Vladimir Putin took part in the plenary session of the Eastern Economic Forum. This year, representatives of 35 countries applied to attend the forum. In total, delegations from 56 countries are taking part.
September 3, 2016
The Eastern Economic Forum (EEF) was established by a Presidential Executive Order in 2015 to promote the accelerated economic development of the Russian Far East and the expansion of international cooperation in the Asia-Pacific region.
The EEF focuses on enhancing the investment appeal of the Russian Far East and offers broad opportunities for cooperation between Russian and foreign business partners.
* * *
President of Russia Vladimir Putin: Ms Park Geun-hye, Mr Shinzo Abe, friends, ladies and gentlemen. Welcome to Vladivostok, to the second Eastern Economic Forum, which brings together over 3,000 participants from 35 countries this year.
For us this means a growing interest to Russia in the political and business circles of the Asia-Pacific and other regions; an interest in our Far Eastern agenda in general, our steps and initiatives that open up new possibilities for cooperation and the implementation of lucrative projects in the Far East.
We have set ourselves a big goal, ambitious in every sense, a huge-scale task: to make the Far East one of the centres of Russia’s social and economic development – a powerful, dynamic and advanced region. As I said, this is one of our most important national priorities.
We can already see real change here – only the first, but nevertheless significant and encouraging results. For example, industrial production in the Far East grows at a more than 5 percent rate; growth has been modest across Russia at 0.3 per cent, but in the Far East we had 5 percent.
Over the past year, the region has additionally attracted more than 1 trillion rubles of investments – about $15 billion, and more than 300 investment projects were launched here. This means that the business support policies we proposed enjoy demand.
Finally, there is the main consolidated and most valuable indicator of ongoing changes in the Far East – the emerging positive demographics. For the first time in a quarter century, Khabarovsk Territory, Sakhalin, Yakutia and Chukotka have seen an increase in population. For the third year in a row, the birth rate in the Far Eastern Federal District exceeds the death rate, and fewer people are leaving the Far East.
There is population outflow, regrettably. However, it went down 3.5-fold for the Far East Federal District as a whole over the first half of this year. It is true that the demographic results are still modest, but they do demonstrate an emerging trend and we must now build on this trend and make it irreversible.
Over the next three years, we must achieve a sustained growth of population in the Far East. I remind the Government and all ministries and agencies that our state programmes must also focus on this task, especially economic, social and demographic programmes, our housing policy, healthcare and education.
Ladies and gentlemen, the strategy for developing the Far East is based on openness to cooperation on a broad international level, all the more so as the Far East is literally at the epicentre of dynamic integration processes.
We are working consistently to develop the Eurasian Economic Union and expand its international ties. In October this year, Moscow will host the second round of talks on a trade and economic cooperation agreement between the EAEU and the People’s Republic of China. This will lay the foundations for a comprehensive Eurasian partnership in the 5 plus 1 format.
The trade and economic agenda within the Shanghai Cooperation Organisation is also becoming more substantial and promising all the time. The upcoming accession of India and Pakistan as full members of the organisation, and, I hope, Iran in the future as well, will add to these opportunities.
In short, several integration tracks are taking shape in the Eurasian region today. They flexibly complement each other and enable us to carry out projects on a mutually advantageous basis.
We believe that this integration network and the system of multilateral and bilateral agreements, including those on free trade zones, could become the foundation for developing a big Eurasian partnership. We discussed this very idea at the St Petersburg International Economic Forum this summer.
Now, together with our EAEU colleagues, we are drafting consolidated, practical proposals on developing broad Eurasian integration. These proposals concern such matters as regulation, unification of administrative procedures, removing trade barriers, supporting trade and investment, technological and production cooperation, intellectual property protection, and infrastructure construction.
We believe that effective integration is possible only on the basis of equal rights of all participants and respect and consideration for each other’s interests without any political or economic pressure or attempts to impose unilateral decisions. As we understand it, integration is about predictable, long-term rules and openness to cooperation with other countries both in the East and the West. We are ready to study counterproposals attentively and look for the best possible solutions with anyone who is interested in such cooperation.
We realise that these are big, ambitious, complex and long-term tasks. The project I refer to can be carried out only within the framework of a flexible multi-level model using innovative solutions and working in the interests of economic growth and greater prosperity for people throughout this vast region.
The driving force behind this integration will be business energy and initiative and its obvious and ever-growing demand to remove barriers and create big markets with a business-friendly environment.
This integration must also be based on serious joint projects, which will sew the seams of our economic space and create new development resources. I would like to mention a number of these projects and opportunities now.
