Overview of Uzhhorod Oblast (Zakarpattya) Uzhhorod Oblast (Zakarpattya) has a unique geographic position. It is situated in the far south-west of Ukraine, occupies the south-western part of the Ukrainian Carpathians and the Danube low-land. It borders on the Lviv and Ivano-Frankivsk oblasts in the north- and south-east , while in the north, west and south it borders on Poland, Slovakia, Hungary, and Romania. By virtue of its geographic peculiarities, Zakarpattya has always a convenient link between the Northern and Southern, Eastern and Western European states. The advantages of the geographic location allow to maintain good relations, develop direct production links, execute bargaining transactions with companies and organizations from the neighboring countries. The position on the junction of four states, on international transit routes permits the oblast playing a great part in Ukraine integration to European structures and favors its active participation in the development of economic cooperation. As to its area and population the oblast is not large on the country scale: its territory is 12,800 sq. km, population . 1,284,000, or 2.1% and 2.5% respectively of those of Ukraine as a whole.

Uzhhorod Oblast is divided into 13 administrative districts and 3 cities of oblast subordination, 295 township and village councils. There are 10 towns, 20 townships, and 298 villages in the oblast.

The oblast is rich and diverse. Forests, which constitute its major wealth, cover about 50% of the territory, the forest stock is 687,000 ha. The natural composition of the Carpathian forests is rather diverse with prevalence of hard-leaved (62.2%) and coniferous (29.9%) species. The total wood reserve is 157,800,000 cubic m., including 37,040,000 cubic m of mature stands.

Mineral and raw material base of the oblast is represented by nearly 150 deposits of over 30 kinds of minerals, including the ones non-traditional in Ukraine (polymetals, alunites, pearlites, zeolites, liparites).

Reserves of rock salt of the Solotvyn deposit, amount6ing to 3.5 billion tons are rather significant among the oblast non-metallic minerals. The zeolite deposits (their estimated reserves amount to 1 billion tons) are the only ones in Ukraine and especially promising for development. Within the Byiganian alunite deposit they have explored 5.7 million tons of barite ores used to obtain boring solutions when boring deep wells, including those for oil and gas.

Germanium, which is used as semiconductor in modern radio electronics, instrument engineering, space technology and other fields, is of great value at the world market. The proved but not yet mined reserves of the deposit make 850 tons, the predicted reserves amount to 1,900-2,000 tons.

The oblast has a great potential for development of porcelain and faience industry, kaoline being its raw-material. Zakarpattya kaoline (its reserves exceed 5 million tons) is exceptionally white and has no analogues in Ukraine; by its chemical composition it is similar to Chinese kaoline.

The oblast is extremely rich in raw-materials for the construction industry. Thirteen (13) deposits of carbonate raw-materials (marble limestone, dolomite, marble) used as facing material, decorative crumb, limestone flour, construction limestone have been discovered.

Zakarpattya is rich in mineral and thermal waters, unique as to their medicinal properties and energetic power. Above 360 mineral water sources various as to their chemical composition and medicinal characteristics, with the total debit of about 10,000 cubic m. per day, have been discovered and examined. They are not inferior to the well-known waters of the Caucasus, Czech Republic, Poland, and France. Over 30 sources are exploited in the oblast, including 12 whose mineral water reserves (4,334.4 m3 /day) are acknowledged by the State Commission on Mineral Reserves.

The mineral waters having wonderful gustatory qualities, are used both by resort and sanatorium establishments as medicinal-table waters and by bottling plants. In the recent years the scale of mineral water bottling for everyday consumption has considerably increased. Presently about 30 business are into it.

The oblast is distinguished by favorable climatic conditions and a high natural recreational potential. 5.2% of the territorial and 5.1% of the cost potential of natural recreation resources of Ukraine are concentrated there.

The oblast is also rich in high quality fresh surface water an acute deficit for which is felt through all the south-east of Ukraine. Nearly one forth of the Ukrainian hydro-electric potential is concentrated on the oblast rivers, which opens opportunities for development of small-scale hydro-electric generation.

Zakarpattya is famous as an extremely popular place for health improvement and recreation. The health improvement and tourist system includes 128 establishments which can simultaneously accommodate and provide treatment to 18,100 people. About 100 companies of different ownership forms are active in the tourism business.

During the period of market reforms considerable changes happened in the oblast of the forms of ownership for the means of production, sector structure and organizational and legal forms of subjects of economy, the grounds of multi-structure economy have been laid. The unified State Register of Companies and Organizations of Ukraine numbers 14,700 subjects of the oblast, 72.3% of which are involved in material production.

The greater part of the latter, or 40.8% are enterprises of trade, 19.7% of industry, 10.5% of agriculture, 11.8% of construction, 1.6% of transportation and 0.65 of communications. Among the enterprises of the non-productive sphere, the institutions of sanatoria and health care complex account for 1.2%, those of tourism 2.7%, and the subjects of non-productive kinds of consumer services for 3.7%.

There are 1400 farms in the oblast.

1277 subjects with foreign capital participation are registered, including 105 with 100% foreign capital.

As free market structures, 74 insurance and 105 financial and audit companies, 32 audit firms, 5 trust companies and 54 extra-budgetary funds were created.

As a result of privatization, the predominant structures today are non-state-owned ones, with 55.6% enterprises of the collective form of ownership, 27.1% private ones, 16.2% state-owned ones and 1.1% belongs to foreign legal entities.

