Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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About myths, volcanoes and the Northern Sea Route

Nikolai Pegin about the land where the dawn begins

About myths, volcanoes and the Northern Sea Route

Nikolay Pegin, General Director of the Kamchatka Krai Development Corporation, talks about what Kamchatka is rich in and what it still lacks.

The development of the Kamchatka Territory is influenced by a whole range of different factors. Moreover, both positive and negative. And, which is also important, the human prejudices, the stable myths surrounding Kamchatka, are influencing. And, sadly, many of them are beginning to believe and the inhabitants of the region themselves. Although, of course, now at the state and regional level, much is being done to ensure that the region develops, and people live comfortably in it.

- About comfort - one more proverb immediately comes to mind. About that "they will not send further." Whatever one may say, but Kamchatka is not a very friendly "end of the world" for the rest of the country ...

- This phrase refers rather not to Kamchatka, but to other territories of the Far East and the North. To Kamchatka they never exiled - to Kamchatka at all times people went voluntarily. Here were the famous Kamchatka expeditions, which at one time gave impetus to the development of industry in the Far East. By the way, it was here that the foundations of Russian naval forces were laid in the region. And the wealth of Kamchatka (fish, furs, forest) has always attracted people here. Someone for good, someone (already under Soviet rule) under a contract for three years to earn money, but once having got to Kamchatka, a person grew to her soul and stayed for a long time, and many for good. Therefore, not in the "link" - that's for sure. You see, let it sound somewhat pathetic, but Kamchatka for Russia is the place where the sun really rises. And, more importantly, it has always been an eastern outpost with important military and strategic importance. Even in the times of the Russian Empire, when it was necessary to "pile the territory" of the country, garrisons and Cossack prisons were created here, all the rest appeared, trade people came to visit, industry developed, the fish industry, raw materials extraction, and so on. And it continues. But the outpost always remains an outpost.

- And what is left for people? To live by the shift method or at military gatherings?

- Of course not. Nobody talks about the shift method today - although, of course, there are projects in the mineral-raw materials sector or for the time of the way, for the implementation of which people come, work and then go back. To say that the whole population of Kamchatka leads a "sedentary" way of life, too, is impossible. However, the government of the Kamchatka Krai is doing everything possible today, so that people want to live here, conditions are created so that their children, when they leave to study in Khabarovsk, in Vladivostok, in the central part of Russia, are already returned by experts to Kamchatka, and it was with her that they linked their future life. Today it is probably one of the main tasks. 

By the way, after the 90-ies, when the outflow of the population was more like a flight, the population still stabilized. And now we can already speak about the annual population growth. 

It is clear that people compare their level and quality of life with Moscow or St. Petersburg. And it is clear that such a comparison does not always please them. They want to live better in Kamchatka. Such sentiments are a kind of "fuel", on which the Krai government works, they push the government to more active actions. It is very important that the people of the region understand how rich their land is. And they, naturally, want this wealth to be reflected directly on their standard of living.

- But what has the chance to change in the coming years? How can new economic and administrative institutions created in Kamchatka (for example, your corporation) help in this sense?

- Not only Kamchatka region, but also in For the longest time the Far Eastern region was 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. New state structures are called upon to help the Far East not only to be a "storehouse" of mineral, raw materials, fish or other resources, but also to 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 - to make the most of this resource. Today, from an exporter of raw materials, we can become the center of global trade, production and transport flows that create and determine the new geopolitical situation in the world.

For this purpose, both our corporation and other new structures have been created, which facilitate the conduct of business and the process of attracting investors.

- It sounds very beautiful and tempting, if not for one short question: how? What concrete steps should the federal government take to ensure that everything does not remain at the level of slogans? Now a lot of specific infrastructure or investment projects are being discussed - which of them do you consider the most promising?

- I will say, probably, a seditious phrase. Do not cling to individual projects and "priorities". First of all, it is necessary to change consciousness and psychology - and in the state dimension. The state should have a holistic and long-term ideology of "turning to the Far East" and its development. If we only talk about individual commercial components, then the emasculated investment project entitled "The Development of the Far East" will not profit in the future. Actually, almost all previous development programs therefore had limited success, which were aimed at short-term benefits (choose a fur-bearing animal, take out ore, forest, fish). I will explain what is meant. Since we want to "raise" the territory, which has long been underdeveloped and subsidized, the state will have to assume quite large risks and costs. For example, related to the construction of infrastructure, the development of the social sphere. This is a long process, and such incomes will not give instant profits. However, the investor, when calculating the project, first of all evaluates the possible profit. So, the state will have to go to simplify for the investor the process of obtaining it - tax and other benefits, the construction of transport arteries and in all possible ways. Not counting on the fact that the return will be fast. Working exclusively for the future.

