SPECIAL ISSUE ON THE EASTERN ECONOMIC FORUM, SEPTEMBER 2016 FAR EASTERN REGIONS: BUSINESS GUIDE FOR INVESTIRS

FREE PORT AND ADVANCED SPECIAL ECONOMIC ZONES FIRST RESULTS

MINING, ENERGY, TRANSPORT, FIRHERY, magazine AGRICULTURE, TOURISM

WAY TO TRANS-PACIFIC ISLAND THE STARS PARTNERSHIP CHALLENGE The first rocket launch at What does the TPP : mean for ? 5 tips for a visitor

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HORIZONS EastRussia.ru On the photo: city of ▶ Cover story: FAR EAST BEING PROACTIVE

Investment attractiveness of the Far East: the first results of adopted decisions. TLast year became a turning point for the Far East, thanks to the introduction of several mechanisms for socio-economic develop- ment......

Yury Trutnev: “The Far East should be developed according to a comprehensive plan”. Deputy Prime Minister of the Russian Federation about what the government’s priorities are in the development of the country’s eastern territories......

“Our strategy is to present the intelligence poten- tial” – The Governor of Vyacheslav Shport......

Kolyma: Gold, water and skiing. The Head of the re- gion, Vladimir Pecheniy shared with ER what is going to be the hallmark of the region’s projects at the upcoming EEF......

Yegor Borisov: In the last 7 years, we have attracted Vladimir Ilyukhin: “Interest in is 1.5 trillion rubles of investments into Yakutia...... growing” ......

Vladimir Miklushevsky: ” will show- Oleg Kozhemyako: “The construction of a Marine sta- case its “success stories”...... tion in is crucial for the region”......

▶ Business Trip: GUIDEBOOK FOR INVESTOR

Regions of the Far East: firhery, mineral resources, tourism, transport, energy resources, agriculture...... Road to the Stars. On the Vostochny cosmodrome first rocket was launched...... Victor Sumsky: “Cooperation in the area of education is the most important reserve for strengthening relations The Kuril Islands: 5 tips for a visitor...... with ASEAN countries”...... A trip across . Mini-guide to Vladivostok...... “There is a chance, and it is considerable...” Will Russia fit into Chinese projects?......

Magazine SPECIAL ISSUE ON THE EASTERN ECONOMIC FORUM, SEPTEMBER 2016

Publisher Information agency EastRussia.ru (www.eastrussia.ru) registered with the Feder- Editor in chief: Artur Agafonov al Service for Supervision in the Sphere of Communications, Information Technology and Art direction: Daria Krichevskaya Mass Communications. Certificate of a publication Pl No FS77-77-65750 of 20.05.2016 Authors: Rostislav Turovsky, Andran- ik Agafonov, Artur Agafonov, Vlada Partner Ministry for the Development of the Verevkina, Alexandr Abramov, Viktor Sumsky, Igor Makarov Circulation: 1500 c...... USD rate by the time of publication: 64,7 RUR ▶ panorama

A. Galushka: any private Yury Trutnev: value of contracts at second investor in the Far East Eastern Economic Forum to exceed rub 1 trillion receives administrative The Deputy Prime Minister, Presidential Plenipotentiary Envoy to support the Far Eastern Federal District and Chairman of the EEF Organiz- Resolution on amending the meth- ing Committee shared his expectations for the upcoming Forum. odology for selecting and support- “According to preliminary estimates, we have already harnessed ing investment projects, signed by roughly RUB 900 billion under various agreements this year. I think Prime Minister of the Russian Fed- we will definitely get that up to a trillion. That means new jobs, and eration Dmitry Medvedev, allows a new economy for the Far East. We are aiming for the Far East any private investment project to to be a comfortable place to live and work, for there to be lots of receive administrative support and roads, power lines, water pipelines, for the infrastructure to be the official status of participant in raised to a level which can ensure the necessary conditions for the state programme for socio-eco- creating new businesses,” said Trutnev. Far East to annually receive rub 466 bln for nomic development of the Far East He noted that the EEF would give a major boost to the develop- development and the Baikal region, according to ment of the Russian Far East. “Today, dozens of new enterprises Dmitry Medvedev has approved a new version of the state programme a Ministry for the Development of are being built. That’s great, but it doesn’t mean we’ve achieved our Socioeconomic Development of the Far East and Baikal Region for the Russian Far East press release. goal. We will have achieved our goal when everyone living in the Far Period until 2025, the Ministry for the Development of the Russian Far “Any investor in the Far East is East feels that life has become better. As such, the Forum is a fur- East said in a press release. important to us and, at their wish, ther step in the development of the Far Eastern region,” he said. The new version of the state programme provides updates to its goals and we are prepared to develop an indi- objectives and also adjusts the indicators and anticipated results from its vidual Road Map for the project implementation. The state programme defines the main focuses for the consisting of administrative support rapid development of the Far East and takes into account earlier work and measures, to resolve specific prob- new mechanisms for the development of the macro-region such as priori- lems and assist in successful imple- ty development areas, the Free Port of Vladivostok, infrastructural support mentation of the project. Any inves- to major investment projects and preferential financing from the Far East tor wishing to take advantage of Development Fund. The state programme entails an increase in federal this form of support may do so“, A. budget funding to RUB 466.52 billion in 2016–2025. Galushka stressed. “The state programme should become a comprehensive manage- According to the Minister, adoption ment tool that aims to improve the level of the Far East’s socioeconomic of the Russian Government Resolu- development. This also includes attracting domestic and foreign invest- tion is another step toward practical ment, the realisation of the macro-region’s human resource potential implementation of the new version and the creation of new high-tech jobs above all for the residents of the of the state programme for devel- Far East themselves. This is all being done so that people want to live opment of the Far East, which prior- and work in the Far East”, Minister for the Development of the Russian itises private investment. Far East Alexander Galushka said. Eastern Economic Forum to host charity to naming the diamond, the winner will also be able to give auction to support rare and endangered names to Far Eastern leopards as the symbolic custodian animals of a leopard from the Far Eastern Leopards autonomous The event will take place at the initiative of Russian Deputy non-profit organisation. A russian-made rapid Prime Minister and Presidential Plenipotentiary Envoy to the Several lots consist of fascinating tours of nature reserves passenger vessel to be Far Eastern Federal District Yury Trutnev. in the Far East. Russian Minister of Natural Resources and presented at the Eastern The HelpRussianNature charity auction will take place from Environment Sergei Donskoy will travel to any of the Rus- Economic Forum September 2–3, 2016 at the booth of the Russian Ministry of sian nature reserves with the person who acquires the cor- During the Forum, an A45-2 class vessel Natural Resources and Environment and also at the official responding lot. Sculptures of Far Eastern leopards and made at the Khabarovsk Shipbuilding Works HelpRussianNature website. tigers in their original colour, which were produced will be berthed in Russky Island’s Ayaks Bay. A wide variety of items will be offered at this year’s auction. as part of the Wildcat Parade environmental project, will be The new model can reach speeds of up to 70 Bidders will have the opportunity to spend a day on set with offered as special lots at the auction. km/h and carry up to 100 passengers. Such Danila Kozlovsky, attend master classes for martial arts fans The lots are being offered by the heads of regions of the vessels may be used in shallow waters and conducted by Konstantin Tszyu, Batu Khasikov and Nikolai Far Eastern Federal District, nature reserves and national can berth at unequipped parts of shores. Valuev, and receive autographed boxing gloves. parks of the Far East, environmental non-profit organisa- Several of the А45-2 project vessels have One of the most extraordinary opportunities being auc- tions as well as prominent cultural and sports figures such already been ordered for the region but the tioned is the chance to give a name to a 136.24-carat dia- as Danila Kozlovsky, Konstantin Tszyu, Ilya Lagutenko, Batu plant needs a greater loading. The ship will be mond presented by the company Alrosa, one of the larg- Khasikov, Nikolai Valuev, Pelageya, Anatoly Karpov, Boris demonstrated to potential buyers at the EEF. est stones discovered in the company’s history. In addition Eifman and Yulia Chicherina, among others.

2 Eastern Economic Forum Special Edition EastRussia Magazine • September 2015 • eastrussia.ru 3 ▶ panorama

Japanese company plans representatives of the Japanese by BM-, JSC, with the to invest in timber mill in holding company, as reported by Khabarovsk-based BM Group and sakhalin. A Japanese RIA Sakhalin–Kuril Islands. the Sakhalin government as its investor may open a After reaching the planned main stakeholders”, Mr. Nesterov new sales market for the production capacity, the annual describes. The Japanese partners A Russian-Chinese timber mill. volume of harvested timber will might chip into the operating agreement on exchange -based Iida Group Holdings, amount to 747 thou cubic m. business as shareholders. They will trade in fish to be sought specialising in private housing At least 50,000 wooden house provide an additional sales market at the Eastern Economic construction, multi-family houses structural elements, 150,000 for the lumber and will also share Forum and in production of sawn lumber, of export-quality cut and dried up-to-date stockpiling and milling A special Forum session “Aquatic plans to become a co-investor lumber pieces, 100,000 cubic technologies. Bioresources in Exchange for in a timber mill construction m. of wood pallets and chips The sides agreed to meet once Investment” will be devoted to project in Sakhalin. This became will be produced. “This is a big again in late September – early development of the fishing industry known after the meeting between investment project to develop October this year to make a final complex. Deputy Chairman of the Regional wooden house building in the decision. A number of agreements will be Government Dmitry Nesterov and north of Sakhalin, to be operated concluded at the EEF with investors for fishing industry projects, according to the press services of the Primorsky Territory Administration. In particular, the Far East Fish Auction SUPERVISORY BOARD OF THE FREE PORT House and the Liaoning industrial OF VLADIVOSTOK APPROVES 36 RESIDENT corporation Jun Tsen Group are APPLICATIONS to sign a contract on exchange The meeting was chaired by Deputy Prime Minister and Presidential transactions in the fishing sphere, Chinese companies seek real investment projects Plenipotentiary Envoy to the Far Eastern Federal District Yuri Trutnev. involving investment of RUB 2 bn. at the Eastern Economic Forum “So far, there are 60 companies resident in the Free Port, with investments TINRO Center plans to open Chinese investors are anticipating a lot from the Forum, TASS informs. totalling over RUB 110 bn”, Yuri Trutnev noted. an enterprise for catching and Chinese entrepreneurs hope to meet with heads of the 14 of the 36 companies chose the Vladivostok urban district as their processing Far East sardines and Administrations of various Russian regions, establish contacts and location, while the other preferred other parts of Primorsky Territory. In Japanese mackerel at enterprises find business partners for joint production with Russian companies, particular, an industrial park has been set up in the Ussurisk Area for of the Far East fishing basin, with stated Deputy General Secretary of Overseas Development production of packaging cardboard and corrugated packaging materials; investment of RUB 7.2 bn. Association Mr. He Zhenwei. production of foamglass blocks is to be launched in the Olginsk District. After the Forum, a project will be Mr. Zhenwei stated that Chinese companies intend to acquaint Household chemicals are to be manufacturer din Artem with involvement launched for creating a high-tech themselves with real investment projects at the Forum. of South Korean investors and netmaking in . production enterprise for processing “For instance, there are energy, agriculture and infrastructure Many residents are small and medium-sized businesses. sardines, mackerel, Japanese sectors, but we need specific investment projects for building new In the opinion of Primorsky Territory Governor Vladimir Miklushevsky, the anchovies and Pacific squid, with transport hubs, revamping transport facilities, laying new roads and rise in the number of application from potential investors is explained by investment of RUB 1.6 bn, a project constructing new plants. We attach great importance to the Eastern the simplified procedure for registration of residents of the Free Port of for construction of a complex for Economic Forum, given that Russian top leaders are expected to Vladivostok. basin breeding of fish with a capacity attend. On the sidelines of the Forum, our companies hope to get A potential resident has to meet certain criteria: to register the new of up to 200 tonnes a year, and a better acquainted with the policy pursued by the Russian Government business at the Free Port of Vladivostok with at least RUB 5 m in investment project for creating a technopark for in the region, the specifics of special economic zones and how they over three years. Antarctic krill. work”, he went on.

4 Eastern Economic Forum Special Edition EastRussia Magazine • September 2015 • eastrussia.ru 5 ▶ cover story Yury Trutnev: “The Far East should be developed according to a comprehensive plan”

Юрий Трутнев: «Развивать Дальний Восток нужно комплексно» Deputy Prime Minister of the Russian Federation, Заместитель председа- теля правительства РФ, Presidential Envoy to the Far Eastern Federal полномочный предста- витель президента РФ District, talks about what the government’s priorities в ДФО о том, какие акценты расставляет are in the development of the country’s eastern сегодня государство territories. в развитии восточных территорий.

