GEOGRAPHICAL OUTLOOK

Astrakhan region is placed in the South-West of the European part of Russia, in the South part of the East-European plain. In the West it borders with the Kalmykya-Halm Tangch Republic, in the North - with the Volgograd region, in the East - with the Kazakhstan Republic, in the South it’s washed by the Caspian sea.

The length of the low stream of Volga in the limits of the region is more than 40 km. Volga-Akhtuba poima, Volga delta and the neighboring semi-deserts and deserts of the pre-Caspian lowland are placed here. The bigger part of the territory of the region is 15-20 meters lower than the ocean level in the North, the Caspian sea coast is 28 meters lower.

The climate of the Astrakhan region is sharp continental, drought. It is characterized by the big differences of the temperature: from +40 C in summer to - 34 C in winter (though such a low temperature happens rather rarely). The average annual quantity of the precipitations is not significant - 244 mm in the North of the region and 175 mm in the South. The duration of the vegetation period with the temperature higher than +5 C is 201 days in the North and 216 days in the South.

Three climate zones are differentiated in the territory of the region: the zone of dry and hot semi-desert climate, the zone of extremely dry and very hot desert climate with the brown semi-desert soils, the zone of soften intermediate climate in the Volga-Akhtuba poima, Volga delta and narrow littoral strip of the sea (Caspian sea and Volga create a special microclimate here) with the fertile alluvial soils.

The area of the region is 44 thousand square kilometers, the population - 1024900 people. The region consists of six towns and eleven rural areas. The regional center of the Astrakhan region is the city of Astrakhan with the population 485.300 p. The second in size town in the region is Akhtubinsk (50.000 p.).

The percentage of the city population in 1998 is 66.9%, compared to the average index 68 % in 1991.

Due to its geographical position and historical development, people of more than 100 nationalities live in the Astrakhan region, of them: 73.9% Russians, 11.8% - Kazakhs, 8.4% - Tartars, 1.1.% - Ukrainians.

Political situation

Despite of affinity to " to hot points " and multinational structure of the population the Astrakhan area always was and remains one of most politically stable areas of Russia. Here there are no national conflicts. The officials of the Astrakhan Administration have good relations with the federal Authorities. There are no tendencies of separatism in the region.

Rather quiet political and social conditions in the Astrakhan area are caused by several factors, among which the greatest importance have:

• constructive interaction of bodies of the executive and legislative authority of the Astrakhan area;
• measures undertaken by Astrakhan regional Administration on social protection of the needy citizens;
• dialogue between the majority of trade-union organizations of the Astrakhan area and Astrakhan regional Administration within the framework of a tripartite commission on social - labor relations regulation;
• constantly working political advisory Council at the Head of the Astrakhan regional Administration, in which the representatives of more than hundred public associations of the Astrakhan region take part.

Resource potential

Astrakhan region is rich with natural resources among which large resources of oil and gas, pooch, construction materials (clay, gypsum, ceramics, Crystal sand, salt saturated with bromium and chlorine. The resources of fish are unique.

Astrakhan deposit of gas condensate is the largest in Europe, mining exploitation of which has promoted the region to one of the first places in Russia in oil made, gas and sulphur products. The acting deposit of natural gas and oil is unique because of the volume of gas and carbonic hydrogen ( from 3,6 till calculated 6.0 thousand billion of cube m.) what is in 2-2.5 times large then the Orenburg resource ( 1.6-1-8 thousand billion of cube m.) and also in complexity of the composition. Except sulphurhydrogen average content of which is 24%, there is carbonic gas ( 12-16%), oxide of carbonic and sulphur.

On the comprehensive level of mining, the deposit will be enough for centuries. Nowadays, 5 billion of cube m. is mined every year. JSC Gasmining Company “Astrakhangasprom” is exploring the deposit.

On the territory of the region except of Astrakhan deposit of oil and gas there are some others perspective ones. The total quantity of oil and gas resources is valued as 1350 mln. tons of oil and 1430 billion tons of gas. Three main oil deposits: Rightbank, Enotaevskoye, Kharabalinskoye - are ready for the industrial mining of oil. The advantage of milder climate and developed infrastructure makes the Astrakhan deposit especially attractive for reconnaissance and exploring in comparison with Siberia and Far East deposits.

