Economy of Buryatia

Overview

Buryatia has a well-developed transport infrastructure of federal importance and boasts an impressive natural resources base. The republic has well established international and interregional relations, high potential for tourism development, and stabile political and economic conditions. Historically, the Republic of Buryatia has demonstrated higher growth rate compared to Russia’s average. The city of Ulan-Ude is the administrative, economic and cultural center of the republic.

Early history

Until the end of the seventeenth century the Buriats were mainly nomadic cattle breeders. Hunting continued to play a significant role in their economy. In the taiga they hunted large wild animals such as elks or bears. In the steppe it was foxes, wolves, or Siberian marmots. They hunted some animals for meat, some for fur, and others for both meat and fur. They especially valued beaver and otter fur, with which they paid tribute (Russian: iasak ) to the czar.

20th century

After the October Revolution of 1917 in Russia the process of integration of Zabaykalye and Far East into the structure of Russia was very intensive.

During the soviet period the developed agriculture was created in the republic. Large enterprises nearly in 60 branches of economy were built including aircraft industry, machine-building, energy power, coal and ore-mining, timber-processing and other kinds of industry connected to all economic regions of the USSR. The major part of factories on the territory of Buryatia belonged to military-industrial complex that caused the certain isolation of Buryatia. The Republic was forbidden for entry to foreign citizens until the 80s.

Market reforms in the 1990s privatized much of Russian industry and agriculture, with notable exceptions in the energy and defense-related sectors.

Economic figures

According to the Ministry of Economy of the Republic of Buryatia, the economic figures in 2011 were as follows:

Infrastructure

The Baikal region which is a bridge between Europe and Asia is located favorably for the development of Trans-Eurasian transport and logistics.

Transsiberian railway is crossing the whole Buryatia connecting the capital Ulan-Ude with Ulan Bator (Mongolia) and Beijing (PRC). The railroad distance from the city of Ulan-Ude to Moscow is 5519 km, and to the Pacific Ocean is 3500 km. On the northern part of Buryatia there is a part of Baikal-Amur main line, which is 547 km long. Buryatia has a relatively good traffic net, and an international airport (UUD).

Lack of investment in the integrated transport and logistics system has become a major obstacle to the economic growth in the region and its strategic development. According to Bulatov, R.V , the development of the transport infrastructure should be managed through transport and logistics centers, which are the centers of the economic growth in the region. He confirms the position that the integration of the regional transport system into the international transport system will form the Asian macrologistical platform and will provide an opportunity to transform the Republic of Buryatia into an international transport hub. Particular attention has been drawn to the development of the new international transport corridor «Mongolian Vector» aimed at servicing transit cargo flows. Currently, the cooperation within the framework of the railway transit traffic between Russia, Mongolia and China is aimed at creating an investment project to set up the transport and logistics company «ANMET.»

Foreign trade

The Republic of Buryatia is located in the center of the Asian continent and serves as a transportation and communication bridge between Russia and Mongolia, China and the countries of the Asia-Pacific region. The Republic plays an important role of Russia’s "transport gate" to the Asia-Pacific region.

Main export articles are round wood, sawn wood, non-bleached paperboard, helicopters, spare parts and accessories, food- and agricultural products.

In 2011, foreign trade turnover of the Republic of Buryatia was USD 903.3 million. That year, Buryat businesses had foreign trade transactions with partners from 42 countries.

Agriculture

Agro-industrial complex provides up to 10% of the gross regional product. Agriculture is one of the main and socially significant sectors of the local economy. 95% of the districts are agrarian, and the economy of 67% districts is agrarian. Major part of the agricultural sector is livestock breeding, with cattle-breeding accounting for almost three quarters of agricultural produce.

Processing industry of the Republic of Buryatia is represented by meat, dairy, fruit and vegetable, animal feeding and milling industries. Food processing industry accounts for 17% of the total output of all industrial production of the republic.

In 2011, the volume of agricultural production was planned to reach 3 billion rubles, with 36,4% labor productivity and 5% profit level. The Baikal region's low pollution level is an important competitive argument on the Chinese market.

In the post-Soviet era, there has been a decrease in domestic production of agricultural products in the republic and an increase of the share of imported goods in it, which in its turn, poses the threat to ensuring of the region's food security. The macroeconomic risks comprise the loss of competitiveness of regional products in the global food market, as well as the high interest rates of bank loans. The technological risks in the area of production are associated with the low level of the technical and technological manufacturing facilities of production. The significant role in ensuring food security of the country and its regions belongs to the foreign trade factors, including the strengthening of the imported products volumes under Russia's WTO accession.

Tourism

Convenient geographical and geopolitical location, unique nature, rich history and culture make Buryatia attractive for travellers from all over Russia and abroad.

Buryatia’s natural resources, national parks and the Lake Baikal are the foundation for tourism development in the Republic. Beaches suitable for recreation purposes occupy about 60% of the coast of the Lake Baikal; scenic mountain ranges offer many sites for mountain tourism, mountaineering and skiing. Lakes and rivers are suitable for developing water tourism, whereas over 300 mineral and thermal water springs and 47 medicinal mud deposits with difference in chemical and balneological properties provide conditions for health recreation.

A Special Economic Zone of tourist-recreational type “Baikal harbour” has been established on the coast of the Lake Baikal. The zone incorporates main tourist resources: spurs of Golondinsky mountain ranges, Ulan-Burgasy and Marine, desert valleys, lush pine forests, lakes and mountain rivers, mineral water springs and muds, historical and cultural monuments.

Buryatia is home to two of Russia's national parks. Zabaykalsky National Park covers the middle of the eastern shore of Lake Baikal; with developed ecotourism routes and facilities. To the southwest of the lake, in the Irkut River Valley, is Tunkinsky National Park, drawing tourists with the dramatic scenery of the Sayan Mountains to its west, and the lower Chamar-Daban mountains to the east.

Mining

Major mining complexes include the Ozyerny mining complex, with extraction capacity of 1 million tons of ore per year.

In 2011, Siberian coal power company started developing the Nikolsky coal deposit. The "Atomredmetzoloto" JSC is working on the Chiagda uranium deposit and Ermakovsky beryllium deposits. In the south of the republic, in Zakamensk district, there is potential to master deposits of tungsten and molybdenum.

Work has been done to prepare deposits of pure quartz and greenstones, Orekitkansk molybdenum deposit in Bauntovsky district, Zharchihinsk molybdenum deposit in Tarbagataysky district, Nazarovsk gold sulfite deposit in Eravninsky district, Oshurkovsky deposit of apatite for the development.