– Yury Petrovich, could you problems of people, to invest into dures. Because if we had done tell us, please, what are the key social programs, initially it is nec- so, we would have to apologize issues of the Far East today? essary to earn some money. And to the President and the pub- – As I often travel through the when we earn this money, other lic today, bow from the waist and Far East, in particular, I spend opportunities will open up for us. say that we did nothing. We pro- nearly 50 percent of my working Now we are concentrating all our ceeded immediately from the fact hours there, I have seen first hand efforts on this. And the key indi- that we had to create a new strat- how people live in the distant set- cator is that private investments egy, new instruments and a new tlements. Frequently accessi- are totalling 12 rubles per 1 state business practice. We could not time, we win converts. The vast ble only by seasonal roads, with budget ruble. This is the most expect that everyone would sud- majority of the governors are our damaged airports or even without effective use of state budget mon- denly agree with us, that every partners. They are acutely aware Thus, opportunities were cre- them. With infrastructure that was ey, when we put in 1 ruble, and government official in the entire of the fact that we are inventing built 30 years ago and is simply 12 rubles are brought by private territory of the Far East would stop all these instruments and mecha- ated for applying instruments being destroyed by strong winds. investors. Because without such a living as they lived before. It would nisms of support, not just to report The housing stock is in absolutely multiplier, we simply cannot suc- be strange if they began working to our superiors, but to help peo- which are not used in other disgusting conditions. ceed – it is impossible to develop entirely on supporting businesses, ple live better in their regions. And if you try to deal with all the vast territory of the Far East for the development of the econo- The Far East is huge, Russia these problems simultaneously, using only state budget funds. my and for the country. is huge, and a lot of work needs regions then the situation looks really tough. – How do you evaluate field Every government official that to be done. Currently, more than I think that is why the President work? The foreigners complain meets a person with questions 200 enterprises are being con- changes happening every year. President signed a new legislation defined the development of the that they do not always under- about Advanced Special Eco- structed with state support, The turning point has already on tax benefits. How much invest- Russian Far East as a national pri- stand the regime of the Advanced nomic zones, should not think although, it is not being done occurred this year, the outflow of ment will be attracted thanks this ority. Thus, opportunities were cre- Special Economic zones (ASEZ), about where or to whom to send in every settlement. Moreover, population from the region has new legislation? ated for applying instruments which and government officials cannot that person. They should think the construction works are still virtually stopped, hence, we are – Unfortunately, the scale of are not used in other regions. explain it to them. about what is beneficial for the at the initial stages. Neverthe- on the right path. declared investment indicates that What we started with – was not – From the outset, as the task country, and how to act to ensure less, we have witnessed the peo- – The scale of declared invest- the investor only promised to build a coincidence. In order to deal was set, we did not start working that the investor does not turn ple’s reactions, they understand ments into the region has already a factory, contributing some money with the social and other pressing within the existing familiar proce- around and leave. Gradually over that there are more and more exceeded 1 trillion rubles. The in 2016, and an additional sum of

6 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 7 ▶ cover story

We will develop the Far East using various instruments, and this is only one of them would write a report to the Chair- forward, and introduce some new the Far East and all of its support- man of the Government, and he mechanisms: “What did come up ive institutions. Today the mech- would punish the deputy minis- with? Do you really think that you anism should be mastered com- ter. After being punished a few will manage to develop the Far pletely, then we will definitely win. times, they would be suspended East due to this mechanism?” We – Do you the Eastern Econom- money in 2017. The factory will be from that post. A new, energetic, reply: “No, we will not manage ic Forum is becoming a good tra- built, for example, in 5 years. And intelligent minister comes – and to develop the region using only dition? if we summarize all these invest- Komsomolsk-on-Amur is a we achieved more under his/her this mechanism. We will develop – The Eastern Forum was held ments, we reach a total of approx- command. the Far East using various instru- only once before. However, it is imately 1 trillion rubles. If 1 trillion marvelous city, where people – Recently you have returned ments, and this is only one of finally evident that the decision rubles had already been raised, we from Asia. Does small business them.” The same applies here. had been taken in the right place would have felt it. We will certainly express interest in the Far East? Food production, logistics, and at the right time, because it attract these trillion rubles and will build great airplanes. On the – The interest of the Pacific manufacturing – today there are had already become an abso- certainly feel its effects, however, Rim countries in working in the many areas that can play their lutely anticipated event. And now, this will take a few years. other hand, it is the city that Far East is growing rapidly. For role. And there are many details. when we were inviting investors to Large systems – and the Far the time of my work, I have nev- For instance, transport corri- the Eastern Forum, they no longer East, naturally, is a large sys- has been left behind, in terms er had such meetings as I had in dors cannot work without chang- asked – what was it? What does tem – have considerable inertia. Japan. In my opinion, the Jap- es in customs regimes. In this the program include? The people And when I was entrusted with the anese have demonstrated an case, they are simply not need- said: “To Vladivostok? In autumn? task of developing the Far East, of the processes of develop- absolutely strong interest in col- ed. Because the distance will Of course, we’ll be there”. We I thought a lot about how much laboration with Russia. I am confi- be shorter, but the time frames are confident that our content time it would take to overcome ment of social infrastructure dent that this is the result of meet- – longer, due to the procedures. will be interesting and competi- this inertia. There were different ings between the Prime Minister Therefore, this entire road con- tive. That we will give people the concepts as to the time frame for build great airplanes. On the oth- federal executive government of Japan Abe and the President of sists of details which should be information that will help them this process, but I`m bold to state er hand, it is the city that has been bodies, with investments total- the Russian Federation Vladimir taken into account every day – run their business and interact that the locomotive is on its way. left behind, in terms of the pro- ling more than 62 billion rubles, Putin to a large extent. concerning the Freeport, the Far with us better. We urgently want – You were authorized to cre- cesses of development of social will participate in this program. – And what areas of invest- Eastern Hectare, the Program of to obtain feedback, because we ate a Working Group on the Devel- infrastructure, as well as housing Our task is to draw up a sched- ment cooperation between Rus- Development for the Kuril Islands, have some ideas, but we are not opment of Komsomolsk-on-Amur. and utilities infrastructure. There- ule: what, when and where things sia and China do you consider as Komsomolsk-on-Amur, and many doing everything perfectly cor- Do you already know who will be fore, the President has decid- will be constructed Then we will the most important? other issues. To be perfectly hon- rect, there is certainly room for the members of this group, and ed that the municipal economy stick to this schedule. The event – It seems to me that there are est, we need such a mechanism improvement. what will be its tasks? should be brought to the lev- has occurred – the school should no most or least important are- to manage the development pro- (Based on materials of Rossi- – Komsomolsk-on-Amur is a el of production and technology have been constructed, show it to as. From time to time they tell us, cess. We have created it within yskaya Gazeta and TASS press marvelous city, where people that already exist in the city. The us. If it was not constructed – we especially when we start moving the Ministry of Development of releases)

8 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 9 ▶ regions Amur region

Exhibit-interactive section "Albazino fort" exposes the history and spirit of Amur Region. Visi- tors are able to fan- cy the real fort look. The Street Jewish of the Far East Autonomous region

Exhibition pavilion concept of What can participants of the second Eastern the region in the frame- work of the project “The Economic Forum see at exhibition organized Street of the Far East” will look in the form on the waterfront of the FEFU campus. of a rainbow arch.

n the beggining of September at The participants of the Eastern the waterfront of Ajax bay in the ter- Economic Forum will see the project Kamchatskiy Iritory of Far Eastern Federal Univer- for oil production in the shelf area and sity Campus will host the exhibition the Vostochny Cosmodrome; military “The Street of the Far East”, timed helicopter that is produced in Primo- krai to the second Eastern Economic rye and the unique nature of Kam- Forum. The purpose of the exhibi- chatka, diamonds of Yakutia and gold The pavilion name is «Kam- tion – to show visitors the diversity of nuggets from Magadan. chatskiy krai – in harmony activities and the full potential of the This festival has become a tradi- with nature». The Central Hall Far East. tion of the forum. This year’s partic- is designed as a stylized vol- The exhibition presents Far East ipants measures will be introduced cano, inside which you can regions and their main achievements. to the pavilions of nine regions, with see samples of real lava and «Улица Дальнего Востока» As Deputy Prime Minister of Rus- stands of relevant federal depart- volcanic sand from the beach sia and Presidential Envoy to the Far ments involved in the development of of the Pacific ocean. Что участники второ- Eastern Federal District Yuri Trutnev the Far East. Magadan region го Восточного Эко- номического форума said, the main purpose of the exhibi- The special guest of the exhibition The unique 3D-photo exhibition увидят на выставке, tion is to show Russian Far East: nine is the Crimea. “The Kolyma nuggets” – the unique collection meets guests of the pavilion. организованной на набережной кампуса regions, over 40 ethnicities constitute EastRussia publishes information of gold nuggets mined in . Such large 3D-photographs ДВФУ. common history of one third of the on the most interesting objects in the There will be organized the exhibition – sale are printed for the first time biggest country in the world. exhibition. of jewelry, made in the Kolyma enterprises. in the world.

10 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 11 ▶ regions Chukotka Autonomous area Primorsky krai Two mobile models of an animal (full-scale), nar- The exhibition hall is designed in the shape of a rate each of which about features of physiology lotus. Lotus is one of the most popular symbol of and behavior of a bear female and bear male. the Primorsky Territory and Eastern Economic Forum, it’s used in the Forum’s official emblem. The Republic Sakhalin region (Yakutia)

Inside the exhibition pavilion our guests Inside the pavilion there is the original cub of a cave will have the chance to ski, to get lion aged more than 10 thousand years (the only dis- acquainted with the history and cul- covery of preserved cave lion in the world). ture of the Sakhalin region, to see the In the center of the pavilion – a light table in the form of breathtaking beauty of nature and even a diamond, filled with diamond-shaped candies. to go fishing for a while.

Khabarovsky krai Inside the exhibition booth the visitors using interactive multi- media equipment (touchscreen panels) can get acquaint- ed with the socio-economic development of Khabarovsky Krai, achievements in the field of high technology, rich cul- tural heritage and tourist potential. The special place is given to the comprehensive development plan of Kom- somolsk-on-Amur.

Republic of Crimea The forum’s guests and participants are able to taste the best wines by the Crimean and Sevastopol manufacturers from such plants as Massandra, Novyi Svet and Inkerman.

12 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 13 ▶ regions Ministry of Natural Fish market Resources and Environment

The ecological path around the central pavilion will host an out- door exhibition with information about the possibilities of ecot- Delicatessen ourism in the Far East and photos of the beauties of the Far East nature. Guests of the exposition can also take photographs on the background of protected landscapes and animals of the region and share their photos on social networks with the #ДАЛЬНИЙВОСТОРГ hashtag.

Ministry of Culture lasses Four-day screening of Russian fs c top-grossing films («Legend #17», B ie er «Flight Crew», «The Admiral», «Mon- est ch t gol», «Sunstroke» and others). s a

M

Ministry of Industry Ministry Show-tasting of Agriculture POT SHOW BROILING RACK SHOW and Trade Cooking station with a giant A unique mobile broiling rack Open Exposition of the Ministry of Defense and Trade of the The Ministry of Agriculture of the Russian 1200-litre pot. Audience watches and slow simmering technique. Russian Federation together with Russian Helicopters, JSC Federation is demonstrating the dynam- the process of cooking of famous Audience watches how to will present the Ka-52 Scout-Attack Helicopter. Ka-52 was ics of development in top priority sectors or historical soups of the Far cook a whole bull, big fish, created to destroy armed and protected (among them are of agribusiness in the Far East, presenting East together with theatrical wild animals and other local mobile) land objects, slow-speed air targets and enemy fight- more than 120 major investment projects performances. specialities. ers, as well as to performs tasks on reconnaissance and guid- and introducing the best products made at ing a group of attack helicopters. regional food-producing enterpises.

14 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 15 ▶ cover story Investment attractiveness of the Far East: the first results of adopted decisions

In addition, business has often For example, according to offi- The successful example of Vlad- Last year became a turning point for the Far East, turned away from investing into Far cial statistics, at the end of July ivostok contributed to the extension Инвестиционная привлека- thanks to the introduction of several mechanisms for Eastern projects due to the lack of 2016 (9 months after the start of the of this regime to other ports of the Far тельность Дальнего Востока: первые результаты socio-economic development: Advanced Special necessary infrastructure. Now the project) the project received 100 East. As a result, the status of a free принятых решений Economic zones, free ports, as well as funding pro- state is ready to provide appropri- applications amounting to more port, according to the amendments Прошедший год стал ate support by allocating investments поворотным для развития Дальнего grams of the ‘Far East Development Fund’ and state from the budget for the construction Востока, благодаря of required facilities. The key thing внедрению ряда subsidies for infrastructure all began to operate. By социо-экономических here is that regional governors play The status of a free port was механизмов the end of the year, we may say that the adopted an important role in implementing the measures have brought about positive results. projects while simultaneously work- ing on creating ASEZs and looking granted to the Vanino port, the for investors inside and outside Rus- tive burden, and other privileges for the country’s largest gas processing sia. In general, the new mechanism Korsakov port, and the port of investors. and gas chemical complex connect- is a more complex and sophisticated Since that time, 13 ASEZs have ed to the “Power of Siberia” pipeline approach as compared to SEZ, which been created, each with its own spe- project. The Magadan Region, which helps to attract investors. Petropavlovsk-Kamchatsky cialization. The leader in the number has not yet established a single ASEZ, of ASEZs is Primorsky Territory where is also working on its projects. Free port – free business than 167 billion rubles that will make to the federal legislation, was granted there are as many as 3 ASEZs: in the It important to point out that in con- Another special mechanism for the it possible to create over 26 thou- to the Vanino port in the Khabarovsk fields of agriculture, light industry, tract to the regime of special eco- development of the Far East is a free sand jobs. 52 companies have Territory, the Korsakov port in the logistics as well as shipbuilding. nomic zones, which was not very port regime that offers a range of tax already become official residents Sakhalin Region, the port of Petropav- TEXT▶ ROSTISLAV TUROVSKY At the moment some more successful in the Far East, the ASEZ incentives and customs preferences of the port having signed the agree- lovsk-Kamchatsky in the Kamchatka DOCTOR OF POLITICAL SCIENCES, Advanced Special Economic zones mechanism implies that a platform for entrepreneurship. The pilot area of ment with the ‘Far East Develop- Territory and the Polar Port of PROFESSOR OF HSE are getting closer to being estab- is created only if there is a block of the project is the Free port of Vladiv- ment Corporation’. In contrast to in the Chukotka Autonomous District, lished, including “The Kurile Islands” applications of potential investors. ostok which united 15 municipalities ASEZs, the free port has no specific while one more territory, the Lazovsky Learning from mistakes (tourism, agriculture, and fishing Thus within ASEZs, there will not be in the south of Primorye. The relevant field of activity, though initially it was district, was incorporated into the Free March 30, 2015 was the day when industry complex) in the Sakhalin any empty territories without a single law (No. 212-FZ “On the Free Port of assumed that porto franco would Port of Vladivostok At the moment the Federal Law No. 473-FZ “On the region, “Nikolayevsk” (fish process- registered resident as it happened Vladivostok”) entered into force on attract project mainly specializing new free ports are collecting bids from territories of advancing socio-eco- ing and ship repair industry) in the with SEZ. For instance, the federal October 12, 2015, and now the inter- in logistics. However, 39 % of res- potential residents. In the meantime, nomic development in the Rus- Khabarovsk region, “Svobodnen- authorities take their time to endorse im results of the port operations have idents chose the industrial activi- 15 residents are willing to enter the sian Federation” came into force, skaya” (gas chemical industry) in the the “Russky Island” tourist and recre- already received a positive assess- ty, 18 % focused on logistics being project of the Port of Vanino contrib- introducing a special legal regime, Amur Region. The latter is expected ational ASEZ as it has not gathered ment of both the federal government followed by real estate projects that uting the investment totaling 70 billion tax benefits, relief of administra- to become a platform for launching enough investors. and the business community. accounted for 11 %. rubles. Thus, free ports are springing

