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The Russian Far East: Creating a New Reality

Plenary Session with Vladimir Putin

“This year, we have brought together guests from over 60 countries. I am grateful to everyone for your interest in the Russian Far East, its current state, and its future <...> From one year to another, interest in this forum is certainly growing,” said President of the Russian Federation Vladimir Putin.

“This forum is being held for the third time.  As I see it, it is becoming more and more vibrant,” said Prime Minister of Japan Shinzō Abe.

The economy of the Russian Far East is growing at an accelerated rate

“We are formulating specific innovative approaches to manage the Far East.  Over the past four years, 19 federal laws have been passed, laying a new foundation for work to bring up the region,” Vladimir Putin explained.

“Over the past three years, growth of industrial production in the Far East has overtaken average growth. The average rate of growth in the Russian Federation is 8.6%. Gross regional product grew 4.2%. In 2017, the dynamics are positive. What's more, they are growing.  As such, investment into fixed assets in the first half of the year increased by almost 20%,” Vladimir Putin indicated.

The Russian Far East is opening a unique opportunity to investors when it comes to tax benefits, an easier administrative regime, and a wide range of industries and sectors open for investment

“In order to implement these ambitious projects, the Far East is presenting itself as a unique combination of opportunities and competitive edge.  This includes preferential tax regimes and comfortable administrative procedures that in many respects either surpass or are at the level of the most advanced territories both in the Asia-Pacific Region and the world.  This also includes availability of natural resources: coal, oil, gas, metals, and low energy tariffs.  For example, they are lower in Blagoveshchensk, Vladivostok, and Khabarovsk than in Busan, Seoul, Osaka, Tokyo, and Beijing.” Vladimir Putin said.

“In order for business to have the opportunity to quickly and cheaply deliver their goods from Asia-Pacific Region countries to Europe and back, as well as to and from other regions, new transportation corridors are being laid in the Far East and port capacity is being increased.  We are objectively studying the possibility of constructing a railway crossing to Sakhalin Island.  Developing the Northern Sea Route, modernizing the Baikal-Amur Mainline and the Trans-Siberian Railway, and realizing other projects will all help turn the Russian Far East into one of the most important logistic hubs in the world,” said Vladimir Putin.

Incentives for investors will be expanded

“Any investor who has become a resident of an Advanced Development Zone or the free port of Vladivostok up until 2025 will have a 10-year relief when it comes to paying insurance premiums, whereas before this relief could be received no later than three years from the moment of the creation of the Advanced Development Zone,” Vladimir Putin explained.

“For large investment projects worth more than 100 billion rubles, tax relief will be extended from 10 years to 19,” said Vladimir Putin.

“I propose that foreign investors who invest 10 million dollars or more into the Far East to be provided with a simplified procedure for obtaining Russian citizenship,” Vladimir Putin said.

The state is creating conditions for forming a new quality of life and a comfortable environment in the Far East

“The most important direction of our work, which is of fundamental importance for the prosperity of people, is creating modern social infrastructure,” Vladimir Putin emphasized.

“In order for the Far East to develop with confidence and in order for people to see prospects, not only centers for economic growth and new jobs need to be created, but we must also open new hospitals, medical and cultural facilities, kindergartens, and schools, taking into account the requests made by citizens to change the images of their cities and towns.  By 2025 it will be necessary to bring up the main indicators of social development in the region to a level higher than the Russian average,” Vladimir Putin stressed.

South Korea, Japan, and Mongolia are interested in developing bilateral economic ties with Russia

“South Korea is interested in speeding up negotiations on closing up an agreement on free trade between Korea and the Eurasian Economic Union,” said President of the Republic of Korea Moon Jae-in.

“I plan to focus on cooperation with Russia.  For example, [cooperation] in shipbuilding and marine logistics could become a new model for Korean-Russian economic relations,” Moon Jae-in said.

Among other areas of cooperation, the president of South Korea named the gas industry, agriculture, IT, waste processing, developing tourism infrastructure, health, and education.

“In just one year, progress between Japan and Russia has begun, something we were unable to do for 70 years. If we continue these steps for another year, and then another, I am certain that ahead we will see nothing other than a splendid future for Japanese-Russian relations and we will be able to fully unveil all of their potential,” Shinzō Abe said.

“Mongolia is a country without access to the sea.  The opportunity to have access to the sea to export our goods is very important to us. Russia will provide Mongolia with competitive preferential tariffs for the transit of our products. I want to express my gratitude to you, Vladimir Vladimirovich, and to other officials for preparing this agreement on transit traffic.  This issue has been discussed for many years, and we were able to get results,” said President of Mongolia Khaltmaagiin Battulga.

Creating a unified energy system could be the foundation for the economic integration of countries in northeast Asia with direct participation from Russia

The presidents of Russia and South Korea noted substantial prospects for cooperation in the electric power industry.  Creating a general system for supplying countries in the region with electricity, supplies, and infrastructure will open other opportunities for expanding multilateral cooperation in other economic sectors.

“I want Russia to play a leading role in this direction <...> The world's largest energy community can be created in northeast Asia.  This can become a fundamental point for creating economic integration in northern Asia under the EU model launching a multilateral security mechanism,” Moon Jae-in suggested.

In connection with growing tension on the Korean Peninsula, country leaders called for the need to address North Korea in order to stabilize the situation in the region

“This is not light, not simple, and not a fast way to solve the problem, but it is the right way, and specifically we need to start negotiations to convince North Korea that this is the best way to solve the problem for them, too. It is necessary to gradually bring North Korea into cooperation in the region <...> It is counterproductive, in my view, to ignite a hostile atmosphere and hysteria,” Vladimir Putin warned.

“In order to solve the North Korea problem with the international community we are levering sanctions and exerting pressure, but the purpose of using these measures is to resolve the issue peacefully and diplomatically,” Moon Jae-in said.

“We need to ensure that North Korea promptly and fully comply with all relevant resolutions made by the UN Security Council and has abandoned all its programs to create nuclear weapons and develop ballistic missiles in a way that is thorough, verifiable, and irreversible <...> The international community must oblige North Korea to radically change its policy,” Shinzō Abe said.