Regions and territories: Kaliningrad

The Russian exclave of Kaliningrad on the Baltic Sea is sandwiched between Poland to the south and Lithuania to the north and east.

Annexed from Germany in 1945, the territory was a closed military zone throughout the Soviet period.

More recently Russia has threatened to station missiles there if the United States goes ahead with its plan to deploy an anti-missile shield in neighbouring Poland and elsewhere in eastern Europe.

OVERVIEW

Koenigsberg, as the city of Kaliningrad was once known, was founded by Teutonic knights in the 13th century. It became one of the cities of the Hanseatic League and was once the capital of Prussia. The philosopher Immanuel Kant spent all his life in the city and died there in 1804.

The region was part of Germany until annexation by the USSR following World War II when it saw bitter fighting and suffered rampant destruction. The German population was expelled or fled after the war ended.

Kaliningrad has strategic importance for Moscow

During the Soviet period, Kaliningrad Region, administratively part of the Russian Federation, was separated from the rest of Russia, more than 300km to the east, by the then Soviet republics of Lithuania, Latvia and Belarus.

Since Lithuania joined the EU it has been impossible to travel between the exclave and the rest of Russia over land without crossing the territory of at least one EU state. There has been friction, particularly with Lithuania, over transit regulations. President Putin described as a matter of Russian national security the inauguration of a new sea route linking the region with Ust-Luga, near St Petersburg, in 2006.

Kaliningrad was one of the most militarised and closed parts of the Soviet Union. Up to half a million servicemen were stationed there. The military were the region's chief economic mainstay in the Soviet years. When the USSR ceased to be, that military presence was decimated along with the economic benefits it provided.

Kaliningrad is still of great strategic importance to Moscow. It houses the Russian Baltic Fleet at the port of Baltiysk and is the country's only European ice-free port.

Uneven development

The economy has prospered and tax breaks lure investors

During the Soviet period, agriculture was a key industry. The market for Kaliningrad's produce was largely dismantled with the collapse of the USSR. The economy nosedived in the early 1990s. Russia provided very little real investment. Unemployment soared and poverty became very widespread, particularly in rural areas. Organised crime and drugs became increasingly problematic. HIV infection rates rose.

In a bid to tackle the region's problems, in 1996 the Russian authorities granted it special economic status and tax advantages intended to attract investors. Although corruption was an early deterrent, the region's economy benefited substantially.

Kaliningrad underwent an unprecedented boom, and in 2007 a new $45m airport terminal was opened.

The European Commission provides funds for business projects under its special programme for Kaliningrad. The region has begun to see increasing trade with the countries of the EU as well as increasing economic growth and rising industrial output.

Russia keeps a wary eye on developments. Moscow is particularly sensitive over calls from within the region for a referendum on whether to seek greater autonomy within Russia with a view to strengthening ties with the European Union.

KALININGRAD FACTS

Territory: Kaliningrad Status: Semi-autonomous region of Russia
• Population: 1 million
• Capital: Kaliningrad
• Area: 15,100 sq km (5,800 sq miles)
• Main language: Russian
• Ethnic groups: Russians
• Main religion: Christianity
• Main industries: Manufacturing, shipping, fishing, amber

LEADERS

Governor: Georgiy Boos

Georgiy Boos, a former Russian tax minister

A member of the United Russia party, Georgiy Boos became Kaliningrad Region governor in autumn 2005 after the local parliament approved his nomination by Vladimir Putin.

He was previously deputy speaker of the lower house of the Russian parliament. He is also a former director of the Russian Federal Tax Service and tax minister.

He has said that he aims to boost investment and has spoken of his desire to make the region a "European market centre".

He was born in Moscow in 1963 and trained as an engineer.