16 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 17 ▶ cover story

up in almost all coastal regions of the taxes, private investment, and add- aid is directed towards gold industry removed the requirement that require- cated 2.5 billion rubles for the con- Far East. ed value. as well. Funds are allocated for the ment that the actual investment shall struction of a cross-border bridge Total investment in fixed as- In fact, this mechanism is aimed development of gold mining project at least be 10 % of the planned pri- over the Amur river in the Jewish sets in the Far East for 2015 A ruble for two at large-scale projects that are not in the Selemdzhinsky district of the vate investment. Now investors can Autonomous Oblast. This project is a Another instrument used to facilitate included in a ASEZ or a free port but Amur region as well as the Ozerno- get exemptions on corporate miner- joint venture of the Fund together with the recruitment of investors is a tar- still need significant infrastructure vsky gold deposit located in Kam- al extraction taxes in the volume of the Russian Direct Investment Fund 885.7 bn rub. geted infrastructure support for pri- support. Two rounds of selection of chatka. In addition, the Fund’s money their investment in the transport, ener- (RDIF) and China Investment Corpo- In 2015, investment in the ority investment projects provided by investment projects have already is spent on infrastructure – the coal gy and other infrastructure required ration (CIC). Another large project is Far Eastern Federal District the state Far East Development Fund. been held by now, and the support handling project in the Port of Vani- for the implementation of investment related to the production of gold in the amounted to To secure incentives, the amount of was allocated to 10 applications with no and the Russian Post logistics projects. As a result of this approach, Kamchatka region, where “Gold of investment should not be less than private investment reaching 274 bil- hub in the Khabarovsk Territory. The projects still receive infrastructure Kamchatka” refines the Ametistovoye 50 million rubles (for a period up to 3 lion rubles and budget investment food industry, namely the plant for support, but without the direct involve- and Baranyevskoye fields: the Fund 99.6 % years) or at least 500 million rubles (for totaling 23.43 billion rubles. deep processing of soybeans in the ment of budgetary funds. In addi- plans to provide up to 2 billion rubles a period up to 5 years). Regardless The Far East Development Fund Belogorsk ASEZ, has also managed tion, the project can be considered necessary transport infrastructure. of the volume registered of the field of activities of an applicant provides significant support to the to secure the Fund’s aid. a priority one but however, does not for the same period last and location of an enterprise in the mining sector, and particularly to Moreover, the Ministry of Develop- require budgetary financing, in order The Far East as the main year (figure for the whole of region (within the Far East), the inves- the Tayozhny iron-ore mining and ment of the Far East has developed to be included in the state program Russian ASEZ Russia – tor can participate in an open tender processing complex and the “Ina- new mechanisms of state support in “Socio-economic development of the According to preliminary calculations, held to select applications. The main glinsky” coal mining and process- investment projects in the Far East. Far East and the Baikal region” for fur- new mechanisms of development of criterion for an investment project to ing plant in Yakutia, as well as the Back in 2015, the authorities simpli- ther targeted assistance. the Far East contributed to the growth 91.6 %). be selected is the economic benefit coal mining and beneficiation pro- fied the procedure of assigning a pri- It is worth noting that the Far East of the declared volume of prospective The first quarter of 2016 – of its implementation: the amount of ject the Khabarovsk region. Financial ority status to projects: namely, they Development Fund is also engaged in investments up to 1 trillion 107 billion the financing of investment projects. It rubles. It is important to note that inves- investment in fixed assets for the Far East amounted to INVESTMENT IN FIXED ASSETS DYNAMICS provides loans for the needs of appli- tors are not only Russian companies, cants. In winter 2016, the loan inter- but also foreign ones. As anticipated, The Amur 131.1 % est rate was reduced from 11 % to one of the leaders in terms of invest- Region 5 % per annum for up to ten years. To ment volume is China. Its representa- 101.8 % 103.0 % use such a loan, an entity is required tives are ready to invest about 163 bil- (around Russia – The Jewish 122 % to give at least two rubles of private lion rubles (16 billion yuan). Autonomous funds for each ruble of the Fund. Such According to statistics, the Far Oblast 115.7 % funding can be obtained by a compa- Eastern regions have not yet experi- 95.2 % ny investing at least 500 million rubles enced a steady growth of investment The Kamchatka 91.4 % that has already consolidated its good in fixed assets. In 2015, investment Territory 101.5 % standing in business by being finan- in the Far Eastern Federal District cially stable and having proven expe- amounted to 99.6 % of the volume believe that the standing of the mac- The Magadan 126 % rience in implementing similar pro- registered for the same period last ro-region has become much better Region 47.6 % jects. However, there are no industry year (885.7 billion rubles), which is than in other federal districts. Inves- restrictions – the application can be still better than the result for the whole tors cannot remain indifferent to a The Primorsky 78.7 % – 2015 submitted by any enterprise. In turn, of Russia (91.6 %). A more optimistic wide range of opportunities in terms Territory 95.9 % – 1st quarter of 2016 the Fund is ready to provide to one picture was recorded in the first quar- of funding conditions and preferen- third of the total funds required for the ter of 2016. The investment in fixed tial support as they understand how The Sakhalin 99.8 % project. The Fund has already grant- assets for the Far Eastern Federal Dis- serious are both the economic poten- Region ed support of about 10 billion rubles to trict saw a slight growth – 101.8 %, tial of the Far East and the state inten- 96.5 % six projects. while for the whole country it is still a tions. One of the main priorities is still Particular attention was paid to the decrease (95.2 %). Even today, we attracting foreign investors and busi- Khabarovsk 74.9 % Territory mining industry and related infrastruc- can expect that in 2016 there will be a nessmen from other regions of Rus- 99.1 % ture. For example, the largest invest- positive dynamic in investment in the sia, as well as the creation of new pro- ment (2.8 billion rubles) was aimed Far Eastern Federal District jects, even small ones, from scratch. Chukotka 90.1 % Autonomous at the construction of the main pipe- The climate in the Far East is grad- However, the expansion of the capac- District 178.7 % line from the Solntsevskoye deposit to ually improving due to various mech- ity of existing enterprises also con- the port of Shakhtersk in the Sakhalin anisms, which provides incentives to tributes to the development of the Far The Republic 100.3 % Region, and at the modernization of a growing number of entrepreneurs. East. Nevertheless, the macro-region of Sakha (Yakutia) 130.4 % the region’s single specialized marine The current results of 2016 inspire is still at the very beginning of a radical coal terminal. The Fund has also allo- cautious optimism and give reason to change of the investment climate.

18 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 19 ▶ regions

declared within the Advanced Spe- cial Economic zones (ASEZ) as some of our «success stories». We can say, with a certain lev- el of confidence, that these proj- ects will be implemented, as the construction equipment is already working at these sites. I mean here both the Mikhailovsky Advanced Special Economic zone and the Nadezhdinskaya ASEZ. Sure, we are in the process of building of Zvezda Shipyards. This is our third ASEZ – the Bolshoi Kamen, estab- lished in Primorsky Krai by the decree of the RF Government. All three Advanced Special Econom- Vladimir ic zones are extremely import- ant for us, because they provide new jobs and production facilities. This will deliver an increased tax Miklushevsky: base and obtaining more money to the Krai’s budget as a result, and then these funds will be allocated towards further regional develop- models for their modernization. Advanced Special Economic ”Primorsky Krai ment to improve the quality of life. I Our partners from China are great- zones and the Free Port. What also expect that these new oppor- ly interested in rapid completion of industries is the Primorsky Krai tunities will attract economically reconstruction works on these cor- focusing on within the framework will showcase its active people from other regions ridors, as these will allow reducing of launching of those sites? of Russia. the time needed to transport car- – All the Advanced Special Eco- Moreover, we will for sure pres- go from the northeastern provinc- nomic zones in the Primorsky Krai “success stories” ent at the Forum the projects of es of China to, for example, Japan, are created, based on the princi- the Free Port of Vladivostok. On by 3‍3.5 times. ple of priorities and needs of the August 22, the fifth meeting of the At the Forum, we definitely will regional economy. Obviously, this Supervisory Council took place, present the Zvezda Shipyards, the is transport and logistics sector. Владимир Миклушевский: The Primorsky Krai is among the leaders in terms of «ВЭФ – форум президент- economic development in Russia’s Far East: within where 36 investment projects were natural gas liquefaction plant, the We have the Trans-Siberian Rail- ского уровня» approved, in addition to the 60 res- construction project of the univer- way here, we have a developed just one year since the last Forum, the region has idents already operating there. This sal seaport Big . We network of automobile roads, there О том, что Приморье представит на ВЭФ- demonstrated great dynamics in the implementation will bring the total of all investments will as well talk on such large-scale is a modern international airport, 2016, рассказывает of successful projects. Governor Vladimir of the 96 companies to 125 billion projects as the modernization of the and all ice-free ports in the Rus- губернатор края. rubles. Registration process has biggest refrigerated port terminal sia’s Far East are located here. Miklushevsky talks about what the Primorsky Krai will been simplified as much as possi- of the Far East, located in Vladivo- Therefore, it is quite logical that the be presenting at the Eastern Economic Forum 2016. ble, however, a resident company stok, the construction of a pig farm, multi-functional production and will only receive benefits in terms it a touristic recreation cluster of the logistics site of the Nadezhdinska- – Vladimir Vladimirovich, in morsky Krai, but also to the entire grams. I would like to mention that constructs something. Primorskoye Koltso and the facto- ya Advanced Special Economic 2016 the Primorsky Krai will host Russian Far East. This year we this year guests would have an In addition, at the EEF the Pri- ry that will produce energy efficient zone appeared here. We planned the Eastern Economic Forum for are expecting up to three thou- opportunity to visit the Oceanari- morsky Krai will present 29 invest- materials. We hope that initiators of to locate nearly 30 enterprises on the second time already. Have sand participants, which is twice um – a unique and extremely inter- ment projects, 5 of them will take a these projects will manage to find its territory, and the site is almost you prepared any surprises for as much as came last year. Both esting place. «pitch-session» format. These are interested investors at the Forum. full already. The investment vol- visitors? the city and the Krai are exercis- – What projects and proposals such large-scale projects as the – One block of the EEF’s busi- ume already amounts to nearly 7 – The EEF is one of two presi- ing active preparations: we are will Primorsky Krai be presenting international transport corridors ness program will be dedicat- billion rubles. Implementation of dential-level forums in Russia. It is inspecting hotels and restaurants at the Forum? Primorsky Krai-1 and Primorsky ed to the opportunities avail- the Law on the Free Port of Vladi- a very important venue for attract- accredited for the Forum, prepar- – First of all, we will be present- Krai-2. Together with Chinese able to investors in the Far East, vostok opens huge opportunities ing investment not only to the Pri- ing venues and cultural event pro- ing projects that have already been investors, we will discuss financial including those provided by the for the development of transport

20 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 21 ▶ regions investment projects

and logistics sector. According to Primorsky Krai is in high ple, the Mariinsky Theater, then the MODERNIZATION OF THE CREATION OF THE ment Park» is the core competitive expert estimates, by 2025 the spe- demand among tourists from the yew grove on Petrova Island, and LARGEST IN THE FAR TECHNOPARK OF ANT- advantage providing diversified reve- cial regime of the port will increase Asia-Pacific Region also because later go to Khabarovsky Krai or to 1 3 EAST REFRIGERATION ARCTIC KRILL nue sources. The location of PrimRing the Gross Regional Product by it is the largest center of European Kamchatka Peninsula. PORTSIDE TERMINAL possesses easy transport accessibil- more than 2.5 times. The capi- and Russian culture in the Pacific – Many participants of the Project initiatior: Russian Pelagic Re- ity and is close to Vladivostok Interna- tal investments will also grow2.5 Region. We have the famous Mari- tional Airport, servicing a wide range Forum are interested in the inte- Project initiatior: search Company times. What is also important, the insky Theatre, as well as museums of domestic flights and providing links grated entertainment resort Pri- Aqua-Resources Group Project cost, mln rub: 26 000 number of jobs in the regional and art galleries with unique col- with China, Japan and Korea. The morye. During the last EEF, one Project cost, mln rub: 1500 The project is unique in the Russian economy will increase by 30%. The lections. In early September there Project is supported by the Regional year ago, its first complex was Modernization of the largest in the Far fishing industry which has an audit of Government and entered into the spe- key macroeconomic project of the will take place a grand opening of not yet in operation. However, this East Refrigeration Portside terminal. the companies “Big Four”. The key cial economic zone of Free Port Vlad- region is the modernization of inter- the Oceanarium, the biggest one in year, as we already know, guests Increased capacity for simultaneous driver: pent-up growing demand and ivostok. national transport corridors Pri- Russia and one of the two biggest plan to visit this resort. Is this one storage of 25 to 50 000 tonnes of fro- increasing prices on the world market morsky Krai-1 and Primorsky Krai- oceanariums in the world. Subdi- more success story for the Pri- zen fish, increasing the berth, the con- for fish products and fish meal, on the 2, which I have already mentioned. visions of the Hermitage, the Rus- morsky Krai? struction of container yard, reefer con- one hand, and undeveloped inexpen- Shipbuilding is one of the most sian Museum and Tretyakov Gal- – The first complex of the resort tainers and conventional treatment in sive “historically Russian” Antarctic promising industries in the region, lery will soon open here. now can accommodate 500—600 its own sea terminal. krill resources, on the other. Purposes: and currently we are constructing Every year the Primorsky Krai people per day, and over 130,000 highly effective fishery of Antarctic krill, the Zvezda Shipyards, which will records an annual increase in people have already visited it since manufacturing of marketable prod- produce even ice-class vessels. incoming tourism of 9% and of its opening. Every year it brings in PIG FARM ucts, creation of the base of technolo- The Bolshoi Kamen Advanced 11-17% in domestic tourism. In 140 million rubles of taxes to the 2 CONSTRUCTION gy park of Antarctic krill. Special Economic zone was estab- addition, we are among the leaders regional budget. Now, in addition lished on its base; its private invest- considering the volume of incom- to the first working complex, con- Project initiatior: ments would amount to nearly 140 ing tourism within the agreement struction work on four more hotels Mersi Agro Primorye, LLC billion rubles. between the Governments of Rus- is about to start. We plan to build Project cost, mln rub: 2278 Agriculture is also of strategic sia and China on visa-free group 22 of them. This is a challenging The project will address the following importance for the Primorsky Krai. travel. According to the last year task; we schedule the completion three areas of focus: – pig farm – CONSTRUCTION The Primorsky Krai’s Mikhailovsky results, the flow of tourists visiting of the project to the year 2025. phased construction of seven pig- 5 OF ENERGY-SAVING Advanced Special Economic zone the region under this agreement has Overall, this is a good thing. breeding complexes for a total MATERIALS PLANT specializes in hosting modern agri- grown twice, and this trend remains However, you should also under- of some 540,000 head annually; cultural-industrial production facili- strong. By the year 2020, we are stand the following: when infrastruc- construction of slaughtering and Project cost, mln rub: 1300 ties, engaged in full-cycle process- planning to become a powerful inter- ture is completed, many more ser- primary dressing facilities; – animal Project initiatior: NC "STK" LTD ing, storage and logistics of prod- regional tourist hub in Russia and vices will become available. The feed production – required to raise Project cost, mln rub: 155 ucts. Six companies have already the Far East with up to 10 million practical experience of Las Vegas pig-breeding efficiency as Primorsky The project involves the construction of become its residents: Rusagro-Pri- tourists coming annually. The Pri- and Macao shows that, with time, a region lacks well developed animal an energy-saving materials plant under morsky Krai, Merci Trade, Pri- morsky Krai has everything neces- bigger part of revenues shifts from feed sources; – crop farming – TSMCERAMIC trademark in the Far morsky Bacon, KhorolAgroHold- sary to achieve this: there is a tour- gambling to the area of additional soybean and corn cultivation both for CONSTRUCTION OF East. After reaching full capacity in 2018, ing, Dalnevostochnaya Selskok- ist market of the Asia-Pacific Region services: accommodation, enter- in-house production of animal feed 4 TOURIST-RECREATION- the volume of materials produced will be hozyaistvennaya Kompaniya and nearby, the fastest growing one in tainment, shopping, business tour- and for selling of excessive products AL CLUSTER 10 mln. liters TSMCERAMIC per year. 78 Chernigovsky Agroholding. The the world with about 120 billion tour- ism and other ones. For example, to third parties. jobs will be created. total amount of investments made ists travel annually just from China. the current ratio in Las Vegas is Project cost, mln rub: 1900 Stage 1: construction of the 1st stage by the residents has already sur- One more advantage is represented 70/30. It means, gambling accounts Project initiatior: Tourist and Motor- of the plant Stage 2: construction passed 60 billion rubles. by the unique preferences provid- for only 30% of the revenues. sport Complex “PrimRing”, LLC company foundation using innovative – Tourism is also an important ed by the Free Port of Vladivostok. During a visit to the gambling "PrimRing" is a unique project in the materials of its own production, industry for the Primorsky Krai. This will help us create travel routes zone with Deputy Prime Minister tourist, leisure and sport industries, including the creation of scientific What future development pros- from Asia to Russia and back. Inter- Yury Trutnev, we discussed with aimed at becoming a visiting card and technical fields on the basis pects do you see for this industry? regional routes inside the Far East investors the questions they were of the Primorsky region and Far East of the construction of universities Tourism really is one of the pri- and across Siberia are also in high interested in. For example, estab- of Russia for domestic and incom- in major cities, regions. Stage 3: ority industries for the Primorsky demand now. The Vostochnoye lishing a customs tax-free zone. ing tourism. Unique composition of construction of the 2nd stage of the Krai. Our huge advantage is the Koltso project was presented at the We do not have anything like this the complex allows to operate a wide plant. The ultimate goal of the project: unique natural environment, which Second Pacific Tourist Forum this in Russia yet. We should consid- range of events and entertainment the foundation in innovation sphere attracts tourists from all over the past May. Its idea is the following – a er establishing this, at least in a tri- shows. Guests will have unforgettable in the region of production a closed world. This is the Taiga in tourist can use a package tour and al mode. We would like to have the time of active and varied leisure. The cycle with the scientific and technical the North, and sea beaches and visit the most amazing places of the Primorye Gambling Zone hosting Business Model – a technical «Amuse- facilities and construction company. islands in the South. regions in just a few days. For exam- the first project of this kind.

