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"We represent the interests of Kamchatka"

Nikolay Pegin

General Director of the Corporation for Development of the Kamchatka Krai

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Nikolay Pegin, General Director of OJSC Kamchatka Krai Development Corporation, talks about how to create conditions in order to attract investors to Kamchatka.

- 4-5 September, the Government of the Kamchatka Krai together with the "Development Corporation of the Kamchatka Krai", with the support of the Ministry of the Russian Federation for the Development of the Far East, will hold an investment forum "Far East - 2014" in Petropavlovsk-Kamchatsky. Nikolay Anatolevich, what is the main goal of the event?

- The main goal of the forum is to stimulate the flow of investments into the Kamchatka Territory. For example, our neighbors have an interest in investing and the ability to invest. Our rapprochement is beneficial both for us and for them. But until very recently, there was a lack of mechanisms for this rapprochement. These mechanisms are developed at each stakeholder meeting. The Forum in Kamchatka should become the largest venue this year for meeting investors from Northeast Asia, Europe and the regions of the Russian Far East. The Far East, Kamchatka is the gateway to Russia for the economies of the APR countries and the entry point of Russia into the most economically developed region of the world.

Why is the development of Russian Far East seen not only as part of the development of domestic consumption, but also through the prism of building relationships with the APR countries? The answer to this question lies on the surface: today, not only Russia depends on the countries of the Asia-Pacific region, but the ongoing development of our eastern neighbors largely depends on Russia, on the growth of our mutual trade, the volume of investments, on the implementation of large-scale joint projects. For our neighbors, such cooperation is an opportunity to profitably place free capital, to get additional profit. For us, residents of the Far East, residents of Kamchatka, these are not only new productions and opportunities, but also wage growth, improvement of cities and towns. Moreover, we are today “a window to the future” for the whole of Russia, not a “remote territory”, but the vanguard of the country.

By holding an international investment forum in Petropavlovsk-Kamchatsky, we want to show our partners in the APR that Russia welcomes foreign investment in the country's economy and, above all, in the Far Eastern regions. The Kamchatka Territory, which possesses a unique strategic and trading potential, supported by the enormous wealth of natural resources, can become one of the key players among the Far Eastern regions and countries of the Asia-Pacific Region.

- What is the role of the Development Corporation of the Kamchatka Krai as a key regional development institution?

- The Development Corporation of the Kamchatka Krai was established with a very specific purpose - to provide conditions that will help the investor or the project proponent when assessing the options for territorial location and when choosing the support measures envisaged in the region. "Corporation" - this is a kind of factory that takes ideas, brings it to the state of demand and promotes it. One of the most important tasks now facing the Corporation for Development of the Kamchatka Krai is to shorten the time for launching the investment project, providing all-round assistance to the investor at the initial, most difficult stage.

The corporation becomes a key tool that launches public-private partnership mechanisms, identifying and supporting the perspective points of the region's growth, combining financial, organizational, analytical, marketing, communication and information tools in its work. We can participate not only with our own resources, but also with our competencies, powers, as well as opportunities to find sources of financing in foreign investment companies, Russian financial institutions, Russian companies interested in implementing investment projects in the territory of the Kamchatka Territory. That is, we represent the interests of Kamchatka, coordinating them with the interests of potential investors.

- What industries in Kamchatka would you like to support and develop? What types of services and what kind of assistance do you render to Russian and foreign companies that want to start work in Kamchatka?

- Not only the Kamchatka Krai, but the entire Far Eastern region has long been deprived of the attention of the state. All focused on the central regions with their politically-forming cities and politico-forming problems. The fact that the state and the president in recent years have called the Far East a priority for the development of the country, speaks volumes. The new state structures are called upon to help the FEFD not just be a "storehouse" of mineral, raw materials, fish or other resources, but also give it the opportunity to play a new role in the history of the country. This is a unique territory: it is located between the world center for the production of goods of mass demand, which is the Asia-Pacific region, and the centers of consumption of these goods - European states. And one of the important tasks for the Far East and Kamchatka in particular is to make the most of this resource. From an exporter of raw materials, we can become the center of global trade, production and transport flows that determine the new geopolitical situation in the world.

There are areas where the return on investment will be the fastest, and the interest of the authorities and the population is the highest. I would single out some of the most promising areas, based on the advantages of the Kamchatka Territory. This is a mineral-raw complex, tourism, fish farming and mariculture, coastal fishing and processing of seafood, reforming and modernizing energy and municipal services.

- Kamchatka is a complex region, climatically, economically and socially. What own resources can it rely on as a “growth point”, and what are they definitely not enough for and will have to wait for help from the center?

