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Plenary meeting of the Eastern Economic Forum

Vladimir Putin attended the plenary meeting of the Eastern Economic Forum.

Invitations to the forum have been sent to foreign heads of state and government, the heads of major Russian and foreign companies, as well as leading politicians and experts.

The theme of the forum is The Far East – Development Horizons.

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Speech at the plenary meeting of the Eastern Economic Forum

President of Russia Vladimir Putin: President Battulga, Prime Minister Narendra Modi, Prime Minister Mahathir Bin Mohamad, Prime Minister Shinzo Abe,

Ladies and gentlemen, friends,

First of all, I would like to address our foreign guests, both leaders of the countries represented here and our foreign partners in the audience. Thank you for showing so much respect for Russia, and for your interest in developing relations between our countries.

I hope, I am certain that our work during this forum will be most productive and rewarding for everybody here. I am happy to welcome you all to the Eastern Economic Forum.

It is the fifth time that Vladivostok, the capital of Primorye Territory and now of the entire Far Eastern Federal District of Russia, has brought together heads of major Asia-Pacific states, the largest investors, business people, representatives of the public and expert communities.

This year we are hosting over 8,500 participants from 65 countries. Since the first forum, representation has increased more than twofold. We believe this is a convincing indication of the growing interest in the Russian Far East and the cooperation opportunities offered by this truly colossal region.

The power and competitive advantages of the Far East lie in its talented, hard-working and energetic people, educated and ambitious youth, in new centres of research, industrial growth, and industries of the future.

Its power is in rich natural resources, enormous logistics potential such as the Northern Sea Route and other trans-Eurasian routes. Last but not least, its power is in its proximity to rapidly-developing economies and the world’s most dynamic region, the Asia-Pacific.

It is hardly surprising that, while mapping out a long-term strategy for the development of the Russian Far East in the mid-2000s, some 15 years ago, we opted for the region’s maximal openness and its close integration in the economic, transport, educational and humanitarian space of the APR and, in a greater scheme of things, the world at large. We made it our priority to promote international and cross-border cooperation as well as investment and technological partnerships, which implies creating new opportunities, primarily for Russian citizens, their life and work.

In fact, this was a radical, historic turning point. Let me remind you that many Far Eastern territories, including the city of Vladivostok, where we are now, were mostly used for military purposes and had an off-limits status in the early 20th century, in the middle of the 20th century, and later during the Cold War.

This certainly had an impact on the development of these regions. Properly speaking, there was practically no development in the social and economic sense of the word.

To reiterate, the situation has changed radically over the past years and we are proud that the Russian Far East has become a symbol of openness for the whole country, a symbol of innovation and resolve in lifting all sorts of barriers to business and human contacts.

Of course, we are aware that this result would have hardly been possible were it not for the effort to enhance an atmosphere of trust and constructive cooperation in the APR as a whole. We are interested in promoting these positive trends to make the region we share safe and stable.

Our relations with India, China, the Republic of Korea, Malaysia, Mongolia, Japan and other APR countries are based on the principles of respect and honest dialogue. I am confident that these relations are showing great promise concordant with the growing role that the Asia Pacific Region is due to play in the coming decades. I think that our esteemed foreign guests present here, our friends, agree with this.

Along with openness, another key principle underlying our ambitious plans for the development of the Russian Far East is that they are long-term and consistent. We will be enhancing our efforts further, concentrating resources and managing this work administratively, step by step. Once we achieve our goals, we set ourselves new tasks, and strive to achieve more.

Over the past fifteen years, we have successfully created conditions for the Far East to enter the path of faster growth. And these are not empty words – I will now give you some examples of this.

Preparations for the 2012 APEC leaders’ meeting in Vladivostok was a good start. We invested significant resources then in modernising the local transport, business, and educational infrastructure, and in improving the capital of the region as a modern, dynamically developing city, a city for people, as one of the major academic centres of the Asia-Pacific region.

We are certainly aware that much still remains to be done, but a lot has been done, too. And then, based on what has already been done and achieved, we will launch large infrastructure, transport and industry projects as well as construction projects in the region and beyond.

At the same time, along with steps to improve the business climate everywhere in Russia, we have offered completely new and largely unique support tools for doing business in the Far East and being globally competitive.

I would like to inform our colleagues who plan to invest in the Far East – you are welcome to benefit from these opportunities, so please look at them again. These are not just promises – this is a practice that is already in place, and it works.

Thus, as many as 20 territories of priority social and economic development have been established around the region, with special conditions for launching production, special tax regimes and state support measures. As many as 369 resident companies have registered there, signed contracts worth nearly 2.5 trillion rubles and announced the creation of more than 60,000 new jobs. These businesses have already invested 344.8 billion rubles in their projects and created nearly 20,000 jobs. This has already been done.

