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Investors will be helped with entering foreign markets

SPIEF-2018 opened with a discussion about the "Far Eastern breakthrough" and business requests to power

The St. Petersburg International Economic Forum (SPIEF) was held on 24-26 in May. A discussion entitled "Far Eastern Breakthrough. How to become a leader in private investment growth? "Was based on statistical data for 2017 year.

Investors will be helped with entering foreign markets
Photo: TASS / Photo Bank SPIEF
The Far Eastern Federal District for the first time in several years has become the leader in the rate of growth of private investment - 17,1% vs. 4,4% on average in the country. 1200 investment projects are being implemented in the Far Eastern Federal District with total financing of 3,7 trillion rubles. 107 of new enterprises are created by residents of the territories of advanced development (TOR) and the Free Port of Vladivostok (SPV) with a total investment of 90 billion rubles. According to Rosstat, the growth rates of industry in the Far Eastern Federal District exceeded the national average by 2,2%, agriculture - by 8,2%, construction - by 9,2%. 

The session was moderated by Alexander Ivlev, EY Managing Partner for Russia. Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yuri Trutnev, Head of the Far East Development Corporation Denis Tikhonov, Head of the Far East Agency for Attracting Investments and Export Support Leonid Petukhov, as well as major entrepreneurs: General Director of PJSC Polyus Pavel Grachev, CEO LLC Sibur Mikhail Karisalov, CEO of PJSC Sollers Vadim Shvetsov, presidents of two corporations - TechnoNICOL Sergey Kolesnikov and Kinross Gold Paul Rollinson, heads of the boards of directors of LLC Rusagro Group of Companies Vadim Moshkovich, LLC Kolmar Group Anna Tsivilevai group of companies "ESN" Grigory Berezkin. Among the experts were also Deputy Speaker of the State Duma Irina Yarovaya, Khabarovsk Governor Vyacheslav Shport, Dean of the Faculty of World Economy and International Affairs at the Higher School of Economics Sergey Karaganov. 

All these people personify the largest investments in the Far East, already implemented or just planned (the most significant contribution from the listed is being prepared to do Sibur - 500 billion rubles to the Amur Gas Chemical Combine). It is worth noting the absence in the hall of the discussion about the "Far Eastern breakthrough" of the representatives of Gazprom, Rosneft, and Viktor Vekselberg, although they also appeared to be on the SPIEF in the Far Eastern agenda. So, Igor Sechin and the project VNHK mentioned at the press-approach Yuri Trutnev, and Alexei Miller a few hours later said that by 2035, Gazprom expects to supply to China through the pipe already 80-110 billion cubic meters of gas from 180-190 billion cubic meters , which China will import through pipelines. Victor Vekselberg, a major investor in the Far Eastern economy, spoke at the digitalization session.  

Yuri Trutnev, opening the session, began with an answer to the question, "what are we going to do next?" "First of all, we will continue to support the conditions for better business. The world is changing every day, and once creating a matrix favorable for the investor, one can not count on winning, "the Deputy Prime Minister stressed and promised to begin transforming in the interests of entrepreneurs this year the sectoral legislation, since" general preferences are not enough, "and "Continue to reduce administrative pressure on business." 

"In most industries there are significant obstacles to investment, we will try with your help to understand to the last decimal point, what needs to be eliminated," said Yury Trutnev. "It is also very important to have a sufficient number of trained specialists. Now people are trained in one specialty, and they are in demand for others. Within two months we must complete the "balance" throughout the Far East, and then start the education reform, "he added. Thus, changes are promised not only to legislation, for example, on timber processing or aquaculture, but also to the system of the Ministry of Education, new to the Russian government.