- I think we need to dispel some myths or stereotypes that relate to the Kamchatka Territory and the Far East in general. One of the myths is that it is “very far”. Immediately the question arises: from what? From the European part of Russia, from the EU countries, we are really far away. And what, Australia, New Zealand, Japan, Korea - is near? Nevertheless, these countries have overcome difficulties, have managed to turn the "disadvantages" into advantages and demonstrate the growth and stability of their economies. But the market, where we strive for and in which we want to be competitive (which the president also spoke about in his Address), is the countries of the Asia-Pacific region, and with them, Kamchatka, is within reach. Here they are, our partners and our investors. Although Kamchatka is primarily of interest to investors from China, India, Korea, and Japan, we remain attractive to European businesses - Italians, French, and Czechs.

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- In the Far East, it is planned to create territories for advanced development (TOP). From your point of view, is it economically justified?

- The approach underlying the TOP is more than once tested in the world in the implementation of breakthrough strategies - in principle, it is a territory of special socio-economic development or a special economic zone. It will be viable if the mission for which it is created is in demand. This is indicated by the successful world experience in the functioning of the territories of advanced development. In this case, the Kamchatka Krai proposed several projects, in which the Development Corporation of the Kamchatka Krai took part, and one of them is a project of the port-industrial, transport and logistics territory of the advanced development of Kamchatka as a supporting part of the national transport system. This is the Northern Transport Corridor and the Northern Sea Route as its basic component, as well as all related infrastructure, enterprises, ports and so on.

At the moment, traditional routes from Asia, America to Europe and back through the Suez and Panama canals transport more than 900 million tons of cargo per year. Russia offers alternative, more economical, short and safe transport and logistics solutions. But this should be a state mega-project, albeit with the participation of private investors. The development of the Northern Transport Corridor and the Northern Sea Route as its component will give impetus to the intensification of interregional and international relations. From the implementation of this project, one can expect a cumulative effect: even if other subjects of the Russian Federation do not show special activity, their economy will still grow. It will revive the north of the country. The unique wealth of the Arctic can naturally accelerate its way to the consumer, to the processing centers. Their prime cost will be lower, and competitiveness will increase sharply. The government of the Krai and the Development Corporation of the Kamchatka Krai see their role in preparing and developing the engineering infrastructure for the project, looking for investors and creating conditions for the business climate in the region to contribute to the development of Kamchatka.

- What economic effect can the development of the Northern Sea Route or the creation of TOP mean?

- The issue of development of TOP is a strategy, and it is not necessary to consider the possible effect in the short and medium term. This is the creation of a new one, and, therefore, it is possible to achieve an appreciable effect only in 5-10 years. This, of course, does not mean that this does not have to be done. But we must understand all the risks associated with this factor, and be prepared for the possible consequences of these risks.

And the effect of the development of the Northern Sea Route ... Here experts give different numbers. The closest thing to our forecasts is that by about 2022 or 2025, the amount of traffic through the Northern Sea Route may increase to 60 million tons. Transit goods in these transportation can amount to no more than 10-15 million tons, but this will already be enough for the NSR to become a profitable transport artery of global importance, and the impact on the Kamchatka economy is significant. So it is not difficult to calculate, but the effects may begin to manifest themselves from the moment the implementation of this project starts. Therefore, the implementation of the project of the port-industrial, transport and logistics priority development area "Kamchatka" is acquiring extremely important strategic importance for the Russian Federation.

- How much money does it take to invest in the development of the Northern Sea Route?

- It is difficult to calculate exactly. The project as such is not yet available. According to the most approximate forecasts of experts, trillions of rubles will be needed to modernize and create new capacities all along the Northern Sea Route. But you need to understand that this is an investment in the future of Russia. Its great future.

- Except for transport-logistic, mineral-raw, fishing, what other competitive sectors does it make sense to develop in Kamchatka?

- In the first place - tourism. Kamchatka is a unique and beautiful region. With its own huge tourist potential. Unfortunately, very few have so far been able to see all this beauty. Data from experts on the study of tourist flows show that over the past year in the world traveled more than one billion people. This is a colossal figure. And if we consider that the population of the APR countries in aggregate is about 40% of the total population of the Earth, which is about 2,7 billion people, you can imagine the potential for attracting tourists here.

- In fact, the "Corporation" has been working for about a year. What do you lack most - ideas, projects, money, people, energy?

"Most of all, we do not have enough time." We in the Far East had a whole list of what we would like, but there was no way to do it. And now such chances have appeared. We have ideas, they need to be translated into business plans, solve a whole bunch of problems with taxes, with the speed and cost of connecting to energy and engineering networks, with conciliation procedures. All this is much slower than we would like. And time does not wait. And investors, too, competition for investment in the world is very high. We try to rush time and fill every day with real meaning. I want to believe that we are on the right track and we will succeed. And here we really want everyone to understand: our luck, our success story is also a success story for the whole of Kamchatka, the Far East, the whole of Russia. This will be our common victory, our common tomorrow.

EastRussia.ru - information partner of the Investment Forum "Far East - 2014"