Sakhalin Region has substantial reserves of off-shore oil and gas. The oil and gas industry is developing rapidly, involving participation by foreign companies, and is expected to stimulate economic activity both in Sakhalin and the Russian Far East. Sakhalin Region has an active forestry sector and produces whole logs, pressboard, paper, and pulp. An airport is located near Yuzhno-Sakhalinsk with direct flights between that city and Hokkaido, Japan as well as regular charter flights to Seoul, Korea. In the first half of the century, Japanese occupying forces constructed a rail system in the southern half of the island.
Rail extends into the north as well, but the railroad gauges differ.
Korsakov, on the southern tip of the island, is open to international shipping. On Sakhalin and the Kuriles there are more than 50 mineral springs suitable for drinking and bathing, such as carbonate, iron, silicon, hydrogen sulfide, iodine and iodobromite. Sakhalin produces building materials, including cement, bricks, and concrete. Although overall industrial production declined significantly between 1991 and 1994, slow steady growth is observed in some sectors related to the beginning of off-shore development. The city now is a center for light industry and food-processing.