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President of Russia Dmitry Medvedev: Mr Nazarbayev, friends,

I would like to once again welcome everyone to this Forum and say that holding it regularly has become a kind of good tradition. This is the sixth year in a row that we are holding this Forum, and it brings together regional leaders, business people, scientists, and public figures. The purpose of the Forum is discussing a widest range of issues regarding cooperation between our nations.

As we agreed at the previous Forum in Aktyubinsk last September, this time we invited delegations not only from the bordering regions, but also from regions that actively cooperate with one another. Thus, from now on this is not a cross-border cooperation forum, but rather, an interregional cooperation forum. This is good, as it means we have designed a more effective and more expanded cooperation mechanism.

I would like to support the opinion voiced by Mr Nazarbayev at our bilateral meeting, that Forum activities are in no way intended for merely ceremonial or formal purposes, they are absolutely instrumental. These activities are not a formality; rather, they are aimed to reinforce our interregional ties and our cross-border contacts which facilitate resolving most practical issues, as well as give momentum to attracting new investments and increasing innovation. Although for the moment there are certain difficulties in innovative development, I hope our cooperation will promote implementation of new technologies.

In this regard, it is indicative that about 200 cooperation agreements have been made among our partner regions, with nearly 40 percent of our bilateral commerce originating from cross-border trade and over 70 percent from interregional trade. Thus, interregional trade generates over two thirds of our overall turnover. Our goal is to continue strengthening these trends, because they bring our nations together, helping develop our regions, creating new jobs, and expanding regional revenues, which is probably most important.

It is quite natural that this Forum is taking place in Orenburg. Kazakhstan is Orenburg’s number one foreign partner, accounting for over one third of the Orenburg Region’s trade turnover — that share reaching about 2 billion dollars. There are over 30 joint Russian-Kazakhstani companies operating in Orenburg Region. Certainly, the significance of direct investments is very clear here.

This Forum should pay particular attention to energy cooperation. Over the last several years, we have been implementing joint projects in all areas. We have just mentioned prospecting, mining, refining and transporting hydrocarbons and constructing new facilities. Good examples of such cooperation are establishing a joint venture involving Orenburg Natural Gas Processing Plant, construction of a third unit at Ekibastuz Power Station and close contacts within the Caspian Pipeline Consortium. We have been actively discussing other prospects such as civilian nuclear energy projects and joint companies.

Now, after the accident at the Sayano-Shushenskaya Hydroelectric Station, the issues of integrating energy systems of Siberia and European Russia through Kazakhstan’s energy supply network and increasing capacities of supply lines from the Urals to Siberia via Kazakhstan are of particular relevance. The wellbeing of the huge area of Siberia entirely depends on successful accomplishment of the above targets. The subject was examined at the bilateral meeting between Mr Nazarbayev and myself.

The energy sector’s general development is a significant subject today. Until recently, such development was powered by assumption of a perpetual energy consumption growth. In the current circumstances we have to focus on improving our economy’s energy efficiency, developing alternative energy sources, and reducing environmental damage. All of this is important both within the general context of our development which is impossible without improved energy efficiency, and in the context of minimising the global financial crisis impact.

We are ready to engage in designing a new architecture of energy cooperation. In 2006, Russia submitted its respective suggestions. This year, we drafted a Conceptual Approach to developing a new legal framework for international cooperation in energy. In particular, we proposed to sign a legally binding document that would regulate all aspects of global interactions in this field. We would like for contacts of this kind to continue between Russia and Kazakhstan as well.

Energy sector is of major importance for all the regions present here today. That is why energy efficiency is very practical. This issue affects every region and every city, and is therefore most relevant. I think we should address it, especially since technologically Russia and Kazakhstan are absolutely identical. It has to be admitted with regret though, that our technologies are quite obsolete and require modernisation which may well be accomplished through joint projects. We are close technologically and climatically and therefore are in similar conditions allowing us to join our efforts.

We have a common technological infrastructure, common oil and gas pipelines, railways, motorways, waterways, and electricity transmission lines. Thus, I believe that improved energy efficiency and saving will allow resolving, among other matters, the most urgent problems faced by our nations.

Energy is unquestionably a major driving engine for development. Still, the spectrum of our cooperation is not limited to energy, which is very good in itself. Last year, Mr Nazarbayev and I approved a plan for joint actions by Russia and Kazakhstan for 2009–2010. Today, we have stated the fact this plan is being implemented. It consists of high-priority goals in politics, trade, economics, space exploration, transportation, communication, emergencies prevention, scientific research, and the humanitarian projects. We are basically following this plan, although we will need to accelerate our work in certain areas, which is a matter that we will talk about separately.

I am certain that this Forum will have a positive influence on our cooperation, even during this difficult period of crisis. And in spite of certain problems, including trade decline, I am hopeful that today’s discussions and presentations, as well as the agreements we will reach, will contribute to development in all areas of relations between our nations. I would like to wish all of us a successful day of work, and I would like to wish the regions continued success, for the benefit of the peoples of Russia and Kazakhstan.

Thank you.

***

Dmitry Medvedev: I will say a few words in conclusion. First, I fully support what was said by the President of Kazakhstan in terms of directives. Russian instructions in this regard will lay out positions that show we are in complete agreement. I would like to just point out some things.

