburg agglomeration. The coastal location of the agglomeration and close connections with the Leningrad region make it possible to consider the Saint Petersburg coastal region (Baltic Area) as a whole. The article sets out not only to verify, confirm, and explain the features of the geoeconomic position of the coastal region, but also to describe the contiguous geoeconomic space. The position of the St. Petersburg coastal region is of crucial importance for ensuring a steady growth of regional economy, the propagation of industrialization impulses, and modernization in the heart of Russian Northwestern macroregion. At the same time, the specific features of the region’s geoeconomic position magnify the ‘inherited’ ad acquired effects of focal industrialization and space polarization, which creates additional prerequisites for the inversion of the Russian economic space — ‘Russia of the physical space’ and ‘the economic space of Russia’. The study uses traditional methodology of economic geography (the territorial, cluster, and spatial approaches) and the geoeconomic approach developed by the authors. The article also addresses recent findings in regional economy and spatial studies. It is aimed at the development of the geoeconomic paradigm in the framework of social geography and that of spatial science. An analysis of the geoeconomic position and the developing spatial relations can be of interest for researchers of geographic clusters, agglomerations, and such cross-border forms of cooperation, as growth triangles, for example.

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Development of Aland Islands: major trends and challenges

Abstract

This article considers key conditions and factors of the development of Aland Islands, describes main international legal regulations determining current status of the islands, identifies the trends in volume and structure of economic activities, ana lyzes processes of population change by regions and communes, as well as migration flows. The article also characterizes legal framework for socioeconomic development of the Finnish region. It is argued that the key factor behind modern welfare of the islands is not their political status or institutional makeup, but rather their economic and geographical position, the ‘concentration effect’, and the population influx. It is stressed that wide regional disparities observed within such small territory are indicative of the spatial structure of society development — primarily under the influence of natural features, which are nearly impossible to disregard.

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Spatial planning in the European Union and the Russian Federation

Abstract

This article analyzes the principles of spatial planning, which form the basis for this type of urban development in the countries of the European Union (EU) and in the Russian Federation. The following principles are considered and compared for both territories: 1) promotion of territorial cohesion through a more balanced social and economic development of regions and improved competitiveness; 2) encouragement of development generated by urban functions and improvement of the relationship between the town and countryside; 3) promotion of more balanced accessibility; 4) development of access to information and knowledge; 5) reduction of environmental damage; 6) enhancement and protection of natural resources and natural heritage; 7) enhancement of cultural heritage as a factor for development; 8) developing energy resources while maintaining safety; 9) encouragement of highquality, sustainable tourism. An efficiency analysis of these principles showed that the level of their application for ensuring sustainable development differs. It is a result of the significant differences in natural and socio-economic conditions of sustainable development in these countries, as well as different experiences and traditions in the space-time dimension. In most EU countries, ministries of spatial planning were established as early as the 1960s; in the Russian Federation, such authority still does not exist. The coordination of spatial development by the Russian Ministry of Regional Development is of fragmentary nature; therefore, at the moment, the efficiency of spatial planning is rather low. The authors find it necessary to adopt EU practices of urban planning in view of the Russian spatial potential.

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Geography of international clusters in the Baltic region

Abstract

International cluster is a relatively new form of spatial organisation of economy in the globalisation conditions, which has become a frequent phenomenon in European countries, including those of the Baltic region. It requires a comprehensive study of both regional economics and economic geography. This article aims to identify structured international clusters in the Baltic region and map the corresponding regions. The results obtained will make it possible to get a comprehensive idea of the aggregate of international clusters existing and emerging in the region and put forward a hypothesis about the prerequisites of their formation. The methodological framework of the research is an integrated case study. The article considers the processes of transboundary and transnational regionalisation in the countries of the Baltic region aimed at the development of international clusters. ‘International cluster’ is defined as a new form of spatial economy. The author identifies and maps organised international clusters and cluster initiatives in the Baltic Sea region countries. The international clusters of the Baltic region are characterised according to the following criteria: the degree of geographical localisation, the organisational type of formation, and specialisation areas. The author analyses the degree of involvement of a Russian region into the processes of international cluster cooperation in the macroregion.

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