Focus on Asia-Pacific would improve investment climate in Far East – minister

Map of Asia-Pacific Highlighting APEC Member States

MOSCOW. Oct 21 (Interfax) – The investment appeal of Russia’s Far East has been seriously hampered by Soviet stereotypes of economic regionalism with a focus on the European part of Russia, when the focus should be on the Asia-Pacific region, Far East Development Minister Alexander Galushka believes.

“We’ve had to face a fairly large number of stereotypes in the formation of programs for the development of the Far East that are, in our view, dictated by Soviet economic geography. It’s economically irrational to locate production facilities in the Far East while focusing on the market of European Russia. Naturally, an investor in this case will go there, not to the Far East,” Galushka said at a first meeting with members of the Foreign Investment Advisory Council’s working group for development of the Far East and Siberia.

He said focusing on the markets of the Asia-Pacific region would help improve the investment climate in Russia’s Far East. “We see colossal opportunities in the Asia-Pacific region. This is a huge market,” Galushka said.

“Our objective is to win the competition of conditions. The Far East is competing to create conditions for investors with other parts of the Asia-Pacific region. We realize that this competition can only be won if we respond to what investors are interested in: availability of infrastructure, availability of workers, financing and taxes and so on,” Galushka said.

One of the first steps in educating potential investors will be a “map of investment opportunities” in the region, work on which the ministry is now overseeing, the minister said.

“We’re preparing a map of investment opportunities in the Far East, an information resource on opportunities for investment projects. It’s a questionable approach when regional officials conduct investment projects. It’s not their job to think up projects. Their job is to create conditions for investors, while coming up with investment projects is already the creative role of businesses,” Galushka said.

He said this position is shared by his colleagues in the federal government who are responsible for the Far East. “Both for me personally and for Deputy Prime Minister Yury Trutnev the priority of investment, including foreign investment, are obvious,” Galushka said.

He said these positions will be the foundation of a report that he will make next week at a meeting of a government commission headed by Prime Minister Dmitry Medvedev. “Everything that I’m saying generally now, I plan to discuss in detail at the special government commission for the social and economic development of the Far East that is headed by the prime minister of Russia. A meeting of the commission will be held next week in Komsomolsk-na-Amure,” Galushka said.

The working group members who met with the minister included representatives of BASF, the European Bank for Reconstruction and Development, Ernst & Young, Kinross Gold Corporation, Mitsubishi Corporation, Mitsui, Royal Dutch Shell and SUN Group.

Galushka said he sees this format of interaction as an effective way to eliminate barriers for investors.