On September 12, 2023, Russian Foreign Minister Sergey Lavrov answered a question from the Russian media outlet Izvestia on the sidelines of the Eastern Economic Forum, which took place on September 10-13, in Vladivostok.
Lavrov said: "When the West introduced sanctions against us as a punishment for the failure of its plan, what we did in terms of economic development and foreign economic ties in the East started exceeding the Western dimension to a great extent. The EU, NATO, and other residents of Europe that have joined the sanctions are depriving themselves of the advantages they used to enjoy in the past."
During the Plenary session of the 8th Eastern Economic Forum, Russian President Vladmir Putin stressed several times that the "Far East is Russia's strategic priority for the entire 21st century" (See ANNEX).
(Source: Mid.ru)
Following is Lavrov's answer to Izvestia:[1]
"We Have Never Turned Away From The East"
Question: "What signs of Russia's pivot to the East do you see now ahead of the plenary meeting? What economic prospects are opening before our country?"
Sergey Lavrov: "This phrase – 'pivot to the East' – is misleading and obscures the meaning of current developments.
"We have never turned away from the East. For nearly 20 years after Vladimir Putin became president of the Russian Federation, our foreign, economic and investment policies have always taken into account the immense advantages available in the east of our country and on the Eurasian continent.
"These advantages – we should honestly admit this – were not taken into consideration or put to use in the late 1990s after the disintegration of the Soviet Union. Objectively, the Western dimension prevailed at that time.
"The Russian Far East and Northern Russia, this Eastern flagship of our continent, came to attract increased attention long before the current developments. Moreover, this was not only in a token way, because Russia adopted concrete investment programs, created new transport and logistical routes, developed ports, built new ships and oil tankers, grain carriers and freighters, and much else.
"But the West decided to 'strike an attitude' and 'punish' Russia with sanctions for our reluctance and inability to tolerate its plans to use Ukraine to undermine our security and eradicate all things Russian on Ukrainian territory, which was created and licked into shape by Russian tsars, engineers and military leaders. When the West introduced sanctions against us as a punishment for the failure of its plan, what we did in terms of economic development and foreign economic ties in the East started exceeding the Western dimension to a great extent. The EU, NATO, and other residents of Europe that have joined the sanctions are depriving themselves of the advantages they used to enjoy in the past. This is a historic and objective trend and it will only grow stronger."
ANNEX – Plenary Session Of The 8th Eastern Economic Forum
Russian President Vladimir Putin's address at the plenary session of the 8th Eastern Economic Forum:[2]
(Source: Kremlin.ru)
"We Are Witnessing A New Emerging Model Of Relationships And Integration – And Not By Western Patterns"
President of Russia Vladimir Putin: "Good afternoon, friends, Ms Yathotou,
"I am delighted to welcome our guest, and I ask the participants to do so as well.
"Our moderator has now greeted the audience by saying "good afternoon, good morning, good evening" – and indeed, when you arrive in the Far East, everything gets confusing and time-disorienting here. But one thing is clear: the Far East is Russia's strategic priority for the entire 21st century, and we will stick to this.
"I would like to welcome the participants and guests of the 8th Eastern Economic Forum, which has traditionally brought together business leaders, experts and senior officials from our country as well as from dozens of other states from across the globe to discuss promising and strategic areas for the development of the Russian Far East, the Arctic and the entire Asia-Pacific region. In my remarks today, I will mention other Russian regions one way or another as well, because they are part of a single national economic complex. We are meeting here to assess the main trends that determine the further development of international business relations.
"We can all see very well the changes that the global economy has experienced in recent years and continues to experience now, including due to certain countries, primarily Western ones, of course, who are destroying the system of financial, trade, and economic relations that they had put much effort into building.
"It is very important that in these conditions the world sees the expanding space for actual business cooperation between states that do not yield to external pressure but pursue their own national interests, with a growing number of such states in different regions of the world.
"In their activities and policies, they prioritize efforts to promote their own projects in transport, energy, industry, finance and the humanitarian sphere that bring direct long-term benefit to their nations, instead of being led by current political issues.
