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North Ossetia-Alania: social and economic indicators looking up

at 18/09/2008 17:05

The Republic of North Ossetia-Alania is located in Russia's North Caucasus region, and is part of the Southern Federal District.

The republic has a total area of 8,000 square kilometers, or 0.05 percent of Russia's total area. Nearly 48 percent of North Ossetia-Alania is covered by mountains.

With a population of 702,500 people, or 0.5 percent of Russia's total population, North Ossetia-Alania is among the country's most densely inhabited territories (87.8 people per square kilometer). About 70 percent of the republic's inhabitants live in rural areas. The capital of Vladikavkaz boasts a population of 314,500 people.

The nature and climatic conditions of the republic contribute to the successful development of various economic sectors, which is compounded by the abundance of natural resources. The most widespread resources are zinc- and led-containing complex ores. Deposits of limestone, dolomites, marble and touchstone, both discovered and explored, are also of practical interest. There is also a large availability of construction materials, such as clay, sand, break-stone and gravel. The local oil deposit reserves are estimated at 10 million metric tons.

The republic has over 250 mineral and fresh water springs, with estimated daily reserves of 15,000 cubic meters. North Ossetian mineral waters are known for their unique qualities, as well as special mineral composition.

North Ossetia-Alania's social and economic development for the past few years has given the republic growing competitive advantages. In terms of its infrastructure, the republic ranks second in the Southern Federal District and 10th in the nation.

The republic has some of the most extensive telecommunication networks in the North Caucasus region and in Russia. It ranks first in terms of its telecom network installations in the Southern Federal District. Moreover, the republic's entire territory is covered by cell telephone networks.

In 2007, Southern Telecommu­nications Company, VympelCom, Mobicom-Kavkaz, and several other companies invested over 800 million rubles ($34.4 million) in the development of the telecommunications network. This figure is double the amount invested in 2006.

The republic ranks fourth in Russia in terms of its paved roads, and its expanding transport and logistics complex provides communication networks between Russia and the South Caucasus, as well as Central Asia. The complex includes two federal highways running across the Greater Caucasus Range, two customs checkpoints for cars, a developed railway network, Vladikavkaz international airport, and well-equipped transport terminals.

Major companies in the republic include Elektrotsink and Pobedit, which manufacture zinc, lead, cadmium, molybdenum, tungsten and related metals. The Kristal plant produces copper products and ultra-pure copper, while Magnit manufactures magnets of different configurations and for various purposes.

Elektrokontaktor - producer of generators and optical parts for cars , and manufacturer of night-vision device microchannel plates and electron multipliers Gran and Baspik, resistor producers Binom and Alagir Resistor Plant, resin and compound manufacturer NIIEM and superfine capacitor foil manufacturer Keton - is also a major player.

Widely known in the south of Russia are glass container manufacturer Iristonsteklo, corrugated packaging producers Digor Corrugated Packa­ging Plant, and Mozdok Cardboard. The local textile and sewing industry includes a number of sewing and knitting factories, such as Russia's biggest curtain fabric manufacturer Mozdok Patterns and Fabex Jeans.

The local construction company Rokos is building a large wood processing and furniture production plant, which has already produced its first shipment of furniture of the highest standard.

In 2007, the share of zinc produced in the Republic of North Ossetia-Alania accounted for 39.3 percent of the total amount manufactured in the country, while the share of lead and tungsten was 46.2 percent and 37.8 percent, respectively. The share of molybdenum accounted for 30 percent of the national total, hard metals for 15 percent, cadmium for 32.6 percent, sulfuric acid for 1.9 percent, curtain fabric for 48.8 percent, vodka and champagne for 2.9 percent and 24.2 percent, respectively.

The local alcoholic beverages industry is represented by 45 companies, including Istok, Salyut, Fenix, which are known throughout Russia.

The state-owned company Kav­dolomit extracts quality materials used by the local glass and construction manufacturers.

The policies of the North Os­setian government for promoting the republic's social and economic development were approved by the Russian government's Protocol Resolution No. 25 of June 28, 2007. The indicators of the republic's social and economic development in 2005-2007 revealed a stable growth of all sectors of the economy and major social parameters. In the past three years, the gross regional product per capita in­creased by 30 percent, amounting to 61,000 rubles ($2,596) in 2006. The index of industrial production in 2005-2007 amounted to 123.4 percent.

In the past three years, the rate of the region's agricultural gross product has been 105.7 percent, while the rate of investment growth is 236.7 percent.

In 2005-2007, the average monthly wage in North Ossetia-Alania doubled, with the actual cash earnings increased by 42.5 percent. In terms of the average monthly wage growth, the republic ranks first in the North Caucasus.

