VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Finland is one of Russia's major trade partners in terms of both imports and exports. According to Russia's Federal Customs Service, in 2008 the trade turnover between the two countries grew to $22.4 billion, showing a 42.1% increase against 2007, including exports of $15.8 billion, indicating a 46.9% growth, and imports of $6.6 billion, showing a 32% increase, with external surplus of $9.2 billion. Russia relegated Germany to second place in trade to become Finland's biggest foreign trade partner, while Finland is Russia's 11th largest trading partner, ranking as its 5th biggest partner in the EU.
In January 2009, Russia and Finland saw a 38.2% slump in their trade turnover, including a 35.6% decrease in exports and a 45.9% fall in imports against the corresponding period in 2008.
Over 80% of Russia's exports to Finland are energy resources. High global oil prices were an important factor for the growth in bilateral trade in the past years. However, with Finland's moderate market capacity in consumption of energy and raw materials and the global fall in oil prices amid the current economic crisis, Russia's exports to Finland have decreased. More than 80% of Finnish imports to Russia are mostly ready-made products, including machinery, equipment and vehicles, which amount to 61%; chemical products stand at 13%; and timber, paper and food products, stand at 6% and 4%, respectively.
Russia is a major destination for Finnish investments, with Finland ranking 8th largest investor into the country. According to Russia's State Statistics Service, as of late 2008 the total volume of Finland's cumulative direct investments in Russia's economy was $2.1 billion, or 1.7% of all foreign cumulative direct investments in Russia, showing a 57% increase against the end of 2007. 25.7% of Finland's cumulative direct investments go to Russia's construction industry, and 17% go to timber processing and wood products manufacturing, while real estate operations, leasing and services account for 13.6%. 10.7% of Finland's investments are made into manufacturing non-metal mineral products and 8.4% are invested in production of rubber and plastic goods, while 7.4% go into wholesale and retail trade. 3.7% go into transport and communications, and 3.4% is invested in publishing and the printing industry. Finally, engineering takes the last place in investments, with production of electrical equipment accounting for only 1.8%, and no investments made into the pulp and paper industry.
Russia's Northwestern and Central federal districts receive 96% of Finland's cumulative direct investments, with 70% and 26%, respectively. Finnish investments into the economy of St Petersburg and the Leningrad Region make 36% and 21%, respectively, while the Moscow Region gets 10.4%, and Moscow receives 8.4% of the investments. 8.3% goes to the Novgorod Region, while 5.5% and 4.1% are invested into the Pskov and Tver regions, respectively. Finally, the Nizhny Novgorod Region gets 3%, while the Kaluga Region and the Republic of Karelia receive 2.9% and 2.8% of the investments, respectively.
With Russia's similar interest in the Finnish market, over 3,000 companies with Russian capital operate in Finland, most of which are small companies engaged in services, trade and logistics. In April 2005, Russian oil giant LUKoil purchased Finnish oil companies Oy Teboil Ab and Suomen Petrooli Oy for 160 million euro. In 2006, Russian metals giant Norisk Nikel bought a nickel refinery in western Finland for 408 million euro, acquiring a share of the nickel deposit.
According to the 1992 intergovernmental Trade and Economic Cooperation Agreement drawn up between Russia and Finland, a Russian-Finnish Intergovernmental Commission for Economic Cooperation was set up, with its tenth meeting held in Moscow on March 20, 2008. The commission's co-chairmen, Russian Economic Development Minister Elvira Nabiullina and Finnish Foreign Trade and Development Minister Paavo Väyrynen, regularly meet between the commission's sessions.
The legal basis for cooperation of the two countries' cross-border regions is set out in the 1992 Russian-Finnish Intergovernmental Agreement on Cooperation in the Murmansk Region, the Republic of Karelia, St Petersburg and the Leningrad Region. Under the agreement, an intergovernmental commission was created to be coordinated by Russian and Finnish Foreign Ministers, with the commission's tenth meeting held in Helsinki on November 17, 2008. Within the cooperation agreement, Russia and Finland are implementing about 200 joint projects in nature preservation, including improvement of nuclear power plants safety, telecommunications and transport, as well as agriculture, forestry and healthcare.
