In Russia, With Russia: Kaliningrad’s Dependence on Russian Domestic Policy and Economic Development. By Evgeny Vinokurov

The principal argument of the paper is the following. Russia’s policy on Kaliningrad, above all the Special Economic Zone (SEZ) regime, renders the defining impact on Kaliningrad’s regional economic development. At the same time, changes in the external environment, of which the 2004 EU Enlargement is a major instance, have only a moderate impact on Kaliningrad. In other words, economic gravity of the enclave is determined politically (through the alliance with the mainland state) rather than geographically. Despite being detached from mainland Russia, its geographical proximity to the EU is by far less important than the special economic regime and other consequences of Kaliningrad being a Russian region.

The paper has the following outline. It starts with discussion on the SEZ as a mechanism, which made Kaliningrad a springboard to the Russian market and thus defined the current regional economic specialization. This analysis is supplemented by the assessment of the Federal Task Program. Then, the paper moves towards the correlations, which demonstrate a heavy dependence of the Kaliningrad economy on Russian economic trends. Further, the impact of the major external processes is discussed, in particular the 2004 EU Enlargement and Russia’s WTO accession, likely due in 2007. It rounds up by showing that all major domestic and external factors influencing Kaliningrad’s regional economic development are manifestations of globalization and economic integration processes.