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Target - 2%

The Far East will work for export

Target - 2%

The Governmental Commission for the Development of the Far East has defined the export orientation as the most effective way of developing the region. This is the result of the next meeting that took place on October 11 in Komsomolsk-on-Amur, chaired by Dmitry Medvedev.

As the chairman of the government noted, the measures applied earlier to develop the region did not bring economic benefits. He also listed three possible scenarios: either to substitute imports and focus on the domestic regional market, or focus on the all-Russian market, or develop export potential. However, the first scenario is not very promising because the DFO market is limited and amounts to only 5% of the country's GDP. The second scenario is difficult because of the poor transport accessibility of the region to large Russian consumption centers.

The development strategy of the Far East should be export-oriented - such an economic model for the region is considered optimal by the Russian government. According to the Ministry for the Development of the Far East, the export orientation of the Far Eastern industry is most economically justified, taking into account the specifics of this region.

The domestic market of the Far East today is less than 5% of the Russian GDP, and working on it is not very profitable. But the Asia-Pacific countries market is currently showing strong growth, access to this site can give regional enterprises a substantial profit. As for the market of the European part of the country, any possible benefit is negated by the inevitable transport costs due to the geographical remoteness of the Far East regions. The distance from the Far Eastern cities to the capitals of the Asian states is much less than to Moscow.

What can the Russian Far East count on the market of APR countries? The total volume of imports of its member states is now more than 6 trillion dollars a year and has a tendency to increase. Therefore, investors who decided to deploy production in the Far East, may be interested in investing in Russian enterprises that will be export-oriented. This will make it possible to use the advantageous geographical position of the Far Eastern regions of the Russian Federation and ensure their stable economic growth.

However, in order for the Russian Far Eastern exports to reach the stated ambitious indicators - 2% of the total import volume of the APR, significant efforts are needed. To increase the competitiveness of industry and entrepreneurship in the Far East, it is required to introduce not only tax and customs privileges, but also to establish various kinds of preferences and favorable conditions in the field of attracting personnel, leasing land, etc. The development of high-quality modern infrastructure is of great importance. greatly hinders the development of the Far Eastern business, and keeps investors from investing in the regional economy.

It is also necessary to solve the problem of personnel shortage, attract qualified workers and, if not suspend, then at least reduce the migration outflow from the Far Eastern regions. Now many residents, especially young people, prefer to leave for the European part of the country or abroad - just to the countries of the Asia-Pacific region. However, if people in their hometown or nearby will see prospects for work and professional self-realization, for starting their own business, it is quite possible that they will refrain from moving. True, you cannot convince such residents of the Far East with promises of a "bright future": they want changes for the better here and now.

The key issue of the development strategy is what to export even further from the Far East? Now the region mainly exports resources - natural, raw, energy. It is necessary to create a favorable investment climate, create industrial-industrial zones and technoparks in the Far East. On the way to this promising, but not too easily attainable goal, it will be necessary to study the experience of the neighbors in the Asia-Pacific region (for example, China, Japan, South Korea, Southeast Asian countries), the United States and Brazil.

A number of experts are concerned that the development model of the economy, which is almost entirely focused on Asia, will further alienate the Far East from the rest of Russia. But otherwise, economic dependence and subsidies are inevitable, which certainly will not benefit the region. To put the Far East in even greater dependence on the center is clearly not to be. The main task is to make it a rich, actively developing region, and not a distant periphery. The only thing that needs to be recognized is that the orientation towards the export model can serve as a tactic rather than a long-term strategy. 

Naturally, one should not completely abandon work in the domestic market. Entry into the Asian market will take time, and this period must be used to make Far Eastern products competitive at first “at home”, and then beyond. 

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