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Vladimir Miklushevsky: ”Primorsky Krai will showcase its “success stories”

The Primorsky Krai is among the leaders in terms of economic development in Russia’s Far East: within just one year since the last Forum, the region has demonstrated great dynamics in the implementation of successful projects. Governor Vladimir Miklushevsky talks about what the Primorsky Krai will be presenting at the Eastern Economic Forum 2016

Vladimir Miklushevsky: ”Primorsky Krai will showcase its “success stories”

– Vladimir Vladimirovich, in 2016 the Primorsky Krai will host the Eastern Economic Forum for the second time already. Have you prepared any surprises for visitors?

– The EEF is one of two presidential-level forums in Russia. It is a very important venue for attracting investment not only to the Primorsky Krai, but also to the entire Russian Far East. This year we are expecting up to three thousand participants, which is twice as much as came last year. Both the city and the Krai are exercising active preparations: we are inspecting hotels and restaurants accredited for the Forum, preparing venues and cultural event programs.  I would like to mention that this year guests would have an opportunity to visit the Oceanarium – a unique and extremely interesting place.

– What projects and proposals will Primorsky Krai be presenting at the Forum?

– First of all, we will be presenting projects that have already been declared within the Advanced Special Economic zones (ASEZ) as some of our «success stories». We can say, with a certain level of confidence, that these projects will be implemented, as the construction equipment is already working at these sites. I mean here both the Mikhailovsky Advanced Special Economic zone and the Nadezhdinskaya ASEZ. Sure, we are in the process of building of Zvezda Shipyards. This is our third ASEZ – the Bolshoi Kamen, established in Primorsky Krai by the decree of the RF Government. All three Advanced Special Economic zones are extremely important for us, because they provide new jobs and production facilities. This will deliver an increased tax base and obtaining more money to the Krai’s budget as a result, and then these funds will be allocated towards further regional development to improve the quality of life. I also expect that these new opportunities will attract economically active people from other regions of Russia.

Moreover, we will for sure present at the Forum the projects of the Free Port of Vladivostok. On August 22, the fifth meeting of the Supervisory Council took place, where 36 investment projects were approved, in addition to the 60 residents already operating there. This will bring the total of all investments of the 96 companies to 125 billion rubles. Registration process has been simplified as much as possible, however, a resident company will only receive benefits in terms it constructs something.

In addition, at the EEF the Primorsky Krai will present 29 investment projects, 5 of them will take a «pitch-session» format. These are such large-scale projects as the international transport corridors Primorsky Krai-1 and Primorsky Krai-2. Together with Chinese investors, we will discuss financial models for their modernization. Our partners from China are greatly interested in rapid completion of reconstruction works on these corridors, as these will allow reducing the time needed to transport cargo from the northeastern provinces of China to, for example, Japan, by 3‍‑3.5 times.

At the Forum, we definitely will present the Zvezda Shipyards, the natural gas liquefaction plant, the construction project of the universal seaport Big Port of Zarubino. We will as well talk on such large-scale projects as the modernization of the biggest refrigerated port terminal of the Far East, located in Vladivostok, the construction of a pig farm, a touristic recreation cluster of the Primorskoye Koltso and the factory that will produce energy efficient materials. We hope that initiators of these projects will manage to find interested investors at the Forum.

– One block of the EEF’s business program will be dedicated to the opportunities available to investors in the Far East, including those provided by the Advanced Special Economic zones and the Free Port. What industries is the Primorsky Krai focusing on within the framework of launching of those sites?

– All the Advanced Special Economic zones in the Primorsky Krai are created, based on the principle of priorities and needs of the regional economy. Obviously, this is transport and logistics sector. We have the Trans-Siberian Railway here, we have a developed network of automobile roads, there is a modern international airport, and all ice-free ports in the Russia’s Far East are located here. Therefore, it is quite logical that the multi-functional production and logistics site of the Nadezhdinskaya Advanced Special Economic zone appeared here. We planned to locate nearly 30 enterprises on its territory, and the site is almost full already. The investment volume already amounts to nearly 7 billion rubles. Implementation of the Law on the Free Port of Vladivostok opens huge opportunities for the development of transport and logistics sector. According to expert estimates, by 2025 the special regime of the port will increase the Gross Regional Product by more than 2.5 times. The capital investments will also grow2.5 times. What is also important, the number of jobs in the regional economy will increase by 30%. The key macroeconomic project of the region is the modernization of international transport corridors Primorsky Krai-1 and Primorsky Krai-2, which I have already mentioned.

