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Yury Trutnev: “the Far East should be developed according to a comprehensive plan”

Deputy Prime Minister of the Russian Federation, Presidential Envoy to the Far Eastern Federal District, talks about what the government’s priorities are in the development of the country’s eastern territories

Yury Trutnev: “the Far East should be developed according to a comprehensive plan”

– Yury Petrovich, could you tell us, please, what are the key issues of the Far East today?

– The President defined the development of the Russian Far East as a national priority. Thus, opportunities were created for applying instruments which are not used in other regions.

What we started with – was not a coincidence. In order to deal with the social and other pressing problems of people, to invest into social programs, initially it is necessary to earn some money. And when we earn this money, other opportunities will open up for us. Now we are concentrating all our efforts on this. And the key indicator is that private investments are totalling 12 rubles per 1 state budget ruble. This is the most effective use of state budget money, when we put in 1 ruble, and 12 rubles are brought by private investors. Because without such a multiplier, we simply cannot succeed – it is impossible to develop the vast territory of the Far East using only state budget funds.

– How do you evaluate field work? The foreigners complain that they do not always understand the regime of the Advanced Special Economic zones (ASEZ), and government officials cannot explain it to them.

– From the outset, as the task was set, we did not start working within the existing familiar procedures. Because if we had done so, we would have to apologize to the President and the public today, bow from the waist and say that we did nothing. We proceeded immediately from the fact that we had to create a new strategy, new instruments and a new business practice. We could not expect that everyone would suddenly agree with us, that every government official in the entire territory of the Far East would stop living as they lived before. It would be strange if they began working entirely on supporting businesses, for the development of the economy and for the country.

Every government official that meets a person with questions about Advanced Special Economic zones, should not think about where or to whom to send that person. They should think about what is beneficial for the country, and how to act to ensure that the investor does not turn around and leave. Gradually over time, we win converts. The vast majority of the governors are our partners. They are acutely aware of the fact that we are inventing all these instruments and mechanisms of support, not just to report to our superiors, but to help people live better in their regions.

The Far East is huge, Russia is huge, and a lot of work needs to be done. Currently, more than 200 enterprises are being constructed with state support, although, it is not being done in every settlement. Moreover, the construction works are still at the initial stages. Nevertheless, we have witnessed the people’s reactions, they understand that there are more and more changes happening every year. The turning point has already occurred this year, the outflow of population from the region has virtually stopped, hence, we are on the right path.

– The scale of declared investments into the region has already exceeded 1 trillion rubles. The President signed a new legislation on tax benefits. How much investment will be attracted thanks this new legislation?

– Unfortunately, the scale of declared investment indicates that the investor only promised to build a factory, contributing some money in 2016, and an additional sum of money in 2017. The factory will be built, for example, in 5 years. And if we summarize all these investments, we reach a total of approximately 1 trillion rubles. If 1 trillion rubles had already been raised, we would have felt it. We will certainly attract these trillion rubles and will certainly feel its effects, however, this will take a few years.

Large systems – and the Far East, naturally, is a large system – have considerable inertia. And when I was entrusted with the task of developing the Far East, I thought a lot about how much time it would take to overcome this inertia. There were different concepts as to the time frame for this process, but I`m bold to state that the locomotive is on its way.

– You were authorized to create a Working Group on the Development of Komsomolsk-on-Amur. Do you already know who will be the members of this group, and what will be its tasks?

– Komsomolsk-on-Amur is a marvelous city, where people build great airplanes. On the other hand, it is the city that has been left behind, in terms of the processes of development of social infrastructure, as well as housing and utilities infrastructure. Therefore, the President has decided that the municipal economy should be brought to the level of production and technology that already exist in the city. The federal executive government bodies, with investments totalling more than 62 billion rubles, will participate in this program. Our task is to draw up a schedule: what, when and where things will be constructed Then we will stick to this schedule. The event has occurred – the school should have been constructed, show it to us. If it was not constructed – we would write a report to the Chairman of the Government, and he would punish the deputy minister. After being punished a few times, they would be suspended from that post. A new, energetic, intelligent minister comes – and we achieved more under his/her command.

– Recently you have returned from Asia. Does small business express interest in the Far East?

– The interest of the Pacific Rim countries in working in the Far East is growing rapidly. For the time of my work, I have never had such meetings as I had in Japan. In my opinion, the Japanese have demonstrated an absolutely strong interest in collaboration with Russia. I am confident that this is the result of meetings between the Prime Minister of Japan Abe and the President of the Russian Federation Vladimir Putin to a large extent.

– And what areas of investment cooperation between Russia and China do you consider as the most important?

– It seems to me that there are no most or least important areas. From time to time they tell us, especially when we start moving forward, and introduce some new mechanisms: “What did come up with? Do you really think that you will manage to develop the Far East due to this mechanism?” We reply: “No, we will not manage to develop the region using only this mechanism. We will develop the Far East using various instruments, and this is only one of them.” The same applies here.

Food production, logistics, manufacturing – today there are many areas that can play their role. And there are many details. For instance, transport corridors cannot work without changes in customs regimes. In this case, they are simply not needed. Because the distance will be shorter, but the time frames – longer, due to the procedures. Therefore, this entire road consists of details which should be taken into account every day – concerning the Freeport, the Far Eastern Hectare, the Program of Development for the Kuril Islands, Komsomolsk-on-Amur, and many other issues. To be perfectly honest, we need such a mechanism to manage the development process. We have created it within the Ministry of Development of the Far East and all of its supportive institutions. Today the mechanism should be mastered completely, then we will definitely win.

– Do you the Eastern Economic Forum is becoming a good tradition?

– The Eastern Forum was held only once before. However, it is finally evident that the decision had been taken in the right place and at the right time, because it had already become an absolutely anticipated event. And now, when we were inviting investors to the Eastern Forum, they no longer asked – what was it? What does the program include? The people said: “To Vladivostok? In autumn? Of course, we’ll be there”. We are confident that our content will be interesting and competitive. That we will give people the information that will help them run their business and interact with us better. We urgently want to obtain feedback, because we have some ideas, but we are not doing everything perfectly correct, there is certainly room for improvement.

(Based on materials of Rossiyskaya Gazeta and TASS press releases)