"Essentially, we are witnessing a new emerging model of relationships and integration – and not by Western patterns, for the elite, for the chosen 'golden billion,' but for the entire humanity and the entire existing and developing multipolar world. This model offers creative energy, openness and focus on a specific outcome as a powerful competitive advantage of the Asia-Pacific region, a key factor that determines and I am sure will determine for a long time its global leadership in economic growth.
"Notably, last year Russia's trade with Asia-Pacific countries increased by 13.7 percent and added another 18.3 percent in the first six months of this year. It was up 13.7 percent for the whole last year and this year, it is up 18.3 percent just in the first six months.
"I expect our trade with the APR countries and economic relations in general to further expand, because Russia, our Far East, is open to strengthening trade and cooperation ties, and the potential of such cooperation simply cannot be overestimated."
"The Far Eastern Federal District Accounts For 40 Percent Of Russia's Territory"
The Far Eastern Federal District accounts for 40 percent of Russia's territory. Almost half of our forestland and gold reserves, more than 70 percent of our fish, diamonds, and over 30 percent of titanium, copper and so on are located here. Critically important strategic enterprises, seaports and railroads are located here. In short, the role of the Far East for our country and for its future, for Russia's position in a multipolar world is immense. We are well aware of it. That is why I would like to repeat what I said in my Address to the Federal Assembly ten years ago, in December 2013, and what I said at the very beginning: the advanced development of the Far East is our absolute priority for all of the 21st century, our shared responsibility and work of the Government, the regions and major Russian companies, both state-owned and private.
"In order to organize such work, a serious regulatory and legal framework has been created over the past several years, and modern approaches to the economic and social development of the Far East, as well as the Arctic, which is another strategic priority, have been laid down.
"What are the results? The moderator asked what results we have managed to achieve working together in this region over the past ten years. First of all, it concerns the economy. We have come up with special tax, administrative and customs preferences in the Far East in order to promote the development of industrial sites and high-tech production facilities and to create new jobs, and we have taken on the construction of infrastructure and bringing utilities to industrial sites. This business support is provided in the priority development areas and the free port of Vladivostok, although other territories have been added to this port as well."
"The Average Percentage Of Explored Subsurface Resources In The Far East Is Now 35 Percent"
"Last year, a special preferential regime was launched on the Kuril Islands, on even more favourable terms than in the priority development areas: the duration of benefits is longer, the tax cuts are greater, and so on. I will not go into detail now, so as not to waste time.
"Thanks to the Government support for the Far Eastern projects, investment agreements have been signed for over 7.7 trillion rubles, 3.4 trillion of which have already been invested. As many as 125,000 jobs have been created, and about 700 new enterprises have become operational. Among them are landmark projects such as one of the world's largest gas processing plants and a gas chemical complex in the Amur Region, the Nakhodka Mineral Fertilizer Plant and the Zvezda Shipbuilding Complex for large-capacity vessels, which is located right here, next door. Copper and other mineral deposits, including Udokan, Baimskoye and Malmyzhskoye, are being developed.
"Important projects have also been launched in the agribusiness sector. These include greenhouse farms in the Sakhalin Region and the Primorye Territory, fish processing in Kamchatka and Magadan, pork production in the Amur river basin, and increased soy bean production in the Amur Region. All of these are also promising areas both for supply to our domestic market and for export.
"In general, the investment dynamics in the Far East, and I would like to emphasize this, are three times faster than in Russia as a whole. While from 2014 to 2022, the growth in investment in fixed capital across the country was 13 percent, in the Far East it was 39 percent.
"This is also reflected in production output. Industrial growth rates in the Far East also exceed the Russian average.
"According to the results of the last five years, most of our eastern regions – the Magadan and the Amur regions, the Trans-Baikal Territory, the Jewish Autonomous Region, the Amur river basin, Chukotka and Kamchatka – are among the top 20 constituent entities of the Russian Federation in terms of gross regional product growth rates, and the Magadan Region tops this rating.
"Here are a few figures that speak for themselves. In 10 years, the cargo turnover of Far Eastern seaports has increased 1.6 times, housing commissioning, 1.3 times, electricity consumption, 1.2 times, annual gold production in the east of the country has increased 1.6 times, and coal, 2.8 times. You understand what we are talking about – not about the percentage increase in growth, everything is growing exponentially.