Nowadays Bashkulskoye oil and gas deposit developed. The process of mining is leaded by JSC “ LUKOIL-Astrakhanmorneft”. The industrial exploitation of North- Shadzhinscoye gas deposit has begun. The searching work was begun on the Verbluzhye deposit.

The majority of regional districts are perspective in oil-gas direction. There are suppositions of finding in the nearest future of some new deposits of carbomidhydrogen row materials.

Some places are perspective for looking for and reconnaissance of oil and gas deposits in over and under salt complexes, and first of all the Rightbank of Astrakhan deposit. The significant perspective of oil-gas supposition here are connected with deeper horizons of carbonic, lying on the depth 5000-6000 m.

The region is known for unique Baskunchak deposit of salt. The deposit serves as the main base of mining of food and technical salt in Russia. Baskunchak salt business is the oldest and biggest enterprise in the country which acts more then 100 years. Salt mining are carried on here by the open method. Moreover, in our region there are many little deposits of salt on salt lakes and in uncountable salt basins and stone salt lying as statums and cupolas on the depth of 150-300 m.

Baskunchak deposit of salt containing bromium with the average concentration of it - 350 g/cube , according to the international criteria is considered to be profitable. There are possibilities of organization of bromium production.

There is raw material for chemical and oilchemical production of opoch ( gravely mining rocks rich with amorphous silicon). The main deposit - Kamenoyarskoye - which is situated on the north of the region and belongs to the unique ones as because of the resource potential, and also because of the quality of the raw material. Reconnoitered deposits constitute 20 billion cube m of raw material.

Astrakhan region has the deposits of raw materials for constructing materials production. Deposit of clay is situated in the southern part of the region - in Volga delta, gypsum - in northern part in the area of Baskunchak lake.

The index of mineral waters, different in chemical composition and quality is found on the territory of the region.

Three sorts of balneologic medical water are found in the area of Astrakhan. The first - chlorine-nitrogen mineral water, analogic to the medical water of Old Russa health resort. On the territory of health resort Tinaki-2 chlorine-nitrogen, bromium, iodine mineral waters which are used is as in taking bathes as also in medical drinking are being mined.

The specialization of the region is greatly determined by the appearance of unique sorts of fish in Volga river and Caspian Sea. Among the 60 sorts of fish dwelling in the rivers of the region, more than 30 sorts have the work importance.

The Caspian sturgeon flock is unique. The majority of black caviar and “red” fish delivered to the world market is procured in Astrakhan region. Bioresources of Astrakhan region (pikeperch, catfish, bream, herring and others) are supplied to internal and external markets.

Astrakhan national park and hunting areas of Volga delta - are the favorable places of relaxation of hunters and fishermen from all over the world. The regional possibility for spending vacation is 150.000 annually.

There are unique nursery places in the region to which the tourist routs are organized. The possibility of having medical rest is caused by the presence of curative dirt and mineral waters. A great number of medical grasses grow in the region.

OVERVIEW

Astrakhan land is situated very successfully on the cross-roads of several climatic zones and on the ancient “people's road” between Europe and Asia. Many centuries ago, b.c., hither to the bellicose nomads a lot of different goods from the ancient Egypt were brought. During the epoch of the Golden Horde it was a place where the Caspian sea - farers and Chinese merchants, following the “Grate Silk Way” met, there were merchant settlements, organized by merchants from the Western and Eastern countries.

This tradition was kept and after the Nijnee Povoljie was joined to Russia in 1536. In XYII - XYIII centuries in Astrakhan “trading houses” were organized - Armenian, Bukharskyi, Persian, Indian ones.

Astrakhan guberniay was founded November 22 (December 4), 1717 in accordance with the edict of Peter the First. At the end of 1997 the population of Astrakhan Region celebrated the 28-th anniversary of this memorable event. Peter the First was intended to spread the influence of Russia to the South (to the Caucasus and the Near East).

