In 1991 President Yeltsin granted it a special status to the Karelian republic which gave it more autonomy this was intended to contribute to the development of Karelia as a region bordering the West. As far as practical measures is concerned, Karelia has a special fund for its own economic development and its own ministry of foreign affairs.

In October 1993 the President of the Russian Federation, Boris Yeltsin passed a decree on the reform of local and regional government. According to this decree, the former soviets were to be replaced by newly elected bodies. After a long debate and a referendum in December 1993 the new structure of government in the Republic of Karelia was defined in a new constitution. Members to the new legislative body of Karelia were elected in April 1994 for the first four year term. In these elections the electoral turnout was only 42 per cent. The centrist "Avangard" bloc, who included various interest groups and the communists, gained the highest proportion of seats.

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