22 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 23 ▶ regions

Business program of the EEF will include a discussion of our steps “Our strategy on the development of very differ- ent spheres: forest industry com- plex, touristic infrastructure of the Far East, logistics, industrial clus- is to present the ters – everything connected with investments, production, master- ing of Advanced Special Econom- intelligence potential” ic zones. The second part – as in the previous year, is “The Street of the Far East”, where we will show, for sure, many things, including the The Governor of Khabarovsk Krai lives of our indigenous minorities. However, based on the experience of the previous forum, we will try to Vyacheslav Shport about what the build a more specific exposition. – What will it consist of? region will present at the EEF – We will present, for example, the Komsomolsk-on-Amur Aircraft Factory – the leader of aircraft engi- REPORTER▶ Dmitry SHCHERBAKOV neering – through such innovations as assembling workplace of the Did the Eastern Economic Forum actually become assembler-riveter. All forum guests «Наша стратегия – предста- вить интеллектуальный an efficient platform for expanding the possibilities will be provided with a possibility потенциал» to approach a work bench and to of regions when it comes to investment attraction; assemble the model of the Sukhoi Интервью с Вяче- SuperJet-100 aircraft from parts – славом Шпортом, what do big business representatives look for губернатором Хаба- at such events, and what unique conditions is to rivet it fast and to take it home. ровского края Such actions, first of all, are a good Khabarovsk Krai able to offer them – tells Governor way to introduce Khabarovsk Krai Vyacheslav Shport. to the people, and secondly – a possibility to take something home as a tangible memento. The most – One year has passed since representatives in Singapore, and mentioned, and now there is also advanced technologies will also the last Eastern Economic Forum at the second EEF they intend to the Free Port of Vanino already. be presented interactively, such as was held. Is it already possible to arrive with a ready designed solu- During this time, we managed to real know-how – assembly instruc- summarize the performance of tion, and we identified the land we initiate a proposal and to validate tions for one very complicated unit

agreements reached back then? are ready to provide for this plant. it, to defend it and to get approval of the aircraft will be printed on the RIA NOVOSTI – The First EEF, on the one Here is a specific example of a from the President of Russia. This screen. This is a brand new theme, hand, turned out to be very fruitful, project with significant amount of year at the forum we will present it has never been presented by in terms of signed memorandums investments – USD 200 million at what directions may be developed anyone before; I think it will be inter- Such actions, first of all, are of understanding and agreements. the first stage, when the sugar pro- in the Vaninsky District. esting. On the other hand, it was a kind of duction line will be created, and at – What other new sites and – So the bets are placed on introductory meeting for investors. the second stage it is proposed to projects will be presented by the external effects as well? a good way to introduce We have already initiated active already move to sugar derivatives region? – Our pavilion is built in the form work on most of the projects first as well, and it is a brand new level. – We will put emphasis on the of a cube. It embodies the idea Khabarovsk Krai to the people, voiced at the EEF. For example, on – Were there any changes in promotion of the region’s intelli- of intelligent production, different the sugar plant, a project of a Thai the sphere of accelerated devel- gence potential. This year inves- mathematical formulas used dur- investor. Last year, they said that opment of the Far East during this tors offered the Ministry for Devel- ing aircraft designing are reflected and secondly – a possibility such a project would be interest- past year? opment of Russian Far East for on it. This is our strategy – everyone ing, we signed an agreement, and – There is something very Khabarovsk Krai 23 projects, sev- has to see that people with high IQs to take something home as a today we are examining this issue important for us – at the fist forum, en of which were selected for live in Khabarovsk. Our region is not in detail. We met the company’s the Free Port of Vladivostok was presentation during the Forum. intended for simple ground boring tangible memento 24 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 25 ▶ regions

has neither been created nor con- By-pass motor road at firmed yet, but the idea has been Khabarovsk approved, a couple of investors have been found – and we will be Project mission: construction of a toll highway looking for others. The region there between Federal status highways M-60 Us- suri and M-58 Vostok. The new highway is, of course, very remote, but also is characterized by a high traffic intensity, very promising. road safety, convenience and speed. – Did you have any new ideas during this past year in respect of existing ASEZ? – A big work continues on those sites of Advanced Special Eco- nomic zones which belong to the greenfield category, i.e., with- out any infrastructure. To provide gas, water, energy supply are the responsibilities undertaken by the state, this is clear. However, we are faced with such nuances in the process of interaction with inves- tors: not all of them are ready to one else has done something sim- ments will refer to personnel train- build production facilities, although litmash site, on which there are, – I held many meetings with ilar during the last few years in our ing, support of small exporters of they want to invest into produc- although old, but existing produc- foreigners. When I worked as a Length of route: 29 km, 4 lanes country, and it is unlikely that some Khabarovsk Krai; we are also plan- tion. Thus there is an idea to cre- tion buildings, and for business it is member of the State Duma, for Total cost of the Project - 48.6 bn roubles constituent entity of the Far East ning to sign agreements with Sber- ate an industrial park, the Parus, more easy to enter the latter, both instance, I interacted with investors Construction time: till 2018 will be able to present something bank and RAO Energy System of on one of these sites, and to con- psychologically and economical- building an oil terminal in De-Kas- Form of participation: The Project is implement- similar. This is a natural sample of the East. Regarding the projects, struct buildings there, tailored for ly. Life experience shows that not tri under an agreement on produc- ed on Public-Private Partnership terms in success of our shipbuilding, and it seven projects will be presented in the needs of specific investors. I every investor needs a site in an tion sharing. They were afraid that shape of a concession will show that our region is tailored detail – they have already passed think this will advance the process open field. they would invest money and the for production in any knowledge the selection procedure. And of of attracting investors – finished – What else does a major for- money would be stolen. Such cas- intensive industries. This will be the course, we will talk about all pro- sites ready for equipment installa- eign investor need, to come to es occurred, but those were hard sense of all our exhibits, both real jects which may be implemented tion will be snapped up faster. This Khabarovsk Krai, in addition to times back then. They also worried and oil pumping. We are sending a and virtual. My position is steadfast: on the territory of Khabarovsk Krai. idea came to us when we com- preferences, staff and land with about our technical inability to par- signal – let’s build production facil- the most important thing – is the per- This Forum is a platform where pared the Parus site with Amur- infrastructure? ticipate in the project, since they ities. The first thing people coming son and his intelligence, which may everyone must show possibilities presented documents for the plat- with industrial projects ask – is not be used to make life better. If there and specific features to the utmost. form of the Amur Shipyard with all even land plot allocation, land plots is no intelligence, someone can, The better we present how we sup- calculations made in inches. And go without saying. They ask: “Do let’s say, run around the exhibition port and protect investments, the as everyone knows, our produc- you have staff and training facili- with a shovel, but will not be able to higher is possibility that we will tion facilities operate in milliliters. ties?” We have an entire system of convince anyone of anything this attract investors. And inches cannot be converted personnel training and retraining way. And we will show that our res- – And to what place is the to the metric system accurately – here, and when an investor sees idents can create highly intelligent region inviting them to first of all? giving integer numbers and a lot of this, then specific talks start. products. – For example, to the Free Port digits after the decimal point. They – And what else, except air- – Are you planning to sign new of Vanino. We can show what pref- said: you will not be able to do craft, can the Khabarovsk Krai cooperation agreements or exe- erential conditions are being cre- this. Nevertheless, we managed surprise people with? cute certain investment projects? ated there, and investors will have to convert all the documents and – There will be one more exhib- – There will definitely be at least to define by themselves what the to build the platform. Such fears it as well – the so called, full sized four – this is the number of projects business possibilities exist there. today do not exist. All investors say exhibit. The first vessel of the project already on my desk. Maybe there There are already coal and grain that we have a good investment A-45-2 constructed by Khabarovsk will be more. However, our task is handling projects, as well as ship climate here in the Far East, and Shipyard, ordered by the govern- not to run after someone and sign a repairs, but it is not nearly the full this is specifically the achievement ment of Khabarovsk Krai, will be bunch of documents. Negotiations potential of Vanino. One more site of the last few years. However, the exhibited at the docks of Russ- with different potential investors will be presented at this forum – the relevance of personnel issues is ky Island. It is unlikely that some- and partners are ongoing. Agree- ASEZ in Nikolayevsk-on-Amur. It obvious, and today we are rebuild-

26 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 27 ▶ regions Development of airport ize on the site of the Komsomolsk purposefully, do they know what complex Novy in Advanced Special Economic to ask and what to offer? Khabarovsk city zone. This will be a separate com- – Last year, and this is no plete story, focused on the work secret, many foreign investors did done following the results of the not manage to join the forum at all, last message of the president to although they wanted very much to the federal assembly. Of course, it do so. Today negotiations of busi- does not have any material results nessmen, potential investors and yet – the idea was made public state authorities of all levels are only at the end of the last year, held in order to reach the stage of and converted to a governmen- document execution at this sec- tal document this spring. How- ond EEF. This is the case with ever, the projects are being pre- the progress of the sugar project pared already, and financial esti- by the Sutech Company, which I mates are being calculated. The have already mentioned. The pro- main work, in terms of construc- cess is alive, and negotiations are tion, will start next year. For now, ongoing. With knowledge of whom we are able to show at the EEF and what will be presented at the Khabarovsk (Noviy) international airport is only a presentation of the infra- forum, people will have an opportu- the largest airport in the Russian Far East structure development of Komso- nity to conduct talks one day, and in the amount of servicing passengers and molsk-on-Amur, in a comparative then determine with whom they cargo – annually airport serves more than format – how it was before, and are planning to have a meeting the 2 million passengers and 30 thousand how it is now: what is being done next day. However, here we have cargo. Construction of the new passenger now, and what effect we expect no such a technology of bringing terminal is the priority project of infrastructure to obtain. together a project initiator and his modernization within the airport complex – In which sessions on Far East potential partner with 100% prob- development program. Terminal area: 26 thousand sq.m. development will the delegation ability. I, for example, have visited Capacity: 1100 passenger/hour (3,5 million of Khabarovsk Krai participate? all leading global air shows dur- – We will participate in all ses- ing my lifetime, and some several passengers per year) sions and all round tables – we times. I have even been to Austral- Volume of already realized investment: 300 mln. rub. The requirement investment: 2,1 bln. rub. are registered everywhere. How- ia, Chile, not to mention the lead- ever, we intend not only to dis- ing sites. It never happens that, cuss. Together with the Tech- coming to such events, their par- city of Amursk. They were not able noNIKOL Company, we will con- ticipants already know everything to come, but I proposed that they duct a grand opening ceremo- in advance. At all such events prepared their samples and we – This is an instruction from ny of a new plant already built have an element of chaos to them, would place them on our exhibi- President Vladimir Putin, issued in on the site of the Khabarovsk and people meet by chance, get tion stands – in Farnborough, and Together with the Techno- April by means of a special reso- Advanced Special Econom- to know something unexpected in Le Bourget. And what was the lution adopted by the government ic zone – this will be a dramat- and new, and they communicate. result? Here are our airplanes, NIKOL Company, we will con- of Russia on the comprehensive ic moment. We are the one in After all, if it were possible to build and the ammunition rounds close development of the city. We will the Far East who has operating everything in accordance with pre- to them. And everyone came to present 27 development projects food production on the ASEZ – liminary agreements, maybe there touch the ammunition rounds duct an opening ceremony of at this session of the forum. We a greenhouse complex by the would no need for forums: people since people, naturally, had will complete the construction of Russian-Japanese JGC Ever- would meet in the offices, sign a become used to seeing aircraft at a new plant already built on the three facilities this year, including green Company. We will show contract and start working. air shows. As a result – the factory reconstruction of the drama theat- this as well. And in general, we – It seems that the element of now supplies ammunition rounds site of the Khabarovsk ASEZ er and a new water intake struc- have may implemented projects novelty is mandatory for the suc- to the USA. And everything start- ture. Next year, we are planning to in the region, there are success- cess of any forum? ed with a presentation at an air construct an additional 11 facili- ful examples in all sectors, into – I can give an example. show. Later they exchanged con- ing the entire system of staff train- – One of the sessions of the ties. We will show all the attractive which we can attract investors. Once our delegation from Kom- tact details, conducted meetings ing, we will introduce new quali- forum will be devoted to one more infrastructural stuff – for example, – The past EEF was a little bit somolsk-on-Amur took samples and started working together. fications and change the educa- growth point – the development of the sports complex. Besides this, chaotic, many investors visited it of ammunition rounds to one air This is an ideal example of what tional programs – tailoring them for the city of Komsomolsk-on-Amur. the Epsilon-2 Company will show just to have a look. Is it clear that show. Products from our muni- meetings at discussion platforms specific investment projects. What will be discussed here? what production it plans to organ- now the people are coming here tions factory in the neighboring should end with.