In the pre-Revolutionary period the native and foreign businessmen realized in Astrakhan guberniay considerable capital investments not only in trade, but also in industrial production. Especially large these investments were in the field of fishery, fish processing, ship building and ship repairing. It is sufficient to recall the prosperous shipping company “Caucasus and Mercury”, the partnership of Nobel brothers, etc.

The latest history of the region is connected with the irrigation, which has greatly developed the agricultural areas of the region; with the exploitation of the richest gas condense deposit which has clanged the industrial structure office region; with foundation of powerful fuel-energetic complex, which will provide necessary resources for the development of regional economy.

The region is reach in natural resources - hydrocarbon raw materials, natural gas and gas condense, sulfur, oil, .salt. Now days large deposits of gypsum, mineral dies, clay-gypsum, glass sands, silica clays, potassium salts , bromide, iod, etc. are explored and developed. The industrial production of mineral water is in process.

Special hopes we connect with the development of new deposits of natural resources, first of all oil and gas. Deposit forecasts can be compared with the richest world deposits.

Fish resources of the region are attributed to the main components of the raw material basis office region . The unique sturgeon flock is of the main importance for the region. The Astrakhan natural reservation and hunting lands in the Volga Delta are the favourite places for hunters and anglers rest from all over the world.

The region has in its disposal medical mud and mineral springs. In the region there are all necessary possibilities for organization of rest for 130 thousand people.

The complex development of the region is closely connected with the realization of the Federal Target Program “Social - Economic Development of Astrakhan Region for 1997 - 2000”, approved by the Government of the Russian Federation in January 1997. The Program defines the most important trends of social-economic development of the region and comprises 19 sub-programs consisting of 99 projects with specific dates, financial expenses and expected results. In essence, this is the business-project for the region's development and ready proposals for potential investors.

The transformation of the region to the region attractive for the investments depends on the development of market infrastructure. Today in the region there are all necessary for normal business. The modern communication system has been organized which functions normally. The transport infrastructure is developing dynamically, it provides connection between the central Russia and economic space of the pre-Caspian states.

We are sure that the transport infrastructure of the region will become the component of the global world transport system providing the shortest ways form the Europe to the Middle Asia, to the Near and Far East.

The first line of the international port on the Caspian Sea coastline was put into operation. Today the port infrastructure is developing very intensively.

The region has developed the Law “About the Investment Activity in Astrakhan Region” defining the order and terms of the investment process organization on the territory of Astrakhan region, which is directed to stimulation of the investment activity, to development of the investment market, to provision of interests of investment activity subjects, to state support of investment projects, which include:

- establishment of preferential tax rates, temporary discharge from tax payment to the regional budget, other measures related to taxation which is under the jurisdiction of the region within the bounds of acting taxation legislation;

- granting the preferential credits to the enterprises which realize investment projects at the expense of Astrakhan regional bond (funded) loans;

- fulfilment of debt re-structuralization as to the regional budget and the regional budget to securities;

- conversion of regional budget debt to investors and enterprises realizing the investment projects to securities with discounting possibility;

- granting other non-financial privileges : allocation of state regional orders; rendering an assistance in formation of business infrastructure, renting and purchasing of land and real estate objects, unfinished construction sites which are the regional property, etc.;

- development and expertise of investment protects at the expense of state financial resources;

- rendering an assistance to investors in receiving customs privileges; - granting state regional guarantees. In the region there are necessary conditions for fund market development. We have also an experience issuing and circulation of regional bonds, notes, shares and other securities.

The regional bank system actively participate in financing of investment projects. Bank affiliates from other towns act within the bounds of Agreement about collaboration in realization of investment projects signed between Astrakhan Region Administration and leading banks. To initialize the investment process the regional Law “About Taxation, Dues and Other Payments on the Territory of Astrakhan Region in 1997” stipulates privileges for taxation of banks actively participating in investment process.

All these facts evidence about seriousness of our intentions to transform our region to the most important industrial center of international significance, to make it open and attractive for business and investments. We are ready for mutually advantageous collaboration with native and foreign partners.

