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President of Russia Vladimir Putin: Mr Prime Minister, ladies and gentlemen,

I am glad to welcome the leading business people of Russia and Japan. I met many of you at the second Eastern Economic Forum in Vladivostok, and we also regularly meet at the annual St Petersburg International Economic Forum.

This direct contact with entrepreneurs is always useful and very interesting, providing first-hand information about the issues businesses are facing and what specific action is needed to improve the business climate.

First of all, let me emphasise that Japan is an important partner for Russia in the Asia-Pacific region. It is our sincere aspiration to strengthen and deepen Russian-Japanese ties, and of course to expand mutually-beneficial economic contact between our countries.

It is for this reason that trade and investment were among the key topics during the two days of intensive talks with Mr Abe. Of course, we also discussed the contentious issues inherited from the past. I am referring to the signing of a peace treaty.

At the same time, we regretted to note that trade between our countries has been declining recently. We agreed that we can put bilateral trade back on the path of sustainable growth. For that, we need our governments and business communities to step up their efforts.

We need to undertake new initiatives and projects and change the usual frameworks for cooperation by moving away from preferential deliveries of Russian oil and gas in exchange for Japanese equipment and cars. We need to diversify our trade and economic ties.

Building up cooperation in investment is also important. Over 50 new agreements and business contracts will be signed following today’s meeting.

Joint business projects are being implemented in various areas, including energy engineering, the automotive, the chemical, and the high-tech industries, to name a few. We are natural partners, as I mentioned earlier. We generally do not have to deal with the issues of competition, we can only create competitive advantages for each other, which are there for anyone to see.

I would like to note with satisfaction that the governments of Russia and Japan are committed to providing as much support to bilateral entrepreneurial initiatives as they can.

Agreeing on an ambitious plan for cooperation with a consolidated list of 90 priority projects in eight key areas, which were suggested by the Prime Minister during his visit to Russia in Sochi, was a positive step forward in this direction.

This includes energy industry, the manufacturing industry, agriculture, healthcare, infrastructure, innovation, small business, and exchanges in culture and education. They will be funded, among other sources, by the Russian-Japanese investment fund with a capital of $1 billion, which was created by the Russian Direct Investment Fund and the Japan Bank for International Cooperation.

Russia welcomes the participation of Japanese businesspeople in investment programmes that focus on the Russian Far East with its 13 priority development areas and the free port of Vladivostok. Foreign investors are granted a number of significant preferences, including special terms for building new production facilities, preferential tax treatment, and assistance in accessing the infrastructure.

This favourable business climate has been created in other Russian regions as well. The Russian regions are, in fact, competing with each other for investors, including foreign investors. The administrative and tax burden has been significantly reduced in Russia, supervisory holidays were introduced in 2016, and a moratorium on tax increases is in place.

We hope that Japanese businesses will make full use of the opportunities to cooperate with the Eurasian Economic Union. Russia is a member of this integration association, which is guided by the universal WTO rules and covers a vast market of 182 million consumers. By the way, experts will soon meet to discuss the creation of a free-trade area between the EAEU and Japan.

Russia is proactive in enhancing its macroeconomic stability. The Russian economy has proven to be resilient and capable of withstanding an unfavourable external environment. The Government enacted an anti-crisis programme to support the key industrial and financial sectors. Unemployment remained low, and debt stayed at reasonable levels.

Initiatives by the Bank of Russia to introduce a floating exchange rate helped the economy better adapt and preserve gold and foreign currency reserves with a trade surplus exceeding $71 billion, which is quite a positive result.

The Government is also consistent in its efforts to promote exports. The Russian Export Centre was established to promote competitive products on foreign markets.

Taken together, all these measures boosted Russia in the World Bank’s ease of doing business ranking to 40^th place, up from 120^th place in 2012.

Ladies and gentlemen, to conclude, I would like to wish every success to all forum participants. I hope that businesspeople in both Russia and Japan will continue to contribute positively to promoting multi-dimensional and mutually beneficial cooperation between our countries, and will create the conditions needed to normalise the relations between our countries to the fullest possible extent.

Thank you for your attention.