- Kamchatka is a complex region both climatically, economically and socially. What own resources can it rely on in the role of “growth points”, and what exactly they will not be enough for and will have to wait for the help of the center?

- I think we need to dispel some myths - or, more precisely, stereotypes, which concern both the Kamchatka Territory and the Far East in general. The first is that it is "very far". At once there is a question - from what? From the European part of Russia, from the EU countries, we are, indeed, far away. And what, Australia, New Zealand, Japan, Korea - "close"? Nevertheless, these countries overcame difficulties, managed to turn "shortcomings" - into advantages, and today demonstrate the growth and stability of their economy. But the market where we are striving and where we want to be competitive (as the president was talking about in his message) is the countries of the Asia-Pacific region, and before them from the same Kamchatka is already within reach. Here they are, our partners and our investors. Although Kamchatka, in the first place, is of interest to investors from China, India, Korea, Japan, but we remain attractive for European businesses, for example, Italians, French, Czechs.

The second myth is "we are cold." But the same weather is in Alaska, in the north of Japan, in Norway, in Denmark. This does not prevent them from developing and being comfortable for living.

The third myth is “our territories are huge, but few are inhabited”. I can give examples of the same Australia or Canada: there is no more population density there. Moreover, modern technologies fully compensate for the "lack of humanity". Yes, this is the tradition of the region. In the 19th century in the Far East, the level of agricultural mechanization was fantastic both for Russia and the world. Few people, a lot of land. That machine used. Actually, that's why they are created.

And the fourth, most annoying myth - "we are of no interest to anyone." Here it must be debunked most actively. We are not just interesting - we are unique. And in terms of its geographical location, and in terms of business, tourism, culture. Gigantic reserves of natural resources, stunning beauty landscapes, huge opportunities for treating dozens of diseases. And this is not all. However, it is necessary to overcome all stereotypes at once, this is what I call the "ideology" of the state. In order to solve tasks of this magnitude, our Corporation for the Development of the Kamchatka Krai has also been established.

- And how do you like the idea of ​​transferring offices of state corporations, some ministries and departments to the Far East? This will help in some way to change the ideology and style of thinking? Your company has one office in Moscow, and the other in Petropavlovsk. Will it be better if we move RosBranchry, Morrechport, offices of large companies with strategic interest in the Far East and so on in the Far Eastern Federal District?

- I will refrain from addressing comments in this case. I think this is a question more political than economic. The decision to transfer part of the offices to the Far East confirms the seriousness of the state’s intentions in the development of this territory. So if, from a policy point of view, such steps are required, then they must be done.

And it seems to me that people directly preparing proposals for the development of the Far East and responsible for their implementation, should live in the Far East, or at least live in the Far East.

- Creation of territories for advanced development (TOP) is planned in the Far East. Is this, from your point of view, 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 they are 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 Kamchatka also participated, and one of them is the project of the Port-industrial, transport and logistics territory of advanced development as a supporting part of the national transport system. First of all, we are talking about the Northern Transport Corridor and the Northern Sea Route as its basic component, as well as all related infrastructure, enterprises, ports and so on.

Today, traditional routes from Asia and America to Europe and back through the Suez and Panama Canals for the year of transportation more than 900 million tons of cargo. 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 Federation do not show special activity, their economy will still grow. The North of the country will come to life. The unique wealth of the Arctic can naturally accelerate its way to the consumer, to the processing centers. Hence their cost price will be lower, and competitiveness will increase dramatically. The government of the Krai and the Development Corporation of Kamchatka see their role in preparing and forming the engineering infrastructure for the project, looking for investors and creating conditions for the investment and business climate in the region to contribute to the development of Kamchatka.

- And again - how will this look in practice? Do you propose to introduce a special tax regime?