INDUSTRY

Fuel Industry (oil - gas complex )

Oil-gas complex is the leading branch in Astrakhan region economy. Part of this branch of industry in the total volume of production is constantly increasing. If in 1990 it was 6,2%, in 1997 - 34,2%. Fuel industry based on the main famous oil-gas deposits and on exploring the new ones, even larger than previous becomes the main branch of local industry. This branch is presented by several companies: “Astrakhangasprom”, “Lukoil-Astrakhanmorneft”, “Astrakhanenergo”, “Astrakhanoblgas”, “Lukoil-Astrakhannefteproduct”, “Astrakhangasservice”, “Astrakhantopproduct”, “Astrakhanneft” (founded in 1998), “Right Bank”(founded in july 1999).

“Astrakhangasprom” is the leading company of the complex. It was created on the base of Astrakhan gas condensate deposit which was opened in 1976.

The company owns 25 year license on exploitation of the deposit. “Astrakhangasprom” is one of the 16 sub-companies of Russia Joint Company “Gasprom”. Today “Astrakhangasprom” is the main producer of sulphur in Russia (more than 60% of overall production of sulphur in Russia).

According to the resolution of the Government of Russia ?1183 from 19.09.97 Astrakhan region is included in the commission of the regions being subject to gasification within the framework of the Federal program “Gasification of Russia”. According to this program Joint Company “Stpoytrnsgas”, the main contractor must construct 1436 km of the pipeline. After realization of this project 54 thousand of households will be gasified, it will convert 225 boiler-rooms to natural gas that will reflect in the reduction of tariffs.

Shipbuilding and Ship Repairing

The main branch of mechanical engineering complex - shipbuilding and ship repairing today is winning and finding its place on the market of consumption. Geographical position of Astrakhan region and functions performed by it in the former All-Union territorial division of labor in the south of country, to a great extent, defined the level of concentration of shipbuilding and ship repairing in the region.

18 shipbuilding enterprises have hull processing equipment which allows to construct ships of any class and do repairing with docking on slips weighted till 6 thousand of tons with metal processing equipment and foundry production. A number of enterprises such as JSC “Shipbuilding plant “Lotus”, JSC “Shipbuilding and ship repairing plant named by III International”, JSC “Shipbuilding plant “The red barricades”, “Shipbuilding and ship repairing named by Lenin” Ltd. increased the rate of production, mastering the use of modern technologies. According to the results the production volume in 1997 has been increased more than 50% . 25 billion rubles of profit was received.

Nowadays there are a lot of orders from foreign firms (Republic of Hungary, Greece, Holland) for shipbuilding and shiprepairing enterprises of the region for construction of dry-cargo carriers and tankers, container-carriers and shiprepairing. There are also native orders for tancker-refuelers construction for RJSC “Gasprom” , assembling of drilling platform for exploring the shelf of North of Caspian sea, constructing of floating mourning, oil tankers, motorboats, transport refrigerators, floating plants, self-propelled ships of the type “river-sea”, unself-propelled barges. The main aim is financing orders in time.

Food Industry

In present time the food industry takes 25% in the industrial area. Its main branches are: fish, salt, flour-milling and grating, meat-milk, canning.

Astrakhan region is the main subject of the Russian fish industry in the Caspian sea, one of the suppliers of the precious fish products to the Russia’ markets. The fishery in the region has a many-centuries tradition, its products are widely and for a long time known in the markets of Russia, Europe, America. Nowadays the fishery has the following trends: river, marine and pond.

A special place is occupied by the fishing of the sturgeon kinds of fish (sturgeon, beluga, sevryuga), in the Caspian sea basin 70% of the world stock of sturgeon kinds of fish are found, 40% of them are fished out in the Astrakhan region. Sturgeons, black caviar, river kinds of fish (pike perch, bream, vobla), ponds’ fish, sea fish (mainly, the famous Caspian sprat) - are the main wealth of the region.

Today, in the Astrakhan region the enterprises for fishing and fish processing function. They process the sprats, river and ponds’ kinds of fish and produce frizzed, cold, salted, smoked and sun-dried products, cans, semi-products, flour for animals.

