Prospects for modernization of regional economies in remote regions of Far North‐East Russia

As Russia transitioned to market relations with its Far North-East11 The northernmost territories of East Russia include administrative entities of Magadan Oblast and Chukotka Autonomous Okrug, Koryakia and northern Kamchatka up to 60° north latitude. region, its industrial production declined sharply, the share of federal subsidies reached 50–70% of regional budget revenues, and the population declined by more than 60% since 1990. The results of our study show that, along with changes in external economic conditions, the reasons for this transformation are the various peculiarities of the northern and Arctic regional economy, including mono-specialization on gold mining, depletion of basic assets, increased costs, lack of infrastructure, and reduction in standard of living. We propose to change the trajectory of regional development through modernization of the economy. To this end, directions and institutional conditions of diversification of extracted resources and measures to improve the standard of living of the population are identified. Efficiency of the implementation of the new investment projects is also calculated.