Thursday, September 7, 2017

Plenary session of the Eastern Economic Forum - Part 1 + 2

Vladimir Putin took part in a plenary session of the Eastern Economic Forum in Vladivostok.
September 7, 2017


Speech at plenary session of the Eastern Economic Forum
In his speech, the President, in particular, outlined his vision of the prospects for cooperation in the Far East, and Russia's approaches to regional economic integration, and gave an assessment of the most acute challenges and threats in the Asia-Pacific region.
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Speech at plenary session of the Eastern Economic Forum
President of Russia Vladimir Putin: Mr Moon Jae-in, Mr Battulga, Mr Shinzo Abe, esteemed moderators, ladies and gentlemen,
I am pleased to welcome all the participants and guests of the third Eastern Economic Forum in Vladivostok. This year, we have guests from over 60 countries. I am grateful to all of you for your interest in the Russian Far East, its present and future.
As we were waiting for this session to open, we noted that the interest in this forum has been growing year in and year out. I am pleased to hear that, and I think that this is very important for us.
Dynamic growth and renewal of this region are among our unconditional priorities. It is an essential part of our strategy to improve Russia’s competitiveness, its economy, and human capital.
We have concentrated considerable financial and organisational resources in the Russian Far East over the past several years. Preparations for the APEC summit in Vladivostok in 2012 gave a major boost to this macroregion.
This forum helped re-open the Russian Far East to the entire world, including businesses from the Asia-Pacific region. The Eastern Economic Forum, where we have gathered now, serves to enrich this spirit of friendliness and openness.
We are developing special innovative approaches to administering Russia’s Far East. Over the past four years, 19 federal laws have been adopted that have laid a new foundation for our efforts to lift the region.
Our plans include the further development of the Far East, improving the legal framework, codifying and systematising it even better to make sure that the laws and, most importantly, law enforcement practice, are convenient and clear for our citizens, for investors, and businesses, as well as the federal and municipal authorities.
It is necessary to do so to improve the effectiveness of special mechanisms that were launched in the Russian Far East. I am referring to the priority development territories and the Free Port of Vladivostok.
They opened up new opportunities for Russian and foreign investors in this macroregion, which made it possible to launch projects faster and cut the costs involved in their implementation.
The results are there for everyone to see: over the past three years, the increase in industrial output in the Russian Far East has outpaced the average growth rates in the Russian Federation which stand at 8.6 percent. The gross regional product grew by 4.2 percent.
The dynamics remain positive this year as well. Moreover, they are improving with investment in fixed assets up almost 20 percent as of the end of the first six months of 2017.
Notably, such positive dynamics can be seen across Russia showing a 4.1 percent growth. This is an excellent indicator. Everyone here is a specialist and perfectly understands what this means. What I am saying is that when investments in fixed assets go up at an increasing pace, GDP growth is guaranteed to follow during the next several quarters. The funds have been invested, and the production facilities begin to operate, and then the growth is guaranteed.
Major projects, such as the Zvezda Shipbuilding Complex in the Primorye Territory, and a gas chemical cluster in the Amur Region, are also being implemented. A major package of cooperation agreements will be signed as part of this forum as well.
These plans and investment decisions should be embodied in successful enterprises, plants, factories, and infrastructure facilities, and, most importantly, modern workplaces and high living standards.
We will not stop there. We are working to make sure that more of our friends, partners, and investors come and join us in the future with their capital, technologies, and ideas now that our previous projects in the Far East have become operational.
We will provide all-round support to the companies that are ready to advance to global markets and to produce and export high-tech products, including both leading corporations and those that are still working to join the top league of the global business.
The Far East offers a unique combination of opportunities and competitive advantages for the implementation of ambitious projects, including preferential tax treatment and streamlined administrative procedures, which are comparable to or even more comfortable than in the best development areas in Asia Pacific and the world.
These advantages also include rich natural resources – coal, oil, gas and metals, as well as low energy prices, which are lower in Blagoveshchensk, Vladivostok and Khabarovsk than in Busan, Seoul, Osaka, Tokyo or Beijing.
New transportation corridors are being built and ports capacities are being increased to give companies an opportunity to deliver their goods from Asia Pacific to Europe and back, as well as to other regions, as quickly and as cheaply as possible. We are scrutinising the opportunity of building a railway bridge to Sakhalin.
Taken together with the development of the Northern Sea Route, modernisation of BAM and Trans-Siberian Railway and implementation of other projects, this will help us make the Russian Far East a major global logistics hub.
And lastly, the Far East is a major seat of integration processes. We know that business is interested in the lifting of trade and protectionist barriers so as to get free access to markets.
I would like to say that this was in the focus of our attention at the recent BRICS summit in China. Russia intends to continue to rely on the logic of openness, cooperation and trust and to lift obstacles that are hindering the development of business contacts, tourism and educational and youth exchanges.