The Joint-Stock Society “Russian caviar” and some enterprises in JSS “Kirovsky fish plant” and JSS “Oranzhereny fish plant” are equipped with the equipment to process the sturgeons and to produce caviar and cold-smoked balyk products. CJSS “Casprybkholodflot” works out the frizzed, piquant and salted production, preserves, fish flour for animals. The fish-processing enterprises supply its products to the markets of Russia and abroad.

The main directions of the fishery development in the region are the progressive structural sub-branched reforms in the fish-processing industry, connected with the rational usage of the raw materials (the increase of the ready production output, the deepening of the fish-processing), the improvement of the production assortment, orientated to the payable customers’ demand.

The salt branch of the food industry is presented by JSS “Enterprise “Bassol”, that exploits the Baskunchakskoye deposit. This deposit is the main source of the food and technical salt in Russia. In last years about 1 mln. tons of salt are extracted annually, and it makes 58% of the salt extraction in Russia. About 90% of salt are taken out of the region.

On the basis of the natural springs of the medical-drinking waters, opened in the territory of the region, a net of water-bottling enterprises is developed. The bottling of the mineral water “Tinakskaya” is performed by JSS.

Bottling of mineral water "Tinakskaya" carries out " Beer alcohol free" combine " Astrakhan ". In Akhtubinsk area are widely widespread nitric-sulfate-chloride waters which can be used as healing-drinking. On their base manufacturing and bottling of water “Kochevaya " is organized.

Agriculture

Favorable climatic conditions, presence of rich water resources have determined the Astrakhan area as a zone of heat-loving melons and gourds and rice cultivation.

The Astrakhan region occupies leading positions in rice collection among other regions of Russian Federation (Rostov region, Primorye Territory), specializing on rice cultivation.

Gross crop of rice, basic grain culture of region, makes about 133 thousand tons per one year. It is 12 % of a whole crop of rice in Russian Federation and 83 % of total volume made in the Volga river regions.

The areas, engaged under vegetable culture, are largest in the Volga river regions. Astrakhan vegetable and melons differ by high flavoring qualities. The water-melons on flavoring, healing and dietary qualities have no equivalents neither in Russia, nor in Europe, and tomatoes are sources valuable vitamins and mineral substances. As for the content of vitamin C tomatoes do not concede to a lemon.

Agricultural production of Astrakhan is realized almost in forty regions of Russia. There are long-term connections with cities: Moscow, Saint-Petersburg, Perm and other regions of Russia.

In area the search and introduction in cultivation of new agricultural growing is conducted: tobacco and cotton. In 1997 in area an industrial crop of cotton for the first time is assembled. It is called the most "northern" in the world.

The area has unique genetic potential of fine-wool, astrakhan fur and meat sheeps ensuring the large opportunities on manufacture of wool.

In herd horse-breeding and camel-breeding the large attention is given to increase of quality of the horses and camels live-stock. The farm on cultivation of the horses of kushumskaya breed is created, breeding farm "Aksaraysky" is engaged in cultivation of camels of Kalmyk breed.

Transport communications

The transport infrastructure of the Astrakhan region includes 574 km of the railway, 2996 km of the auto roads and 1143 km of the navigable water ways. It provides cargo- and passenger streams both inside the region, and in the Euro-Asian transport routes.

Due to Volga and Caspian sea, Astrakhan is the biggest port of Russia in the Caspian sea. It is the shortest, convenient way, the only one in the Caspian sea, that connects the European Russia with the countries of the Western and Middle Asia, India and Pakistan, the countries of the Indian ocean. Volga with its biggest tributaries Kama and Oka, the system of the navigable channels connects by the united water route 22 regions of Russia. It gives the possibility to the bulk-cargo vessels to enter the Azov, Black, Baltic and White seas without the intermediate trans-shipments.

Today, like in the past, the control over the transit routes is the subject of the acute competition between the large transport-industrial corporations, whole countries. These factors determine the perspectiveness of the investments into the trade-transport infrastructure of Astrakhan and Low Volga. About 1,2 mln. tons of the export-import cargoes are processed in the local ports annually.