The Vladivostok free port regime has been extended to 22 municipalities. Its goal is to facilitate integration of the Far Eastern regions into the Asia-Pacific economic space and promote the development of high-tech enterprises.

As many as 1,404 resident companies chose to take advantage of the benefits offered by the free port regime and signed contracts worth almost 700 billion rubles. They are going to create about 68,000 jobs in the area. As of today, 95.2 billion have been invested and over 10,000 jobs created. This is a fait accompli.

Overall, thanks to the proposed support measures, starting from 2015, investors have contributed 612 billion rubles to the region’s economy, launched 242 new plants, and created more than 39,000 jobs.

As a result, industrial production growth in the Far East over the past five years has amounted to almost 23 percent – almost three times greater than across Russia.

Far Eastern Federal University is developing as a centre of new competencies, youth exchanges and international cooperation, ambitious experiments in education, science and innovative industries in the new technological era. This centre traditionally hosts our meetings.

During the previous academic year, the university welcomed 20,000 students, including 3,500 foreigners from 74 countries. More than 200 foreign professors teach here.

It is planned to further develop the local research infrastructure, including the construction of a megascience facility. And we can confidently talk about the university’s future as one of the supporting centres of the common APR education space.

Friends,

At the preceding Eastern Economic Forums we focused on the significance of the Far East for Russia, as well as on plans to develop this region, tools for promoting business activity and how businesses can benefit from them. I briefly spoke about this just now.

However, we understand all too well, and this question has been raised at the working lunch that we just had with our colleagues, that goals of this kind will never be attained without people, their energy, their talent plus their commitment to achieving results.

For this reason, in my opening remarks today I will focus my attention on socioeconomic development and, more specifically, on the social development programme for the region.

I believe that this would be interesting not only for the domestic audience, but also for our prospective investors and the companies that already work here, since what this means is that we are committed to further improving the social and political environment and attracting the workforce the region needs in order to develop.

Yesterday I had a meeting with the heads of Russia’s Far Eastern regions to discuss the goals for a new stage in the development of the Far East. This stage will be about translating the region’s economic achievements over the past years into a social breakthrough in order to offer people a better quality of life.

What this means is that we have to promote change in healthcare, education, urban and rural infrastructure that will be felt by millions of people. Importantly, people must feel these changes as soon as possible rather than in some kind of a distant future or in many years.

In this context, let me note that the migration outflow from Russia’s Far East has halved compared to 2005. We need to reverse this trend once and for all: instead of leaving the Far East, people must head here bringing their energy, force and initiative.

We discussed this at the working lunch we just had, and our colleagues asked me this question. Is there an inflow, and how many people are leaving the region? This is a major question in terms of its moral and ethical, as well as economic implications, among other things.

Qualified professionals must find this region attractive and, of course, young people as well, as they are our future, as we all well know.

Moreover, Russia’s Far East is a very young region. It has an enormous demographic potential that has to be preserved and augmented. The aggregate birth rate here is higher than the national average.

Nearly 1.5 million out of the 8.2 million residents of the federal district are school, college and university students. They have won in sports competitions and international and national academic Olympiads and contests.

For example, Kazan has recently hosted a WorldSkills Competition, where Andrei Meshkov, a 9th-former from Ulan-Ude, won a gold medal at WorldSkills Russia Juniors in the sphere of information technology. I congratulate him on his victory once again. (Applause) In short, clever, creative and energetic people who can achieve the most ambitious goals live here, as I have said before.

Therefore, the first priority of the new stage in the development of the Russian Far East is to support young people. We must do our best to offer the broadest opportunities possible to them, so that they can receive education, realise their potential in life and their profession, create families and have children, and contribute to the progress of their home region, the Russian Far East.

First of all, we must dramatically increase the construction of modern housing, which must be as affordable as possible. In this context, as I have said, we discussed this issue with our colleagues, the heads of regions.

I agree that a special mortgage programme should be launched in the region, so that young people can borrow money to purchase flats or houses in the Far East at an annual rate of 2 percent.

We have recently approved a preferential mortgage rate for the region of 5 percent, which is lower than the country’s average. But our colleagues convinced me yesterday that this is not enough. I would like to warn the heads of the other regions that we cannot do this everywhere. This would lose all meaning because the idea is to attract educated professionals and skilled personnel to the Far East.

I suggest that we launch this programme this year for the duration of five years. I will tell you why. First, we will need to carefully consider the amount and sources of funding for the future, because this is a long-term matter.

