Policy Department External Policies

Transcription

1 EUROPEAN PARLIAMENT Directorate-General for External Policies of the Union BRIEFING PAPER Policy Department External Policies SOCIAL MEASURES: INTEGRATING CIVIL SOCIETY IN KALININGRAD External Policies JUNE 2006 JA NUARY 2004 EN

2 DIRECTORATE-GENERAL FOR EXTERNAL POLICIES OF THE UNION DIRECTORATE B - POLICY DEPARTMENT - BRIEFING PAPER Social Measures: Integrating Civil Society in Kaliningrad The main target of the Study analyses the Kaliningrad Area of the Russian Federation through the eyes of a regular visitor to Kaliningrad since 1993 as well as advising on EU subjects at the Kaliningrad Oblast Duma and acting as Instructor on EU/WTO Subjects at the International University in Moscow - Kaliningrad Branch. These duties result in giving me experience in all three sectors referred to in the Study. Any opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. EP-ExPol-B June 2006 PE EN

3 2 This briefing paper was requested by the European Parliament's Committee on Foreign Affairs. This paper is published in the following languages: English Author: Volkmar WULF Europa Consultant Birkenstrasse 3 D Langenselbold Manuscript completed in June 2006 Copies can be obtained through: xp-poldep@europarl.europa.eu Brussels, European Parliament, June 2006

4 3 Kaliningrad / RF, an attractive location for: Investors, Efficient Borders between EU Countries, better Integration of Social Society 1. Historical views A. Investors and economic development Kaliningrad is the most western part of the Russian Federation sandwiched since May 1 st, 2004 between the two new full EU members Lithuania in the North and East and Poland in the West and located at the shores of the Baltic Sea. The Kaliningrad area has about one million inhabitants and the area comprises about square kilometres, which is about three quarters of Belgium or as large as the federal state Schleswig Holstein of the Federal Republic of Germany. (See enclosed map). The distance to the Russian Government in Moscow is about km which is nearly the same distance to Brussels. However, the distance to Stockholm is about 450 km and to Berlin about 600 km. Of course, besides those cities mentioned, the nearest EU capital cities are Vilnius in Lithuania and Warsaw in Poland. However, Kaliningrad itself is physically cut off from the Russian mainland and besides the Russian mainland, the European Union is the main trading partner for Kaliningrad. In 1945 the Potsdam Conference decided that the former German East Prussia area with the capital Königsberg should be split. Two third of the territory was allocated to Poland and the northern third to the Soviet Union. When the three Baltic States Estonia, Latvia, and Lithuania regained their independence in 1991 and the Soviet Union happened not to exist anymore, the former Königsberg - since 1946 named Kaliningrad - became a Russian enclave. Up till the opening of the strictly military area in 1991 Russia started to find a way of ensuring the region s economic prosperity. While the rest of the Russian Federation was going through economic turnover, Kaliningrad was left to its own specific restructuring and transition problems. On the other hand, Russia needed to find a way of ensuring the region s economic prosperity. To overcome this both geographic and economic disadvantage, Kaliningrad was granted the status of a Free Economic Zone (now called Special economic Zone SEZ), being effectively able to import duty free just about everything from raw material to consumer goods. The idea was to use this incentive to attract investment, Russian and foreign, boost international trade and, thereby, turn the region into a Baltic Hong Kong and gateway between Russia and the West. This law came into force 1996 but has been changed several times, so that one could say the original 1996 law on the SEZ failed

5 4 somehow. The Russian economic crises of the 1990s had severe consequences for Kaliningrad. 2. Development after the crash of August 1998 By 1999 industrial production fell by about 62 % compared with Since then, however, the economy has been growing with impressive speed. Especially since it became a fact that the two neighbour countries Poland and Lithuania would become members of the European Union. Another push for economic growth was the anniversary of 750 years of the city of Königsberg in 2005, as well as the 60th anniversary of Kaliningrad in The construction industry accounts for the main proportion of growth in the city of Kaliningrad, its suburbs and in other towns of the Kaliningrad Area. The main investors for this industry come from the main Russian regions and especially from Moscow after those developed Kaliningrad as a possible door to the EU and the Global Market. Many new district towns have been established in the last 4 5 years in Kaliningrad and in the suburbs of Kaliningrad. This encouraging development has been followed by industry and private investors from Russian territory and now also slowly from the EU side, which means that the investment from foreign countries even from the P.R. of China, South Korea, the EU and other countries is generally on the rise. 3. Trade development after the EU Enlargement Trade flows are growing rapidly. Foreign trade has returned to its highest level initially reached in the middle of 1990s. Trade with mainland Russian is very intensive and growing by % almost every year. Kaliningrad enterprises have set up in the Russian market as producers of processed goods, whereas Russian regions supply Kaliningrad with energy and all kinds of raw materials ranging from fuels to metal and wood. Bearing in mind the official goal of both the Russian Federal Government and the Kaliningrad Regional Administration, to match living standards in neighbouring countries as Poland and Lithuania, it is of great interest and practical importance to know the ratio of living standards in Kaliningrad in relation to those in Lithuania and Poland in purchasing power terms. The initiatives of the EU concerning the New Neighbours and the agreement of the Russia / EU Road Map ( signed in May 2005) with a great part of spaces even for the Kaliningrad Area, will be supportive for Kaliningrad in total for investors from the Russian mainland, from EU countries and for the inhabitants. The Road Map is an important step toward establishing a more open and integrated market between the Russian Federation and the EU and especially the Common