In relation to increase in volumes transported by the Caspian Pipeline Consortium, I support the idea of speeding up work in this area on the package of documents and the relevant resolutions, which must be a part of the framework of the decisions that we have already made. It is also necessary for the board of directors to approve these decisions. But I hope that all this will be done soon. In any case, before the end of the year we will be working in a brand new way.

Another issue that was raised during my talks with the President of Kazakhstan was the subject of a new offshore field that will be developed by Lukoil and Gazprom, I mean the Khvalynskoye and Tsentralnoye fields. We need to finalise departmental coordination in this area, and for the Tsentralnoye field determine the subsurface resources management rights. I hope that the relevant agencies in Russia and Kazakhstan can deal with these issues in the near future.

Cooperation in the nuclear sphere: our colleagues have talked about this today. We must continue our work, because the subject is very important, although there are some complicated issues that are as yet unresolved. We must finally set amounts of contributions to share capital. I think they may well be equal. As discussed, we can also progress with individual projects by setting up joint ventures. So I think we should give the appropriate instructions to the various agencies.

Another subject that was touched on – and this is topical – was the tragic accident that occurred at the Sayano-Shushenskaya Hydroelectric Station. What is particularly important now is to coordinate the operation of our energy systems. I think it’s a good idea that we make agreements outlining how to harmonise our positions on a compromise basis, bearing in mind that we will render services to each other which we will not pay for. I am referring to the transit services and services related to peak loads downplay. It would of course be desirable to straighten out this situation as quickly as possible, given the current circumstances. I think that we could completely resolve these issues in a month, if Mr Nazarbayev doesn’t raise any objections.

We discussed the issue of Kazakhstan’s Ekibastuz coal mines. This is indeed very important, and we need to decide on our further ways of operation, including operation of the joint ventures that we have. I think that if we take a reasonable, compromise approach, then this problem can be sorted out and work can proceed.

Migration issues: we are preparing a series of documents, I mean the readmission agreement and the agreement on the status of migration services representative office. On the one hand, I think that we need to complete work on this issue. On the other hand, I absolutely support what Mr Nazarbayev said about the duration of stay. The situation is strange, even humiliating. Anyone who wants to get into our country to commit crimes can just walk in, those involved in drug trafficking or who are simply up to no good. Meanwhile law-abiding citizens have to prove that they are what they say. For these reasons we need to get this problem resolved. Here I fully support what has been said, and will give the appropriate instructions to our agencies.

Regarding the plan to connect the Caspian and Azov-Black Sea basins. I hope that early next year, in February or March, Institute Hydroproject, the consultant for this project, will submit its report and that this will help us figure out our final position. We need to make a final decision on this project, but of course we have to bear in mind our countries’ mutual interests, and the decision has to be feasible in terms of technology, have a sound financial plan and, most importantly, be beneficial to the peoples of Russia and Kazakhstan.

Another subject that we touched on related to a transport corridor from Western Europe to China. Our colleagues in Kazakhstan have already signed a lot of useful agreements, including about syndicated loans. I believe that the Russian side should also think about raising funds from various sources, starting with our joint bank and moving on to international banking institutions, foreign banking institutions. We need to resolve a number of organisational issues in order to progress in this area, and assess all kinds of risks that of course are associated with it. But in general it is a very, very positive idea. Yesterday we discussed it with the Governor of the Orenburg Region. I believe that we should engage with the project and I will issue the relevant instructions.

Concerning the protection and rehabilitation of rivers, I refer to the Black Irtysh, Tobol and Ural rivers. This situation is really difficult. We have to do something about it, bearing in mind our shared responsibilities to future generations. This morning I took a walk along the banks of the Ural. It was a sorry sight, a dried up river, pathetic. If we do not start work on this problem in earnest, the channel and the whole basin will continue to deteriorate. Therefore, we should think about establishing joint programmes. But we certainly need to involve our neighbours in such a project, since they are as responsible as we are for the environment. I am referring to our partners from the People’s Republic of China, which the President of Kazakhstan mentioned.

And there is one more thing that I consider very important. Although it is last on the list it is certainly not least in importance. This is our cooperation in high technology. A while ago we agreed to give this some momentum. I fully support what Mr Nazarbayev said about energy saving, with respect to cooperation in the field of IT, nanotechnology and biotechnology. Here it is necessary that our working groups continue to stay in touch. We have made a number of important decisions in the EurAsEC [Eurasian Economic Community]. I believe that they too must be implemented. If in the end our partners in the EurAsEC don’t want to, we can bilaterally establish a centre for high technology and let the others join later. But it's obvious that this is currently something on everyone's mind. Otherwise, we will not be able to implement the decisions on most needed modernisation of our economies. The crisis has clearly demonstrated that neither Russia nor Kazakhstan can ensure their continued development through exploitation of their natural resources alone. Natural resources are important for our export potential, but we should not limit ourselves to raw materials only. We must create another sort of economic structure, we have to take diversification seriously.
That's what I wanted to say in relation to the proposals made by various speakers, by our ministers and by various governors.

I would like to cordially thank the President of Kazakhstan and our Kazakhstani colleagues for participating in this forum. The forum really is designed to be practical. The presentation of every participant focussed on practical issues rather than general discussions on the subject of how we should be friends and what we need to do to strengthen this friendship. This is a practical forum and that is what makes it important. I hope that it will remain so.