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President Vladimir Putin: Good afternoon, dear colleagues,

Not only do we have a busy international agenda for our meetings here in Tomsk but also a busy domestic agenda. One of the items on our domestic agenda is the current social and economic situation in the Siberian Federal District.

As you know, the Development Strategy for Siberia was adopted in 2002. We must admit, however, that it has not brought about the substantial growth in the region that we had hoped for.

Despite its natural competitive advantages, the Siberian Federal District remains dependent on federal assistance. Federal assistance accounts for an average share of 19 percent in the Siberian Federal District regional budgets’ general expenditure, and in some regions in the district it accounts for more than 50 percent.

Gross regional product has been growing on average in Russia, but the per capita gross regional product in the Siberian Federal District has decreased for the second year in a row.

Development is very uneven from region to region within the district itself with basic socio-economic development indicators varying very widely.

The demographic issue remains high on the agenda. This is a problem for our country in general but it is particularly acute in Siberia. It is clear what is causing people to leave the region. Socio-economic factors are behind this outflow of population. Real incomes in the district come to 85 percent of the national average, but the cost of living here is higher than on average in Russia. Dozens of ministerial and regional programmes are being implemented in the district, but they often simply lead to funds being dispersed and achieve only fragmented and insignificant results. This is another general problem. We need to learn to concentrate our resources on the key development issues.

It is clear that we need to find solutions that will cardinally change the situation – innovative solutions. The development of Siberia and our country’s other eastern regions must be based on their effective integration into the Russian economy and world markets.

What we need to do is analyse very carefully the promising plans for developing sectors and regions and get rid of duplication of effort and insufficient focus on the key issues. In this respect I would like to mention the following priorities.

First, we need to make more effective use of the district’s natural resources. These resources constitute a real competitive advantage and are the key to resolving the region’s energy problems.

Until now, the region’s export sectors have developed based on cheap and accessible raw materials. But the lack of infrastructure to access new deposits means that this advantage is gradually being lost. Investment, both foreign and Russian, is starting to move to other countries and other regions. I ask you to look at this issue in more detail today.

Second, we need to make more active use of the innovative environment – and quite developed it is – that already exists in the district, and get scientific centres involved.

Many new ideas, as you know, are not developed in practice because of lack of resources. But it is precisely your task, the task of the local, regional and federal authorities, to make these areas attractive for investment. I hope that we will discuss this point in detail today.

Third, industrially developed regions of the district must work to achieve a noticeable increase in the number of processing facilities. Today they account for only 20 percent of our industry.

I remind you that at the beginning of April at the meeting in Syktyvkar we talked in detail about primary timber processing. This subject is also relevant in Siberia, which has more than 40 percent of Russia’s wood resources. But this is just one example. In reality there are many more areas for development work.

Finally, one other important issue – that of improving the transport infrastructure in Siberia. It has been noted in the past that this region is crossed by international trans-continental transport corridors. This enables Siberia to act not just as one of the links in the transport chain connecting European Russia to the Far East, but also gives it the real possibility of playing a much greater part as a bridge linking Europe – via Russia – to the Asia-Pacific Region. We must not forget that the Asia-Pacific Region is probably the fastest-growing region in the world and this creates huge opportunities for Russia to open up new markets and make use of its national advantages.

We also need to develop more actively communications along the Trans-Siberian route, increase the amount of passenger and freight traffic and not by rail but also by air and by water.

We need to modernise roads effectively and on time. Finally, we need to re-establish active use of the Northern Sea Route. We must not forget that this will do a lot to make the population more mobile, will open up new horizons for business activity in the district and ultimately help raise living standards for the people who live here.

In conclusion, I would like to note particular significance of cross-border and inter-regional cooperation in the Siberian Federal District. This is a powerful growth resource for all of Siberia. I ask you to speed up work on modernising the border infrastructure and on improving the legal foundation for inter-regional cooperation.

These are the points I wanted to make. Now let us begin work.

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