6 5 Economic Spaces will have great advantage for Kaliningrad if the framework will be transformed in such a way, that the administrative, regulatory and investment environment for businesses operating in Russia and here also for Kaliningrad through close co operation, exchange of information and by working towards the harmonisation of technical legislation and standards relating to industrial products, will come into force. 4. Natural resources of Kaliningrad and the future for investments Kaliningrad has some natural resources, including modest oil reserves (on and off shore, explored some years ago), which currently yield tons a year in an average. Salt, clay, gravel, brown coal, peat and wood are found in reasonable quantities. However, there are great and large parts of arable land, which is so-called fallow land so that the Kaliningrad Area became a net food importer, as after the Soviet Union broke down also the collective farms ( kolkhoz ) deteriorated. However, there is great interest by concerned bodies of industry and Kaliningrad Administration to make investments on Bio Oil plant construction. That Bio Oil company should use the raw material from the fallow land, plastic and other waste etc. The great hope is to receive know how and financial support from EU related bodies including industry. Another issue is that there exist no Rape-Oil and Sunflower Oil manufacturing companies. The rape seed and sunflower seed is being exported to main Russia or EU countries. The vast areas in the Kaliningrad region produce grass, plastic and other waste, wood bark, liquid manure and slurry, which could be used for manufacturing Bio Oil or Bio Diesel. Even investments for better environment as for instance energy recovery could be one of the best options for Kaliningrad. One has to keep in mind that Kaliningrad is lacking of energy and depending on energy supplies (electricity, gas from coal or natural gas) from main Russia. On the other hand, the inhabitants have to be given encouragement to collect waste for energy recovery. If there is no encouragement, the current situation will not change. 5. Investment in Kaliningrad and problems The main problem for the Kaliningrad Area and the Russian Federation in total concerning investment growing slowly from foreign countries and here especially from EU Member States, is that Kaliningrad and Russia have not the reputation abroad that they deserve. There is a big difference between the evaluation of the area and the country of those who work in Kaliningrad and the Russian Federation and those who know about Kaliningrad and Russia only second hand. Those who have established business in Kaliningrad will complain about

7 6 the bureaucracy, the complication procedure of registration of companies, the border control and afterwards the registration at police headquarters with a special letter of the inviting institutions, without which one will never get a visa. However, all business companies who managed to solve that, admit that it is possible to do business in Kaliningrad after all. Russia and Kaliningrad are not hostile against investments. On the contrary, they welcome foreign investments. Those who do not work in Kaliningrad or in Russia will emphasize what they have heard, for instance the bureaucratic item, the Not for Profit Law for Federation (NGO law) related to foreign institutions etc. which did not help to improve the image. The real concern of foreign investors seems to be the transparency of investment regulations and laws including transfer of income of investments, accruing actual profit etc. This transparency is not clear enough I have been informed in Russia and concerning the regulation of services in this respect in relation to the newly established SEZ law for Kaliningrad, However, this law came into force on April 1 st, 2006 and I think, a certain time after interested investors have read the implementing regulation they will not be too suspicious anymore. Investment is well promoted, when Kaliningrad and the Russian Federation provide a well functioning legal, political social and economic environment in which companies can operate successfully, one of the main tasks of OECD, but the attractiveness for investment in Kaliningrad is missing as the image of the area has to be changed in the western media. Besides this situation, the Kaliningrad Statistics show a relatively positive foreign investment flow in Investments grew by 18 % or USD 56.2 millions. Investments took place, according to the executive director of the Regional Development Agency as follows: a. The major part of investments are loans equivalent to USD 42,3 million b. Most of them are so called trade investments, which means that a Kaliningrad enterprise receives with raw material and goods. c. Direct foreign investments made only USD 14 million. d. Inflow of foreign money into the region is not that large. Direct foreign investment per capita accounts only for USD 15 million, as compared to the Russian average of USD 45 million. This is far behind Lithuania hosting almost USD 5 billion of cumulative foreign investment as of beginning of 2004 as Kaliningrad received 100 times less. There still is a great lack of information on both sides to get correct and sufficient data from Kaliningrad competent bodies and the information flow from EU areas to Kaliningrad.