"I should note here that the average percentage of explored subsurface resources in the Far East is now 35 percent. You understand, only 35 percent of the subsurface area has been explored. What does this mean? It shows that there is every opportunity for the mining industries to grow by leaps and bounds, including the strategic raw materials that are in short supply, and which will be in demand in the economy of the future."
"This Is Not Only A Guarantee Of The Country's Resource Sovereignty, But Also A Basis For The Production Of New Material"
"All this is not only a guarantee of the country's resource sovereignty, but also a basis for the production of new materials, microelectronics and promising energy sources, for the promotion of domestic environmental and nature-saving technologies and scientific developments, for the creation of good jobs, and for making use of the natural competitive advantages of the Far East and the whole of Russia at a new level.
"In order to increase the scope of geological exploration, we have launched a frontal strategy, it is called so beautifully: Geology. Revival of a Legend. I ask the Government to include a separate section in it, dedicated to the study of the Far East subsurface and to start preparing a similar section for Siberia.
"The prospects for the Far East and the Arctic are related not only to the development of mineral deposits, which, without a doubt, enjoy high demand both in the domestic industry and internationally.
"To reiterate, the potent raw material base for economic development that we are laying down allows us to move forward, to increase the depth of processing of resources, as experts put it, to increase added value at domestic enterprises, including and above all, of course, to do so in the Far East. This is the most important thing.
"For us to be able to do this, we must constantly improve the terms for doing business in the macro-region, keep them at a globally competitive level and provide long-term and cheap financing for investment projects that is affordable to both small and medium-sized businesses, as well as major production companies in all areas and sectors, territories and districts.
"As you may be aware, we have launched a federal cluster investment platform. This mechanism is designed to finance major systemically important projects, primarily for the production of materials, components and finished goods in the manufacturing industry.
"This year, projects to produce priority output worth at least two trillion rubles should be financed as part of this investment platform. I would like the Government to use this tool to expand the Far Eastern economy, so that more sophisticated production facilities with modern and well-paid jobs can be created here. It is necessary to promote projects that require large, multi-billion investments which, in turn, become points of attraction for related sectors, the construction industry, service companies and equipment manufacturers, and for small businesses, too.
"I would also like to emphasize that petrochemistry and natural gas conversion, metallurgy, machine building and other manufacturing industry sectors are all energy-intensive industries. However, and it should also be mentioned, most of the Far Eastern regions, which, as I said earlier, are building housing, opening new production facilities and industrial sites, still face energy shortages, and this, of course, is a problem.
"The scale of the projects that we are implementing in the Far East requires a similarly sweeping upgrade of the Far Eastern energy system. At the same time, there are truly unique opportunities for developing environmentally friendly hydro, nuclear and renewable energy.
"I ask the Government, together with our major energy companies and business community, to prepare a program for the development of the energy capacities in the Far East. It should cover a long-term period, until 2050, to expand the economic capacities of our Far Eastern territories to the fullest. I also ask the Government to develop mechanisms of project financing for this strategic program.
"Plans call for connecting the Sila Sibiri (Power of Siberia) and Sakhalin-Khabarovsk-Vladivostok gas pipelines and then for including them in the country's integrated gas supply system. That will resolve – I dare say – a historical and global task for our country: to integrate the Russian western and eastern gas distribution networks into one.
"Together with the construction of Sila Sibiri-2, it will allow us not only to work flexibly on the global energy markets, which is relevant today, as we know, but also to significantly expand the program to connect communities in Buryatia, the Trans-Baikal Territory and other Far Eastern regions to the gas distribution system and provide the local industries in the Far East with additional resources and local cities and villages with environmentally clean fuel. The capacities of the LNG terminal, which has already been built by one of our companies, will be used to connect Kamchatka to the gas distribution network."
"Development Of The Northern Sea Route Has Special Priority Among These Projects"
"This sector is developing actively, including in the Arctic. After the successful launch of the Yamal LNG project, a new major project has been started to build an LNG terminal in the Arctic: the first technological line of the Arctic LNG 2 project. It has already been delivered to the production site, and the startup work is underway, am I right? That's great.
"I want to note that the line is in fact a floating plant to liquify natural gas. This project is the only one of its kind in the world, it is safe to say, and is built with Russian technology and capacities. The project is being implemented by the Murmansk LNG Construction Centre, which manufactures GBS liquefaction trains.