We must apply it to the so-called primary market, that is, the market of new residential buildings, as well as to the construction of private homes by those who are taking part in the Far Eastern Hectare programme.

I suggest that we use funds from the national programme for the development of Russia’s Far East and the Far East Development Fund.

The healthcare system should be modern and affordable. First of all, this concerns primary care, which is closest to people, upgrading equipment and digitising outpatient clinics, hospitals and rural health centres, maternity hospitals and perinatal centres, and the development of ambulance aviation. This is especially important for the vast and boundless expanses of the Russian Far East.

This work is already underway around Russia, but here, in the Far East, we must create a truly effective system of medical care that would meet, and perhaps even surpass the best standards and practices.

I understand that this cannot be done overnight. But we need to start working today, to start with breakthrough pilot projects. Indeed, it is possible to create a medical cluster in the Far Eastern Federal District with a special regulation procedure, which would make it possible to open subdivisions and branches of foreign clinics without excessive formalities, attract the best foreign specialists, and use pharmaceuticals and methods that have already proved their effectiveness abroad.

This cluster should of course function within the Russian jurisdiction, and all the details should be carefully worked out by the Government agencies concerned, and, above all, with the Ministry of Healthcare, of course.

I have said more than once that for the Far East, we must propose special policies, advanced mechanisms and flexible tools that take into account the specifics of this vast territory, and the needs of the people who live here.

We have ventured into such experiments and economic innovations, and new ways to attract investment and, as I said at the beginning, have obtained a very positive result. The same approach should be used in the development of social and public services.

I ask all federal agencies, all our colleagues who are involved in the development of the region to be guided by just such logic, by the interests of the Far East, which essentially means the interests of Russia.

Creating a new cultural, educational and museum complex here in Vladivostok, Russia’s Far East, should be a major step toward consolidating the national educational and cultural space.

At the same time, the network of museums, libraries, theatres, cultural, extracurricular and vocational institutions is in need of significant upgrades across Russia’s Far East. We need to breathe new life into them by transforming them into interesting and up-to-date centres capable of attracting people of all ages, including children and teenagers.

We have just discussed this matter, and I think that this is the third time that I am mentioning our preliminary meeting: Prime Minister Shinzo Abe said that this region has a lot of appeal and great tourist potential.

Of course, the creation of a major national cultural and educational centre of this kind that would include branches of Russia’s leading museums, such as the Tretyakov Gallery, the Hermitage Museum, the Russian Museum, and the Mariinsky Theatre, will certainly make Vladivostok much more appealing for tourists.

Developing cultural offerings in rural areas and towns is especially important. Let me share some figures with you in this connection. Of the 1,834 communities in Russia’s Far East, 1,614 have a population of less than 5,000 people each, while towns and villages can be hundreds of kilometres apart. We need to make sure that this is taken into consideration. This was also on the agenda of yesterday’s meeting with governors.

Among other things, we need to adapt the Rural Doctor and the Rural Teacher national programmes to Russia’s Far East. This could include offering doctors, paramedics and teachers willing to relocate to small communities in the Far East greater benefits. I propose doubling these allocations for the Far East compared to the existing national rates.

It goes without saying that we need to be forward-looking. The future is in the hands of today’s youngsters and school students who love their region and want to live and work here. We need to offer them an opportunity to get quality education regardless of the income or financial situation of their families.

I believe that we need to offer more targeted and state grants at Far Eastern universities in areas where professionals are in very short supply, so that the young people have their tuition fees covered by the government, or by their potential employers. This way, students will know for sure that they will get a job, which solves employment-related problems.

Of course, young people and people of all ages must have the ability to benefit from online education, as well as telemedicine, information resources and e-services, and access to digital platforms and services that open up new horizons in terms of starting and running businesses.

I would like to remind you that more than half of all internet users on the planet live in the Asia-Pacific region. Russia’s Far East has to keep up with the global digital infrastructure and standards in this sphere, including high-speed internet penetration rates.

I ask the Government to take this into consideration when working on the Digital Economy of Russia national programme. Let me reiterate that we need to create an appropriate digital environment in terms of the challenges we currently face and the fast technological change around the world.

In this context, our second most important objective for Russia’s Far East is to make it one of the world’s top centres for high-technology, competences and new industries, a centre of the most advanced and quality jobs for high-skill professionals.

This must primarily benefit people living in the Far East, meaning the Russian nationals who live here, in this region. This is our position of principle.

The potential is there. It is here, on Russky Island, that a new innovation cluster is being created. A space industry cluster is emerging around the Vostochny Space Launch Centre. Aircraft manufacturing, natural gas processing and chemistry are all actively developing in the region. The construction of the Zvezda shipyard is underway.