A month ago, on August 8, we started issuing electronic visas to foreigners coming to Vladivostok. Over the past four weeks, some 1,300 people have used this service, including those who came here for the Eastern Economic Forum. On January 1, 2018, we will start issuing electronic visas for travel to Kamchatka and Sakhalin.
We intend to deepen investment, trade and financial ties with all our partners, both on the eastern and western coasts of the Pacific Ocean, considering that the Russian Far East has limitless potential for investment.
The Far East Investment and Export Agency has already created joint investment companies in conjunction with their colleagues from China and Japan. A similar entity with our South Korean partners will be created before the year is out. We share interest in creating such a close investment partnership with our Indian friends as well.
To be competitive and attract investment, we plan to keep moving forward, analyse practices for attracting capital adopted by the leading countries, and offer better terms and conditions.
My colleagues and I have on many occasions discussed a number of innovative solutions to improve the investment appeal of the priority development areas and the Free Port of Vladivostok, including at recently held working meetings in Moscow.
For example, our agreements with residents of such areas should include the so-called ”grandfather's rule,“ where the terms and conditions for investment cannot be downgraded during the first 10 years of project implementation.
To reiterate, we intend to focus on improving the business environment. In this connection, I will go over a number of other decisions. This is new information, so those who are working in the Russian Far East should pay attention.
For example, any investor who has become a resident of a priority development area or the Free Port of Vladivostok until 2025 will enjoy a ten-year break in insurance premium payments, whereas previously such a break was available no later than three years following the creation of a priority development area.
I think those who engage in practical work understand what I am talking about. That is, if you registered with a priority development area in 2014, your exemption will remain effective for the next 10 years until 2024. If you did so in 2025, then it will be effective for 10 more years.
For major investment projects in excess of 100 billion rubles, the revenue tax exemption will be extended from 10 to 19 years. In this regard, we are proceeding from the premise that these are long-cycle projects, and those who invest certain amounts of funds should understand the economic aspects of these projects.
Finally, foreign investors who invest $10 million or more in the Russian Far East, should be able to use an expedited procedure for obtaining Russian citizenship.
We could make such an offer to our moderator [head of the privately-owned company Ronnie Chan in Hong Kong]. He is a businessman and says that it is unlikely he would ever have come to this region if it were not for this forum. No problem, he may go ahead and invest $10 million here, and then come here as if it were his home. Actually, his home, not as if it were his home.
Colleagues, we are entering a new stage in the large-scale and comprehensive development of the Russian Far East. This stage concerns primarily the creation of better working and living conditions for the people, as well as an economic and social environment that will be better than the average in Russia in many ways. This is what we want and will try to achieve. We intend to focus on several things.
First, we must provide effective incentives to encourage the growth of business activity in the Far East and create comfortable conditions for doing business not just in priority development areas but across the Far East as a whole.
We discussed these issues with Russian business people at one of the meetings that were held in Vladivostok yesterday. I want you to know that this is a key task for the federal and also for regional and municipal authorities, which is more important.
We must create broad opportunities for enterprising, smart and diligent people, of whom we have always had a lot in the Russian Far East, to show initiative.
I ask the management of the Corporation for the Development of Small and Medium Business to take additional measures to support business in the Far East. Regional authorities and the Ministry for the Development of the Russian Far East must take part in creating a portfolio of projects which need support in the form of preferential tax treatment and guarantees.
The second crucial area of our work is vitally important for the well-being of our people. I am talking about the creation of a modern social infrastructure.
To help the Far East develop sustainability and to let the people see that they have a future here, we must not only create economic growth centers and new jobs, but also build new hospitals, medical and cultural facilities, kindergartens and schools, improve the populated environment based on public requests and change the image of cities and towns. As I have said, social development indicators in this region must surge above the country’s average by 2025.
The Far Eastern regions’ development plans and federal programmes must focus on these issues.
I ask the Government to coordinate the necessary managerial and institutional mechanisms and find additional sources for financing the comprehensive development of the Russian Far East.
Third, the future of any region depends on young people, those who are choosing an occupation, studying or shaping their lives and careers, which are inseparable from their home region.
We must make use of the initiative, open-mindedness and talents of the young people in the Russian Far East, which means that we need an effective youth policy that will take into account both current and future objectives of this region.
I spoke about this yesterday when I met with foreign investors. One of the problems they pointed out – our colleagues in this room will confirm this – is the shortage of personnel in the areas of concern to them.