"By 2030, LNG production in the Russian Arctic zone is expected to increase by 200 percent, to 64 million tons per year. In this regard, a principled decision was made to build new LNG lines at the Murmansk center to operate at the Arctic deposits. Naturally, it will make a great contribution to the development of our northern regions and improve Russia's technological sovereignty.
"A high-capacity LNG production center will be built in the Murmansk Region. The issue is not directly connected to the Far East, but a Volkhov-Murmansk-Belokamenka gas pipeline will be built to that end.
"I will not go into detail, but I very much hope that our companies, with the help of the Government, will come to an agreement among themselves regarding who and how will be engaged in the construction of this important infrastructure facility. It is very important for Murmansk and local communities, as well as for Karelia.
"Transport projects are important as a means of support for business initiatives and in general for the economy of the Arctic and the Far East and for local residents there. It is necessary to expand the existing logistics routes and open new corridors for cargo operations.
"Certainly, development of the Northern Sea Route has special priority among these projects. Thirty-four million tons of cargo were shipped using the route last year. In the next few years, the cargo traffic on this global transport corridor will only grow, which requires prioritizing the construction of a modern icebreaker fleet, as well as upgrading Arctic ports and their infrastructure.
"By 2030, we expect the general capacity of seaports in the Arctic waters to double. While last year, this capacity stood at 123 million tons, by the end of the decade it is expected to reach 252 million tons, in part thanks to the construction of new terminals and the expansion of railway access. By 2027, we plan to substantially ramp up the capacity of the Murmansk port, from 56 to 110 million tons per year.
"We will continue to modernize the Baikal-Amur Mainline and the Trans-Siberian Railway. Certainly, the pace needs to be stepped up, including through concessions and by attracting private capital for the construction of bridges, tunnels and overpasses. We have just discussed this matter with moderators of the respective sessions.
"In this connection, I want to note that, thanks to the initiative of private investors, we are building the Pacific Railway and a new port on the Sea of Okhotsk, which will allow us to utilize the resources of Yakutia and the northern regions in the Khabarovsk Territory, and to secure direct access to Asia-Pacific markets."
"We Created An Integrated Far Eastern Airline"
"Our major companies are currently building a new port on Taimyr and modernizing the Pangody-Nadym railway on Yamal. There are many such examples when businesses making long-term investment in logistics, transport, energy projects, construction of railways and motorways, sea terminals and airports.
"I would like to ask the Government and our colleagues in the regions to rely on this resource and make sure that both state and private investment create a synergetic effect for renewing the infrastructure and social facilities and for spatial development of regions and the country in general.
"I have already told Russian business leaders, many of whom are facing pressure from some of our partners, and I want to reiterate today that it is definitely better and more reliable to invest in Russia, both in major, ambitious infrastructure projects and local but important projects related to urban development and tourism. We see what happens with capital and how and where it goes. Do not make the same mistake twice.
"Just recently, we have opened a section of the high-speed motorway from Moscow to Arzamas. By the end of this year, the road will reach Kazan, and then Yekaterinburg and Tyumen. I want to say that we will certainly continue this major project and build high-speed roads across Siberia and the Far East to reach the Pacific Ocean. The Rossiya integrated transport corridor will be created from St Petersburg to Vladivostok. It will help develop tourism, connect logistics, agrarian and production centers, and will give a boost to entrepreneurship and revival of cities and villages.
"A separate matter is the development of air travel between the Far East and the European part of Russia, as well as improving direct interconnectivity of the Far Eastern regions, so that people would not have to fly to neighboring regions via Moscow or Siberian airports.
"To that end, as you know, we created an integrated Far Eastern airline. Its most important routes are subsidized by the state so that airfare becomes more affordable, and there are additional opportunities to create new routes, including local ones.
"I suggest that this important work be continued and made system wide. I ask the Government to put together a comprehensive plan of measures to develop air travel within the Far Eastern region by March 1, 2024. It should cover the construction of new and modernization of the existing airports, the improvement of general aviation standards, deliveries of Russian-made aircraft and helicopters, and of course, increasing the affordability of air travel by reducing airlines' expenses on aircraft leasing.
