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Modern economic POTENTIAL OF UKRAINE |
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Investment overview of Lugansk regionRegulating environmentActivities on drawing foreign investments to the economy continued in the region. Promising investment projects and information on the investment attractiveness of the region were presented in special editions “Investment proposals of Lugansk region” and “Reference book of an investor”. Corresponding materials were submitted to the Ukrainian publishing consortium for the yearbook “Investments to Ukraine” and the magazine “Investment Market Review”. Quarterly questionnaires of regional companies’ and organizations’ investment projects were directed to the Ministry of Economy to be placed on its website, as well as to the trade and economic missions of Ukraine in foreign states (pursuant to the Errand of the Prime Minister of Ukraine No.40432 as of July 17, 2003 to the Article 4 of the Decree of the President of Ukraine “On additional measures to draw investments to the economy of Ukraine” No.580/2003 as of July 7, 2003). The Third International Exhibition of foreign economic activities and interregional cooperation “Eastern Gates of Ukraine – 2005” organized by the Lugansk regional state administration and Lugansk regional Chamber of Industry and Commerce with active support of governments, the Chamber of Industry and Commerce and the exhibition centers of Rostov, Voronezh, and Belgorod regions of Russia, Minsk region of Belarus, and Lublin province of Poland with the aim to draw investments to the region was conducted on May 24-26, 2005. 150 enterprises and organizations participated in the exhibition, specifically 94 companies from Lugansk region, 17 from Rostov region, 1 from Voronezh region, 8 from Moldova, 16 from the Republic of Belarus, 5 from Poland, and 6 from other regions of Ukraine. A roundtable with entrepreneurs took place on May 24, 2005 in the office of the Lugansk Chamber of Industry and Commerce in the framework of an agreement on cooperation in the sphere of business development between the Ministry of economy, trade, international and foreign economic relations of Rostov region and Chief department of economy of Lugansk state regional administration. Approximately 100 practical agreements, arrangements, protocols on intentions, etc. were reached during the exhibition including about 30 contracts in Lugansk region. There were tentatively 900 business contacts between participants and visitors of the exhibition, in particular, about 500 with companies from Lugansk region and approximately 200 with companies from the Russian Federation. It is expected to conclude 40 agreements in Lugansk region (31 have been already signed). The region has already approved personal staff of the Public council of investors at the Lugansk regional state administration. The state regional administration conducts activities on agreement and submission of proposals on:
InfrastructureDistance from Lugansk to Kiev by railroad is 813 km and 814 km by highway. The Lugansk region borders on Belgorod, Voronezh, and Rostov regions. The state border stretches for 776 km. Transportation routes The total length of regional railway is 2,380 km and operational railway length is 1,140 km (6th place in Ukraine). The average density of railways is 44.6 km (37.6 km in Ukraine in general). Direct railway routes Lugansk-Moscow, Lugansk-Kiev, Lugansk-Kharkov-Sumy, Kupyansk-Debaltsevo, Debaltsevo-Roven’ki-Likhaya, Debaltsevo-Lugansk-Millerovo, Lugansk-Lvov, Lugansk-Simpheropol, and Lugansk-Odessa converge in Lugansk. The railway branch line Kupyansk-Svatovo-Lugansk crosses the northern part of the region. There are 4 locomotive sheds and 62 railway stations in the region. All towns and districts of the region are crossed by a network of highways. They stretch for 209.7 km. Transit highways Volgograd-Kharkov, Debaltsevo-Rostov-on-Don (by route Moscow-Rostov-on-Don), Lugansk-Donetsk, Lugansk-Millerovo, and Lugansk-Starobelsk-Valuyki cross the region. OJSC Lugansk Airlines, the collective company International airport Lugansk, and the Severodonetsk airport represent aviation transport in the region. Air transport connects Lugansk with other regional centers of Ukraine (Kiev, Simpheropol), and some foreign states. Pipeline transportation is of a transit nature. The main gas line Stavropol-Moscow, oil lines Samara-Lisichansk, Tikhoretsk-Lisichansk, as well as product lines Lisichansk-Lugansk and Lugansk-Trudovaya-Donetsk cross the region. Means of