8 7 6. Benefit of European Information Centre for Kaliningrad? The note for the chairman of the Committee on Foreign Affairs of the EU Parliament mentions for Kaliningrad to establish a European Information Centre (EIC) of the European Union which is somehow in conformity with the Brief description of project Support for the Regional Development of Kaliningrad, Russia (EUROPEAID / / C / SV/ RD) made for the Material prepared for the Meeting with Members of the European Union Parliament Kaliningrad October 10, However, since 1994 there have been many different intensions in Kaliningrad to establish such an office of the EU. The Baltic Sea State Council, the Northern Dimension, the Kaliningrad Oblast Duma, the Kaliningrad Oblast Administration and finally the City Administration of Kaliningrad tried to open such an or an equivalent office to provide interested citizens, industry and / or its federation, agriculture, retail trade, services ( banks and insurance etc.) schools and universities (professors, lectureship, students) with information necessary for both the Kaliningrad Area and the European Union. The Northern Dimension together with the representation of the European Union in Moscow supported such an Information Centre at the State University Kaliningrad for a certain period. The problem in all above mentioned cases was that there was and still is a lack of knowledge about structure and work of the EU, so that the target of providing assistance to the concerned interested bodies failed. Even that operation from September 16 th, 2004 is justified in the direction of projects like TACIS and is taken over by the Regional Development Administration. However, that altogether is not what is needed in Kaliningrad as I found out since All the initiatives were welcomed and desirable but failed due to the fact, that persons have been in charge not knowing enough about the EU and how to proceed. Therefore an EIC, which should be fully supported by the EU Parliament and the EU Institutions will be highly appreciated for Kaliningrad. As mentioned above, the knowledge about the EU is rather limited in Kaliningrad. But an EIC should be independent and open for all citizens including industry, all Russian administration institutions, Universities etc. and should and must be free from Industry (Industry Federation, Chamber of Trade and Commerce, Baltic Business Club, Universities Instructions ) and Russian Government Administration. Otherwise the EIC will come quickly under pressure of one sided and unilateral interests, which will lead to a paralysis of the aim of the EIC. The EIC must be run not as the former one at the State University of Kaliningrad by a man knowing only the English language but had very little knowledge of how to provide the necessary information needed by the interested bodies visiting him by a person knowing the situation in Kaliningrad and what is needed and the European Union. I recommend, that there should

9 8 perhaps be two persons in charge of the EIC: One knowing all the EU institutions, the work of the EU institutions etc. and the Kaliningrad side for years and one person from Russia (multilingual) knowing main items and sectors of the EU and the Kaliningrad side, and who has international knowledge. This European Information Centre could and should also be responsible for the European side, helping to provide necessary information about the situation in the Kaliningrad Area and providing help for investors or other subjects. However this last item could be made in cooperation with the Kaliningrad Administration concerned. The EIC must be a permanent institution and could not be limited to a certain period, because the aims of an EIC for the area of Kaliningrad cannot be accomplished satisfactorily within a short time frame. Permanent EIC exist in many countries, even in Egypt, Jordan or other areas of the world. The main target for an EIC should be to support especially SMEs with information on the EU market, to inform entrepreneurs or all interested parties in Kaliningrad about the actual and current development within the EU, about its supports and encouragement programmes and directives, regulations etc., as well as to provide information about standards (CEN) for delivering quality products; and to promote EU and governmental procurement, to help about market approach, EU finance systems, approximation of EU environmental regulations, research and development and many more as to enhance the stability of the economy in Kaliningrad. Finally it could give feedback to the EU Institutions on the development of Kaliningrad. Finally the EIC could help to upgrade the image of the Kaliningrad Area for foreign investors. It should also be an institute to provide seminars to increase the education and youth culture, strengthen the creative institutions (students, lectureship and teachers) in Kaliningrad. 7. The Think Tank for the Kaliningrad Administration Concerning the Think Tank present Governor Boos is aiming at in public, I would like to mention, that the former governor Jegorov, established a Round Table composed by Russian inhabitants from Kaliningrad and representatives from the various institutions as Chamber of Trade and Commerce, Industry Federation, Banks, Insurance, Business Clubs and if necessary from Universities. Such a former Round Table could be transformed into the Think Tank and could integrate some of foreign investors if necessary and depending of the topics.