28 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 29 ▶ prospects

continuing efforts for more accurate data, we will be “We do expect engaging specialist con- sultants to carry out more detailed studies. In fact, the data gathering of sugar mar- competition from ket is an on-going process, a standard operating proce- dure for the plant. We have to ensure that we have up to date incumbent Russian information for more appropri- ate business strategies when we go to market. players” – Where you will be sup- plied sugar products, in what amounts? – The Russian Far East sug- Leong Choong Chee about the next step ar demand is estimated at about 250,000 metric tons per annum. We are ready to supply this quanti- by the Far East sugar factory’s project ty. However, we awaiting Authorities’ approval or a lower volume restric- REPORTER▶ Dmitry SHCHERBAKOV tion will be imposed. The company from Thailand Sutech Engineering Gavan – Your sugar from Soviet Gavan «Мы ожидаем конкурен- Co. announced plans to create in Khabarovsk Port site in 2nd region also will be supplied to Chi- цию со стороны сильных Quarter 2017. The construction na, isn’t it? русских игроков» territory the manufacture of refined and standard will take about 24 months to com- ard white – Yes, we plan to export sugar Интервью с Леонгом plete. products to neighboring countries Чун Чи, исполнитель- sugar. The subsidiary company which will act sugar 350,000 tons/ ным вице-прези- as the project operator is registered in Russia. – Previously it was announced annum and high quality brown including China. Market study is still дентом «Дальнево- that the factory requires 6 to 7 hec- sugar 50,000 tons/annum. being carried out. сточной фабрики по What further steps will be taken by investor for the производству сахара tares. Is it correct? – The plans remain same. How- – Your products enter into com- и производных» construction of a sugar factory, says Executive Vice – We felt that the previous site ever, as discussed above, we are petition with the local company President Leong Choong Chee. offered, although just adequate, awaiting approvals from relevant “Primorsky sugar”. How do you was not exactly suitable for our long authorities. Should there be any intend to win? term plans. After several months of restrictions to our sugar products – We do expect competition from – How is the registration in Rus- – And who will become major Advanced Special Economic Zone collaborative efforts by the Local supply for domestic market, we may incumbent players. We are confi- sia, did you receive documents shareholders and top managers? in Sovetskaya Gavan Port area. Authorities and ourselves, we have amend production plans accord- dent of establishing a respectable from the tax service about registra- – The ultimate owners will even- At the same time, we are awaiting identified a more suitable location a ingly. Further, we are developing foothold in the market with our pro- tion of the subsidiary company? tually be 3 parties from ASEAN for approval from the Federal Author- short distance from the earlier one. plans for value-added sugar down- duction efficiency through the use of – Yes, we have received 80-90% and balance by one or two ities for our request for importation It encompasses an area of about stream products. These plans will be latest technology in sugar produc- endorsement from the Russian Tax parties from Russia. The names of for raw materials. 48 hectares, while still within the announced in due course as later tion, logistical supply, and sales and Authorities for the company regis- the investors will be announced in – When your company plans to Advanced Special Economic Zone phases of our investment. The final marketing distribution strategies. tration. due course. start design works and construc- in Sovetskaya Gavan Port area. decision may have some impact on – What pricing policy will be set – What is the name given to The company has just been tion works? – How much should be the total the current production output mix by your company? subsidiary company? formed. It is too early to appoint or – The preliminary plant design investment? plans. – We trust you will appreciate that – Far East Plant for Sugar and hire top management staff which will has already been completed. It – The total investment for the – Does the raw materials for product pricing is a sensitive matter Derivatives, LLC. be done in due course. will go through further fine-tuning sugar plant is US$210 million com- the sugar refinery will come mostly hence will only be revealed as we – How many rubles will amount – What are the next steps in the months ahead before work prising US$150 million for capi- from Asia and Australia? approach ready-to-market phase. to its share capital? should be for the project’s realiz- orders are issued out to relevant tal expenditure and US$60 million – That is correct. Ultimately, any pricing strategy must – Presently, the share capital is ing? service contractors and equipment working capital. – Has the company studied the be grounded on market realities tak- Ruble 100,000 only. When all rel- – We are in the process of sub- suppliers. Assuming all regulatory – At the preliminary stage market of the Far East and Russia? ing into account buyers sensitivity evant approvals are obtained, we mitting to the Local Authorities our approvals as mentioned above are stating that the factory will pro- – Yes, we have carried out pre- for product quality, efficient distribu- shall increase to 30% of the total application for “Priority Large Pro- obtained, we expect construction duce the high quality refined sug- liminary evaluation of the Russian tion and quick response to competi- investment project value. ject” Status, and for admission to the ground breaking at the Sovetskaya ar 100,000 tons/annum, stand- Far East sugar market. As part of the tors’ actions.

30 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 31 ▶ regions

ology and paleontology sphere, with a repository of unique exhib- its, the exhibition of mammoths and other fossils, an interactive paleo- Yegor Borisov: zone for both children and adults, and an exhibition of paleontological In the last 7 years, we have and archaeological sites. – How can the unique weath- er conditions of Yakutia be used attracted 1.5 trillion rubles for scientific and economic pur- poses? –The cold is a unique phe- nomenon that can preserve many of investments into Yakutia things over many, many years. As of today, we have built a unique cryogenic storage bank in Russia, which we use to preserve endan- gered plant species. Thanks to the cold and permafrost, the mainte- nance of this cryo-bank requires virtually no additional energy con- sumption. Speaking about economic proj- ects, Yakutia could become a plat- form for cold-endurance testing of any materials allowing the carrying out of field certification tests at min- imal cost. This is especially relevant for the aircraft industry, where met- als are tested at temperatures down to minus 50-60 degrees Celsius. We should not forget that the cold can also be a source of ener- gy. And today, it is high time to think about certain technologies that will enable us to turn it into a different kind of energy, such as gold, coal, oil, natural gas, tin, etc. SMEs that are capable of solving Егор Борисов: за 7 лет мы привлекли Head of Yakutia Yegor Borisov talks about the electricity. Currently we are trying to follow the social problems, creating jobs and 1,5 трлн инвестиций в Якутию need to establish an International Center for – What is the republic doing same course as everyone else in paying salaries to the local people Глава – о том, как ре- to attract investments into the Russia: we are striving to increase of Yakutia. спублика привлекает Mammoth Studies, about the ways the republic инвесторов и какие attracts investments, and about projects region? sales of processed products within – What niche can SMEs occu- проекты развития In the past 7 years, Yakutia the total volume of sales of extract- py in the republic, given the fact сейчас в повестке дня регионального that are now on the agenda of the regional has attracted 1.5 trillion rubles of ed raw materials. The significant that in Yakutia, mainly large-scale правительства. government. investments. In 2015, we attracted role here belongs to the develop- projects are being implement- 200 billion rubles in investments, ment of small and medium-sized ed, which are beyond the means while this year, because of the con- enterprises (SMEs). available to small entrepreneurs? – At a recent meeting with ering the remains of mammoths as information about this geological struction of the Power of Siberia The Kangalassy Advanced Spe- –These are those industries Vladimir Putin, you brought up well as other animals from the Ice era, landscapes, and climate. This Pipeline, we will attract 300 billion cial Economic zone (ASEZ) was and niches that are cost-effective, the idea of creating a Center for Age: prehistoric bison, horses, cave idea is of interest not only to Rus- rubles. That is our estimate. established to support such SMEs. It in terms of sales. First of all, this Mammoth Studies in Yakutia. lions and rhinos. Thanks to perma- sian scientists, but also experts from In general, Yakutia has huge is the only ASEZ in Russia that grants is the jewelry industry, which is a What are the goals of this project? frost, these remains are very well Korea, France and Japan. investment potential, because in resident status only to SMEs. The traditional one for us. Our IT-com- – The soil of Yakutia is a natural preserved. The creation of such a The draft concept of the Mam- contrast to other Russian regions, priority of the development strate- panies, which produce animated storehouse, where over the past two Center would enable scientists to moth Center includes an interna- we have large amounts of mineral gy of Yakutia until 2030 is expect- movies and software, have also centuries people have been discov- study in detail the vast amount of tional research institute in the arche- resources. We produce diamonds, ed to be providing support to those started to perform very well on the

32 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 33 ▶ regions

global markets. Their products District. This ASEZ may also include the republic annually consumes 2 are in demand even in the Ameri- a wood processing complex. million tons of fuel, which current- can market. We are also going to The South Yakutia Develop- ly is imported here, after travelling develop other kinds of projects ment Corporation is currently car- through almost the entire coun- that require intellectual work, and rying out preparatory work for the try. These are large and unnec- that can be implemented within creation of the ASEZ in this region. essary expenses, given the fact our republic or, at a minimal cost, During the EEF, we will learn to that we can produce oil products beyond its borders. what extent businesses are inter- ourselves to cover the needs of For instance, agriculture can ested in the new ASEZ, and based the republic, and thus avoid enor- become one of the main areas of on this knowledge, we will decide mous transportation costs. work for small and medium busi- to submit documents to the Minis- In addition, this time, we will nesses. This is unique for us here, try for the Development of the Far offer projects aimed at the devel- as no one else in the whole world East to establish such an area. opment of SMEs. These projects develops agriculture in permafrost – What projects will Yakutia are related to the hotel sector, as conditions, while we grow cere- offer to investors at the EEF-2016? well as to commercial and food als, vegetables, potatoes, and – The projects include the markets. bridge across the Lena River, the ASEZ in South Yakutia, the creation of a high-technology IT-Park, and Production complex for the the comprehensive project to reno- Geological study and indus- processing of hydrocarbons vate and modernize the Zhataysky trial development of Zapad- in Aldan Ship Repair and Shipbuilding Plant. no-Anabarsky area We will also demonstrate projects related to the development of min- eral deposits of Yakutia, and in par- ticular, the Tarynsky Gold Deposit breed livestock. We are going to discussions at the East Economic est in the world. We are also plan- and the project of the SakhaPetrol increase our support for vegeta- Forum. We expect that this year, we ning to increase the volumes of coal Company, involving the pumping ble production and animal breed- will have chosen both the financial production and enrichment at the and process of oil right in Yakutia. ing in Yakutia, particularly since model and the investor, and then in Inaglinsky Coal Complex, and to This latter project is very these are the industries that most 2017, we will get down to the devel- produce oil and gas in Olekminsky important for Yakutia, because of the indigenous population is opment of the project design. In involved in. 2018, we will proceed with the con- – The most important invest- struction of the bridge and it will be THE BRIDGE MUCH NEEDED BY THE RESIDENTS ment project in Yakutia is the placed into operation in 2022. Questions concerning the Lena bridge construction near are construction of a bridge across – Has the region started to under study since the last century. The launch of the bridge construction the Lena River. You have been draft documents to create a was planned for 1991, however, due to some external reasons, the work negotiating with a number of Chi- ASEZ in South Yakutia? Do you never started. The idea of bridge construction emerged again in the year 2000, relating Project initiator: nese companies. What has been already have an understanding of JSC Oil company "Tuymaada-Neft" to the construction of the Berkakit-Tommot-Yakutsk railway line. In 2008, Project initiator: achieved so far? who will become the anchor resi- The main goal is exploration and cost-effective JSC Oil company "Tuymaada-Neft” – Two Chinese state-owned cor- dent of this area? design documentation was developed for construction of a 3.2 km long industrial development of Western-Anabar area The project will provide petroleum products porations are interested in develop- – The ASEZ in South Yakutia is a combined road-rail bridge. of Yakutia. to the domestic needs of the Republic of ing projects: The Sinohydro Corpo- new project of the republic, which In 2015, it was decided to reconsider the project under a concession The project is one of the key issues in forming an oil and gas cluster in the Arctic zone of Sakha (Yakutia) in full volume at lower prices ration, a subsidiary of Power Chi- we are going to showcase at the agreement and to search for foreign partners to implement it. The pres- compared to imported. The exception of costs the Republic. Manufactured products: Oil of transportation and handling of petroleum na, and China Railway Construction EEF. The purpose of the new ASEZ entation of the project took place at the Eastern Economic Forum in Vlad- supply for processing and export. Reserves products in the supply to the Republic will Corporation (CRCC), represented is to create a major industrial cen- ivostok, the Second Russian-Chinese Expo in Harbin (China) and at the of category C1+C2 –16.6 million tons significantly increase the efficiency of the by its affiliates – the Bridge Engineer- ter for the deep processing of natu- 7th session of the China International Fair for Investment and Trade. The (recoverable). The C3 prospective resources of project, eliminate their seasonality and ing Bureau and the China State Con- ral resources. I am talking about the Government of the Sakha Republic (Yakutia) together with the Russian 90 million tons (recoverable). Inferred resources irregularity of delivery. D1+D2 –256 million tons (recoverable).1 The production capacity is 2 mln tons per year struction Engineering Corporation processing of uranium ore of the Federal Road Agency negotiated with potential investors from China. The production capacity: 12 million tons per year of raw material. (CSCEC). At the moment, negotia- Elkon Deposit, which is being devel- Currently, there are some negotiations held with potential partners. Chi- Cumulative production: 178,1 million tons Total investments: 103.3 billion RUB tions are still in progress. Our part- oped by the Elkon Mining and Met- nese state-owned corporation Sinohydro Corporation Limited and the Total investments: 364.7 billion RUR Net present value (NPV): 28.5 billion RUB ners are gathering information, and allurgical Plant JSC, and the devel- China Railway Construction Corporation (CRCC) showed their interest in Net present value (NPV): 132.2 billion RUR. Internal rate of return (IRR): 15.3%. analyzing certain technical solutions. opment of the Seligdarsky Apatite the project. Internal rate of return (IRR): 24.35%. We have agreed to continue our Deposit, considered to be the larg-

