Investment Forum. Investment Potential of the Republic of Karelia in Tourism and Possibilities for Japanese Investments

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Saint-Petersburg Petersburg, September 6, 2008 III Russian-Japanese Investment Forum Investment Potential of the Republic of Karelia in Tourism and Possibilities for Japanese Investments A.S. Kolesov Deputy Prime- minister, Government of the Republic of Karelia

Republic of Karelia: - favorable region for tourism development, - entrance into Russian Federation for foreign tourists

Kizhi, Valaam, Solovki Karelian allure basis

Public accounting includes over 4000 monuments involving: petrogliphs, Saami seids and labyrinths (approximately 5000 years old)

The Republic of Karelia is covered by 27 thousand rivers and 63 thousand lakes Nature protected areas consist over 5,5% of Karelian territory

Old Karelian, Veps and Pomor settlements are preserved in Karelia

Folklore and national traditions of Karelian indigenous peoples are rich

Karelia is the birthplace for world-known Karelian-Finnish epos Kalevala

Karelian people hospitality

is well known

Regional target programme Tourism Development in the Republic of Karelia up to year 2010» Main goal formation of tourism basis in Karelia, providing for economic diversity and decreasing of future development risks in the region

Key Figures of Tourism Development in Karelia Figure* 2000 2007 increase Number of workplaces within tourism industry Overall number of visitors in Karelia, million people Number of tourists, thousand people Tourism, excursion and and hotel services, million Rubles Volume of off-budget investments into Karelian tourism infrastructure, million Rubles * by expert appraisal 1600 2300 43,8 % 1,29 1,78 38 % 237 500 111 % 133 510 283 % 105 500 376 %

Volume of Off-budget Investments into Tourism Infrastructure in the Republic of Karelia 600 million Rubles 500 400 300 200 100 105 130 155 200 400 440 470 500 0 2000 2001 2002 2003 2004 2005 2006 2007

Among on-going projects: Building of Onego-Palace hotel complex

No less than 5 new tourist camps are opened every year

Share of Tourism Infrastructure Investments within Overall Volume of Capital Investments 3.00% 2.70% 2.50% 2.00% 1.50% 1.00% 0.39% 0.50% 0.00% Russia Karelia

Concept of Karelia development Strategy of Karelia development Territorial scheme of planning in Karelia Priority direction: Hospitable Karelia Tourism development strategy in Karelia Master plan of tourism objects allocation Programmes and projects of tourism development

Projects system of Karelian development strategy up to 2020 Regional projects system Forest Karelia project Forest cadastre electronic system Forest GIS-systems Outsourcing and contracting in forest sector New technologies New Karelia project International specialization of Karelia Karelian mineral resources project Hospitable Karelia project Tourist Internet portals, GIS Electronic booking systems Outsourcing services, franchise networks Electronic service systems Land cadastre electronic systems Automation systems of mineral developers account New technologies and equipment in mining sector Automation of documentation expertise GIS-technologies and electronic monitoring of mining resources

Tourism development goals Figures Number of workplaces in tourism industry Total revenue, milliard Rubles per year Number of visitors, million people per year Now 2150 3,2 1,7 Year 2020 8000 5,2 3,5

Regional law «State support for investment activity in the Republic of Karelia» Ways of state support: - granting exemptions for property and income taxes; - granting of state guarantees for investment projects; - allocation of regional budget funds for subsidy provision on partial refund of interest rate for credits taken for investment purposes.

Possibilities for Japanese Investments Master plan of tourism infrastructure and objects allocation in Karelia: Development of 12 new perspective tourism and leisure sites (22,1 billion Rubles)

The schemes for 12 perspective tourism and leisure sites are developed (Project plan of central tourism district)

Planning drafts for seven chosen sites have been developed

Preservation of Kizhi churchyard and development of Kizhi open- air museum infrastructure (3 billion Rubles)

Revival and development of Valaam archipelago: - Valaam monastery reconstruction; - roads construction; - entry zone reconstruction; - construction of communication and electricity lines; - construction of litter baling machine

Joint plan with the Moscow Government on small hotels network construction

Development of the first Russian health-resort Martial Waters (1,9 milliard Rubles)

Petrozavodsk Besovets airport reconstruction (0,96 billion Rubles) In the integrated air traffic system Besovets airport is the reserve airdrome of Pulkovo airport Ð

Construction of Ski Resort Spasskaja Guba (10,4 billion Rubles)

Murmansk region FINLAND М- 18 Arkhangelsk region Road networks modernization in the Republic of Karelia (37,5 billion Rubles) Vologda region Leningrad region

You are welcome! 2008 Government of Karelia Republic www.gov.karelia.ru www.ticrk.ru