10 9 8. Why does Kaliningrad matter for the EU? Why does Kaliningrad matter to the EU? Why should the EU be concerned? Kaliningrad matters for two reasons. Though not dissimilar to many other regions of Russia, its situation is being acute by its exclave status. It is physically cut as mentioned above from those Russian regions with which it might otherwise conduct internal trade and it feels neglected by Russia somehow. But, in addition, over the next few years with the initiative of the Russian Government and the common interest of the EU ( for instance the Road Map ) Kaliningrad will become not just an exclave outside Russia but also a Russian enclave geographically within the EU. Its problems will become the EU s problems, while, conversely, the EU's activities will have a huge impact upon Kaliningrad and the Baltic Area. The EU Enlargement around the Baltic Sea region gives already a slowly significant boost to both the development of, and demand for increasingly modernised and integrated transport systems. An important element of this is the Trans European Networks programme which involves the modernisation of major road, rail and ship networks linking the Nordic Countries, Russia, the Baltic States, Belarus and Ukraine with central, eastern and western Europe. The programme involves huge investment and procedural reforms also in Kaliningrad. However, the about 40 top 50 transport haulage and shipping contractors delivering goods to EU countries and transporting goods from EU countries sometimes directly to Russian main land which is much shorter than via Kaliningrad, are faced with problems. The new SEZ law does not allow such an activity. Trucks first have to go back to Kaliningrad to go through customs control and are then allowed to transport the goods in question to the Russian main land. The Kaliningrad Governor tries to obtain a change of this regulation. As I have been informed by haulage companies, there seem to be no clear instructions to the border customs officials at the Russian side concerning the definition of goods in the customs tariffs so that the tolerance for introduction is up to the customs officers. 9. Standards of the EU and Problems for Kaliningrad? The EU requires that all new Member States adopt the Single Market regulation and standards including health certification as laid down in the acquis communautaire. Their adoption by Poland and Lithuania, and other Baltic Countries, will have and already has head a significant impact on Kaliningrad, whose future economic prosperity is and will continue to be critically dependent on exports to EU countries. Some of the more important manufactured exports from Kaliningrad such as processed fish may well be barred from the new EU

11 10 markets unless they comply with the relevant standards of health. The cost for Kaliningrad companies of acquiring the necessary information and adapting technologies and processing accordingly are high, so that one of the largest fish processing company transferred its production to Latvia, where the know how was available. A harmonisation between the Russian standards by GOSSTANDARD with those of the EU from CEN would be essential for the Russian and the EU side, especially for investors and the trade between both sides. 10. Russia and Kaliningrad: what happened in the past and what to do in the future? Since the EU enlargement, with Lithuania and Poland joining the EU, the Russian Government stresses that Kaliningrad should remain an integral part of the Russian Federation, but recognises the need for help, and also argues that the EU is under an obligation to find means of alleviating any additional problems caused to Kaliningrad by the enlargement. Well, one of the sad discoveries that slowly dawned on the inhabitants of Kaliningrad, and the Russian Government as well as in the Headquarters of the European Union is, that in the past it was evident that Kaliningrad never has been on the list of priorities either in Russian, or in European politics, Kaliningrad was left alone on the world scene. It is encouraging that for some time about 2 3 years - both the Russian Government and the European Union try not only to talk about Kaliningrad but take common action. Discussions and documents, surveys, studies etc. have been made nearly enough now. It will be necessary, that the EU Parliament in accordance and together with the Russian Government takes the lead on the Russian Exclave Kaliningrad. A highly ranking director of international affairs in the Kaliningrad Oblast Duma said: If this goal is set to provide some sort of development prospects for Kaliningrad it would be appropriate for both Russia and the EU to establish a permanent framework for a day to day dialogue and information exchange on the issue. Such element or framework could recommend the following points: Appointing a Russian Government official to deal with EU related issues in Kaliningrad Opening a subsidiary of the Moscow EU Delegation in Kaliningrad, or an independent European Institution like an European Information Centre with special power Participation of Kaliningrad representatives in PCA (Partnership and Co-operation Agreement) and the forthcoming negotiations with the Road Map concerning Kaliningrad and other sectors as Northern Dimension committees where appropriate. He further said that a detailed assessment of the trade and economic strategy should be established for investors, an improvement of the efficiency of the border between EU and Kaliningrad including transit to main Russia should be achieved, and a special programme for

12 11 the social society should be started, which is an urgent requirement. Such a joint programme could help to estimate the specific impact upon the Kaliningrad Area of EU related changes in the neighbouring countries in the various areas of economics, civil society, education, training, teaching etc. This should be a target for the next years. Without concrete actions for improving its economic prosperity, Kaliningrad will not have the chance to catch up with its neighbours and this will be a problem for the total region of the Baltic Sea. The future of Kaliningrad must be decided in the frame of the New Europe and not just be talked about B. Efficient Borders between EU Countries and Kaliningrad 1. Basic support by the EU - Russia Parliament Co operation Committee The Russian Federation ( RF ) is the major partner of the European Union ( EU ) in the East with one of the longest borders from North to South including the part of the Baltic Exclave of the Russian territory, Kaliningrad, within the EU. Several agreements or projects were created between the RF and the EU even concerning Kaliningrad on different subjects. For the Kaliningrad Area the transport, transit and visa sectors are important. However, the EU Parliamentary Co operation Committee could support the development of relations between the deputies of the Kaliningrad Oblast Duma and help that the structure from the various agreements made between the RF and the EU, showing the will of cooperation between the hard grasp political organisation EU is in this particular form of State Nations which is the RF on one side and the EU on the other side. Some new EU members do not trust the RF Government. This creates the problem for Kaliningrad concerning the existing border system, but also on the Russian side the difficulties exist as an inheritage from the soviet period. It will not be easy to change the current system at Kaliningrad borders to Lithuania or Poland. A slow ease of the transport, transit, or visa regulation and system especially for the Kaliningrad border to its neighbours should be one of the main and priority targets for the EU Parliament Co - operation Committee and the EU Institutions. 2. Transport and Transit situation Trust of neighbours and agreements In 1999 there were 8.6 million border crossings to or from Kaliningrad. In 2005 the situation changed as can been seen from the table below:

