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New RF ministry offers special state administration in Far East

June 04, 2012, 15:45 UTC+3 Alexandrova Lyudmila

After the formation of the Russian Ministry on Far East Development the Far Eastern Federal District, which is the largest federal district in the country, may actually turn in a state inside the state. The ministry was established to make this federal district with abundant natural resources, but not only human resources and that one bordering China in a dynamically developing and attractive region for people.

The ministry offers a special state administration regime in the Far Eastern Federal District, the Kommersant daily cited the draft regulations of the Ministry on Far East Development on Monday. The ministry, which Russian Presidential Plenipotentiary Representative in the Far Eastern Federal District Viktor Ishayev was appointed to head, intends to restrict or cancel fully the interference of other federal agencies in the affairs of the Far Eastern Federal District.

Last few months saw a close attention of the federal authorities to the problems of Siberian and Far Eastern territories. At first the media were discussing actively the creation of a state corporation for the development of Siberia and Far East. Then the newly appointed government led by Prime Minister Dmitry Medvedev has formed the Ministry on Far East Development unexpectedly for the experts.

On April 11, 2012, Vladimir Putin, who delivered an annual report on the performance of the government in 2011 in the parliament last time in the capacity of the prime minister, stated again about the need for Eastern Siberia and the Far East to outpace other Russian regions in terms of economic growth. Putin stated that this tendency should persist for 10-15 years.

The Far Eastern Federal District is the largest Russian federal district. The district occupies 36% of country’s territory or 6,216,000 square kilometres. The share of Russian population in this federal district is much more moderate and makes less than five percent (7.2 million people).

The most important thing for the Russian Far East is its geopolitical position. The territory of Alaska, the United States, begins 35 kilometres away from Chukotka, across the Bering Strait, and a 43-kilometre-wide La Perouse Strait separates the Sakhalin Island from the Japanese island Hokkaido. The Russian Far East borders China at a stretch of 2,000 kilometres and has the border with North Korea for 60 kilometres. The Russian Far East is rich with natural resources, particularly sweeping reserves of pit coal and brown coal, oil and gas (Sakhalin), polymetals, tin metal, graphite, iron ore and manganese ore. The forecast resources of hydrocarbons make 40% of all explored natural resources in Russia.

The vulnerable point of the region is its underdeveloped transport communications with other Russian regions. Only the air transport really operates and the Trans-Siberian Railway, which is the only railway heavily overloaded in the region. The motor traffic is almost absent, and transport ties between the regions are quite weak.

The draft regulations of the ministry hold that the ministry will assume “the management of federal property, including the natural resources” in the Far Eastern Federal District. The Ministry on Far East Development may provide “for the sale of privatized federal property, particularly acting as a seller.”

The ministry will also manage the natural resources in the same active way, particularly through the coordination of drafting and approving detailed project reports for the development of the deposits of natural resources and even controlling the Ministry of Natural Resources and Environment Protection in the matters related with the licenses for subsoil use development. The regulations vested the ministry with the right to manage all energy assets in the federal district, coordinating the investment programs not only of territorial power grid companies, but also all other electric power facilities in the Far Eastern Federal District.

If the draft regulations are approved, the Ministry on Far East Development will coordinate the activities of the Ministry of Natural Resources and Environment in the issue of licenses for development of natural resources and the Federal Fisheries Agency. Finally, the ministry claims for the functions of a main distributor of budget resources under all state-funded and departmental programs and some functions of the Justice Ministry, the Agriculture Ministry and the law enforcement agencies.

It is unclear yet whether other ministries will be willing voluntarily to limit their functions in the Far East. It is quite probable that the document will be amended during the coordination procedure with the government.

The draft regulations laid down even better coordinated relations between the ministry and nine entities in the Far Eastern Federal District. The slightest attempt of regional authorities to show their independence may be restricted toughly.

The draft regulations of the ministry offer to revise 26 regulatory acts from the federal laws and the presidential decrees to the instructions of some federal agencies. The experts noted that it will take much time for the State Duma to endorse a major legislative package, because these documents contradict the Russian Constitution and the law on local self-government .

Over 250 employees will work in the new ministry. The main offices of the ministry will be situated in two cities – Moscow and Khabarovsk.

“The new ministry will approve bills and will determine the rules of conduct for “the players” on the Far Eastern economic field,” Russian Presidential Plenipotentiary Representative and Minister for Far East Development, Academician of the Russian Academy of Sciences Viktor Ishayev told the Komsomolskaya Pravda daily. “It is needed to count the money, which is allocated from the state budget to the federal district, and to make the financial flows highly mobile and put them under a tougher control. The federal programs, both those of separate industries and regional, are being implemented in the Far East. They do not constitute something undivided. These programs have oppositely directed vectors sometimes. You should put them in order,” Ishayev added.

To put it clearly what scale of the federal programs is meant several figures are enough, he said. Before 2015 the Russian state authorities will invest 3.3 trillion roubles in about 30 targeted programs. Another nine trillion roubles will be invested by 2018-2020.

The main challenge for the Russian Far East is the demographic problem and the attraction of new residents, Ishayev said. Since the nineties of the previous century the federal district has lost about 20% of its population.

MOSCOW, June 4