Part 2
We will take all of this into account.
I am asking the Government, the Ministry for the Development of the Russian Far East, the Ministry of Education and Science and the Agency for the Development of Human Capital in the Far East to prepare a programme that will focus on the development of education, career guidance and supporting young people in the labour market.
This includes the opening in the Far East of branches and specialised departments of the leading Russian universities. Their operation and the training of professionals must be closely integrated with the key industries and social sectors.
The example I mentioned is connected to the problem that was formulated by our Indian partner, who said that they had been working for a long time in Russia, including in the Russian Far East, yet had not yet found good gem cutting professionals. Lack of professionals in gem cutting is part of a bigger problem that concerns many industries.
We must make full use of the existing educational potential in the region. Far Eastern Federal University is growing into one of the best and most modern universities in Russia and a digital technology development centre.
I would like to say that the demand for skilled personnel in this region, including skilled workers, will continue to grow. So, we must create the educational base for training professionals for future companies here, in the Far East.
We will need to modernise the regional system of vocational training in the next three years and upgrade the education and onsite training equipment at vocational schools based on the best WorldSkills standards.
Finally, the fourth area is about an active demographic development policy.
The demographic situation in the Russian Far East is gradually improving, but additional, decisive measures are needed in this area in order to reverse negative trends that have been developing over decades.
This summer, the Government approved a demographic policy concept for the Russian Far East, which should start in 2018. To this end, the Government should adopt a corresponding action plan already in September.
Finally, I support the proposal made yesterday at the meeting of the State Council Presidium to improve the current labour mobility support programme.
I would like the Ministry of Labour and Social Protection to work through possible ways to resolve this issue, to further expand this programme, improve its effectiveness and make it instrumental in helping hard-working and talented people who would like to move to the Russian Far East, and to live and work here.
Friends, in closing I would like to once again emphasise that the development of the economic potential of the Russian Far East should go hand in hand with improving its social sphere, so that every resident of that region could feel actual improvements in education, healthcare, housing and utilities services, and the well-being of their family, relatives and friends.
The future of the Far East depends on the people who were born and live here, and those who came here to work and would like to settle down here.
This work extends far into the future, but we believe that we will be able to realise our plans if we join our efforts.
By all means, the Russian Far East will be successful the way the people who live here see it and want it to be.
Thank you, and I hope that many of those who show interest in the Russian Far East will realise all their plans here.
Thank you very much for your attention.
Moderator Ronnie Chan: I ask President of Mongolia Khaltmaagiin Battulga to deliver his address.
President of Mongolia Khaltmaagiin Battulga: Mr Putin, Mr Shinzo Abe and Mr Moon Jae-in, I congratulate you on taking part in this forum and I welcome all other participants.
This is the first time that I am attending this forum as President of Mongolia, and I am very pleased about that. It took the Mongolian delegation 2 hours and 55 minutes to fly from Ulan Bator to Vladivostok. I have come here from Europe via Seoul, and it took me only 1 hour and 45 minutes. Why am I saying this? I want to say that the Far East is not a remote but a close region for the people of Mongolia.
I began my visit to the Russian Far East with a tour of its ports. I came here two days before the event so as to tour the Vladivostok ports together with Russian Transport Minister Maxim Sokolov and Russian Railways CEO Oleg Belozerov. I have seen how these ports are developing. Mongolia is a landlocked country, and so access to the sea is extremely important for exporting our products.
I have come to the conclusion that our northern neighbour, Russia, can offer competitive preferential transit terms for our products. I would like to thank Mr Putin and other Russian officials for preparing an agreement on transit deliveries. This matter was under discussion for years, and now we have reached a positive result.
Yesterday I met with Prime Minister of Japan Shinzo Abe. We discussed our cooperation in the Far East and also regional security issues. I was glad to have this opportunity.
I would like to express gratitude also to President of South Korea Moon Jae-in, who was elected only recently, just as I was. Both of us firmly believe in the importance of cooperation between our nations and promoting stability on the Korean Peninsula.