34 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 35 ▶ regions Yakutia-Style Innovations Success Story of Russia’s northernmost Technopark

The Yakutia Technopark has demonstrated Инновации по-якутски – исто- рия успеха самого северного exceptional dynamics since it first started технопарка России Технопарк «Якутия» operations: during the 4 years of its existence, it показал выдающуюся динамику: за 4 года ра- has attracted more than 80 residents, mainly local боты здесь собрались более 80 резидентов, companies. The success of the technopark is not в основном – местные only found in the development and prospects of компании. each business as such. This effective model of to use the potential energy of frost. state support for projects was used to create the Now there are discussions taking place on the possibilities for placing Another important area is bi- Kangalassy Industrial Park, the first Advanced data processing centers in Yakutia. Special Economic zone in Yakutia. Systems installed in such centers otechnology, which is based become very hot because they con- sume a lot of energy. This heat can oday it is Yakutia that pro- – Yet, on the other hand, there no overlap. These are links in the be used for heating buildings, while on the unique properties of vides new businesses with are also unique benefits in start- same chain. the cooling system of the data cen- Tthe most comprehensive ing a business here: the region has – How would you evaluate the ters can come from the outside, with our plants and coherent chain of support – a significant potential to replace demand for this support?” the use of the cool outdoor air or administrative support, preferen- imported products. In our case, it – “As time goes by, more and from under the ground. If the exper- Another important area is bio- tomorrow, and not in any foresee- tial rental terms, financing, achiev- is easy to calculate the future mar- more people make their attempts, iments show good results and effi- technology, which is based on the able future, but today. For exam- ing industrial levels of operations ket and identify the prospects for invest and take risks, and we obtain ciency, our republic could become unique properties of our plants. It ple, last year solid fuel boilers were and obtaining all the benefits from the development of each specific more and more interesting results. a platform for data centers of major is known that the extreme environ- installed in Yakutia. These are the Advanced Special Economic technology or innovation. Another Today we have 85 residents, we companies. mental conditions of Yakutia pro- based on an innovative technol- zone regime, and all this in a sin- important point is that today, Yaku- opened a branch in the town of Today there are about 30 mote increased synthesis of biolog- ogy of an upper combustion sys- gle-window system. tia is a region which has devel- Neryungri, and thanks to the whole IT-companies in Yakutsk, and many ically active substances in plants, tem, which allows reducing fuel We are going to talk about the oped probably the most elaborate range of methods used to seek out of them have sales turnover mea- which can be used for the produc- costs several times. This saves development of modern advanced system in the country for provid- new projects, including the work of sured in the millions. As we are tion of medicines and dietary sup- on resources and also provides technology businesses with Anato- ing support to innovative business- our own Regional Engineering Cen- located far from mass sales areas, plements. more free time for the residents ly Semyonov, Director of the Yakutia es. We have a technopark, a ven- ter, we now have a solid portfolio of we simply have to invest into the – The commercialization of of our villages. You know, even in Technopark. ture company, and a Advanced promising business projects. development of this sector. We are R&D is a complex issue. Devel- these modern times, people in our – Anatoly, what are the advan- Special Economic zone called the – What are your technology currently working on the creation opers often do not realize how rural communities take turns when tages of developing a business Kangalassy Industrial Park, which priorities these days? What proj- of an IT-park, which will be a huge they can create a business from attending weddings, because in Yakutia? The region is remote, has been operating here since last ects do you consider as being modern building with an area of their idea. someone must stay at home to look the prices in the local market year. The functions and authori- the ones – that will grow? 20,000 square meters in the cen- – We are looking for projects after the fire in the oven. Here is are high, and the market itself is ties are distributed among them, – Today there is much talk about ter of Yakutsk. It will be the home to that can be implemented not that very demand for innovations small. in such a way that there is almost cryotechnology. We need to learn Yakutia’s IT companies. tomorrow, and not the day after that we are talking about.

36 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 37 ▶ regions

at the federal level – the Russian Government gave it the status of a Advanced Special Economic zone. Some of our residents, such as Sakha Lipsnele, the manufacturer of long-burning boilers, and Bige, a paints manufacturer, have already received the status of residents of ments. We concluded our first the Advanced Special Econom- export contract with China last year, ic zone and started constructing Our product enjoys high for the supply of nanocomposite their facilities in the industrial park. additives to the feed for chicken and Administrative preferences and demand: the weight gain fish, which improve nutrient assim- tax privileges that they receive as ilation. Our product enjoys high residents of the Advanced Special of birds can be from 12% to demand: the weight gain of birds Economic zone give their business Kangalassy Industrial Park can be from 12% to 18%. a good momentum. For example, – The term of the program the Sakha Lipsnele now has an Currently at the site, 6 manufacturing plants and one greenhouse 18% period of some Yakutia Tech- opportunity to import production are under construction. If we take into consideration the state sup- nopark residents is coming to an equipment without paying import port for the creation of the necessary infrastructure, the Kangalassy Russia now has technoparks – If we want to achieve a break- end. Are they ready for gradua- duties. This provides significant Industrial Park generates a total of over 2.2 billion rubles of invest- that are more than 10 years old through innovation, which we are tion and to continue their work savings. By the way, during the ments. The largest project today is the initiative for the construc- and have given rise to business- always discussing, we need to start outside the incubator? time of the Forum, this enterprise, tion of vegetable greenhouses. The commissioning of 1.6 hectares es with sales turnovers mea- exporting right now. The Yakutia – Next year, we will be honor- the first one in our Advanced Spe- of greenhouses is planned for 2017, and by 2020, the total area is sured in the billions. Over the Technopark has received the sta- ing our first graduates. We won- cial Economic zone, will start its expected to double. It is expected that by 2021, the company will years, together with our resi- tus of a member of the Internation- dered where they would be going, operations. have reached its full production capacity of up to 2,200 tons of agri- dents, we have achieved real al Association of Science Parks ‘where are these young plants from Another factor, which is just as cultural products per year. measurable financial results, (IASP), whose mission is to create the greenhouse going to grow?’ important, is that the residents of The projects that are currently in the active stage of implementation, meaning exponential growth of a global network of science parks We have found a solution in the the Technopark are also devel- also include manufacturing companies Sakha Lipsnele (manufac- sales turnover. We started much and innovation centers around the establishment of an industrial park, oping outside of Yakutia. A very turer of long-burning boilers), Bige (manufacturer of paints and var- later, but we have demonstrated world, contributing to their growth which will give them, on the one important role is played by the fact nishes), Tyoply Krai (manufacturer of plastic windows), Dalenergos- very impressive dynamics from and development. hand, comfortable conditions for that we have a branch of Skolko- troyvostok (manufacturer of geowebs), Sakhaplastech (manufactur- the very start. We are interested in the imple- working, and, on the other hand, it vo in the Far East. We are active- er of PET bottles), EGOPLAST (manufacturer of polyethylene pipes). – Who are the future consum- mentation of export-oriented proj- will mean that they are already in ly cooperating, and as many as 5 A year-round hydroponic greenhouse is being built here by a foreign ers of the innovations coming ects, as these have no restrictions the market. The Kangalassy Indus- Yakutia companies have received investor, the Japanese Hokkaido Corporation. from Yakutia? when it comes to volumes of invest- trial Park has received support the status of Skolkovo residents.

38 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 39 ▶ priorities

About 160,000 cubic meters of concrete was laid and over 31,000 tons of rebar was installed

Leasing the Baikonur Cos- Vostochny building site and oper- modrome costs over 6 billion ated about 1,000 pieces of state- rubles a year, and of-the-art machinery. The work has suspended multiple launches was carried out in two shifts with- for various reasons. Furthermore, out weekends or holidays. Work- the infrastructure at Baikonur has ers labored in conditions ranging become significantly outdated and from the chill of minus 40 degrees needs to be fully modernized for to heat of about 40 degrees. the new rocket systems. Dozens of buildings and struc- The choice of construction site tural works were erected at the was based on intensive research. launch facility, which covers over The most important selection cri- 90 hectares. 2.7 km of road and teria were the possibility for unin- over 7.2 km of railroad track was hibited launch of booster rockets laid. All the structures are con- and a favorable location. Having nected by underground communi- the proper flight path can knock cation tunnels, which extend more Road to the Stars off up to 30% of the overall cost than 6 km altogether. The facilities of launching a rocket. The ini- were built with extra durability so

RIA NOVOSTI tial flight path of a booster rocket that they can withstand even the can’t be near densely populated most extreme pressure. Everyone in the country has followed the construction of the Vostochny plies, telecommunications facili- areas or over foreign lands. Fur- About 160,000 cubic meters of ties, roads and railways, security thermore, the pieces that sepa- concrete was laid and over 31,000 Cosmodrome – and that is not an overstatement. Regular news broadcasts systems, even the new city of Tsi- rate from booster rockets during tons of rebar was installed. High have reported on the successes and problems at this enormous construction olkovsky, where the specialists are its flight must fall in sparsely pop- density is a special «start» char- site, which appeared as if it would never be finished. Through the efforts of housed. In total, 115 km of roads ulated regions of Russia or in neu- acteristic of the building reinforce- and 125 km of railroads were built. tral waters. ments. A stronger reinforcement thousands of specialists the most modern spaceport in the world was built in Over 500 buildings and structures Despite of a few difficulties, cage made with bent rebar was the middle of the deep taiga. People have been waiting to hear the phrase: that can withstand strong seismic Uglegorsk was a perfect match for developed for the fire ring. ‘Launch! Ignition! Liftoff!’ for long four years. pressures were erected. these requirements. Construction Many complex jobs were per- of the facility had to begin in the formed in extreme weather condi- A decision on a cosmic taiga in a place practically devoid tions, which necessitated the use scale of anything. Roads, an airfield and of special technologies. To keep pril 28, 2016 at 5:01 a.m. from the entire country. The rocket The public became widely aware a new city also needed to be built. the concrete-hardening technol- time was the begin- launch took more than four years of the construction of the space- But the decision had been made: ogy viable during the pouring of Aning of a new stage in the to be prepared. Over this time the port on August 28, 2010, when the spaceport was on! the concrete for the launch area, «Путь к звездам» development of Russia’s space world’s most modern spaceport Vladimir Putin, Russia’s prime makeshift «heaters» crafted with За строительством industry. The Vostochny Space- was built in the middle of the Amur minister at the time, visited the An engineering wonder the help of hot-air blowers and космодрома «Вос- port opened at the deafening roar taiga. settlement of Uglegorsk. Strate- The numbers best tell the sto- electrical curing devices main- точный» в Амурской области наблюдала of a -2.1a booster rocket’s The spaceport features all gic safety concerns necessitated ry of the job the creators pulled tained the required temperature. без преувеличения engines. The successful launch necessary infrastructure: launch construction of a Russian space- off. During the peak construc- Due to the cold, the machines fre- вся страна. was the culmination of the titan- assemblies, an industrial construc- port that could launch heavy tion period, over 8,000 construc- quently broke down, but people ic job of thousands of specialists tion site, water and power sup- rockets. tion workers were working on the kept on working.

40 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 41 ▶ priorities

Phase two The second phase of construc- tion at the spaceport is underway and is expected to be finished by 2021. The area around the space- port is being developed simulta- neously. A cluster of scientific, industrial, residential and tourism sites is under construction. The science commune of Tsiolkovsky is being built at an enormous pace. Numerous high-rises are already finished, and the occu- pants have already settled in. But the most active development stage will begin after October 31. Two launches are planned next year at the brand new space- port, the only one for civilian use in Russia. Roskosmos head Igor Komarov said two Kanopus series RIA NOVOSTI satellites and a weath- er observation satellite will be Technical section launched into space in 2017, Main construction projects in this The second phase while in 2018 the conveyor will section were the assembly and become operational. Plans call testing facility for booster rockets for six to eight launches annual- and spacecraft (launch vehicles, of construction is underway ly from Vostochny Cosmodrome satellite vehicles, etc), the fuel- while there is the potential to have ing and neutralization station and and is expected ten launches a year. the transfer gallery that were built implementing the most contempo- rary technologies. All necessary to be finished by 2021 engineering infrastructure and a information fire station were established. an area of 45,000 square meters. meters high, which are used for The assembly and testing The conductive, anti-static unloading and assembling boost- Vostochny facility is a cutting-edge collection floors protect the highly sensi- er rockets. Cosmodrome of workshops that covers an area tive electronic machinery from The complex for measuring, of over 39,000 square meters. the impacts of electrostatic ener- collecting and processing data TOTAL AREA The installation and testing bays gy. The floors are subject to spe- includes an integrated tech mod- 1035 KM2 feature a special microclimate: cial requirements. They have to ule, 18 pylons that contain instru- a temperature of 18-25 degrees withstand the weight of a boost- ments for data measurement, col- BUILT-UP AREA Celsius and 80% humidity. These er rocket. For that, 360 pilings lection and processing, and an 96.6 KM2 conditions are created by mod- were installed up to 8 meters 85-meter-high adjustable tower CONSTRUCTED BUILDINGS ern heating, ventilation and air deep with each pair supporting a and shelter. MORE THAN 450 conditioning systems. The ven- 40-ton load. The facilities at the Vostochny tilation devices in the installation Engineering communications Cosmodrome are equipped with ROADS department alone – in an area of and specialized systems were laid engineering communications. 97.3 KM 9,000 square meters – process in the technologic channels, with Heat, water, power, ventilation RAILROADS over 1 million cubic meters of air an overall length of 3.5 km. and sewer systems are all at the 98.6 KM per hour. About 20 cargo-lifting disposal of end-users. The energy A special coating was put machines were installed at the plant built at Vostochny can supply THE BUDGET (I AND II STAGE) on the floors of the rooms in the technical complex, including 100- a city of half a million inhabitants 300-400 BN RUB

technical complex, which covers ton bridge cranes mounted 20 with electricity. RIA NOVOSTI