The private sector accounts for 93.4% of the whole industrial output of the oblast, 98.2% of agricultural products, 67.6% of construction works, 91.3% of commodity circulation, 46.0% of paid services, 80.3% of passenger transportation and 29.8% of cargo transportation.

Owing to specific conditions, a specific structure of the oblast economy has been established. Out of 9,500 registered self-sustainable legal entities and 5,800 ones being audited, 1.1% of the latter have over 500 people staff, 6.6% over 100 people staff, 5.8% over 50 people staff, 34.5% over 5 people staff, and 52.0% employ fewer than 5 people.

Sectoral changes took place in the structure of material production and services. In gross value added, the share of goods production is 49.6% and that of services is 50.4%. Compared to 1995, the share of industry has decreased by 1.7 to 16.1%, that of construction by 1.6 to 5.4% and that of forestry by 0.2 to 1.8%. Meanwhile, the share of agriculture has grown by 2.9 to 25.3%.

The annual average industrial products output in 1995-1999 in current prices was UAH 386,100,000, and in 1999 it came up to UAH 426, 400,000, including 61.5% consumer goods. The share of industrial production in the oblast was 0.4% of that figure country-wise.

Compared to 1990, the volumes of production in comparative prices has decreased by 60.4%, although in 1997, this recession was stopped and the increase started. The average annual increase of the production volumes in the past three years was 14.6%.

Forestry and wood working industry (production of furniture, sawn timber), wood-chemical industry (wood working products), food industry (production of wine, brandy, canned fruit and vegetables), machine building (metal-cutting instruments, electric engines, pipeline valves, etc.), production of building materials (crushed rock, facing materials), light industry (footwear, hats, ready-made garments, and knitwear) are the branches of the regional production specialization.

The construction industry potential includes 105 construction and assembly, 27 repairs and construction and 8 survey and design organizations. Besides, there are 169 small businesses and 36 cooperatives.

The largest and most promising enterprises of the oblast are as follows:

- in food industry: agro-industrial integrated plant "Uzhgorodskyi", CSC "Gelios", OSC "Svalyava Mineral Waters", rental enterprise "Uzhgorod Cognac Plant", small private enterprise "Alex", "Vital-Plus Ltd.", etc.;

- in forestry and wood working industry: CSC "Mukachiv Forest Integrated Plant", SC "Victoria", CSC "Dovhe Forest Integrated Plant", CSC "Mukachiv Furniture Integrated Plant", CSC "Rakhiv Cardboard Factory", CSC "Yasinia Forest Integrated Plants", CSC "Volovets Forest Integrated Plants", SC "Firm Yavirnyk", etc.

CSC "Mukachiv Forest Integrated Plant" is one of the few forestry enterprises in the region that have managed to maintain the production potential in course of transition to the market economy. That is enabled by the enterprise having an adequate raw material base and a complete technological cycle of production. The company specializes in lumbering, milling and wood working, production of veneer, furniture blanks and finished furniture sets.

SC "Victoria" is one of the largest Zakarpattya enterprises specialized in production of extremely comfortable, beautiful and high quality furniture for bedrooms, furniture sets for kitchens and anterooms decorated with artistic carving, office furniture and separate furniture items of unique style;

- in machine building and metal working: Uzhgorod State Production and Trade Enterprise "Turbogaz", Zakarpattya Helicopter Production Association, OSC "Irshava Abrasive Plant", OSC "Valve Plant", OSC "Beregove Research and Experimental Plant of Diagnostic and Garage Equipment", OSC "Uzhgorod Plant "Electrodvygun" (Electric Motor), plant "Tochprylad", OSC "Mukachiv Plant of Complete Laboratories".

Production facilities of the "Turbogaz" enterprise occupy 112,600 sq. m and include 4 autonomous main production buildings. The company manufactures spare parts for gas pipeline power equipment, equipment for gas industry, consumer goods. The company. s products are supplied to consumers in Ukraine, Russia and other CIS countries.

The Zakarpattya Helicopter Production Enterprise is the only manufacturer of seats for pilots and crew in AN, TU, IL aircraft. Aircraft and helicopter airframes are produced using advanced aviation technologies. The total area of the enterprise facilities is 59,700 sq. m.

OSC "Irshava Abrasive Plant" specializes in production of abrasive wheels and abrasive cloth. Ukraine, Russia, Belarus, Moldova, Lithuania, Latvia, and Slovakia are the main consumers.

OSC "Zakarpattya Metallurgic Plant" manufactures titanium powders, titanium tablets, titanium powder-based articles, electrodes, and consumer goods. Ukraine, Russia, Kazakhstan, Holland, Austria, and France are consumers of the products.

Expansion of foreign economic activities is an extremely important strategic direction of the oblast economic development. It favors benefiting from the geographic advantages of the region, efficient engagement of the manpower resources available, accumulation of frontier cooperation experience, and strengthening of both the local and the national economy.

Development of cooperation of the oblast enterprises and organizations with foreign partners has enabled introduction of advanced technologies and know-how and acquisition of new equipment items and technological lines.

The project will be implemented in the situation, which according to the UNIDO international classification belongs to the category with predominantly favorable conditions for development of free enterprise; its efficiency is determined as one of the most favorable in the world.