I wish the forum participants all the best.rt 2
To be continued.

Путин проводит пленарное заседание «Дальний Восток: создавая новую реальность» в рамках ВЭФ LIVE: Putin takes part in Eastern Economic Forum plenary session in Vladivostok VIDEOS EN + RU

Путин проводит пленарное заседание «Дальний Восток: создавая новую реальность» в рамках ВЭФ

LIVE: Putin takes part in Eastern Economic Forum plenary session in Vladivostok VIDEOS EN + RU

Wednesday, September 6, 2017

State Council Presidium meeting on the comprehensive development of the Russian Far East

Vladimir Putin held a State Council Presidium meeting in Vladivostok on the comprehensive socioeconomic development of the Russian Far East.

State Council Presidium meeting on the comprehensive development of the Russian Far East.
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State Council Presidium meeting on the comprehensive development of the Russian Far East. Photo: TASS
President of Russia Vladimir Putin: Good afternoon, colleagues,
The State Council Presidium is holding today’s meeting within the framework of the Eastern Economic Forum. We will discuss the comprehensive development of the Russian Far East and creating conditions for attaining quality improvements that will be obvious to everyone in all Far Eastern regions by the middle of the next decade. We have adopted a decision on a large-scale progressive modernisation and development of the Far East.
It is clear that we could not make up for the decades of unresolved problems within a matter of the past few years. Frankly speaking, when I look at what is being done now I sometimes feel that we are not doing enough, because we want to see the results of more effective work sooner, we want all of us to work more effectively. But I understand that everything we are doing will take a long time to complete, that these projects cannot be implemented as simply and quickly as we would like to.
Of course, there are also positive changes, and quite a lot has been accomplished already. We have created special development institutions and the legal framework for the operation of priority development areas and the Free Port of Vladivostok. We have launched the One Hectare programme in the Far East and large infrastructure and industrial projects, which have produced the first results.
For example, industrial growth rates are higher in this macro-region than the country’s average. The past three years were far from simple for the Russian economy, yet the average growth rate [here] is 8.6 percent. This is much higher than elsewhere in the country.
We have already learned how to attract investments to the Far East, and this work will certainly continue. Now the main task is to raise the people’s standard of living. It should not only reach the nationwide average, but even exceed it in the future. It is vitally important to achieve positive changes that people living in the Far Eastern regions will really feel.
In the past 25 years, almost 2 million people have left the macroregion. Today, the migration situation is slightly better, but the population continues to decline yearly, not at the same pace as before, but it is still declining by some 0.3 percent. Our main task is to increase the attractiveness of the Far East. This means decent housing, quality healthcare, transport accessibility, modern schools, kindergartens and day nurseries. In short, it is necessary to create conditions so that more hardworking, talented and educated people will come here.
The solution of both economic and social tasks can be successful only with the comprehensive development of all nine Far Eastern regions. The Government is developing jointly with the regions draft projects through 2025 for each of these regions. This is a very important stage, when everything needs to be carefully thought through and calculated.
Meanwhile, problems are now arising both at the level of the federal budget and at the level of individual agencies. We know that due to various objective reasons we have not been able to fulfil everything that we were going to do to finance the Far Eastern projects – I mean the federal budget. Although the work is going quite well there on the whole.
I would like to draw the attention of the Government, the economic bloc, the Economic Development Ministry and the Finance Ministry, to the fact that the Far East continues to remain our priority. Let's remember that. I would ask you to promptly make the necessary adjustments and to ensure funding for integrated regional development programmes in the future.
Let me also remind you about the decision to include designated Far Eastern chapters within the key state programmes. I saw a report on the implementation of this decision. It provided a ranking of state programmes in terms of their contribution to the development of the Far East. I have to say that in a number of areas the situation is modest, to put it mildly, if not outright dismaying.
What is this all about? Who drafted these programmes? They were developed by ministries and agencies in charge of specific sectors. Instead of creating special sections on the Far East within the programmes, they either failed to mention it or lack substance. Listen, here is what I want to say to my colleagues in the Government: I will look very closely into this issue, mark my word, and I want everyone to understand that appropriate measures will be taken against those who fail to deliver. We will have to appoint people to those ministries and agencies who understand our country’s development priorities. Please keep this in mind and make sure you address this situation.
Moving on, we have here with us heads of companies that invest in the development of Russia’s Far East. I would like to hear from you, colleagues, whether the current federal and regional support mechanisms are effective and to what extent.
I think that we need to set a specific objective: in the next three years, all Far Eastern regions should be in the top half of the national ranking of regions in terms of their business climate. What this means is that the Far East should outperform other regions in terms of promoting positive change. Other regions will also seek to improve their standing. Of course, we must keep this in mind.
I would like to highlight a sensitive issue for many entrepreneurs in the Far East and across Russia. I am referring to excessive oversight and control. We discuss all the time the issue of inspections being held without any reason or justification.
In August, in Blagoveshchensk I instructed the Government, the Prosecutor General’s Office and law enforcement agencies to look into this situation one more time in order to put things straight in terms of oversight. I expect a separate report on these efforts.
The One Hectare programme has proved worthwhile for supporting local businesses and promoting territorial development. Those who have received land under this programme have not only launched their own businesses but have united into new populated areas in the Far East for the first times in decades. The federal and regional governments must provide them with financial assistance and help them create communal infrastructure. I also suggest that those who are successfully working and have privatised their plots of land be offered larger plots of land to develop.