communication Telephone communication covers all parts of the region. Lugansk obtained a high-quality connection with a lot of states after putting a new telephone exchange into operation. Cellular and paging connections as well as Internet services are widespread. The telephone network of OJSC Ukrtelecom operates 428 telephone exchanges with a total capacity of 467.9 ths. numbers, including 154 telephone exchanges with the total capacity of 437.9 ths. telephone numbers in towns and 274 telephone exchanges with the capacity of 30.0 ths. numbers in rural area. The density of telephone numbers per 100 inhabitants amounts to 21.3. Each town and district of the region has access to Internet services. Postal service is accomplished with the help of 48 post offices subordinate to the Lugansk central post office, a specialized postal company. Water, gas, and electric energy supply Water reserves in the region are insufficient. Severskiy Donets is the main river of the region, the core source of potable, technical and household water supply. More than 12 gas deposits have been explored and are developed in the region, though gas reserves are insignificant. Extraction of natural gas in 2005 was expected at the level of 360.6 mn cu. m making 101.8% compared to 2004. Two new holes at the Eugenievskoye deposit were put into operation by Ukrgazdobycha company (Ukrainian gas extraction) and application of a complex of intensive measures at one hole of Kharkov and 9 holes of Lobachevskoye deposit stipulate an increase in gas volume extraction. Companies from the electric energy industry generated commodity output of UAH 758.9 mn total over the first nine months of 2005. The growth rate constituted 115.2% compared to the same period of 2004. All generating facilities of the region produced 3,673.6 mn kW/hour of electric energy, 116.1% compared to the corresponding period of 2004. Consumption of electric energy over the same period of time was 8,227.4 mn kW/hour, which exceeded the same period of 2004 by 3.6%. Demographic situation and state of labor marketPopulation As of January 1, 2005 the population of the region was 2,440.3 ths. people or 5.2% of Ukraine’s population. It ranks the fifth among Ukrainian regions and has 2,105.4 ths. people in cities and 334.9 ths. rural residents. There are 492.0 ths. people residing in the regional center Lugansk.
Level of education The number of people studying in educational establishments during the 2004/2005 academic year per 10,000 people was 1,627 people. Number and examples of companies with foreign investments in the regionThere are 33 companies with foreign investments in Lugansk region. The following companies with foreign investments operate the most efficient in the region:
Characteristic features of the regionApproximately one third of Donbass balance coal reserves of all marks (from cannel to hard coal) is deposited in Lugansk region. Silver, lead, and zinc ores as well as gold, which has been recently explored near Bobrikovo village, occur in the south of the region, in veins of Nagol’nyi ridge. Meanwhile, these deposits are not developed at the moment because they demand additional investigation. Deposits of sandstones, limestones, chalky clays, chalks, refractory and ductile clays, and sands, which are applied as natural construction materials and raw stock for their manufacturing, are widespread. Because of natural resources extraction, the environment has been harmed severely. In particular, more than 30% of Ukraine’s soil erosion is found in Donetsk and Lugansk regions. There are three terrains on the territory of the region: the Starobelskoye plateau, the Pridonetskaya plain, and the Donetsk highland. The Starobelskoye plateau is situated in the northern part of the region. It is characterized by a general inclination of the plane to the lowland of Severskiy Donets River. It is deeply dissected by river and ravine chains. The Pridonetskaya plain has slightly undulating ground with ancient river terraces, which were amended by destructive processes. The Donetsk highland is an ancient mountain system that incurred significant changes. It is divided into a central (high) belt and peripheral slopes. The Mogila Mechetnaya Mountain (Mosque tomb, 369 m) is the highest peak. Soils of the region are diverse (approximately 200 types). Black earth prevails and is the most valuable soil. A humpy character of the relief, a continental climate (especially showers in summer), and peculiarities of vegetation condition development of erosion processes in the region (more than 65% of agricultural plots). |