Чукотский автономный округ

Strategy of development

STRATEGY OF DEVELOPMENT

Development of the Chukotka economy is conditioned by unfavorable climatic and geographical factors. However, Chukotka disposes of its own mineral and powerful energy resources, a stable management and procurement system and the investment attractiveness of the region becomes more and more obvious.

It is impossible to forecast the balance of the positive and negative factors. It will largely depend on the world staple prices and priorities set by the federal center. The Chukotka Administration, on its part, is looking at three basic scenarios and each of them has its pros and cons.

The first development alternative is linked to demographic optimization. Once it is adopted, the economically active population will be relocated to the regions with a more temperate climate. About 20 thousand people will remain, of which 16 thousand will be indigenous. The next generations will have Chukotka preserved as a huge “national park” with a uniquely low anthropogenic impact on the environment.

The second alternative suggests to maintain the current status quo. Investments into silver and gold mining might continue. However, in general the situation will remain the same.

The third alternative is related to the development per se. It will encourage investments into geological exploration, heat generation, coal mining and transportation. These investments will enable the region to export coal to the Asian Pacific countries and enter the Mexican and Japanese markets. It implies transition from the rural aboriginal-oriented farming to the high-level processing of meat and sea products.

Chukotka’s Administration finds the third scenario more promising. An estimate of RUR 100 bln of investments is required for a 15-year period. The scale of this investment becomes evident when compared to the cost of the first two scenarios. The decision to make Chukotka a national park will cost the state RUR 2.5 bln to “evacuate” the population and about 30 more bln to construct or purchase housing in the mainland.

The program describing these scenarios was submitted for expertise to the Ministry of Regional Development. The intensive development alternative was supported by Russian President Dmitriy Medvedev in the statement he made during his September visit to Chukotka.

RUR 134 bln of state investments will be required to implement all necessary infrastructural projects, of which 80% would presumably finance road construction. Developers estimate that private investments will exceed public investments before 2020 and amount to RUR 150 bln. They will mainly be applied to finance geological exploration and construction of mining facilities.

Some infrastructural facilities have already received funding under the operating programs, primarily, under the Federal Task Program «Far East and Transbaikalia Economic and Social Development». The overall authorized funding until 2013 amounts to about RUR 20 bln. Additional public investment demand until 2020 is about RUR 114 bln.

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