TALLINN - Estonia and Latvia have become leading investors into Russia's Pskov oblast, recent statistics show.
During the first quarter of 2004, investments into the oblast in northwestern Russia amounted to $12.2 million, or $512,000 more compared with the first quarter of 2003, according to the Pskov oblast administration.
On a country-by-country basis, Latvia accounted for 72.5 percent, Great Britain 18.4 percent, Estonia 6.4 percent and Sweden 2.7 percent.
Foreign direct investment comprised 97 percent of the total investments into the oblast during the first quarter of 2004, of which 57 percent were authorized capital stock investments.
Industrywise, the bulk of foreign direct investment went into trade and public catering enterprises (58.9 percent), various industrial branches (29.4 percent) and transport (8.6 percent). The city of Pskov was one of the main investment destinations.
Thanks to contracts that will follow the creation of the so-called Euroregions, or territories uniting several states' border areas, the business cooperation between the three countries in the region will likely increase, Russian officials said.
The main goals for the creation of Euroregions are tourism, trade, education and solving ecological problems. Apart from EU funds, Euroregions will be sponsored by the respective municipalities.
Vladimir Lopatin, deputy head of Pskov oblast administration's foreign affairs and tourism committee, said that so far one Euroregion, named Pskov-Livonia, has been created. It unites the regions of Estonia, Russia and Latvia.
"We are working on the creation of another Euroregion, named Pleskava, which will unite a broader part of the three countries," Lopatin said.
He admitted that the construction of a port that would resurrect the river connection and trade between Tartu with Pskov oblast was still Estonia and Russia's main bilateral project.
"We have, however, many projects for which we hope to get EU funding," Lopatin added.
But businesspeople from both sides were not waiting for this bureaucratic blessing and have already been interacting and investing.
According to Lopatin, there are a few joint ventures in Pskov oblast, and some companies are based entirely on Estonian or Latvian capital. Such contacts are usually established through trade and commerce chambers.
"We are taking wood processing and furniture-details production, fish processing, turf industry, garment factory, plastic window production and so on. There is also a meat processing plant with Latvian participation," he said.
Baltic economists are predicting that more local manufacturers and food companies will set up shop in Russia and Belarus in the near future to take advantage of cheaper labor and transportation costs.