The operational environment in the villages in Russian Karelia had deteriorated once Russia became a market economy and a democracy. Companies had been closed down and jobs were lost in the villages, which had resulted in social problems and isolation. The vitality of the villages was in danger. The regional and village administrative bodies did not have the expertise to develop entrepreneurship in the villages. They also had not taken the local residents into consideration in decision-making nor had they acknowledged the advantages of doing so. The activity groups of the villages were weak and still inexperienced. The advisory organisations did not have the practical expertise or methods either. The problem had even been acknowledged on the federal level, and President Putin had already begun a national project aiming at the promotion of small-scale entrepreneurship in rural areas. The general goal of the project was to support the economic development of the villages by activating their business activities by focusing on establishing cooperatives in the target area. The well being in the villages was to be improved through economic development in eleven target areas in the Republic of Karelia. There was also a wish to strengthen the cooperation of different groups participating in the project and provide new operational methods for handling, for example, participative planning, decision-making, and implementation (double-teamwork method). The cooperation was expected to continue after the project, as cooperatives were to be established already during it, which in turn would create new jobs. The quality standard of advisory services for companies was also expected to improve, which would generate better results. The participation in activity groups in villages would be increased along with self-esteem, motivation, and the commitment to development work in the villages. Therefore, the project was expected to realise advantages already during its implementation period. Achievements: The activities were off to a good start during the first six-month period of the project. The project had produced, for example, PROCOOP brochures in Finnish, English, and Russian. The specialist service providers had been selected through a competitive bidding process. The start-up meetings had also been held for the representatives in the target areas and work had been started in workshops. The actors in the Republic of Karelia also made their first learning trip to Finland. The Steering Group of the project met at Sortavala and the project organised a Karelia Agro Expo 2008 seminar at the agricultural fair in Petrozavodsk.