13 12 Cars Lorries Busses Railcars Marine Vessels Air Carriers People in and out in and out in and out in and out in and out in and out in and out And in 2004 the data show the following development: Cars Lorries Busses People As Poland and Lithuania are now members of the EU, residents of Russia need visa to travel overland outside the Kaliningrad Area for instance to visit friends and relatives in main Russia, in Poland or in Lithuania. The reason is that both countries must act in this respect due to the EU and Schengen regulations. Schengen rules are designed to facilitate international cross border movements within the EU and to do so primarily through tightening the external borders. However, there are already some simplifications which make the visa regime easier between Lithuania and Poland for the inhabitants of Kaliningrad. However, the EU industry is very much interested to push for closer EU Russia cooperation. The latest Round Table of Industrialists ( composed of EU industrialist and industrialist from RF) in London beginning of May this year, issued a new report demanding closer cooperation between the Union and its neighbours. This closer cooperation is not possible with the current cross border regulation between the EU and the RF. This regulation includes the visa regime between the two EU and RF. The ease for visa restrictions for Russia on the one side and EU on the other side, signed in October 2005 between Prime Minister T. Blair and President V. Putin in London, has brought about an agreement to ease travel. The EU agreed to relax visa restrictions for Russian diplomats, businessmen and some students. In return, the EU and Russia have announced an outline agreement to ease visa rules for Russians visiting the EU, following long standing Russian complaints about the costs and delays of the current system an issue of particular importance to Poland and other east European States as also Lithuania. EU officials said in October 2005: the visa deal covers all 25 EU Member States, except the United Kingdom, Ireland, and Denmark, which have opted of the Schengen common travel zone. In return, Moscow took back travellers from third countries found trying to enter the EU illegally from Russia an issue of particular importance to Poland and other east European states including Lithuania. Considering the geographical location of Kaliningrad, cross border co-operation is of particular importance for this area of the RF at the Baltic Sea. The EU Commission itself said, that.a well functioning transport system connecting the EU and the neighbouring countries is essential for sustainable economic

14 13 growth and the well being of all citizens in this part of the world. Better integration of national networks will foster regional cooperation and integration not only between the neighbouring countries themselves. With this development in mind, the EU adopted an ambitious plan that focused investment on a limited number of major trans European transport axes. In particular, the plan aimed at integration the network of the new EU Member States, thereby contributing to a stronger Single Market The agreement signed between President Putin and Prime Minister Blair, reduces the visa fee for both sides to 35, Bureaucratic situation of Border Controls at Kaliningrad Borders As mentioned above it will not be so easy to change the current border system even if the EU Commission has provided technical assistance for border crossing infrastructure in Kaliningrad. There are to my knowledge about four ministries in Moscow responsible for the Kaliningrad Area. The view of the EU Parliament to have nearly a similar system as at the different border crossings of the Finnish Russian Border will be desirable and should be considered but it could take some time. At the Kaliningrad EU - RF borders (between Poland and Lithuania) there are the following controls: a. Firstly, the soldiers of the Ministry of Interior (border guard) look at the passport and / or check the car and the luggage space of the car. If the visitor arrives by private car, he receives an entrance permit after the soldier has controlled the passport. When leaving, after passing the registration of point b.) and c.) and leaving the Control Area, he has to give back the entrance permit to the border guard, before leaving the gate behind him. b. Secondly, the customs authorities of the Finance Ministry controls the luggage and sometimes also the passport. If the visitor has arrived with a private car the car has to be registered at the customs minimum for a two month period. c. Thirdly, the Passport Control of the special force of the Ministry of Interior (former times Foreign Ministry). Here a visitor for Kaliningrad has to receive a Migration Card (MC) with a constant number, so it is not possible to copy it and prepare the document already ahead before the visit at the border to safe time. The MC is hold in Russian and English language. This MC has to be filled in and the Passport Control keeps one part of the MC and the other part is given back together with the Passport. cc.) But this part of the MC has to be registered at a special police headquarter and be kept carefully together with the registration stamp in the passport and the registration stamp on the MC. When leaving the Kaliningrad Area the Passport Control examines the remaining part of the MC with the stamp in the Passport and keeps this part of the MC and the visitor can pass the border. If a visitor stays in a hotel, the hotel makes the registration at the concerned offices together with passport of the visitor. It is a service of the hotels, if they are being granted to do so. If the visitor stays privately, he has to go to the registration office himself. Prior to that, he has to