Shipbuilding is one of the most promising industries in the region, and currently we are constructing the Zvezda Shipyards, which will produce even ice-class vessels. The Bolshoi Kamen Advanced Special Economic zone was established on its base; its private investments would amount to nearly 140 billion rubles.

Agriculture is also of strategic importance for the Primorsky Krai. The Primorsky Krai’s Mikhailovsky Advanced Special Economic zone specializes in hosting modern agricultural-industrial production facilities, engaged in full-cycle processing, storage and logistics of products. Six companies have already become its residents: Rusagro-Primorsky Krai, Merci Trade, Primorsky Bacon, KhorolAgroHolding, Dalnevostochnaya Selskokhozyaistvennaya Kompaniya and Chernigovsky Agroholding. The total amount of investments made by the residents has already surpassed 60 billion rubles.

– Tourism is also an important industry for the Primorsky Krai.  What future development prospects do you see for this industry?

Tourism really is one of the priority industries for the Primorsky Krai. Our huge advantage is the unique natural environment, which attracts tourists from all over the world. This is the Ussuri Taiga in the North, and sea beaches and islands in the South.

Primorsky Krai is in high demand among tourists from the Asia-Pacific Region also because it is the largest center of European and Russian culture in the Pacific Region. We have the famous Mariinsky Theatre, as well as museums and art galleries with unique collections. In early September there will take place a grand opening of the Oceanarium, the biggest one in Russia and one of the two biggest oceanariums in the world. Subdivisions of the Hermitage, the Russian Museum and Tretyakov Gallery will soon open here. 

Every year the Primorsky Krai records an annual increase in incoming tourism of 9% and of 11-17% in domestic tourism.  In addition, we are among the leaders considering the volume of incoming tourism within the agreement between the Governments of Russia and China on visa-free group travel. According to the last year results, the flow of tourists visiting the region under this agreement has grown twice, and this trend remains strong. By the year 2020, we are planning to become a powerful interregional tourist hub in Russia and the Far East with up to 10 million tourists coming annually. The Primorsky Krai has everything necessary to achieve this: there is a tourist market of the Asia-Pacific Region nearby, the fastest growing one in the world with about 120 billion tourists travel annually just from China. One more advantage is represented by the unique preferences provided by the Free Port of Vladivostok.  This will help us create travel routes from Asia to Russia and back. Interregional routes inside the Far East and across Siberia are also in high demand now.  The Vostochnoye Koltso project was presented at the Second Pacific Tourist Forum this past May. Its idea is the following – a tourist can use a package tour and visit the most amazing places of the regions in just a few days. For example, the Mariinsky Theater, then the yew grove on Petrova Island, and later go to Khabarovsky Krai or to Kamchatka Peninsula.

– Many participants of the Forum are interested in the integrated entertainment resort Primorye. During the last EEF, one year ago, its first complex was not yet in operation. However, this year, as we already know, guests plan to visit this resort. Is this one more success story for the Primorsky Krai?

– The first complex of the resort now can accommodate 500—600 people per day, and over 130,000 people have already visited it since its opening. Every year it brings in 140 million rubles of taxes to the regional budget. Now, in addition to the first working complex, construction work on four more hotels is about to start. We plan to build 22 of them. This is a challenging task; we schedule the completion of the project to the year 2025.

Overall, this is a good thing. However, you should also understand the following: when infrastructure is completed, many more services will become available. The practical experience of Las Vegas and Macao shows that, with time, a bigger part of revenues shifts from gambling to the area of additional services: accommodation, entertainment, shopping, business tourism and other ones. For example, the current ratio in Las Vegas is 70/30. It means, gambling accounts for only 30% of the revenues.

During a visit to the gambling zone with Deputy Prime Minister Yury Trutnev, we discussed with investors the questions they were interested in. For example, establishing a customs tax-free zone. We do not have anything like this in Russia yet. We should consider establishing this, at least in a trial mode. We would like to have the Primorye Gambling Zone hosting the first project of this kind.