27 May 2016

    A meeting of the Russian Government Commission for Socio-economic Development of Russia’s Far East and the Baikal Region was held by Russian Prime Minister Dmitry Medvedev. The meeting was followed by a briefing conducted by Deputy Prime Minister and Presidential Plenipotentiary Envoy to Russia’s Far East Yuri Trutnev, along with Minister for the Development of Russia’s Far East Alexander Galushka. The meeting was devoted to implementing the Russian Government’s Far East development policy and creating international transport corridors, informs the Russian Government official website.

    During the briefing, Yuri Trutnev and Alexander Galushka answered questions from journalists. In particular, the Presidential Envoy pointed out that the measures taken and laws passed had improved the situation in the Far East. The best evidence is burgeoning investments: “Already today, the amount of declared investment has exceeded RUB 1 trn. We hope that, by the year’s end, we’ll exceed the RUB 2-trn mark and we’ll be stepping up the development effort.”

    In the opinion of Minister Alexander Galushka, one of the main results of the new Far East economic policy is a drastic reduction in the population outflow: “In January–February of 2016, we reached the historical minimum in terms of Far East population waning. The population outflow from the Far East has almost ceased, having sunk 15-fold this January–February year-on-year to a record low 221 persons. Our goal is not only to stop this outflow, but also to reverse this trend and see the Far East population start growing. All tools we have devised ultimately work towards reaching this goal, since we want our Far East to be a true and comfortable home for people who would want to devote their life to its development.” Mr. Galushka noted that the outflow rates were already going down in 2014 and 2015, but “what we see today has never yet happened in the history of Russia since 1992.”

    In the opinion of Yuri Trutnev, launching of the Far East Hectare project will be another step on the way toward the ultimate goal: an inflow of new residents into the Far East. “I believe that, after the law about free allocation of 1 hectare of land is fully enacted, the outflow of population from the Far East will fully stop”, he stated.

    Another issue on the agenda was the problem of developing the Primorye-1 and Primorye-2 international transport corridors (ITC). Deputy Prime Minister Yuri Trutnev focused attention on the fact that Russia has great opportunities for refining the process of freight turnover between Russia and China. “In order to harness the existing potential, it is necessary, first of all, to create a transit regime, because the situation is rather odd today: our distance is 30% shorter, but freight transit takes twice as long, because our customs checkpoints work inefficiently. In accordance with the law on Free Port Vladivostok, a number of customs regimes are already changing. Prime Minister Dmitry Medvedev has instructed his subordinates to improve these mechanisms and make the customs regime competitive”, Trutnev went on.

    Mr. Galushka added that the Head of the Russian Government had already directed that a “seamless” (uninterrupted) freight regime be established from Northeast China to Primorye ports. In his words, ITCs might provide 45 m tonnes of extra freight for the region. However, “infrastructure investments are needed, as well as favourable cross-border regimes”, the Minister noted, adding that these would be private routes, since this was a “cost-effective project.” Robust engagement and negotiations with Chinese partners are already under way: “They have declared their interest and today’s decisions of the government commission led by the Prime Minister are those very fundamental ones needed for the Chinese side, in order to support these corridors,” informed the Head of the Ministry for Development of Russia’s Far East.

    As regards the volume of investment required in Primorye-1 and Primorye-2, Galushka declared that each corridor would require investment nearing RUB 150 bn, having stressed that “these are gradual investments in the infrastructure and its development up to 2030.” According to the Minister, Primorye-1 – the corridor that will serve as a link between Nakhodka and the Chinese province of Heilongjiang – will require only RUB 10 bn up to 2020. In addition, development of the two international transport corridors will have a positive effect on the economy of the Primorsky Region: the planners anticipate an annual increase in the Gross Regional Product by 4-5% and creation of 4,000 new jobs.

    Mr. Galushka drew attention to the fact that some of the decisions made concerning the ITC had already started working: “as per the law of Free Port Vladivostok (already in force), from 1 October 2016, the checkpoints will be operating on a 24/7 basis. A free customs zone has been inaugurated and, in place of numerous agents, a unified review or border-crossing regulatory body introduced. All those regimes already exist and they are implemented in the law. Yet it’s important to create favourable regimes for transit freight so that they might quickly undergo the necessary clearance and the conditions provided by Russia would be competitive, relative to other functional corridors.”

    The experience of economic development of the Far East can be used in other regions of Russia, Yuri Trutnev believes. He referred to the example of the Baikal Region. “We agreed to study these opportunities and to share the experience accumulated in the Far East, which could benefit the neighbouring Baikal Region of Russia”, the Deputy Prime Minister assured.

    Summing up the results of the meeting, Mr. Trutnev said he was satisfied with the implementation of the mandates given at previous meetings of the Commission. “Out of 78 mandates, only 15 missed the set deadlines.” In his words, Premier Medvedev had told him to think of disciplinary action against employees of the ministries who failed to execute the set tasks on time.