42 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 43 ▶ overview

Gold prospects will happen in 2018. The Natalkin- From Soviet times on gold remains sky Mining and Processing Com- 45 % of the the most important specialization of plex with gold production of over the Far East, which has vast unde- 40 tons annually, is capable of veloped reserves of this precious becoming the largest gold min- gold in the metal. Now 45 % of the gold in the ing enterprise not only in Far East, country is mined in the Far East, but in all of Russia. This investment country is and virtually all Far Eastern gold project gains top-priority status mining regions hold leading posi- in federal government, which will tions in the federations ratings of allow for it to obtain about 10 billion mined in the subjects for volume of extraction. rubles of state support of develop- That said, Kamchatka, which is not ment of deposit infrastructure Pri- Far East yet among the largest producers marily, the deposit needs energy of gold, shows the fastest growth in infrastructure without which work tons of ore and produce about 4 volumes of extraction: there were could not be started for a long time. tons of gold per year. The launch 4.2 tons of gold mined last year, Secondly, Mining and Process- of Mining and Processing Complex which exceed indicators of the pre- ing Complex “Ametistovoye” (Kam- “Ametistovoye” will increase figures vious year by almost a quarter. chatka Gold Company, affiliated of precious metals mining in Kam- It is worth highlighting that there with the Renova Group of Compa- chatka, which establish itself among are several drivers of gold mining, nies) was launched in Kamchatka gold mining regions of the country. which will allow the macro-region Krai in September 2015. “Ametis- Thirdly, the state subsidized to increase current production indi- tovoye” is the largest researched the support of gold mining in Sele- cators. Firstly, the golden ore Min- deposit of lode gold in the region mdzhinsky district in the Amur ing and Processing Complex “Pav- with known reserves over 52 tons Region which is conducted by lik” (Investment Company Arlan) of gold. In the spring of 2016, the company Petropavlovsk. The pro- was launched at full capacity in the Mining and Processing Complex gram received the status of a Magadan Region in August 2015. reached its designed capacity, it top-priority investment project, for Reserves of precious metal at this can process up to 600 thousand which reason the state allocated deposit are estimated to be at 150 MINING tons, and they should be enough for 20 years of work. The output of gold is planned to be increased up GOLD MINING IN THE REGIONS OF THE FAR EASTERN to 10 tons annually. The launch of FEDERAL DISTRICT, 2015 (TONS) this Mining and Processing Com- Russia opens its Far plex was a very important event in Chukotka Autonomous District economic life of the region. Taking Kamchatka Territory into account plans for the devel- opment of other deposits as well, Eastern money-box Magadan Region is capable again 32.1 of holding one of the leading posi- 4,2 tions in the gold mining industry of Sakha Republic The Far East has strategic reserves of these the country and possibly to confi- Россия открывает Khabarovsk Territory (Yakutia) дальневосточную копилку mineral resources: gold, diamonds, ferrous and dently take up the first place. Золота, алмазы, чер- non-ferrous metals. Due to the remoteness and For instance, the start of work ные и цветные ме- of Natalkinsky Mining and Pro- 155.3 таллы – на каждом complexity of the realization of projects, the largest из направлений уже cessing Complex (Polyus Compa- 18.9 идет работа, которая 25 ny) will contribute to the significant в скором времени по- deposits in the country have not been developed зволит значительно for a long time. However, today the situation has increase of gold mining in the Far Magadan Region Amur Region усилить положение East as a whole and in Magadan горнодобывающей changed – in each direction, work is already taking отрасли на Дальнем Region in particular. The launch Востоке. place, which will soon allow the position of the of Mining and Processing Com- mining industry in the Far East and in Russia as a plex was postponed several times, 24,5 25,6 but now it can be said with high whole to be significantly strengthened. probability that its commissioning

44 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 45 ▶ focus

2015 Polyus with other large play- international deliveries of Russian er, company “Polimetall”, initiated diamonds. It is worth noting that ALROSA was first from creation of cooperative enterprise the idea of diamond exchange was for the exploration of the depos- actively promoted by Plenipotenti- it. It is worth mentioning, that Poly- ary of the President in the Far East- state companies to undergo us to large extent is focused on the ern District, Vice prime minister, Yu. development of Natalka, and there- Trutnev, adviser to ALROSA in the process of privatization fore the exploration of Nezhdanin- government of Russia. Besides, dia- skoye is not a priority for company. mond mining enterprise ALROSA Olekminsky Mining and Process- ther production of the Mining and However, creation of cooperative based on Verkhne-Munsk ore field in ing Complex, designed capacity Processing Complex will be export- enterprise tells about high possibil- Yakutia, recognized as a top-priori- of which composes 900 thousand ed to China over bridge crossing ity of that the works at Nezhdanin- ty investment project, received state tons of iron ore concentrate with Nizhneleninskoye-Tongjiang which skoye will finally begin. subsidy of 8.53 billion rubles. iron content at 62.5 % level, was is under construction. For Jewish Also it should not go unmen- put into exploitation on the basis of Autonomous Oblast, the poorest From extraction to cutting tioned, that in 2016 ALROSA Kuranakhskoye deposit. region of Far East, Kimkano-Sutar- As for the diamond mining indus- was first from state companies At the present time preparation sky Mining and Processing Com- try of Russia, it is still almost total- to undergo process of privatiza- for the launch of Kimkano-Sutar- plex may become breakthrough ly concentrated in the Far Eastern tion – 10.9 % of shares of compa- sky Mining and Processing Com- project, providing growth of pro- region. At the moment about 99 % ny became privately owned. How- plex in , duction indicators and budgetary of all diamonds in the country are ever, according to the results of which will become the largest min- receipts. Garinsky Mining and Pro- mined in Yakutia and the main play- privatization it cannot be said that ing enterprise of the region. Com- cessing Complex in neighboring er is the company ALROSA, whose ALROSA gained a new key investor missioning of Mining and Process- Amur Region, production capac- share in the world market com- as different portfolio investors from ing Complex was delayed sever- ity of which will be 10 million tons, poses about 25 %. Talking about Russia, Asia and Europe acquired al times, it became known that the will become the next project of iron the last trends of development of shares. Thus, freefloat of company launch will happen in autumn of ore processing in the macro-re- the company and the industry as increased to 34 % and federal gov- 2016, and in 2017, enterprise will gion. While production will be deliv- a whole, it is worth noting plans of ernment remained with 33 %, while work at designed capacity. Pro- ered for deep processing to Kim- small decrease of mining in 2016 government of Yakutia owns 25 % ductive capacity of the first party of kano-Sutarsky Complex, which is due to the fall of international pric- plus one shares and 8 % belongs Kimkano-Sutarsky Mining and Pro- turning into the main centre of min- es of diamonds. In 2015, compa- to districts of Yakutia. As before cessing Complex is 10 million tons ing and smelting cluster of Far East. ny mined 38.3 million carats but regional authorities insist on pres- per year and 3.15 million tons of However, Far Eastern projects ALROSA managed to sell only 30 ervation of shares in their hands in iron ore concentrate with 65 % con- are realized quite slowly, which million carats, which lead to signif- an attempt to influence the work of tent of iron. It is suggested that fur- is caused by lack of investment icant increase of stock reserves. key company of Yakutia. As a result, in 2016 the manage- ment of company took decision to New projects with state 99 % of all diamonds in the decrease mining down to 37 million participation carats, mainly on account of placer In the Far East large reserves of country are mined in Yakutia deposits. metallurgic raw material are locat- It is worth noting, that the com- ed as well, represented by iron ore pany set the development of the deposits, but in Soviet times they and the main player is the cutting industry as one of its pri- were not developed as they were orities to increase the added val- not considered profitable. Pet- company ALROSA ue of production. However, cutting ropavlovsk – Chernaya Metallurgi- will not be performed in the territo- ya Company, a subsidiary compa- 1.1 billion rubles in 2015 and 2 bil- industry became stalled. Explo- ry of Yakutia. The opening of a dia- ny of Petropavlovsk Group of Com- lion rubles more in 2016 and total ration of Nezhdaninskoye depos- mond exchange in the Far East will panies, the only producer of iron amount of state support of 5.5 bil- it in Yakutia is one of them, right to be a remarkable event in Vladiv- ore in the region, is a pioneer here. lion rubles. Investments will go to development of which Polyus com- ostok. The opening of a diamond This company conducts creation of the construction of 220 kW electric pany received as early as in 2005. exchange should also contribute to mining and smelting cluster of min- power line “Fevralskaya-Rudnaya” It is worth noting that Nezhdanin- more active promotion of produc- ing and processing of iron ore raw in Selemdzhinsky district. skoye is a project complex for real- tion of ALROSA in promising mar- materials on the territory of Amur Nevertheless, implementa- ization, requiring large investments kets of Asia-Pacific Region due to Region and Jewish Autonomous

tion of some project of gold mining in infrastructure. As a result, in the gradual change in scheme of Oblast. In 2010 relatively small RIA NOVOSTI

46 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 47 ▶ focus

received in 2015 license for pros- Metal factory to become resident of Belogorsk pecting and mining of nonferrous ASEZ and precious metals on Baimskaya The company is planning to produce the following steel struc- copper-porphyritic square in Chu- tures through the use of innovative technologies: columns, beams, kotka Autonomous Region, includ- trusses, prefabricated items, and reservoir tanks.“The investment, ing at Peschanka deposit – the which amounts to RUB 716 million, will create 220 jobs. The project largest copper deposit in the Far is expected to be completed over the course of 18 months. Con- East. It the case of parallel reali- struction of the facility is expected to take place at the Belogorsk zation of all necessary infrastruc- advanced special economic zone ‘reserve’ site using investor funds ture projects (primarily, for power and loans”, said the Head of the ASEZ Development and Invest- supply of deposits) Chukotka can ment Section of the Belogorsk Administration. be transferred into new center of The plant will provide the materials required for large investment copper industry in Russia. At the projects under way in Amur Region, the press service of Belogorsk same time, exploration of gold- City Hall reports. en-copper-porphyritic Malmyzhsky deposit, which will be conducted by the American-Canadian compa- Molodyozhny mine in Khabarovsk territory to ny Amur Minerals, is another inter- produce up to 400,000 t of ore per year esting project with reserves of 5.6 million tons of copper and 298 tons of gold. Investment in geological prospecting of this deposit have already made up 1 billion rubles. Recently, Russian government supported the issuing of a license for deposit to a western investor, which created an excellent out- resources as well as by problems look for this deposit and allows to with market outlets. For exam- attract investments to Khabarovsk ple, to this point the building of Recently, Russian government Territory. Tayozhny Mining and Process- Generally speaking, it can be ing Complex in South Yakutia, supported the issuing of a li- said that the mining industry of the with designed capacity of com- Far East is developing sufficiently The opening of the mine and associated processing plant was dis- poses 4.1 million tons per year. well and successfully. Gold min- cussed at a meeting between Vyacheslav Shport, Governor of The project must be realized by cense for deposit to a western ing, which is being invested in by Khabarovsk Territory, and Konstantin Beirit, Director of Russkiye the cooperative enterprise of Russian as well as foreign inves- Fondy, an investment group, reports Delovoy Kapital magazine. group Evraz and ALROSA – Timir investor tors, is on the rise. There is a reviv- The parties assessed the current status and future prospects of tin Group of Companies, which owns al in ferrous metallurgy, where and mining in Khabarovsk Territory. Molodyozhny Mine is already opera- license for development of four and cleaning plant in Solnech- to 3.5 thousand tons of tin per ambitious project of mining and tional. The ore mined there will be processed at the Solnechnaya pro- deposits (Tayozhnoye, Deso- ny district of Khabarovsk Terri- year, while annual needs in tin of smelting cluster is gradually begin- cessing plant in Gorny, which will be commissioned in September vskoye, Taryynnakhskoye and tory, which at the moment is the the country compose 6.5–7 thou- ning to be realized. Besides that, 2016. In autumn, the investor will start to draw up plans for a dry tail- Gorkitskoye). However, ALROSA main centre of tin mining in the Far sand tons. At this moment Rus- the Far East is intended to become ings storage facility there, in order to ensure environmental safety. decided to sell its share and thus Eastern District and Russia, must sia imports 90 % of necessary tin, the center of revival for the tin The Festivalny and Perevalny deposits in the region’s Solnechny to exit the project, which, it must reach its designated capacity by therefore creation of new capaci- mining industry of Russia and the Municipal District have 30 years of reserves, with potential for fur- be said, was expected as only the end of 2016. Mining is planned ties in Far East will help to lead the place to begin copper mining. ther growth. Primorsky Territory is also looking towards developing Evraz was actually conducting at a level of 400 thousand tons country to self-sufficiency. Meanwhile, the diamond indus- tin mining in the future. this project. of ore. Yakutia is again becom- For a long time, the Far East try has adjusted its strategy under “We are trying to attract investment to construct a mining and pro- It is also worth highlighting ing a key centre of tin mining, remained an important reserve for conditions of the reduction in pric- cessing plant at the Pravourmysky deposit, which will enable pro- the new important aspects of where in 2017 “Ruchei Tirekht- copper mining as well in the coun- es and is seeking new market out- duction of up to 5,000 tonnes of tin per year. The cost of the proj- nonferrous metallurgy. Recent- yakh” project will be launched, try. About 40 % of all reserves of lets in the Asia-Pacific Region. Of ect and its associated infrastructure is RUB 9.5 billion. Requests for ly, tin mining, which was another and which makes provision for the Russian copper are concentrat- considerable importance is the federal subsidies have already been sent to the Prime Minister, the specialization of the Far East, is exploration of large deposits of ed here, which are practically not state support for a series of prior- Head of the Far East Development Fund, and the Finance Ministry”, being restored. The tin mine Molo- stream tin. The volume of extrac- developed. Subsidiary compa- ity investment projects in the min- said Mr Shport. dezhny, launched in last year, tion will make up from 500 tons ny Millhouse –GDK Baimskoye ing sector.