- The list of preferences is being developed now by the Minsk region, questions about taxes and benefits are rather to it. Although within the framework of his powers the governor of the Kamchatka Krai has initiated and has already adopted a number of preferences of the regional level for investors. I would also like to draw attention to the fact that Kamchatka itself can. Thus, several of the most promising areas have been identified, which are based on our advantages. These are: a mineral-raw complex; tourism; fish farming, coastal fishing and processing of seafood by coastal enterprises; Power engineering. These areas are capable of providing the region with a rapid steady growth, but they also require considerable investments. And for example, the development of the Northern Sea Route will reveal the large transport and logistic capabilities of the Avacha Bay, which today is the highest-latitude non-freezing Bay at the point of intersection of the Northern and Eastern transport corridors.

- What economic effect can the development of the Northern Sea Route or the creation of TORs give?

- 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, you can count on the tangible effect only in 5-10 years. This of course does not mean that you do not have to do it. But we must understand all the risks associated with this factor, and be prepared for the possible consequences of these risks.

As for the effect of the development of the Northern Sea Route, experts call different figures here. The closest to our forecasts is that, by about 2022 or 2025, the number of traffic through the Northern Sea Route could increase to 60 million tons. Transit cargo in these transportations can be no more than 10-15 million tons, but this will be enough to make the NSR become a profitable transport artery of world importance, and the impact on the economy of Kamchatka has become significant. So it is not difficult to calculate, but the effects can begin to appear already since the start of the implementation of this project.

- From whom does the final decision on the development of the NSR depend?

- For today, unfortunately, there is no single center for making such decisions. So, for example, in the Soviet era, on the eve of navigation, an operational headquarters was formed, which coordinated all the work of the NSR. And I hope that at last, there will be a single body that will make decisions on the development of the Northern Transport Corridor, of which the Northern Sea Route is a part. So far, all this is being done by the Sea Collegium, the Ministry of Transport, the Ministry of Regional Development, Minvostokrazvitie, Rechmorport, the administration of the Northern Sea Route and so on.

- If even federal structures are disunited, how does the regional authorities manage to interact? For example, Kamchatka and Yakutia?

- The interaction is at the level of interregional agreements and consultations. By the way, not only with Yakutia, but also with the Murmansk region and the Yamalo-Nenets Autonomous District, from where we have already come on an experimental basis one vessel - the dry cargo ship "Engineer Trubin" - and, unloading, proceeded further to China. On the way back, after loading the fish products in our port, it again through the Northern Sea Route proceeded to the final point - to the port of Sabetta. I hope that this interregional cooperation will not be limited - we are now at the very beginning of the road, or rather, in the process of preparing the beginning of the road. From the state, regions and business entities depends on how quickly it will be passed.

- How much money is required to invest in such a project?

- It's hard 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.

- In addition to transport and logistics, mineral and raw materials, fishery, what other competitive industries do you have sense to develop in Kamchatka?

- First of all - tourism. Kamchatka is a unique and beautiful land. With its own huge tourist potential. Unfortunately, very few have so far seen all this beauty personally.

The data of 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 you take into account that the population of the APR countries in the aggregate is about 40% of the total number of inhabitants of the Earth, and this is about 2,7 billion people, you can imagine the potential for attracting tourists here.

Of course, an integrated approach and cooperation of all the Far Eastern regions are required here. As part of one tour, guests can suggest skiing on Kamchatka or Sakhalin, plunge into the history of the development of the Far East in Khabarovsk, visit Vladivostok, which changed its appearance, visit Magadan, where to try yourself as a gold miner, to get acquainted with Sakha (Yakutia) national culture and see the diamond pantry of Russia. And you need to create such a product. At the same time emphasizing the uniqueness and attractiveness of each territory. I am convinced that tourism for Kamchatka and for the entire Far East is simply obliged to become one of the leading economic resources. Let not the main, but very important. A positive example for us should be the experience of Iceland, an island nation that has a very close resemblance to Kamchatka. The population of this northern country of ice is a little more than 320 thousand people, and last year almost 650 thousand tourists visited Iceland, but in Kamchatka only a little more than 20 thousand. We have something to strive for, knowing that we have something to show.

- In fact, your corporation has been working in full force for less than 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 and need to translate them 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 happening much slower than we would like. And time is running out. And investors, too, the competition for investment in the world is very high. We are trying 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 I really want everyone to understand that our luck, our success story is the success story for the whole of Kamchatka, the whole Far East, the whole of Russia. This will be our common victory, our common tomorrow.

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