The increasing volume of cargo-deliveries, that will soon reach 20-30 mln. tons annually, will demand the significant broadening of the port facilities’ capacities. The development of the regional water transport infrastructure is included into the Federal target programme “Revival of the Russian trade fleet”. The main part of the programme is connected with the construction of the new marine port near the village Olya, 100 km from Astrakhan in the mouth of the river Volga, that will work all the year. The port will become the main linking part of the United Astrakhan transport knot in the North of the Caspian sea, that will significantly raise the level of the organizational-technological interaction of the different kinds of transport (railway, auto, marine and river). The combination of the port and the railway Astrakhan-Goudermes (50 km) and its prolonging to Elista opens short way to the industrial centers of the Black-sea basin. In 1997 the ferry line between the port Olya and Iran was opened.

The active work is intended to form the trans-continental corridor # 9. One of its directions, according to the suggestion of the regional Administration and Russian Federation’ Ministry of finance, will go through Astrakhan. The development of the international transport corridor # 9 to Astrakhan and Novorossysk with the successional opening of the water routes for the foreign ships will give the opportunity to create in the territory of Russia the unique conditions for the functioning of the inter-continental Euro-Asian transport system, economically founded and balanced according to the technical and exploitment parameters.

The Astrakhan airport, due to its convenient geographical position, is used by Russian and CIS air-companies as the intermediate point during the flights. The services for the transit air-flights make 50% of the whole volume of the airport activities. The opening of the international sector in the Astrakhan airport, that has given the possibility to connect Astrakhan with many foreign countries, helps to increase the attractiveness of the interaction with it. The airlines to Turkey, United Arabic Emirates, Egypt, Cyprus and Romania are opened. At the present time the reconstruction of the airport is being performed. The fulfillment of the whole complex of measures, suggested by the reconstruction plan, will permit to increase the economic potential significantly, and also to widen the economic relations both inside Russia and with the foreign countries.

The Astrakhan division of the Privolzhskaya railway is an important part of the united system of Russia, performing the local and transit cargo and passengers transportaions in different directions: the cargo stream goes from Kazakhstan to the West and form the South to the North.

The railway transport fulfills about 50% from the whole volume of the transported cargoes in the region. The passenger-turnover of the railway transport is about 60% of the whole passenger-turnover.

Four transit autoroads go through the region: Astrakhan-Moscow, Astrakhan-Elista, Astrakhan-Makhachkala, Astrakhan-Krasny Yar-Atyrau, that connects Kazakhstan (in the East) with the North Caucuses (in the West).

So, all the ways to transport people and cargoes are provided in the region, that is found in the cross of the auto, railway, air and water transport routes.

Phone communications

The automatic telephone communication is provided with all the regions of Russia and, practically, with all the world countries.

Along with the development of the traditional kinds of communication, the new types and ways to communicate are introduced. The digital telephone-telegraph channel-forming communication equipment, two stations of the space communication, working in the town phone station, the introduction into the exploitment of the first optics-fiber communication line will give the possibility to widen significantly the range of the inter-town communicational services, offered to the population and enterprises of the region.

In the Astrakhan region the services of the data transmission nets ISDN, ROSPACK, ROSNET are provided.

The length of the international channels is 285,1 thousand km. The enterprise “Astrakhanpage” provides the paging communication with 58 cities of Russia. Through the system of the inter-towns services providing, ROAMING provides the communication with 58 cities of Russia. The volume of the mobile communication system in the standards AMPS-800 and GSM-900 in the region is constantly increasing.

With the participation of the Joint-Stock Society “Svyazinform” two satellite communication stations, made according to the most modern technology, are taken into the exploitment. Their capacities to provide the phone communications are enough till 2010 year. All the conditions to get into the global net “Internet” are created. At the present time the questions of the development of the many-zones trank system of the radio-phone communication and the sole system of the satellite communication (corporation “Escome”) are worked out. This will permit to increase significantly the list of the electro communication services, offered for the population.

CustomS structure

Any business depends on the customs regulation of the country - business partner, infrastructure and the level of custom service. Except Astrakhan regional customs itself, there are 8 custom posts on the territory of the region. There are 2 customs warehouses where the importing goods are hold without levying the custom taxes, excise duty and value added tax, and also without licensing and quoting during the period of holding.