"The exact parameters and target points are to be outlined, but I think that it would be good to plan that by 2030, passenger flow on the domestic flights within the Far East should grow to at least 4 million people per year."
"To Improve The Quality Of Life... In Russia's Far Eastern Regions"
"Colleagues,
"The most important and integral goal of our plans, which we are implementing in the economy, transport and infrastructure of the Far East, is to improve the quality of life, to create comfortable and modern conditions for study and work, leisure and raising children, and to achieve sustainable population growth in Russia's Far Eastern regions.
"For this purpose, a number of mechanisms have been launched, including the Far Eastern Hectare program. More than 119,000 people have received land plots for doing business, opening production and tourist facilities, or building their own homes.
"I would like to remind you of the task at hand: this autumn we need to put in place a regulatory framework to support individual housing construction across the country. I am talking about escrow accounts that are used in the construction of blocks of flats. They will further protect people's savings and create opportunities for them to attract mortgage loans to build their own homes.
"I draw the attention of my colleagues from the Government to the fact that these mechanisms must be developed by the end of this year, and, to reiterate, throughout the country, including the Far Eastern regions.
"Notably, special mortgage terms are available in the Far East with the loan amount being up to six million rubles, the term, up to 20 years, and the interest rate, two percent. With the help of this tool, more than 78,000 families have purchased or built new housing.
"I propose adjusting the parameters of the Far Eastern mortgage lending program and making it more attractive. Yesterday, my colleagues and I discussed this. It is about raising the upper limit of the loan to nine million rubles for those who want to buy their own housing with floor space of more than 60 square meters. That way, families will have more opportunities to choose a flat on the primary market or to build their own house.
"Initially, the Far Eastern mortgage lending program was designed only for young families, but since last year teachers and doctors working in the Far East are eligible for such a loan as well.
"I propose that we take the next step and once again expand the coverage of this program, making mortgages at two percent available to employees of the Far Eastern defense industry enterprises. To reiterate, for all Far Eastern defense industry employees, regardless of their age or marital status, just like we did for doctors and teachers.
"Next. We have suggested special mechanisms for the development of housing construction, including the so-called Far Eastern Quarter project, where companies that are engaged in comprehensive development receive the benefits available to resident companies in priority development areas. As a result, the design stage includes housing plus a comfortable urban environment and social infrastructure, such as kindergartens, outpatient clinics, sports centers, and more.
"Bolstered by the mechanisms of the Far Eastern Quarter, a satellite town is being built near Vladivostok. It will accommodate some 80,000 people in a state-of-the-art living environment."
"Continue To Prioritize The Far East With Regard To State Investment"
"I want to add that the so-called presidential subsidy has been introduced to help bring about comprehensive development of the social infrastructure in the Far East. As part of this program, over 1,500 facilities have been built, repaired and equipped in all Far Eastern regions. These include schools, hospitals, gyms, fitness and health centers, houses of culture, etc.
"Here are several facilities that have opened recently: a cardiovascular center in Yakutsk, a nuclear medicine center in Ulan-Ude, a center for team sports and martial arts in Komsomolsk-on-Amur. Housing for social sector workers was built in Chukotka. Mayak Park opened on the coast of the Sea of Okhotsk in Magadan.
"A separate and major area of work that we have launched is the revival of 25 agglomerations and cities in the Far East. I will not list them now; we discussed this publicly yesterday. The cities should get a new look based on the development of qualitative master plans based on the problems and advantages of each particular city. The master plans are more or less ready, we spoke about this yesterday. It is necessary to finalize them, outline financing sources, and get on with the work as quickly as possible.
"During the renovation of the cities, it is necessary to use the Far Eastern concession mechanism. I also suggest that additional resources be allocated for the priority master plans in the next three years; I instructed the Government yesterday to finalize these mechanisms. Later, we will consider increasing financing for the period until 2030.
"And, of course, it is necessary to pay special attention to municipal entities, including small ones. For example, as part of the One Thousand Courtyards program, 1,245 public spaces were improved last year; another 562 will be improved this year. Naturally, this work should be continued.
"I would like to emphasize that a while back we decided that all our key development programs should include a special section on the Far East. This has allowed us to achieve a decent growth of government investment in projects implemented in the Far East. We should maintain such levels and dynamics and continue to prioritize the Far East with regard to state investment.