First is a reliable energy infrastructure. We support the initiative of Russian, Japanese, South Korean and Chinese companies to create a super energy ring linking our countries as one. We propose setting up an intergovernmental working group in order to move ahead more rapidly and dynamically on this project. Let me note that Russia is ready to offer its Asia-Pacific region partners competitive energy rates and long-term fixed price contracts.
Second is transport infrastructure and the formation of new, competitive trans-Eurasian and regional transport routes. Examples here are the Primorye 1 and Primorye 2 transport corridors, which lay the shortest route for moving goods from China’s northeast provinces to the ports in southern Primorye Territory, and the construction of the Russian section of the Europe-Western China route. I will be discussing the development of this and other transport infrastructure routes with my colleagues at an upcoming State Council Presidium meeting very soon.
Third. We are living in an age of information and rapid development of digital, telecom and Internet technologies. We have to seize the opportunities they offer to promote cooperation, so that our countries’ governments and companies could do business and interact in a convenient electronic form.
Therefore, we suggest creating a common digital economic space. We are talking about the creation of legal and technological conditions for electronic interaction. I would also like to ask the Russian Government to submit a detailed plan of this work.
In fact, some good things have already been done here. The Eurasian Economic Commission is supervising the development of an integrated information system – a system of cooperation in transport, trade, customs, veterinary, tax and other procedures.
Fourth. We need human resources and technological groundwork for the future. In this regard, we invite partners to join the project to build an international science, education and technology cluster on Russky Island.
We plan to put together a support system for start-ups here, including venture capital financing, to organise a network of laboratories for collaborative research, and to create a modern business infrastructure, including business and exhibition centres.
We would like professors and students from other countries to come to Russia, as well as research, creative and project teams from other countries. As far as I know, 2,500 international students are already studying at the Far Eastern Federal University, and dozens of faculty members from other countries teach here.
A few hours ago, my colleagues and I attended the opening ceremony of the Far Eastern Oceanarium. This is not just a commercial centre, but a science, education and information centre, and we hope it will also serve as a good base for the study of marine biology at the level of leading scientists in the region and around the world. And I ask the Government to speed up the development of a comprehensive development programme for Russky Island.
Ladies and gentlemen, the projects I have just mentioned reflect the full diversity of opportunities for joint work in the Far East. We are creating the best possible conditions to make this region a centre of investment appeal and a platform for cooperation.
Starting October 1, a one-step system will start operating in the Vladivostok free port for all border-crossing procedures. The checkpoints and electronic declaration of goods systems will be working round the clock.
I met yesterday with business representatives. I know that not everything here is working exactly as we want it, but we took in your comments and will make the necessary improvements to our work.
The Government is already at work on plans to simplify visa procedures for foreign citizens arriving at the free port. The plan is for people to complete all the formalities via the Russian Foreign Ministry’s internet service and obtain an electronic visa.
In addition to Vladivostok, we recently decided to extend the free port regime to another four Far East ports – Vanino in Khabarovsk Territory, Korsakov on Sakhalin, Petropavlovsk-Kamchatsky in Kamchatka Territory, and Pevek in Chukotka. We will add more if necessary.
At the meeting with business representatives I just mentioned, we heard that this is not enough and that some business representatives have not received the breaks they were expecting. We will certainly examine further all of these issues.
Yesterday we also discussed work in the priority development areas and raised a number of issues concerning procedures for obtaining profit tax breaks.
I do agree that we should take into account each project’s specific nature, scale, and implementation timetable. I think that the tax holidays should be extended for big long-term projects. I discussed this matter yesterday with the Finance Minister, and the Finance Ministry agrees in general to this idea. I ask them to draft the relevant amendments to the law as soon as possible.
We are sure that there will be many big and significant projects. The Far East offers an excellent location and natural resources with direct access to the most promising global markets. This offers inexhaustible opportunities for business initiative.
At the same time, we should give companies the opportunity to attract affordable financial resources. This is the task that the Far East Development Fund is currently addressing. The Fund issues loans at five percent annual interest in rubles. The demand is high, with businesses literally queuing up. To avoid holding back the launch of new projects and provide them with sources of financing, we have to constantly focus on the Fund’s capitalisation support.
Of course, we are facing the overall task of developing an extensive financial and investment infrastructure in the Far East. Such projects are already underway. At this forum, you can see the presentation of a new investment system, Voskhod. It opens direct access to Far Eastern companies’ shares and bonds for Russian and foreign investors.
An agreement has been signed on the forum sidelines between Russia’s Far East Agency for Investment Promotion and Export Support and one of the world’s largest banks, the Japan Bank for International Cooperation. A joint platform will be created to attract Japanese investors to the priority development areas and the Vladivostok Free Port.
The Russian-Chinese Fund for Agro-Industrial Development, which has started its work this year, is a good example of mutually beneficial investment cooperation. The fund supports export-oriented projects in agriculture and the food industry.