We should also give our compatriots who settle in the Far East an opportunity to join this programme. In general, we must analyse the progress this programme is making. As you know, people asked me about this during the Direct Line programme and complained about problems and red tape. We must analyse all these questions and come to proper conclusions. Those who come to live here, including those who come from foreign countries, come with the intention to work here and to build strong families with many children. We must certainly support these people.
Colleagues, during our meeting in Kaliningrad, where we discussed transport problems in northwest Russia, we agreed to do the same for the Far East. As I have already said, the macro-region’s logistics infrastructure is a key area in the development of Russia’s transport system and international transport corridors.
Aviation is crucially important in the Far East. We launched a programme of subsidised flights here in 2010. Over the past eight years, the number of subsidised flights has nearly tripled. But this year problems with buying subsidised tickets were reported. Actually, I believe that this happened not only this year. If we look carefully, we will most likely see the same problem last year.
I want the Transport Ministry to report on what they plan to do about this problem. We must create conditions in which people living in any part of Russia would feel that they all live in one country. I am not going to formulate solutions right now. I am asking everyone to analyse the situation and submit their proposals.
There is also an obvious need for creating more internal routes, which is a separate and very important task. We must think about what we need to do to towards this end.
Another question concerns passenger services between the Far Eastern islands and the mainland. This directly concerns the Kamchatka Territory, where aviation is the only means of passenger service available, although there are vast opportunities for using sea routes.
Also, I want you to tell me about the implementation of the key infrastructure projects, including the Trans-Siberian and Baikal-Amur mainlines and the development of large sea ports and airports. Proper organisation of the checkpoints on the Russian border is of crucial significance. Let us talk about this issue; let us talk about what we are doing in this area.
We have made big but so far only the first steps towards the priority development of the Far East. There is hard and responsible work ahead, but we will definitely accomplish it if we act together and implement all our plans without fail.
The working group of the State Council has presented a detailed report with many new proposals and has prepared a number of measures related to the comprehensive development of the Far East. Let us discuss it.
Mr Shport, you have the floor.
Governor of the Khabarovsk Territory Vyacheslav Shport: Mr President, colleagues.
First of all, I would like to thank you, Mr President, for your trust and the opportunity to prepare the working group’s report on the comprehensive development of the Far East.
In 2013, you described the development of the Far East as a national project of the 21st century. As per your instructions, we have quickly started creating a model of priority economic development of a macroregion that is completely new to Russia. This model is based on the creation of an investment climate and investment systems in the Far East that will be competitive in the whole of Asia Pacific. The new development mechanisms, which we created for a macroregion, are truly working.
The first resolutions on priority socioeconomic development areas were adopted about two years ago. In terms of technology, this is not a long time, but 18 such zones have already been created in the Far East and 158 companies with 500 billion rubles of reported investment have received resident status. Overall, there are plans to implement 340 projects worth 1.4 trillion rubles. The Vladivostok Free Port’s regime applies to five regions; 284 projects with a total investment of over 320 billion rubles have received Free Port resident status.
Infrastructure support is being provided for large investment projects. Federal support, estimated at 34 billion rubles, has been approved for 14 projects in five regions of the Far Eastern Federal District. Mr President, the decisions to level energy rates for companies in the Far East became effective in July, as per your instructions.
Arrival of investors is the best indicator of our system-wide work. According to statistics, the real investment rate index in the first half of this year was almost 120 percent and is one of the highest rates in the country. At the working group’s meetings, we carried out a detailed analysis of the situation in existing and future development areas in the Far East. Working group members and the organisations involved submitted over 300 proposals. We have analysed all of them, and the majority of these proposals have been incorporated in the consolidated report.
I would like to say a few words about the working group’s main conclusions and proposals. As you said, much has been done to attract investment to the Far East, but investors have already pointed out new challenges: how to attract skilled workers, and how to keep them in the Far East. The current residents in the priority socioeconomic development areas and at the Free Port have created 60,000 new jobs. All the proposed investment projects, of which there are over 800, will need more than 100,000 people. This is a large workforce, which we cannot provide even if we forget about the demand for skilled workers in the Far East.
This problem is also reflected in the results of the national ranking of the investment appeal of our regions. All Far Eastern regions received an E in the category Quality and Availability of Labour, which is the worst mark. The Republic of Sakha (Yakutia) has a D, which is also a bad mark.
In this regard, the working group believes that in order to meet economic development needs, it is necessary to implement a set of measures to stimulate labour migration to the Far East. We propose to update the current federal programme, Labour Mobility, for this purpose. The programme is still active, but it has been adjusted (there are new proposals) and today it requires simple modernisation. We propose to focus this programme only on the Far Eastern regions. Today this includes 16 regions in total.
It also makes sense, using the experience of this programme and the programme to resettle compatriots living abroad, to work out measures to support various categories of immigrants. We have worked on such proposals. With your approval, Mr President, together with the Ministry of Labour we will develop concrete proposals on the Labour Mobility programme.
Of course, it is impossible to solve the issue of attracting labour without providing people with certain living conditions. The question arises: how and in what conditions will people live there? So, modern kindergartens, housing, schools, hospitals and sports centres are needed. It is not enough just to stimulate private investment. As you already said, an integrated approach is needed.
Thanks to the investment support system, priority development centres are rapidly taking shape in the Far East today. The working group proposes to apply an integrated development approach to them. The first experience with such an approach is underway in the Khabarovsk Territory. In accordance with your instruction, in April 2016, the Russian Government approved a long-term plan for the comprehensive development of Komsomolsk-on-Amur. I can say that the experience of Komsomolsk-on-Amur will be implemented in Svobodny in the Amur Region soon. In August, the Government approved the integrated plan for Svobodny.