Legislative conditions for the investors

The investment-financial policy of regional Administration is directed on creation of conditions for activization of investment process in region, on creation of legislative base for increase of investment activity of the individual investors and reliable protection of putting means. Special attention is given to creation of economic conditions for increase of a share of long-term investments in private sector of economy to mobilize them for structural and technological reorganization of manufacture.

With the purposes of creation of a favorable investment climate in region the block of the legislative-normative acts of the Astrakhan area regulating investment process is developed, namely:

• Law of the Astrakhan region "About additional economic guarantees ".
• Law "About investment activity in the Astrakhan region ".
• Decision of the Head of the regional Administration "About organization of investment process in the region" and " About the order of organization and conducting of competition on investment resources from the regional budget distribution".
• Decision of the Astrakhan regional Representative assembly " About distribution of the obligations of the guarantee of the regional Administration for realization of the investment projects ", which establishes the order of action of the regional Administration as the guarantor before the creditor of the managing subject at crediting the investment projects and at crediting the enterprises on updating of turnaround means.

The law “About investment activity in Astrakhan region” determines the procedure & the conditions of organization of investment process in Astrakhan region & it is directed to the stimulation of investment activity, the development of the market for investments & of the equity of investment activity. According to the this law, the government support of investment activity of private investors is planned in such way:

• imposing of tax discounts, temporary tax exemption in terms of tax payments to regional budget, other measures, concerning taxation, which is controlled by the region within the active tax law;
• giving of preferential loans to the enterprises which realize investment projects at the expense of bound loans of regional Administration;
• realization of the restructuring of arrears to the regional budget into the securities;
• realization of conversion of the debts of the regional budget to the investors & the enterprises which carry out the realization of the investment projects into the securities with the possibility of discount;
• giving other no financial preferences, distribution of the state regional orders, rendering assistance for creation of business infrastructure, receiving in for rent & attainment in property land & objects of real estate, accomplished construction which are the regional property, etc.
• working out & investigation of investment projects at the expense of state sources of finance,
• supporting investors in getting custom privileges;
• granting state guarantees to the region, including legal, financial & property guarantees, directed to the defense of investor’s rights.

The state guarantees to the region, according to the confirmed procedure, are given to the investment projects on the tender base. Today constantly active competition for giving guarantees during realization of investments projects was announced.

Any legal & private persons can take part in the tender. The competition is held among the investment projects which claim state support & encourage development of priory directions of development of economic potential of the region.

Spending items of the budget (within the determined limit) state property of the region & state owned blocks of shares of JSC act like a security of guarantees of the regional Administration.

With the purpose of economic growth in the region at the expense of attracting investments the financial mechanism of stimulating investments was worked out & it includes:

• tax stimulation of investors;
• tax stimulation of enterprises which realize investment projects;
• using of state guarantees of private investments.

In the law “About taxation, levies & other payments on the Astrakhan Region territory for 1998” there are privileges not only for investors, but also for enterprises realizing the investments projects, exactly:

• differentiation of the descent of the tax rate for enterprises’ revenues depending of the growth of physical volume of realized production to the relevant period of the past year,
• exploitation of the descended tax rate for the property for the those entities, which realize the renewal of the active part of the basic industrial funds in the volumes, equaled or with the more imputed amortization of the main assets, or invested own & attracted assets to realization of the projects, greeted by the Administration,
• affording of the investment tax credits of the tax on property for entities, which use amortization provision to amortization of the basic funds in the whole volume,
• affording of the facilities to revenues’ profits, got by the credit institutions from the affording of the long-term credits for the investment projects.

In this case the special stress is made on the association of enterprises’ assets as amortization provision from out-budget sources of investments.

For the new enterprises, formed with the purpose to realize "the most important investern projects", including firms with the participation of the foreign investors, who invest their own and attracted means into the realization of investment project, approved by the Regional Administration, till the absolute compensation of invested means, but no longer than the rated period of offset (period of credit repayment), called for by the business-plan or project documentation:

• the rate of the profil tax in the part, entering into the consolidated budgel of the region is fixed as 2%;
• the rate of the properly tax in the part, entering into the consolidated budgel of the region is fixed at 0.2%