I am confident that the Russian Far East, with its land and marine resources, can become one of the major suppliers of quality and eco-friendly foods in the Asia-Pacific Region, an area that is home to almost 60 percent of the world’s population.
To our partners from Japan, the Republic of Korea and other countries, I propose establishing similar joint investment platforms. They could focus on financing projects not only in agriculture but also in industry, high technologies and natural recourses development – in short, in the sectors that have a vast potential.
At the same time, we must combine access to our natural resources with investment in their processing. I ask the Government to develop and implement such a mechanism for the Russian Far East. The approach should be simple: if a company wants to receive a priority right to the use of raw materials, aquaculture or forest plots, or to develop mineral deposits, it has to put effort into building plants, contribute technology, and create new jobs and higher added value.
Friends, the future of the Russian Far East is inseparable from the future of Russia. This is what our ancestors believed, and they explored Far Eastern lands and brought glory to the Fatherland. We have begun a new historic period of developing the eastern territories, and it is planned for decades ahead.
The tasks to be resolved in the Far East are unprecedented in scale and importance. We are fully aware of our tremendous responsibility to our citizens and future generations. I am absolutely certain that we will carry out the plans I have outlined here. I believe in the Far East’s success.
Thank you for your attention. Thank you.
President of the Republic of Korea Park Geun-hye (retranslated): President of the Russian Federation Vladimir Putin, Prime Minister of Japan Shinzo Abe, members of government delegations and business communities, allow me to begin by congratulating you all on the opening of the second Eastern Economic Forum in Vladivostok, the centre of the Russian Far East.
The Far East is a treasure trove of diverse energy resources, including oil and natural gas. Asia and Europe meet here and the region is the starting point for transport routes and freight arteries across the Eurasian continent. It would be no exaggeration to call this region Russia’s new heart.
The great writer Dostoyevsky said that Asia would play a big part in Russia’s future and this showed his foresight with regard to the Far East. Currently, North Korea leaves us with a break in the chain that makes it hard to realise in full the Far East’s tremendous potential, but in the future, when these links are joined together once more, the Far East will become a bridge of peace and prosperity linking Eurasia and the Asia-Pacific region.
I hope that the Eastern Economic Forum will become a good platform for comprehensive dialogue and for concentrating knowledge on the task of making this idea reality. The leaders of three countries, the Republic of Korea, Russia, and Japan, are taking part in this forum, as are high-level officials from other countries, and this offers good opportunities for strengthening political will and cooperation in this region.
Ladies and gentlemen, we see today a slowdown in global economic growth and a trend towards protectionism and new isolation, and this creates added uncertainty. At the same time, two opposing forces, integration and separation, intersect, and this creates chaos.
The European Union achieved the highest level of political and economic integration, but it now faces challenges following Britain’s decision to withdraw. At the same time, in the Asia-Pacific region, integration gathers pace and countries are building stronger ties with each other. The international community has come to a crossroads: to take the road of separation and isolation, or to choose the path of openness, integration and ties. The shape of our future depends on the choice we make.
A policy of separation and isolation would be the wrong choice. History has taught us this. During the Great Depression, countries raised customs duties and the result was that trade fell by more than 40 percent in just four years. After protectionist measures were introduced in the 1980s, trade that had been growing at an average rate of 20 percent fell to just 5 percent.
We cannot achieve sustainable global economic growth if we raise barriers and choose separation and isolation. On the contrary, we must raise the level of integration, link our networks together and create a platform for global economic cooperation. On this basis, through ongoing innovation and opening our markets, we must create a new driving force for building the future.
Ladies and gentlemen,
The Far East offers opportunities for economic ties and human contacts as well as good industrial organisation. This potential makes the region a promising new place for carrying out integration and growth initiatives. President Vladimir Putin is carrying out a new eastern policy that is injecting new life into the region and developing its potential in a vision that can become reality.
The Republic of Korea is also paying great attention to the Far East. Above all, I note that trade between South Korea and the Far East accounts for 40 percent of our overall bilateral trade. Sixty-percent of Russian tourists visiting South Korea come via Vladivostok. The Far East is thus a bridge linking the Republic of Korea and Russia.
The ASEAN countries, including Japan and China are also making efforts to develop this region through various development and cooperation projects. There has been progress, but we still have work to do together to fully develop the Far East’s potential and ensure sustainable growth. In his speech at the first Eastern Economic Forum, President Vladimir Putin stressed the importance of social and economic development in the Far East and Russia’s effective integration into the Asia-Pacific region. Keeping this view in mind, we need to concentrate on three main cooperation areas.