(The speaker went on to talk about the implementation of the integrated development plan for Komsomolsk-on-Amur and the problems that had come to light, and also made suggestions on how to solve these problems.)
The working group proposes to change the mechanism for supporting the integrated development of the Far East. What new approaches are recommended, if you will support them (and we hope you will)? First, in conditions of limited state resources, it is necessary to maintain compact centres of economic growth. Today, there are such centres in almost every region. Together with the Ministry for the Development of the Russian Far East, all the Far Eastern regions have designated such development centres.
I can list the main centres: the Eastern Petrochemical Complex in the Primorye Territory, the gas processing centre in the Amur Region, the Amuro-Khinganskaya priority development area in the Jewish Autonomous Area, the coal and metallurgical complex in South Yakutia, the Komsomolsk-Amursk-Solnechny agglomeration, the Yuzhny priority development area in the Sakhalin Region, the Avachinskaya agglomeration in the Kamchatka Territory, the gold mining centre in the Magadan Region, and Beringovsky priority development area in Chukotka. This approach – through development centres – is distinguished by its cost effectiveness.
Here is what I can say about the Khabarovsk Territory. If we act according to sectoral provision standards and open up, figuratively speaking, a broad development front, then the cost of infrastructure will amount to a trillion rubles. But this amount is unbearable, unrealistic. On the other hand, the approach with development centre, which we chose, requires 50 billion, and it solves major problems and they are being resolved today, as we can see. We propose approving this approach in all regions.
Second, the working group recommends reforming the current rules for granting subsidies to the Far Eastern regions: to move from a multi-channel system of subsidising regional activities according to sectors to a single grant for integrated development. This will help avoid numerous regulatory procedures for approval.
Third, it is proposed to select one main manager of the granted subsidy for integrated development. For Russia, this manager is the Ministry for the Development of the Russian Far East. This will allow us to quickly resolve these issues.
(Vyacheslav Shport proceeded to list specific proposals of the working group, in particular, on financing as part of the subsidies for the comprehensive development and under the One Hectare programme.)
According to members of the working group, the subsidy for comprehensive development should not be a substitution for the work with special sections of the Russian Far East in the state programmes of the Russian Federation. You have mentioned this as well. This concerns major transport and energy projects, as well as specific ones that are essential for the Russian Far East, such as Seismic Reinforcement of Residential Buildings, a project which is important for most regions. This programme is operational in every region and has shown very good results.
There are other programmes as well, such as Light Aviation Development. This is a separate programme, and it should not be discontinued after a single subsidy is introduced. The programmes should continue functioning as they are specific and must be included into these special sections.
These are our proposals and main areas of focus, which you can find in the report.
I would like to thank all members of the working group and colleagues – governors of the Far Eastern regions, investors and public organisations for the energetic work and engaging discussion, and for the proposals that have been submitted to the working group.
Mr President, I ask you to support the proposals for the comprehensive development of the Russian Far East voiced here today.
That concludes my report. Thank you.
Vladimir Putin: Thank you very much, Mr Shport.
Mr Trutnev, go ahead.
Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev: Mr President, colleagues,
During the forum, we reported that in the past three years, 837 investment projects have been launched in the Far East with support from the Government.
The total amount of investments stands at 3.2 trillion rubles. We can now say that we have learnt to attract investment to the Far East. We are perfectly aware that the world never stops changing, and development models that were created have to be improved. To draw investors there, we have to take some responsibility, primarily responsibility for supporting every project.
An essential part of our responsibility is meeting the government’s commitments to build infrastructure for new projects for priority development areas. Currently, work is in progress on 130 such facilities. We are overseeing the construction process online and making sure that every ruble from the budget is spent as designated.
There are some problems though. The existing rules on granting subsidies are highly overregulated and do not allow for flexible and efficient management of finances, depending on the schedule of building enterprises.
Mr President,
Yesterday, as you were touring the exhibition of priority development areas, you supported the proposal to create multi-functional service centres for investors as well as a change in the rules of subsidising infrastructure development. We will promptly draft relevant proposals.
And yet, we believe that the first stage in the development of the Russian Far East has been a success. Now we are facing even more complicated and larger-scale tasks. First, we should bring living standards in the Russian Far East to a level not lower – and, if possible, higher – than the average living standards in Russia.
Second, we should build the required housing, infrastructure, schools, hospitals and kindergartens for all major investment projects. This task is being addressed, Mr President, as part of your instruction to develop the Zvezda shipbuilding complex: Housing for 7,000 employees is being built; the overall amount of funding is 14.5 billion rubles as provided by the Fund for the Development of the Russian Far East, the Housing Mortgage Finance Agency of the Primorye Territory, and the state programme for the development of the Russian Far East.
The same comprehensive development task was assigned to the city of Komsomolsk-on-Amur. In that city, we should create 27 municipal infrastructure facilities worth a total of 62.9 billion rubles. But the funding situation is considerably worse, as you noted. In the meantime, we must build highly important facilities, such as a hospital for children, an oncology centre, and a theatre. We must also rebuild an engineering school and a sports complex. The city has none of these.
We are facing the same problems as we implement the gas refinery project in the town of Svobodny in the Amur Region. This will be a major facility, one of the most advanced in the world, with 4,000 employees. We must provide them with housing, infrastructure and all the necessary services.
In effect, we are talking about the need for the Government of the Russian Federation to transition to a project-based way of working, where the state accompanies an investor-implemented project by creating [decent] living conditions for people.
To be continued.