"One more thing: Russia's Far East should not be solely a territory where the economy, social sector and urban environment are developing rapidly. While pursuing these plans and projects, we should not neglect efforts to take care of unique ecosystems and preserve hundreds of rare plant and animal species. Incidentally, the international forum Falcon Day has been held for the first time as part of the current Eastern Economic Forum, with the aim of discussing the preservation and growth of the population of predatory and rare bird species.
"I would like to thank our friends and colleagues from the Middle East, who are paying particular attention to this issue. And we will obviously work with you, colleagues, on this humanitarian yet very engaging matter.
"Russia's Far East has more than 60 specially protected natural areas of federal significance, many included on the World Natural Heritage Sites list such as Lake Baikal, Lena Pillars Nature Park, Wrangel Island Reserve, volcanoes of Kamchatka, and others. All this is our core national wealth and at the same time it is global heritage; we are obliged to preserve it while providing opportunities for scientific research, for education and recreation of children and young people, and for Russian and foreign tourists and visitors to get to know the wonderful nature of our Far East."
"Developing New Industries In The Far East"
"I have mentioned that the Russian Far East should become a platform for new economic sectors, including the development of tourism in national parks in the Primorye and Khabarovsk territories, Yakutia, Buryatia, Kamchatka, the Kuril Islands and other regions.
"On September 1, a law came into effect to provide proper conditions and a legislative framework for ecotourism and create a foundation for unlocking the scientific and tourism potential of the protected areas. It is important to provide them with proper infrastructure.
"In this regard, I propose that additional funding be allocated to national parks in the Far East next year – and not through redistribution of funds allotted for other nature sites but by providing additional money over and above the envisaged financing.
"And a few words on developing new industries in the Far East. The exhibition Development of Creative Economy in Russia, which took place in late May, included a substantive discussion where young entrepreneurs, including those from the Far Eastern regions, came up with engaging proposals.
"For example, Yakutia boasts one of the best practices for promoting creative industries, such as computer programming, architecture, industrial design, and the like thanks to the regional authorities' efforts and the initiative of its business people. This experience will form the basis for developing a regional standard for creative industries, which will then be extended to other constituent entities of the Federation. The most important task here is to improve Russian brand recognition.
"I met with our colleagues, the moderators – I mentioned this meeting earlier – and they shared the good news with me that this process is going at a fairly fast pace with good results.
"It is important to support the demand for domestic products and services, for example, through exhibitions, fairs, and so on. We will certainly keep this process going.
"The first such creative industries fair was held in Novosibirsk in August. It was attended by 70 Russian manufacturers and 17,000 people visited it in three days.
"The second fair was recently hosted by Vladivostok, and the event was included in our forum's cultural program. I think these initiatives will be taken up by other regions.
"Speaking of the Far East specifically, another decision has been made here, which concerns the development of new industries in the economy, culture, and sport. We have agreed that a cyber sports tournament will be held in the Far Eastern Federal District every year.
"This trend is vastly popular around the world, and our cyber athletes are leading the race. I am sure that holding high-level competitions in Russia will help promote computer sports in our country and internationally.
"The first tournament will be held later this year. I would like the domestic IT companies and companies with state participation to pay attention to this sport and support it."
"The Role And Importance Of Our Country In The World Will Only Grow"
"Colleagues,
"Much has been done for the Far East and the Arctic over the past ten years. A powerful boost has been given to the development of the economy, the social sphere and infrastructure, and the environment for doing business that has been created is unparalleled in our country. I am not afraid to use this word: it is an unparalleled environment. We have launched major landmark projects in the production of natural resources and the manufacturing industry, housing construction and upgrading of the transport network. Plans to modernize cities and towns have been drawn up and are being acted upon.
"A huge, key role in achieving these results belongs to the people of the Far East, whose families have lived here for many generations and those who have recently come here from other regions to work, study or run their own businesses.
"I would like to thank everyone who believes in the future of the Far East, its vast opportunities and potential, and who is contributing to its development.
"To reiterate, the Far East remains our strategic priority for the rest of the 21st century. I would like to end my remarks with the opening lines. I am sure its role, as well as the role and importance of our country in the world, will only grow.
"Thank you."