15 14 get a letter of the inviting company or institution or private person with all the details why he visits the Kaliningrad Area, the details of the passport have to be indicated etc. This letter has to be in Russian language. He has to line up in a queue and has then to get a document with which he has to go to the State Bank ( Spare Bank ), pay about RUB, has to go back to the registration office, has to queue again, has to show the receipt that he has paid and finally gets the stamp on the remaining part of the MC and a stamp in his passport and can now make his visits. An investor or his workers, instructors etc, after all the bureaucratic subjects have been solved and who will stay for a longer time, will be reluctant to accept this. d. Depending whether the visitor arrives from a foreign country and applies for border crossing or whether he arrives from the Kaliningrad side, there will be a change between point b.) and c.) but then finally the visitor has to pass the control of the border guard see point a.) e. The whole procedures differs a bit when a visitor arrives by plane, by bus or by train. The MC document which is given in the plane, bus or train, has to be filled in anyhow but the control by the boarder guard is omitted from the controls. But what is not understandable is, that visitors arriving by plane, their luggage has to be scanned again, before leaving the control area, which also consumes time. 4. Proposal for a visa free regime for inhabitants of Kaliningrad and the EU The financial assistance given from the EU for a better infrastructure for the various border crossing points between the two EU countries Lithuania and Poland to Kaliningrad are to be considered as very helpful for both sides. However, the greatest problem for the inhabitants in Kaliningrad or for persons from main land Russia is the visa regime and the bureaucratic registration of a person mentioned above (the Migration Form) and the extra registration at a special police office. I propose for this visa regime a pilot project for Kaliningrad and EU inhabitants as follows: A Russian person born in Kaliningrad and having lived there constantly (absence due to study or military time in main Russia excepted), worked in Kaliningrad constantly for at least 10 years and providing adequate prove by certificates, has the permission to live in the Kaliningrad Area ( certificate of eligibility for a council flat ) should get free access to the EU countries. This can be granted in form of a permanent visa. Persons with a criminal record etc. should not be granted such a kind of free access visa. All other Russian nationals should fall under the current regulation. Perhaps so called biometric passports could help enhance mutual trust. An inhabitant of the EU being national by birth of one of the EU Member States, should get free access to the Kaliningrad Area except people who changed their nationality after migration from another country of the world into one of the EU Member States or being a refugee ( economic refugee ) or having a so called Nansen Pass, or having only a residential permit for a certain time or staying under deportation etc. should not get also free access to the Kaliningrad Area. All EU inhabitants intending to work in main Russia or to visit main Russia should fall under the current proceeding for the visa regime. In that case, biometric passports could also be the basis as for Russians from Kaliningrad.

16 15 5. Common Border Control: Russia and the EU as well as separating controls It is definitely a good idea, to facilitate border crossing between the two nations Poland on the one side and the Russian Exclave Kaliningrad as well as between Lithuania and the Russian Federation. A first step could be a common control system similar to that before the Internal Market of the EU came into force. Further the idea of a separate waiting line and control checks at border crossing could be a first step. There already exist Pass and Luggage controls quick and easy for tourists entering or leaving the Kaliningrad Area by bus. Busses have a special waiting line. Perhaps it is possible to form three or four lines for the cross border system between Kaliningrad and EU countries: one for busses and tourists one for EU inhabitants who have nothing to declare, with the possibility that customs authorities will make random controls one for those persons who have something to declare. (But here in this case problems could occur especially on the western side of the Kaliningrad border as the specialists work from the eastern side to the other western side with mobile telephones and start crossing the border when possible) one for trucks including small lorries one for cars to be registered for import or even private ones to be registered for some days or minimum two month at the customs. The situation, as currently existing at the Finnish-Russian border could be a very efficient solution for Kaliningrad, too, when the above mentioned bureaucratic sectors could be solved within the three and / or four concerned Russian Ministries. This border crossing system is somehow similar the one that existed before the EU Internal Market had been finalized, and it would be similar to the border crossing procedures between EU Member States and Switzerland. The close cooperation of Finnish and Russian authorities and border controls such as passport control, customs control, etc. allows a tight control of people and goods crossing the border without producing endless waiting lines in Kaliningrad or Poland sometimes for 5 36 or more hours. As mentioned recently in a document of the EU Parliament, the Finnish example for border crossing, including methods of close cooperation with electronic exchange of information between similar authorities of the two countries Poland / Russia and Lithuania / Russia together with the common use of highly developed technical equipment such as X Ray screening of trucks are elements of success. Finally single veterinary controls for transit of living animals or farming products for instance as packed meat, vegetables, fruits etc. could also ease the border crossing system, when the EU certificates or Russian certificates are excepted or first harmonised to the WHO or EU health level.