Press statements following talks with President of the Republic of Korea Moon Jae-in

Владимир Путин и президент Южной Кореи подводят итоги переговоров на полях ВЭФ
Press statements following talks with President of the Republic of Korea Moon Jae-in
Vladimir Putin and Moon Jae-in made statements for the press following their talks.
September 6, 2017

With President of the Republic of Korea Moon Jae-in.
06':34 -- President of Russia Vladimir Putin: Mr President, ladies and gentlemen,
We have just completed our meeting with President of the Republic of Korea Moon Jae-in. We had a meaningful and constructive conversation, and discussed in detail the state and future of bilateral relations, as well as urgent regional and international issues.
The Republic of Korea is one of Russia’s key partners in the Asia-Pacific Region. We have always maintained close and mutually beneficial economic ties between our countries. It is telling that in the first six months of 2017 bilateral trade increased by almost 50 percent, reaching $10 billion.
More than 600 South Korean companies operate in Russia, and investment from South Korea in the Russian economy exceeds $2 billion.
The most successful projects include the Hyundai Motor car plant in St Petersburg with an annual capacity of up to 200,000 cars, the construction of a confectionery plant by Lotte Group in the Kaluga Region, and a business centre and hotel in Moscow, and also large-scale home appliance manufacturing by Samsung and LG in Russia.
Korean businesses are highly interested in stepping up cooperation with Russia, something that was confirmed at the Eastern Economic Forum by the presence of a high-profile delegation of almost a hundred business leaders representing 50 companies.
We hope that Korean businesses will be equally interested in taking part in INNOPROM 2018 International Industrial Trade Fair in Yekaterinburg, where South Korea will be a partner country.
Today Mr President and I have agreed to stimulate the operation of the joint investment and finance platforms with the aggregate capital of $1 billion and to create a portfolio of promising projects, primarily for the Far East, where we can make use of the opportunities offered by the priority development areas and the Free Port of Vladivostok.
During our talks, the Korean partners confirmed their interest in creating a free trade zone with the Eurasian Economic Union. It has been decided to continue expert consultations on this issue.
We also expressed satisfaction with the successful development of our energy cooperation. South Korean companies are involved in the Sakhalin-1 and Sakhalin-2 projects. We are discussing the possibility of increasing the delivery of liquefied natural gas. Fifteen tankers will be built at South Korean shipyards to transport the products of the Yamal LNG plant.
I would like to say that Russia is still willing to implement trilateral projects with the participation of North Korea. We could deliver Russian pipeline gas to Korea and integrate the power lines and railway systems of Russia, the Republic of Korea and North Korea. The implementation of these initiatives will be not only economically beneficial, but will also help build up trust and stability on the Korean Peninsula.
We see the advantages of the potential involvement of South Korean companies in the construction of infrastructure facilities in Russia, including the modernisation of Far Eastern ports and shipyards and the joint development of the Northern Sea Route.
We also consider it important to develop cooperation in agriculture. We will continue working to lift obstacles that hinder trade in this area. We have scored the first positive results: Russian food deliveries to South Korea grew 17 percent to $870 million in the first seven months of this year.
Mr Moon Jae-in and I agreed on the importance of stepping up regional ties. The first meeting of the Russian-Korean Forum for Interregional Cooperation is expected to take place in the beginning of 2018.
Cultural ties are also gaining momentum. In May and June, Russia hosted the Festival of Korean Culture, which was a great success, and Korea will host the Festival of Russian Culture next year.
The 8th Youth Dialogue was held as part of the Russia – Republic of Korea Dialogue forum in Seoul and Pyeongchang. We hope that South Korean youth will proactively contribute to the 19th World Festival of Youth and Students that will take place in Sochi in October 2017.
As everyone knows, next year the Republic of Korea will host the 23rd Winter Olympic Games. I would like to thank Mr Moon Jae-in for his invitation to attend the opening ceremony.
South Korea has become a popular destination for Russian tourists. Last year, the number of Russian tourists travelling to South Korea increased by 19 percent, while the flow of Korean tourists to Russia increased by 20 percent. There is no doubt that this was largely attributable to the visa free arrangement between the two countries.
Of course, during the talks we paid special attention to the situation on the Korean Peninsula, in the follow-up to the September 4 telephone conversation on the sharp deterioration of the situation after yet another nuclear test carried out by the DPRK.
I confirmed Russia’s principled position to Mr Moon Jae-in. Russia does not recognise North Korea’s nuclear status. Pyongyang’s missile and nuclear programme is a flagrant violation of the UN Security Council resolution, it undermines the non-proliferation regime and poses a threat to security in Northeast Asia.
This is the reason why Russia supported the statement made by the President of the UN Security Council on August 29 to condemn the latest ballistic missile launches. At the emergency meeting of the UN Security Council on September 4, we also condemned North Korea’s nuclear test explosion.
At the same time, it is obvious that the Korean problems cannot be settled with sanctions and pressure alone. We must not yield to emotions or try to drive North Korea into a corner. Now is the time for all of us to summon the presence of mind and to avoid taking steps that could escalate tensions.
It will be difficult to resolve the situation without political and diplomatic methods. More precisely, it will be impossible to resolve it without this. We put forth our practical proposals on this matter in the Russian-Chinese roadmap. We urge all parties concerned to seriously consider our initiative, which offers a practical way, as we see it, to ease tensions and to move gradually towards a settlement on the peninsula.
In conclusion, I would like to say that our talks with Mr President were open and productive. We have agreed to maintain regular contacts.
