Economy
The economy is centered on mining interests for gold, silver and other non-ferrous metals. The city of Magadan is the only large industrial center. The other main contributor to the economy is fishing, particularly for export, with processing companies in Magadan, Ola, Yamsk, and Evensk. Recently, there has been interest in exploiting the coal resources in the region. Over the medium term, there seem to be excellent opportunities for petroleum and natural gas exploitation. Agriculture is not well developed in the region.
Magadan Oblast is considered one of the world's richest mining areas. Gold is the region's main resource, although silver and tin deposits are also being developed. There are nearly 2000 placer gold deposits, 100 gold ore deposits, and 48 silver ore deposits in the territory.
The fishing industry is the region's only food sector and is second in importance after mining. The 600,000 square kilometers (230,000 sq mi) area of the Sea of Okhotsk that borders on Magadan Oblast is one of the most productive regions of the world ocean. Magadan Oblast has more than 15,900 kilometers (9,900 mi) of coastline and 29,016 kilometers (18,030 mi) of rivers of commercial importance. The catching vessels of the oblast's fishing companies operate mainly in Russia's economic zone, the Sea of Okhotsk and the Bering Sea, and to some extent in the Sea of Japan. Most of the catch comes from coastal waters. Fishing industry companies are concentrated in Magadan, Ola, Yamsk, and Evensk. The most important commercial fish are pollock, herring, cod, navaga (a member of the cod family), flounder, and various kinds of salmon. Crabs, squid, shrimp, and whelks are also caught.
Unfortunately, despite these rich natural resources, the economy has not prospered as much as might have been expected in recent years. The severe climate and poorly developed infrastructure are partly to blame but the difficult transition from Soviet times has led to the collapse of a number of companies with the result that many inhabitants have left the region. Recently, there do seem to have been renewed efforts to encourage foreign investment which could lead to improvements in the economy. Indeed, on a visit to Magadan in November 2005, President Vladimir Putin supported the extension of special tax advantages for the region in order to encourage gold exploitation.
Owing to the severe climate, agriculture is Magadan Region's least developed economic sector; as a result, 50% of all food products must be supplied from outside. The agricultural complex consists of companies producing agricultural products, the food and processing industries, a production infrastructure, and farm enterprises. The particular areas of specialization are reindeer herding, fur farming, and traditional hunting, fishing, and fur trapping activities. Companies involved in food processing and production include Gormolzavod, a distillery, a pasta factory, a sausage factory, the Dukcha state poultry farm, and the Khasynsky state farm.
While official unemployment in Magadan Region is around 12% per cent, it is higher in remote areas where a large segment of the population is indigenous (16–18%). The actual unemployment figures must be much higher, because many people who live in remote areas have no opportunity to register as unemployed. In some places unemployment is probably almost 20%, although this is not officially recognized. While reindeer herding is ruined in many places, and fishing quotas are nearly impossible to get, the fraction of indigenous workers in industry and mining is almost invisible.
Read more about this topic: Magadan Oblast
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