Many speakers thanked Yuri Trutnev for the system of preferences created with his participation for investments in the Far Eastern Federal District and really asked for amendments in certain areas of legislation. Thus, Pavel Grachev proposed to extend the leveling of electricity tariffs in the Far East to the federal level that took place last year beyond the initially defined three years. “For any investor, this is not a horizon: in three years he will only have time to complete a project and, perhaps, start construction, but not launch production. The initiative to extend this measure for 10 years, which is being discussed now, would be very useful as an incentive to attract new players, ”said Pavel Grachev. He also proposed to allow the conclusion of agreements on tariffs in isolated power systems instead of one year, as it is now, for a period of five years (a draft law on this is being considered by the State Duma). 

Paul Rollinson remembered that now the threshold for assigning deposits to the federal is set at a rate of 50 tons of recoverable gold reserves, but the Ministry of Natural Resources "is going to come up with an offer to raise the threshold to 200 tons in autumn, and we continue to make such proposals." Vadim Moshkovich, noting that in the sphere of agriculture "optimal conditions for investments aimed at closing domestic demand have been created," but it is difficult to get out of Russian products for export. "We have not solved the problems of biosafety in the country. The government on the problem knows what to do, of course, we are talking about this at all levels for several years, but there is still no centralized solution, "Mr. Moshkovich said. "One Far Eastern region can easily feed the whole of South-East Asia even without involving the central part of Russia, the task is to double exports - we can easily send 10 million tons of pork abroad, this is 20 billion dollars - that's doubling," he stressed.

Anna Tsivileva also drew attention to the problems of access to foreign markets and the need to refine the mechanisms of benefits to investors. There are restrictions on the import of coal from Russia in a number of Chinese ports, but the problem is not only this, she said. "This is the level of the work of the intergovernmental commission and business - to create us as a competitive partner in the Chinese market. The import duty is coking coal 3%, for energy - 6%. And Australia and New Zealand import goods under agreements without duties. We are a little uncompetitive here: we will either have to lower the price, dump, or increase purchasing prices. In addition, there is the problem of reducing the time for customs clearance in China - we are faced with the fact that sometimes our shipment costs up to three months without customs clearance, "said Anna Tsivileva.

Grigory Berezkin suggested that for the more successful entry of Russian products to foreign markets, "create along the border technological clusters, where different chains of redistribution will work in stages, in an associated way." "We have not reached this stage, but we will soon reach it. This way we will tie consumers to ourselves more ", he stressed (" UST "wants to supply alcohol produced from gas of the" Force of Siberia "to the countries of the Asia-Pacific Region). "And the second is the cost of financing: it is much cheaper all over the world. This is the next frontier, if we have decided on administrative issues and tax planning, this problem remains to be fully developed, "Mr. Berezkin added.

Products of the Khabarovsk factory "TechnoNIKOL" entered the Chinese market through automotive supplies of thermal insulation, but 80% is still sold in the domestic Far East market. "We do not have a single automobile corridor from the Far East deep into China. We have to load our rock wool into Chinese machines, this is a waste of time - the builder always wants the product "yesterday", and we lose a week - and damage, as with any overload. The third thing is the number of cargo and passenger transitions on the border of Russia and China - just 4 crossing, it is catastrophically small on the whole huge border. And when timber trucks start to go, "traffic jams" begin, and we lose time and at the crossings, "said Sergey Kolesnikov.

"The main problem in the Far East is demand, markets. We can not supply Mazda parts to the north of China, where there is no production - it exists only in the south. But 25-percent export duty, of course, prevents supplies. If we apply the same mechanism as Kazakhstan applied - the zone of duty-free trade along the border - it would help develop the machine-building cluster in the Far East, "said Vadim Shvetsov. "What is needed today to attract investment? We have the tools, the technology works. But preferences are good, but it is necessary at the first stage to help businesses find markets. In the Khabarovsk Territory, the population density is 1,7 per square kilometer, and in China - 144, in Japan - 340, in South Korea - 510 person per square meter. From 2 to 4 billion consumers live near our region. It is necessary to help to penetrate there investors. Sales markets plus human capital plus preferences are equal to investments, "the governor of Khabarovsk, Vyacheslav Shport, supported entrepreneurs.

Published in the journal "Economics of the Far East"
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