I have formed an impression that our Korean colleagues are interested in promoting bilateral relations. I would like to assure them that we are interested in this as well.
Thank you.
14':38 -- President of the Republic of Korea Moon Jae-in (retranslated): Allow me to begin by expressing gratitude to President Putin for inviting me to attend the Eastern Economic Forum as a guest of honour.
I visited Russia four months after assuming the office of President of Korea. I made this visit before any other visits I made in the capacity of President of Korea. This shows the significance I attach to partnership with Russia.
The Far East is an area where Russia’s eastern policy and Korea’s New Northern Policy converge. Vladivostok is the gate to the East. It has deep historical and cultural ties with Korea.
I am very impressed by the dynamic development of Vladivostok. The Republic of Korea is the best partner in the development of the Far East. I am confident that an active involvement of the Korean Government and business community in the development of the Far East will help turn it into a solid platform for promoting peace and prosperity in the region.
Today Mr President and I reaffirmed our strong will and our vision for the further development of bilateral relations. We also discussed a wide range of issues related to the strengthening of our practical cooperation, primarily the expansion of the foundation for bilateral relations, including in the Far East.
The Korean Government has recently created the Northern Economic Cooperation Committee under the President. This has completed the creation of a management system that will make Korea the leader in the development of the Far East. The Committee is tasked with strengthening economic cooperation with Northeast Asian and Eurasian countries. In the future, cooperation between the Committee and Russia’s Far Eastern Federal District and the Ministry for the Development of the Russian Far East will play a key role in the development of the Far East.
Next year, we will create a Korean-Russian Regional Cooperation Forum. It should bolster contacts between regional governments in Korea and the Russian Far East. Cooperation channels between regional economic communities and small and medium-sized businesses will greatly expand contacts between people and promote practical cooperation.
Mr President and I also agreed to expand financial support and consulting services to promote investment cooperation in Russia’s Far East in various areas. Specifically, we agreed to create a new investment facility for a total of $2 billion for supporting projects in the Far East.
A decision was taken to establish a centre for Korean investors in order to support Korean businesses that want to work in Russia’s Far East, and address issues that Korean businesses face. We also agreed to hold regular Korean Investor Days in both countries.
Since the free trade agreement between Korea and the EAEU has the potential of bolstering cooperation not only between Korea and Russia, but also between Korea and other EAEU members, we agreed to set up a working group to explore the possibility of signing an agreement of this kind. I think that the nexus between the rich natural and energy resources in Russia’s Far East, on the one hand, and Korean technology, on the other, could transform Russia’s Far East into a new territory of growth and prosperity for both countries.
Many Korean companies already operate in priority development areas and the Free Port of Vladivostok. The project to build a fish processing complex and other projects promise great added value. I hope that as more projects of this kind are launched, we can develop a business-to-business cooperation model and create a new bilateral cooperation framework.
The world's first icebreaking liquefied natural gas tanker was built by a Korean shipbuilding company and transferred to Russia, opening the era of the Northern Sea Route, which until then seemed to lie in the distant future. This example shows that this kind of effective bilateral cooperation can be replicated in a number of traditional areas, including transport infrastructure, seaport development, agriculture, etc.
Despite the second warning from the international community, North Korea held the sixth nuclear test last week, which has been firmly censured. The North Korean nuclear and missile ambitions are the biggest threat to the development of the huge potential of the Korean Peninsula and the Russian Far East. This is why we have come to the conclusion that this problem must be settled as soon as possible.
Mr President and I have agreed that nuclear missile tests are the wrong choice and that our current task is to ease tensions on the Korean Peninsula. In this context, I highly appreciate the commitment of Mr President and the Russian Government to the principle of nuclear non-proliferation and their efforts to implement the UN Security Council resolution and to settle the North Korean problem through diplomatic means.
At the same time, Mr President has expressed his understanding of and support for the Korean Government’s efforts towards a lasting peace on the Korean Peninsula and improved relations between the two Korean states. I appreciate this. Such communication between heads of state is conducive to strengthening strategic ties aimed at settling the North Korean problem.
Mr President and I have also agreed to build up the basis for the implementation of trilateral projects with participation of the two Korean states and Russia, which will connect the Korean Peninsula and the Russian Far East. Despite lengthy talks, these projects have not progressed for a number of reasons, including the North Korean problem. We have decided to give priority to the projects that can be implemented in the near future, primarily in the Far East. The development of the Far East will promote the prosperity of our two countries and will also help change North Korea and create the basis for the implementation of the trilateral agreements. We will be working hard on this.
In conclusion, I would like to congratulate Mr President on the success of the third Eastern Economic Forum. Mr President and I will open a new page of cooperation not only between the Korean Peninsula and the Russian Far East, but also between Northeast Asia and Eurasia in general.
I would like to again express my gratitude to the Russian Government and people for this warm welcome.
Thank you.
21': 45 --Vladimir Putin: I want to congratulate our Korean friends on the Korean national team winning the right to participate in the 2018 FIFA World Cup in Russia. We look forward to welcoming your team.

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