Analysis of the forestry sector in the Republic of Karelia under current economic conditions

Abstract

The Russian economy is faced with the challenge of effectively coping with the economic sanctions imposed over the past decade. The Russian timber industry is also experiencing problems due to market closures and difficulties in obtaining processing equipment and spare parts. This article considers the problems of the forestry sector by the example of one of the regions of the North-West of Russia - the Republic of Karelia. For the loggers of the Republic of Karelia has changed a lot. If earlier the forest industry was largely focused on supplying roundwood to neighbouring Finland, in the current environment, due to sanctions against the Russian Federation and the countersanctions, exports to Europe have completely ceased. Due to geographical remoteness from developing markets of East, Asia and Africa, supplies of timber from Karelia to these regions without deep processing are not economically profitable. In this article the results of analysis of current situation, evaluation of resource potential and production capabilities of the Republic are given. It is noted that one of the main problems is a significant surplus of industrial hardwood, which was previously exported and now accumulates at the logging sites, because of the lack of productive capacity for its processing on the territory of the Republic. One of the factors, hindering development of industrial enterprises, is high dependence on foreign equipment. The results of this analysis can be used when looking for solutions to improve timber processing in the Republic and ways out of crisis for timber industry enterprises.