First, to activate Far East development, we must put in place an environment that will ensure the region’s sustainable development, in particular by strengthening cooperation in foodstuffs, housing construction, healthcare and medical services. We need to get more players involved. In this context, we are ready to work with Russia to come up with specific measures for carrying out joint projects in agriculture based on modern technology in Primorye Territory, including projects to build agroindustrial facilities.
In the fisheries sector, the Republic of Korea could take part in a project to build refrigerated warehouses and fish processing facilities and make a contribution to developing the Far East’s fisheries industry. Korean companies also have great experience in housing construction and by getting involved in big housing construction projects, Korea could help to improve the region’s housing situation. Korean medical facilities use advanced technologies based on ICT (information and communications technologies) and could provide quality medical services, which would of course boost the level of healthcare and medical services in the region.
Secondly, to diversify the Far East’s industrial structure, we need to build an infrastructure and make sure that all projects develop naturally and independently in accordance with economic principles. The Far East’s economic structure is currently centred around energy resources development, but given the region’s geographical location favourable for logistics development, it has great potential for growth through industrial diversification, as the Far East is located so close to the Northeast Asia economy.
If we marry South Korean capital and processing technology to Russian fundamental science and resources, this would enable us to create a competitive industrial base. Furthermore, cooperation between Korean and Russian businesspeople on infrastructure development, including transport and port infrastructure, we can develop a new multimodal logistics route that will unite the Eurasian continent.
In particular, the Northern Sea Route opens up new opportunities for cooperation in sustainable resource development. The project to build rapid intercity transit routes in the Far East and projects to improve city infrastructure also offer good opportunities for cooperation because South Korea has the needed experience and technology for carrying out environmental projects, including technology for processing the waste generated in the process of developing city infrastructure.
At the Korean-Russian summit in November 2013, President Putin and I agreed to develop joint investment platforms with the aim of stimulating bilateral investment in the Far East. Korean and Russian companies can work together in promising areas and use the investment platform to carry out favourable projects.
Thirdly, we can accelerate the Far East’s development and maximise the results if we broaden the cooperation spectrum by linking the Far East to the neighbouring countries’ economies. We can use the Northeast Asia countries’ different Eurasian concepts and initiatives as a basis for spreading the energy of advantageous cooperation in the Far East across the entire Eurasian continent.
The Korean government wants to turn Eurasia into a continent of unity, creativity and peace. This is how we see promotion of cooperation with the Eurasian continent. At the St Petersburg Economic Forum in June, President Putin proposed establishing a big Eurasian partnership. This is a vision for integration across the entire continent and it fits with our own Eurasian initiative too.
The Republic of Korea is a country that has signed free trade agreements with the United States, China and the EU, so if we are able to enter into a similar agreement with the Eurasian Economic Union, in which Russia plays a key role, it will lead to increased economic integration in Eurasia, revive the development of the Far East, and will also promote the benefits of the region’s advancement across the continent of Eurasia.
At the same time, we need to get some practical results of cooperation on a mutually beneficial basis. We must make efforts to develop multilateral cooperation in the region through building trust. Right now, North Korea’s frequent provocations hamper trilateral projects, including the Rajin-Khasan logistics project.
However, if these barriers are eliminated it would be possible to resume these projects on an even more ambitious scale, between three parties: Korea, Russia and Japan, or Korea, Russia and China. This will create an environment where all networks are interconnected – electricity, railways and energy, and in the long run, this will contribute to the effective integration of the Far East and to the region’s prosperity.
Ladies and gentlemen, peace and stability in the region is an absolute prerequisite for the sustainable development of the Far East and the regions’ integration. In this context, I cannot ignore the issue of North Korea, which is a key node in Eurasia and the most serious threat in the region.
Despite the repeated warnings of the international community, North Korea has conducted four nuclear tests since the beginning of this year and launched ballistic missiles. Pyongyang does not recognise the UN resolution, calling itself a nuclear power in the East, threatening nuclear strikes and continuously improving its nuclear and missile capabilities. After the nuclear test, North Korea has already launched 19 ballistic missiles, which means it has launched a rocket every two weeks, which exceeds the number of rocket launches over 18 years under Kim Jong-il’s government.
The ballistic missiles that fall in the eastern sea are a threat to ships navigating there, including Vladivostok. North Korea’s regime ignores human rights and its people’s right to quality life, focusing all resources on the development of nuclear weapons and ballistic missiles. If we fail to prevent the development of nuclear weapons in the near future, the North Korean nuclear threat will become a reality.
I am confident that this forum will become a significant platform for dialogue aimed at joining forces to open a new page for an integrated Eurasia, for prosperity and peace in the region. I hope that in the future, this forum and our dialogue will emanate the energy of openness, change and innovation throughout North-East Asia.
To be continued.