17 16 6. Free Visa Regime for inhabitants of Kaliningrad and EU effective for investors It is encouraging that the Russian EU Summit on May 25 th this year put Kaliningrad again high on the agenda. The Joint Statement on Kaliningrad adopted by the EU Russia includes also the transit issues, at best possible development and a broad agenda for cooperation including visa facilities with the intention of flexibility for border controls. One of the targets of the EU Parliament could be to force EU institutions that bureaucratic hurdles are torn down on both sides, and Kaliningrad could be seen as a special pilot project for good and trusty relations between the RF and the EU also in the frame of the new neighbourhood policy of the European Union. A new situation concerning the visa regime for Kaliningrad, the revocation and withdrawal of the bureaucratic measurements on both sides and free visa regime for inhabitants in Kaliningrad as proposed above for Russians and EU persons will improve the efficiency of investments, strengthen investment in Kaliningrad for EU investors C. Social Measures: Integrating civil society in Kaliningrad 1. New Neighbours and Kaliningrad With its historical enlargement in May 2004 the European Union has taken a big step forward in the frame of the external borders of the Union. The continent has changed completely. New Neighbours have come close to the European Union. These circumstances have created both opportunities and challenges. The European Neighbourhood Policy is as the Commission puts it already in 2004 the response to this new situation. It will support efforts to realise the objectives of the European Strategy and Interests of the New Neighbours. However, this policy reinforces existing forms of regional and sub regional cooperations and provides a framework for their further development. This policy also reinforces stability and contributes efforts to solve conflicts, as for instance Kaliningrad the Russian exclave within the EU with its neighbours Lithuania and Poland on socio economic problems. It is encouraging that the newly agreed programme of the Partnership and Co operation Agreement between the European Union and the Russian Federation will include within its strategic partnership the socio-economic sectors. Of course the programme of the Russian Government on this issue, running from for 2005 till 2008 looks very promising too, in terms of diversifying growth, even for the Kaliningrad Area, which will have a positive impact on the expectations of investors which will also increase the social benefits, labour and

18 17 employment. The EU enlargement and integration of the two countries Lithuania and Poland gives hope to the society of Kaliningrad to participate in the positive development of those two neighbours. Exactly those two countries have, besides Germany, the Netherlands and Sweden, made all efforts to use the beneficial possibilities of the Special Economic Zone (SEZ) for Kaliningrad for direct investments and helped to improve the social side. On the labour market it is easy to find skilled workers as former military man are living from very small earnings related to pension. Before leaving the military service they are (especially officers) trained in the State-Owned Kaliningrad Administration and Management High School for Administration Education for the slowly growing private sectors of the light and food (mainly retail trade), machine building, wood processing, furniture manufacturing, and constructing as well as in the information and communication or electronic industry employed (in Kaliningrad there exists one of the largest Russian producer of TV equipment and electronic devices). At this state owned institution for higher education besides administration sectors also languages (English, German and Swedish), economy, law are taught. The Korean company SAMSUNG announced recently to build a company for electronic equipment in Kaliningrad. Press releases say that this factory will employ about 600 people from 2008 / 2009 on. This company will search for persons trained on electronic and economic sectors. 2. TACIS, Humanitarian Aid and Reforms of Economy TACIS helped in the past with several programmes to strengthen civil society in Kaliningrad and to reduce poverty in the Kaliningrad area. But this help reached only the Kaliningrad city, small towns and some attractive villages for investors from Russia or EU neighbour countries. The civil society in Kaliningrad is developing slowly but many of the small and medium sized companies are considered to be weak in profitability. Large enterprises are better off. In any way, the number of professional support from EU and private organisations or private persons from EU Member States (mainly Germany) for civil society has been very useful in the past and slowly but surely has to be increased for public welfare. To further strengthen civil society requires specific actions directed to the different parties as poor and impoverished inhabitants are still faced to live below the minimum income subsistence level. There also exists a sharp rise in social disparities between population levels as far as public health is concerned. Uneven economic growth has contributed to the regionalisation of poverty and to increase deprivation among certain segments of the population, particularly in the city of Kaliningrad and its neighbour towns. Problems could occur from the accession of the RF to the WTO if the necessary reforms will not come into force in time for better living

19 18 standards for the mentioned persons in the Kaliningrad region. Here, the newly promoted Commission programme Promoting decent work in the world which highlights the importance of better jobs with welfare protection, equal opportunities and social dialogue as a tool to fight poverty, could also help. According to Governor Boos of Kaliningrad, the region combines opportunities and preferences, which makes Kaliningrad attractive for investors, leading to an improvement of living standards. As regards competitiveness, he said, our economy is aligned with the WTO s terms long ago. On the other hand, when all Russian regions enter the WTO, they will find themselves in the same position as Kaliningrad. The governor stated that there are two trends of development in the Kaliningrad Area in WTO conditions. The first one is to update production and increase added value. The second one is to diversify it also for civil society. 3. Socio Economic Surface An increasing problem for Kaliningrad is not only the health care, the tuberculosis and the tuberculosis control or the immune frailty (immunodeficiency) HIV but the Street Children. A German private organisation has established an area for these lost children close to Kaliningrad. The organisation Bruderschaft Salem in Stadtsteinach, bought a large area of land, built houses in which those street children could live together with families. There is a community house for meetings and teaching. This village, which is still under construction teaches those children in regular school facilities but also in agriculture, repair of agricultural machines, floristic, cultivation of food and vegetables etc. to become more or less self sufficient to bring their harvested goods on the market. The problem is, that the organisation has nearly no financial support and is in need of EU aid to fulfil their target and to build more houses for the street children and to continue to save children and to show them ways to better and safer living. In this case and in view of this situation a system for the correct circumstances to establish a training and instruction school for welding technology and to teach the technical equipment so that children are trained on metal processing equipment. For adults, this kind of training could be established at the shipyard or together with the Technical University (see below). Details for this important and necessary training system for modern metal technology will be delivered in an additional mail. The asymmetry of the socio economic surface of the European part of the Russian Federation is: Intensive agriculture (1) Industry (2)