Investment reached 12.6 billion rubles ($536.2 million) in 2007, showing a 60 percent growth as compared to the previous year; 17 billion rubles ($723.4 million) is expected to be pumped into the economy in 2008.

The heftiest percentage of investment derives from extra-budgetary sources, which accounted for 57 percent - an 8.5 percent increase on 2006. Dynamic investment growth has partly resulted from attracting investors at forums and exhibitions.

At the 6th International Investment Forum held in Sochi in 2007, North Ossetian companies signed 9 memorandums and investment agreements with investors in production, energy and agro-industrial sectors worth 24 billion rubles (over $1 billion).

Various Russian companies, such as UGMK-Holding, Gazprom, Rus­Hydro, and Mercury Group of Com­panies are implementing their investment projects in the republic.

Ore-mining company UGMK-Hol­ding has crafted a program for setting up the Elektrotsink company with the aim of reconstructing zinc, lead, sulfuric acid, melting and rolling and mining plants. Investments in Elektrotsink will amount to 4.4 billion rubles ($187.2 million) for 2008-2010. In 2008, investments are estimated at 1.2 billion rubles ($51 million).

In 2008-2010, UGMK-Holding plans to invest in a large modern cement factory to be launched on the base of a local marl deposit, with an annual capacity of 1.5 million metric tons of cement worth 6 billion rubles ($255.3 million). Germany's Hum­boldt is to supply equipment to the factory.

Within the program on developing generating capacities in the Republic of North Ossetia-Alania for 2008-2012, which was passed under the resolution issued by the North Ossetian government, Mercury Group of Companies is building 17 mini hydropower plants with a total capacity of 240 megawatts and the annual capacity of 980 million kilowatt-hours. According to the agreement signed at the International Investment Forum, the total private investments are estimated at 9 billion rubles ($383 million). The construction of the 6.4-megawatt power plant at the settle­ment of Fasnal, estimated at 200 million rubles ($8.5 million), has started in 2008.

Projects aimed at developing the republic's hydropower engineering include the construction of a hydro­power plant on the Ardon River with a capacity of 352 megawatts. The Novaya Energiya (New Energy) Fund, a subsidiary of RusHydro company, is building a 5.1-megawatt mini hydro­power plant on the Fiagdon River, estimated at 180 million rubles ($7.7 million). The plant will have an annual capacity of up to 23.7 million kilowatt-hours.

Russia's Gazprom is implementing a far-reaching investment policy in the republicand is completing construction of a high-altitude, long-distance gas pipeline that runs from the North Ossetian village of Dzuarikau to the South Ossetian capital of Tskhin­vali, (163 kilometers including 92.8 kilometers in North Ossetia-Alania). The project is estimated at 15 billion rubles ($638.3 million).

Another priority for North Ossetia's is developing local tourism and resorts. The investment project Mamison includes a phased construction of an year-round mountain resort complex equipped to the highest standards and expected to provide services for 7,500 tourists at its first stage. The complex will have 45 kilometers of downhill ski runs. Total investments in the project, which will provide over 3,000 jobs, are estimated at over 15 billion rubles ($638.3 million), including 3.2 billion rubles to be allotted from the federal budget for developing engineering infrastructure within the federal target program "South of Russia" scheduled for 2008-2010.

 A mobile crushing and sorting factory has been launched by Bazel­Tsement, capable of producing up to 1.35 million metric tons of crushed rock annually. The state-of-the-art British equipment makes it possible to manufacture products that meet the  highest demands. There are plans for incorporating the factory's produce into the construction of the 2014 Winter Olympics venues in Sochi.

Construction of housing and social facilities is being actively implemented in North Ossetia as well. Sfera and Glavbolgarstroi are among the biggest construction companies. In the past three years, the rate of housing construction has jumped by 128.7 percent.

The Caucasus Music and Culture Center project worth 4.5 billion rubles ($191.4 million) is being planned in the city of Vladikavkaz. The project, which was initiated by conductor and head of the Mariinsky Opera and Ballet Theater Valery Gergiyev, involves one of the UK's leading architectural companies, Foster and Partners Ltd.

The North Ossetian agro-industrial complex has had impressive gross product growth for the past three years. A number of milk-processing factories equipped with the most modern, high-tech equipment have been launched, as well as livestock complexes for raising pigs and cattle, such as Kirovsky, Mir, Monolit and Master-Prime.

The North-Ossetian government is working to create an efficient investment policy and establish a favorable investment climate to attract funds into local economy, with a sound legislative base.
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