The Contribution of Natural Resource Producing Sectors to the Economic Development of the Sakha Republic

Abstract

This paper provides basic materials for considering the sustainability of natural resource development in the Arctic, taking the Sakha Republic as a case study of the Russian Arctic regions. The author clarifies the contribution of the mining industry to the economic development of Sakha with special attention paid to the contribution to government budgets by numerical and statistical analysis of regional and municipal data. The paper demonstrates that the mining industry has been a driving force of the economic growth of Sakha and that the oil sector has sharply increased its presence while the diamond sector has decreased its presence. Simultaneously, it reveals that the mining industry is unevenly developed in Sakha, which has caused significant inequality in per capita Gross Municipal Product (GMP). Then, the analysis of the paper shows that Sakha’s contribution to the federal budget has increased significantly in recent years due to growing oil production and that the diamond sector is still more influential than the oil sector in the contribution to the republican and local budgets.