20 19 Investment in authorized capital (3) Details can be seen in enclosure (2) [but only available in Russian language]. However, within this scope of regions of the RF ( 1990 = 100 %) Kaliningrad belongs to the regions of lower than the average development = % by 21 Russian regions and can be found on the 31st place. If one takes into consideration the number of regions with their cash contribution, Kaliningrad reaches the 28 th place of all RF regions. Taking into consideration the differences of the socio economic production of the European part of the RF and sees the difference of the lowest coefficients till 10 %, the Kaliningrad Area can be found at one of the lowest place, even though the situation changed tremendously as mentioned under point A of this study since The enclosed (3) [but only available in Russian Language] overview somehow shows the situation. This position will be changed with the various programmes, even those prepared by the government of the RF, to improve the social measurers for the civil society in Kaliningrad. 4. Direct dialogue with Neighbours between the Regional Administration There exist very close and intensive connections, dialogues and communication to the chief of administrators, mayors and regional administration to the neighbour areas right behind the border. In many meetings the small problems between the concerned bodies close at the borders areas are solved without the far away governmental decisions. Those meetings are necessary and useful for both sides on the dayly work of the mentioned administration. There is no need in my eyes to give special assistance perhaps only general support from EU side for this section in the Kaliningrad region as TACIS proposed in one of the TACIS reports. I am sure that in this kind of local frontier traffic communication Russians, Lithuanians and Polish chief administration could make quick and unbureaucratic arrangements also on socio economic policy and if necessary, the governments could be integrated. 5. Education and situation of Schools and Universities. The education modernisation concept of Russia, running until 2010, includes of course Kaliningrad. The Russian Government introduce long term education reforms covering primary increasing access to the system, raising the quality of education, and improving its overall efficiency and effectiveness. The priorities of development of the education system approved in 2005 are focused on the development of an up to date system of continuing vocational and profession education, enhancement of quality, access, investment attractiveness and certification and accreditation of curricula. However, education, training

21 20 and human resource development is one of the major priorities for the Kaliningrad Area, especially as this region and Russian exclave is sandwiched between the two EU members States Lithuania and Poland. It is the most western part of the Russian federation. Having recently been engaged for a certain period as lecturer at the International University Moscow Kaliningrad Branch giving lectures on the topic: Working with the EU Institutional Relations and Public Affairs Structure of the EU and Relation to the Russian Federation. I have been very much astonished how little students, professors and instructors knew about the EU and its work even about the relation with the Russian Federation. Many of the students have been in one or more EU Member States either within school exchange or private either with parents or on invitation by friends. But the problem seems to me, that even in the schools, primary schools, secondary schools, grammar schools (high schools) in EU Member States, the knowledge of the EU is lacking tremendously. On the other side one cannot reproach the Russian students for having a lack of knowledge in this respect. Referring to the lectures given at the International University Moscow Kaliningrad Branch one had to begin with the simplest sectors of the EU. With the help of the Northern Dimension and the Council of the Baltic Sea States (see A point 6 above) a European Information Centre and a European Faculty have been established at the Kaliningrad State University ( Immanuel Kant University). This Centre should have been available not only for the University but also for the public i. e. industry, administration etc. but failed as the persons in charge did not have enough knowledge about the structure of the EU and its facilities. It did not have the right information and not always the necessary access to information needed. Finally it died smoothly after about 2 3 years when the financial support from both sides it is the Russian side and the EU side run out. The only name still existing is the European Faculty at the State University. As far as I have been informed, lectures on economics, jurisprudence are given. But even here only from time to time within the frame of exchange with other partner universities of the EU especially Göttingen / Germany, Kiel and Hamburg / Germany, Lund / Sweden, Salzburg / Austria and some others lectures. Concerning the EU or EU relations to the Russian Federation agreements etc. seems to be missing also as discussion show with students. The Technical University of Kaliningrad differs from both mentioned universities. The Technical University is more a state owned special high school with university character. This university is still mainly specialised on fishing, fish industry, fish processing industry, but now also for some years there are faculties for economic, foreign trade including customs development and retail trade, electronics, IT communication, metal processing etc. One