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Meeting on state support for investment projects and priority development areas in the Far East

September 1, 2014

While on a trip to Yakutia, Vladimir Putin held a meeting on state support for priority investment projects and priority development areas in the Far East.

President of Russia Vladimir Putin: Good afternoon, colleagues.

All of you have children and grandchildren and so I congratulate everyone once more on Knowledge Day, the start of the new academic year.

Today, we are meeting in this format to discuss the socioeconomic development of the Far East. This is an issue we have returned to repeatedly over the past years and not without reason as this has great importance for our work over the coming period. Much in Russia’s development will depend on how we manage and develop the Far East and eastern Siberia.

Today, we will look at implementation of the development plans for the Far East and eastern Siberia and examine the issues that need our particular attention.

Let me say again that developing the Far East regions is one of our national priorities and the key to addressing many economic, social, demographic and even geopolitical challenges. Our progress depends directly on how effectively we can implement our plans and on our ability to create a good environment for people to live and work, for investment and for continuing promising projects and expanding international cooperation.

Undoubtedly, we need to take into consideration the specific international situation. I am referring to the limitations that were unfortunately imposed both by some of our partners and us in response. Various actions on our part could prove to be an effective response. We do not want to resort to them, and I hope that common sense will prevail and we will continue in a regular mode, so that neither our partners nor we would bear any losses from these mutual stings.

I would like to note that there have been certain positive developments in the Far Eastern regions over the recent period (we will clearly rely here primarily on our partners in the Asia-Pacific region). A positive trend in the Far Eastern Federal District’s economy continued in the first six months of this year, compared to the same period in 2013. Industrial production went up by almost 10 percent – 9.2 percent to be exact. This is the best figure among all federal districts.

We gave special attention to the clean-up operations following last year’s floods. The concerted efforts of the federal and regional authorities made it possible to help the victims in a timely fashion. We will get back to this topic with some colleagues later on during this trip. However, overall, according to Mr Trutnev [Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District], almost 90 percent of the work has been done. Some work remains unfinished in a number of areas, however we will not deal with this in any detail today – we have other things to consider.

Our main task now is to achieve cardinal, visible results in resolving systemic faults in the Far East in the next few years. These are things like the underdevelopment of territories, disbalances in infrastructure, transportation and personnel training. People are dissatisfied with the condition and functioning of social services.

The range of economic and social problems also affects our demographic situation. Incidentally, it results in a curious situation, an unusual one compared to other regions in Russia: we are seeing natural population growth in the Far East, and this is a very good sign. However, because of the migration flow, the number of residents in the region is still declining, which, of course, is alarming. In other words, the demographic indicators for birth rates and mortality are generally improving and birth rates are good; however, there is a continued outflow from the region. People are going to places where it’s easier to find interesting work and decent salaries, get modern education and quality medical care.

We have already said that most problems in the Far East require an integrated approach and that all ministries and departments must work to resolve them. In addition, much depends on the directions in which our joint efforts are focused.

I want to stress this again: our main goal is to ensure an uplift and advanced development in the Far East, to turn it into a prosperous region that is attractive for living and doing business, to create growth points that will serve as the drivers for future development. In this regard, I want to draw your attention to several issues that I see as priorities.

The first is improving access to transportation in the region, reducing infrastructure limitations in both the domestic market and for developing exports. It is imperative to modernise the Baikal Amur and Trans-Siberian railways. These long-distance railways have strategic significance for the Far East. Without a reliable transport network, it will be hard to implement large-scale investment projects in the region itself and generally unlock the potential of the territories and increase the region’s economic appeal. Moreover, we understand that these are purely economic projects and their efficacy is not in question. Their impact will be evident immediately upon implementation. We began rebuilding the major railways this summer. And today, it would be good to hear from colleagues who are working on this: what has been done, what problems have occurred, and so on.

Second is the creation of conditions for attracting additional investments to the region – both Russian and foreign. And here, we are talking first and foremost about investments in traditional and new sectors, developing deposits and building infrastructure, construction, developing transport, agriculture and, of course, the fuel and energy sector, raw material processing and creating modern manufacturing plants, including export-oriented ones. I know that the Ministry for the Development of the Far East is looking into multiple priority investment projects; and today, I would like to hear about them as well, what state they are currently in.

As you recall, two years ago, we created the Far East and Baikal Region Development Fund, managed by Vnesheconombank (the Bank for Development and Foreign Economic Affairs). However, it basically has not begun working: the funding – somewhere between 15 and 20 billion rubles – is still sitting in the deposits. Meanwhile, we need this kind of financial instrument.

Furthermore, in order to increase the investment appeal of Far East territories, we need to more actively apply best practices from APR nations. We need to reduce the volume and timeframes foradministrative procedures as much as possible when constructing manufacturing facilities, simplify access to infrastructure – electric, gas supply, and roads, and build access to other utilities. There are colleagues here today who deal with investments – who already work or are ready to work in the Far East. Naturally, we would very much like to hear from you.

And finally, third, is the formation of priority development areas, where conditions for investing and doing business must be competitive compared to key development centres in the Asia Pacific Region, providing an inflow of new capital investments into manufacturing plants that are oriented toward the dynamic development of Asian markets. I know that the draft law necessary for creating priority development areas is nearly ready. It should be submitted to the State Duma during its autumn session.

At the same time, let me remind you that the Address to the Federal Assembly set July 1 of this year as the deadline for approving the list of priority development areas in the Far East and their criteria. I would also like our colleagues to talk about how this work is going. This process needs to be completed, and this should be done quickly; otherwise, the new law will hang in the air. First, in such case, it will not be passed in the autumn session, which is imperative, and then it will be on hold if we do not have an understanding of what these territories are, where they are located and how we need to deal with them.

Let’s begin our discussion.


September 1, 2014