Of course, we plan to focus on increasing the volume of value-added products. It is a position of principle to which I would like to draw the attention of Russian and international investors, residents of priority development areas and the Free Port of Vladivostok.

For example, we will raise export duties on round timber, but at the same time, we are ready to provide assistance to those who are willing to invest in timber processing, and create the most favourable conditions for the export of finished products, including to third countries.

The same logic – preferences and support for those who produce value-added products – will be also applied in other spheres, including marine resources and raw materials.

The conservation and rational use of our timber potential is an important topic. We plan to discuss it at the nation-wide level at a meeting of the State Council.

We understand that the creation of a powerful research and industrial centre in the region is a challenging project. At the same time, we see that it is also a very large window of opportunity. In this context, we must set high requirements regarding the effectiveness of the measures and decisions we propose.

This concerns primarily the economy of the future and assistance to the young teams that are implementing breakthrough ideas and solutions. Start-ups led by young people are the most powerful driving force of technological progress around the world.

We need more than just a legal framework to ensure not only the proliferation of start-ups but also their development into medium-sized and then into large companies. Of course, we need regulations, but we must also create effective financial instruments.

In this connection, I suggest that a special venture fund be established in the Far East. We discussed this idea yesterday; I support it. I ask the Government to formulate practical proposals regarding this, especially since the sources of funding are available.

Finally, our third strategic objective is also quite bold. It is in step with the global environmental agenda, the challenges facing not only Russia, but also the entire planet.

I am referring to developing Russia’s Far East as a global nature and tourism centre, an international testing ground for working out ways to tackle a question that matters to all of us: how to ensure harmony between economic activity and green tourism, between making nature accessible to the public and preserving unique ecosystems.

The marvellous natural beauty of Russia’s Far East already attracts hundreds of thousands of tourists. In 2016, 5.2 million people visited the region, including 750,000 foreigners. Last year total visits rose to 7 million, including about one million foreigners.

The natural beauties of Russia’s Far East include Lake Baikal, the Kronotsky Reserve in Kamchatka, Alkhanai National Park in the Trans-Baikal Territory, and other places. There are quite a few of them in this region.

There are a total of 64 natural territories that benefit from federal protection status. Let me note that I have already issued an instruction to trace and register the boundaries of all reserves, national parks and other protected areas. I ask that these efforts be accelerated, first and foremost in the Far East.

At the same time, we need to be more active in launching public-private partnerships in tourism. We need to invite responsible investors and offer them special incentives, subject to strict observation of the standards and rules of sustainable tourism.

Of course, we need advanced information services offering people convenient access to any information they may need: when and where to travel, what tourist route to pick. Foreigners should be able to apply for visas using this service.

Incidentally, it is here in Vladivostok that e-visas were first introduced, substantially streamlining the formalities that foreign tourists and businesspeople have to go through. More than 140,000 visas of this kind have been issued over the past two years.

All the development goals we are discussing as well as, most importantly, new modern standards of living call for a fundamentally new level of mobility. For the Far East, this implies above all a developed network of air transportation and affordable tickets within the region as well as to Siberia, central Russia and abroad.

By 2024, we will have modernised 40 airports in the Far East. We will employ the capacities of the Far Eastern aircraft manufacturing plants in Ulan-Ude, Komsomolsk-on-Amur and Arsenyev to expand the network of domestic flights and renew the pool of regional and local aircraft and helicopters.

I would like to add that safety and comfort are the most important things when it comes to air carriers around the world. One more priority for airlines operating in the Far East must be affordable tickets.

I believe it would be logical if the airlines that are willing to increase their operations in the Far East and to pursue a responsible and reasonable pricing policy were offered a preferential right to make flights in other, more profitable regions.

We discussed this with the Transport Minister yesterday. I do hope that he is listening to me today. In general, this system is already being applied, but we need to reinforce it. I understand that this is not a commercially effective method, but it is justified in this region. However, we must discuss ways of formalising it.

Friends,

We have very ambitious development goals in the Far East, and the attainment of these goals involves partnership and the pooling of efforts.

We are ready for such cooperation, and we are open to everyone who is interested in it. We believe in the future of our cooperation and the future of the Russian Far East.

To succeed in this region, just as across our huge country as a whole, we need a consolidated society, the contribution and the involvement of everyone who is willing to contribute their skills, their energy and their knowledge to the common goal. This is our mindset, and this means that all our plans and the most daring of our dreams will definitely become reality.

I would like to wish all forum guests and participants every success and all the very best.

Thank you.

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