December 1998

by William Mueller

The Autonomous Republic of Buryatia is a region of opportunity in Russia due to its vast mineral resources and its high-quality water. Given the beauty of Buryatia, its friendly and open people, and strategic location, it is an area of potential for foreign investment.

Buryatia is located in south central Asia stretching along the eastern shore of Lake Baikal. The capital, Ulan-Ude, is 5,519 kilometers from Moscow and 3,500 kilometers from the Pacific Ocean. Buryatia covers 351,300 square kilometers, just over 2 percent of all Russian territory, comparable in area to united Germany. In 1996, the population of Buryatia was just over a million people.

The capital of Buryatia is Ulan-Ude, with about 360,000 inhabitants (1991 Census figures). It is situated at the confluence of the Uda and Selenga rivers. Modern Ulan-Ude is an industrial center for the Republic, with production facilities for automobiles, aircraft, locomotives, avionics, and agricultural machinery, as well as meat packing, glass, concrete, and wood product factories.

Economic Highlights
The economy of Buryatia is based on paper, automobile and aircraft construction, forestry, and agriculture. The energy sector constitutes over 58 percent of the gross volume of the Republic's industrial production. The fuel and power industry of Buryatia is coal-based, of which the Republic has significant reserves. At present, about 4 million tons of coal is mined annually and 4 million kWh of electric power is produced annually. Regional companies produce 6 percent of all the energy produced in Russia. Eight enterprises in Buryatia are engaged in coal extraction, including the Tugnuisky and Kholbodzhinsky open casts, and the Gussinoozerskaya coal mine.

Agriculture has always been a significant part of Buryat life, yet Buryatia is a net importer of food. Agriculture constitutes 18 percent of production in Buryatia. Agricultural production occupies 3.1 million hectares, or 9 percent of Buryatia's land. This sector's main products are cattle, sheep, and vegetables. The meat and dairy industries dominate the region's food industry. The leading companies are Buryatmyasoprom and Moloko.
Buryatia occupies a foremost position in Russia in mineral reserves, possessing among the largest Russian deposits for lead, gold, silver, molybdenum, tungsten, fluorspar, and asbestos. Buryatia has enormous deposits of iron ores, potassium, and nepheline-syenite ores. It has 48 percent of the zinc and 24 percent of the lead reserves of Russia. Large deposits of various metals at the Kholodninskoye and Ozernoye mines have been explored and are ready for commercial development.

Water Resources
Despite pollution in spots, Lake Baikal is an enormous natural reservoir of pure, continuously renewed water. Much of it meets the most rigorous international standards of potable water in all characteristics. Baikal rivals the world's great resort areas in its mineral springs. Lake Baikal and mineral water is produced and packaged by Akvabur.

Foreign Economic Activity
Buryatia's imports of finished goods exceeds their exports by 1.8 times; half of its imports are consumer goods. Leading imports include machine building and construction materials (38.8 percent) and foodstuffs (49.2 percent). Machine imports include irrigation equipment, wood processing machines, cars and trucks, transformers and car batteries, and airplanes. Food imports include meat, grain, vegetables, fruits, and meat byproducts. Buryatia's largest trading partners are China and Mongolia.

Foreign Investment
The volume of foreign investments in 1997 was US$10.4 million. Buryatia provides a five-year tax-free status and 50 percent tax relief for a five-year period to joint ventures with 30 percent or more stock owned by foreign investors. Investments have been made by 22 countries, including China, Mongolia, countries of the Pacific region, Ireland, and the Netherlands. Most of the joint ventures are in one of the following industries: timber and wood processing, light industry, construction, jewelry production, or food.

For a complete profile of Buryatia, visit BISNIS OnLine at www.mac.doc.gov/bisnis/country/981010r6.htm.

William Mueller is the director of Rural Enterprises International and REAP International, based in Cedar Rapids, Iowa.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)