Leningrad Oblast's economy has shown significant improvement over the first four months of 2000, according to new figures that show manufacturing levels up and unemployment down this year.
The upturn has been largely due to healthy output in the industrial sphere, with local production reaching 39.2 billion rubles, up 25.6 percent on the same period of last year.
"The main reason for these economic figures is that manufacturing has taken off in the major enterprises," said Valentin Sidorin, spokesman for the oblast. "The paper, forestry and construction industries have contributed most here.
"This year, output has grown by 15 percent in the paper industry, 20 percent in petrochemicals and 22 percent in building materials. Other spheres that boosted the figures were the military-industrial complex and agriculture."
The combination of a pickup in manufacturing together with a new administrational policy of refusing bank loans has helped the regional authorities get to grips with the aftermath of the 1998 crisis.
"Leningrad Oblast ceased taking loans from credit banks last year, and this has contributed to the improvement. At the same time, we have cleared debts on pensions and child benefits," said Sidorin.
Foreign investment is also helping keep the region's coffers afloat. Last year, $500 million of foreign capital came into Leningrad Oblast, and officials expect that figure to remain around the same level in 2000. Major investors include Philip Morris tobacco, Jacob's coffee and the Ford Motor Co.
St. Petersburg is considered an unattractive place to do business by some investors, due to its high levels of organized crime.
However, an investment project worth $2.5 billion was discussed by the city administration and two German firms last week, according to officials. Philipps-Hohlsman and Blue Invest are considering development of the waterfront area at the Greater Seaport of St. Petersburg. Potential projects within the framework of the deal include construction of a dam and upgrading of harbor facilities. If approved by local officials, the project will then have to be ratified at the federal level.
Other news that could have a positive knock-on effect for the economy in Leningrad Oblast came with the announcement that a state program to support small business has been approved by the St. Petersburg Legislative Assembly. Nearly 70 million rubles will be given to developing small businesses in the region over the next year.
Another cause for hope that Russia's second city and its surrounding area may be sustaining a measure of economic recovery is that record-low unemployment figures have been reported for the last quarter. Unemployment currently stands at 1.6 percent, according to the State Employment Service. Most vacancies are in the industrial and construction sectors, with total vacancies increasing by 20 percent in the past three months.