48 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 49 ▶ regions interview

perienced miner. In fact, visitors of the sanctions against Russia. For in- the installation will be invited to take stance, in Q1 2016 foreign trade turn- a journey to the very beginning of the over increased by 15% and totaled 99 20th century, as that is when gold was million USD. One of the beneficial de- mined using a wooden pan, a pick velopments of recent years in foreign axe, a scraper and drying jars that are trade is that now Russia has a new ex- now exhibited at the installation. port partner in Kazakhstan, which ac-

RIA NOVOSTI We will also offer a unique chance counted for 49% of total foreign trade to visit our third All-Russian Gold Fes- turnover last year. tival entitled Prospector’s Luck. Con- Companies are also showing stur- ceptually it is a journey to the past with dy financial results: in January-April even deeper immersion in the time 2016 the region’s economy registered period so everyone can try on the role a gross profit of 3 billion rubles, which VLADIMIR PECHENIY, of an artisan prospector and experi- is twice larger than the same period The Head of the region, ence the atmosphere of the Kolyma last year. shared with EastRussia what is going to Klondike. Every attendee at the fes- – What other industries in the be the hallmark of the Magadan region’s tival has a chance to strike real gold, Magadan region are the most interest- projects at the upcoming East Economic and the winner becomes an instant ing for investors today? Kolyma: Gold, water Forum, and also described the region’s millionaire: in just 15 minutes panning – When talking about investment, current situation before the Forum’s start. gold, the winner of the competition one should first state its current level receives one million rubles. That’s the in Magadan oblast and its prospects and skiing – Everyone remembered first place prize money offered by the for the future. What I mean is that in the Magadan oblast from the unique col- Prospector Luck Festival. first quarter of this year the economy lection of nuggets it presented at the – What is the current economic sit- of Magadan oblast received 5 billion Far East show during East Economic uation in Magadan oblast? rubles of investment, and our general Forum 2015. What will be the signa- – The main features of the econo- projection for the year is that the vol- Колыма: золото, вода и ture moment of the region’s exhibition my of Magadan oblast in 2016 are the ume of investment in current prices will горные лыжи this year? decline of inflation, restoration of pos- grow by 2.6% compared to 2015. As Despite the fact that Magadan oblast, due to its – The region will once again dis- itive dynamics in the goods and ser- for industries, most appealing for in- Несмотря на слож- northern location, has a more severe climate play its collection of nuggets, but in vices market, and the growth of vol- vestors, the international investment ные климатические addition we are also bringing in an- umes for shipped products in the ma- trade fair recently held in Magadan условия, Магадан- compared to other regions of the Far East, it is in ская область боль- other exhibit that tells the story of the jor economic sectors. Moreover, the showed that investors are now mainly шим потенциалом fact poised for excellent growth in the near future. unique culture of indigenous peoples region is expected to have a prolific interested in projects related to mining, для роста. of Magadan oblast: the Evens and Ko- flushing season. agriculture and tourism. This is not at all ryak. When it comes to signature mo- The overall situation on the inter- surprising. We really have something to ment, the region is planning to show national market has improved in com- offer in these areas for investors. Proj- he production index in Kolyma It should be pointed out that the only one that not only sells its an art object called Gold Field. Every parison to 2015, but it is still not the ects with the highest levels of priority has the ability to increase from even though the soil of the Maga- products in the domestic market visitor will be able to experience what same as it was the years preceding possible will be showcased at the EEF. T6% in 2016 to 11% in 2018. dan region is not known for its high of Russia, but also exports them, it’s like to be a gold miner. This im- This will be largely determined natural fertility (much of it has been is the fishing industry. At the same pression will be specifically achieved by the tendencies active in the put to agricultural use as the result time, the region has all the neces- by the elements from the everyday life region. For instance, one positive of land amelioration), the area is rich sary resources to develop all types and work of miners in the field demon- trend can be observed in Maga- in minerals. For example, the region of tourism, from fishing, hunting and strated at the art installation. More- dan’s main industry, gold-mining: has significant stocks of precious, eco-tourism, to educational tourism. over, the needed impression will be the planned volume of gold ore non-ferrous and rare metals such The interest of regional authorities augmented by a field tent, a campfire production in 2016 has exceeded as gold, silver, tin and tungsten. in its comprehensive development site with a cauldron, and tools used the 2015’s level and is expected There are also explored deposits of is put clearly on display by the fact by mine surveyors, geologists and to total 27 tons. At the same time, copper, molybdenum, polymetallic that at the upcoming 2nd East Eco- mining engineers. At the same time, regional authorities are also mak- ores and ornamental stone. In addi- nomic Forum at the beginning of the right effect will be achieved by ing sincere efforts to develop tour- tion, there are also oil, peat, wood, September, the region will present the opportunity for attendees to take istic sector, which traditionally has and gas condensate reserves. The both its touristic and resource pro- gold-bearing sand and try to pan for been an unconventional industry second most important sector in jects. On the whole, the region will gold under the supervision of an ex- for Magadan. Magadan oblast after mining, and showcase four projects.

50 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 51 ▶ regions

 CONSTRUCTION OF THE  CREATION OF A COAL (, Japan, China, Tai- festival 1 MINING AND METALLURGI- 2 CLUSTER wan, and Vietnam). CAL COMPLEX ON THE The project is headed by BASIS OF THE PAVLIK, PAV- Severo-Vostochnaya Ugolnaya A millionaire in 15 minutes LIK-2 AND RODIONOVSKOYE Kompania PJSC (North-East Coal GOLD ORE FIELDS Company) (part of Vostochnaya Gornorudnaya Kompania [East- ern Mining Company] group). To develop the complex for the pro- duction and handling of metal- lurgical coal, 25 billion rubles are required. One of the forms of par- ticipation offered by the project is the possibility of contributing to and people from neighboring the share capital of the compa- regions. The resort is located at an ny uniting the production assets altitude of 720 meters above sea of Sakhalin and the exploration level and surrounded by high hills Gold Festival in Magadan, and in particular the Prospector’s Luck This project provides for the con- facilities of Magadan oblast. with picturesque dense pine for- Thecompetition is a fascinating and exciting show that acquaints struction and development of est. One special feature of Talaya visitors with the daily routine of the gold industry and the unique economic coal mines near vil-  RECONSTRUCTION OF is that it enjoys a unique number of potential of Magadan oblast. lage with a total capacity of more 3 THE TALAYA SPA RESORT sunny days every year. The annual “Kolyma is a special region with excellent potential, and in its depths This project involves the crea- than 3 million tons of coal annu- amount of sunshine here reaches one can find almost the entire periodic table. But our main treasure is the tion of a mining and metallurgi- ally, the design and construc- 1,822 hours, which is even more people. They are strong and brave, from those who founded Kolyma long cal complex on the most prom- tion of the export coal terminal than at Caucasian resorts. ago, to those who work in its mines today. It is not without reason that the ising fields of the Yano-Kolyma in Pestraya Dresva bay, the con- The renovation of the Talaya Prospector’s Luck competition stirs so much interest, as demonstrated by the gold-mining province. When put struction of a motorway of about spa resort was initiated by the record numbers of viewers and participants. And of course, this competition into operation, the project will 130 km long from the town of Government of Magadan oblast. will soon become the most important event for the development of tourism to ensure the production of up to 5 Galimiy in Magadan oblast to The project requires 8.6 billion Magadan oblast. million tons of ore and 6 to 8 tons Pestraya Dresva bay, and the rubles of investment. Prospector’s Luck is a gold mining championship. Participants have to of gold annually. The sponsor of reconstruction of the Omsuk- wash sand and gravel enriched with gold dust with the help of a wooden the project is ZRK (gold-mining chan-Galimiy road section. CONSTRUCTION OF THE pan. Alas, according to the rules the panned gold has to be returned, but complex) Pavlik LLC (part of the Open-pit coal mines explored as 4 SOLNECHNY. MAGADAN, the winners will receive large cash prizes. This year’s best prospector won 1 Arlan investment company), and part of the project contain over AN ALL-SEASON SPORTS million rubles, and second and third place got 700 and 300 thousand rubles the volume of necessary invest- 100 million tons of reserves with AND TOURISTIC COM- respectively. There were as many as 80 participants, and each was given 15 ment is 45.6 billion rubles. Cur- prospects for further growth. PLEX minutes to do their gold washing. rently, the start-up and commis- About 1 billion rubles has already So if you are as strong-spirited and adventurous as the prospectors of sioning works at the complex are been invested into exploration This project involves the reno- Kolyma, don’t miss out on your chance to take part in Prospector’s Luck coming to a close. works. High-quality products vation of the Talaya spa resort 2017. In addition to this project, the from here may be purchased by and the construction of a fit- region is planning to support oth- steel and ferroalloy enterpris- ness center, bowling facility and er endeavors of ZRK Pavlik at the es from the Asia-Pacific Region water park, as well as building a gondola lift, create ski and bike skating rink and bowling facility. east Economic Forum, as well as high voltage 220 kV power line to trails of varying complexity, make The whole complex will occupy further development of the min- Talaya village and reconstruct- cableways and develop ski and 1,000 acres on the grounds of eral resource base of the Pav- ing the motorway leading to it. The hiking trails. An indoor observa- the ​​Russian ski school. The pro- lik and Pavlik-2 deposits. This main advantages of this resort tion platform will call the very top ject is expected to increase tour- will lead to a total increase in include local waters and mud that of the snow-capped mountains ist flows – both Russian and for- reserves up to 250 tons, which contain rare medicinal properties home, and it will provide excel- eign – by 13.8 thousand people can be significantly expanded that activate metabolic process- lent views of the surroundings of per year. by the expected reserves of 100 es in the human body and pro- Magadan and Nagaev bay. The The Solnechny. Magadan pro- tons from the Rodionovskoye mote cell regeneration. The Talaya The project includes a hotel and project also involves building a ject was initiated by the Munic- deposit. In general, in the long resort is the only spa facility in the entertainment complex, shop- ski center, snowboard park, ski ipality of Magadan. It requires run these three fields are expect- northeast of Russia. Every year it ping, recreational facilities and a stadium, cafes, sports and chil- around 2.6 billion rubles of invest- ed to produce up to 18.5 tons of is visited by about four thousand conference room. As part of this dren’s facilities with gyms, a well- ment. The master plan for the gold annually. people, including local residents project there are plans to build a ness center, swimming pool, project is currently being drafted.

52 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 53 ▶ overview

he proximity to Asia-Pacific cargo amounted to 53.7 million tons sky Territory. “Primorye-2” stretch- countries and China, one of (+ 15 %) and liquid cargo to 37.1 es from the Chinese border town of TRussia’s main foreign trade million tons (+ 2.3 %). At the same to the nearby Russian ports partners, gives the Far East a time, all the major ports in the Far of Zarubino and . The project unique set of advantages in terms Eastern basin have shown growth requires a major upgrade of the Port of logistics. Thanks to its geograph- in trans-shipment. The largest vol- of Zarubino for which purpose Sum- ical location, the Far East has tra- ume of cargo turnover was recorded ma Group launched the “Big Zarubi- ditionally played the role of a tran- in the Port of Vostochny in Primor- no” project with planned investments sit region and has been gradually ye (33 million tons; growth of 2.9 %), of over 200 billion rubles. It is expect- boosting its own exports. Today, followed by the Port of Vanino in ed that Zarubino will be used for car- however, by no means all of its pos- Khabarovsk Territory (15.2 million go transit from the northeastern Chi- sibilities are used due to the insuf- tons; + 13.9 %) and two more ports nese provinces to the eastern and ficiently developed transport infra- in Primorye: (11.8 million southern regions of China. structure. At the same time, over tons, +15.7 %) and Vladivostok (6.9 The construction of the transport the past few years, the Far East has million tons, + 13.1 %). A particu- corridors will provide the Primorsky seen, if not a boom in logistics but lar role in the Far East is given to the Territory and the Far East in general definitely a sharp increase in the Kozmino terminal (part of the Port of with competitive advantages in the number of projects related to the Vostochny) which has become the international transit market and con- development of transport and ware- most important oil export port on the tribute to the development of inter- house logistics. Advanced Special Pacific coast of Russia and the end nal Russian transportation services. Economic zones, free ports and point of the pipeline “Eastern Sibe- It is expected that by 2030 the freight other projects initiated by the fed- eral and regional authorities have greatly contributed to this. The turnover statistics of freight for High-speed transport system Far Eastern ports and railways clear- ly demonstrates the important and growing role of a macro-region in the Hyperloop will connect the general logistical flow of Russia. Right now, Far Eastern Railways account port of Zarubino and for 36 % of the exported freight for the country’s entire railway network, while 10 years ago their share was the border of China TRANSPORT only 22 %. During the first six months of 2016, the Far Eastern Railways had ria – Pacific Ocean”. China continues turnover along the “Primorye-1” and a freight load of 23.8 million tons that to use this port to procure a major “Primorye-2” corridors may reach is 2.4 % less than during the same portion of its oil in Russia. Many ports 45 million tons of which 23 million period the year before, which cor- are carrying out a process of mod- tons of grain, soybeans, corn, and responds to the prevailing trends ernization, which will allow them to the remaining 22 million tons of con- A key to development in Russia as a whole. However, its increase their through traffic capaci- tainers. Apart from that, the federal freight turnover in the first half of 2016 ty and to grow freight turnover. government came up with the idea grew to reach 95.3 billion tariff ton-km One of the biggest priorities in the of building a super high-speed trans- Russia will inevitably evolve as a transit state (+6 % year-on-year), and the turno- development of transport infrastruc- port system, Hyperloop, connecting Транспорт как залог развития connecting, East and West: the most favorable ver that includes unladen car mileage ture at the moment is to establish the port of Zarubino and the border of Становление России reached 124.7 billion ton-km (+6 %). communication between the Far East China. Recently, the Chinese Ministry как транзитной transport routes pass through Russia’s territory державы, соеди- We see good dynamics of freight and North-Eastern China. of Transport supported this idea, so няющей Восток и and the volume of freight traffic grows every year. turnover in the ports of the Far East- The most important and ambitious the appearance of Hyperloop within Запад, неизбежно: ern basin, which account for about project was the creation of the inter- the framework of “Primorye-2” seems наиболее выгодные The ability to provide transportation and logistical транспортные пути 26.37 % of the total freight turno- national transport corridors of “Primo- a realistic project and will help to fur- проходят по россий- opportunities to foreign companies is a serious ver of Russian ports. During the first rye-1” and “Primorye-2”. The corridor ther increase the efficiency of the ской территории, а объем грузоперево- challenge for domestic industry, which, however, half of 2016, the ports of the Far East “Primorye-1” connects Chinese Har- transport corridor. зок с каждым годом opens up great prospects for the development of showed a 9.5 % increase in turno- bin, capital of Heilongjiang Province, Another important infrastruc- только возрастает. ver up to 90.88 million tons, of which and the Russian ports of Vladivostok, ture project that has finally entered the entire country and of the Far East in particular. the volume of trans-shipment of dry Nakhodka and Vostochny in Primor- the implementation stage is the

54 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 55 ▶ focus

is the introduction of a new regime of Development of Primorye-1 and Primorye-2 free ports in Russia intended to create international transport corridors will be favorable financial opportunities for discussed at EEF investors working in the most impor- tant seaports of the Far East. Development of Primorye-1 and Primorye-2 international trans- Of the 52 companies having res- port corridors was discussed at a meeting headed by Yury Trut- ident status in the Free Port of Vlad- nev, Deputy Prime Minister of Russia and Presidential Envoy to the ivostok, 18 % are focused on logis- Far Eastern Federal District. The discussion was joined by Alexan- tical projects. It’s a significant figure, der Galushka, Head of the Ministry for Development of Russian Far although within the framework of a East, and Vladimir Miklushevsky, Governor of Primorsky Krai. free port the share of logistics com- International transport corridors will create unique opportunities in panies could be higher (projects in East Russia. Primorye-1 and Primorye-2 will be involved in the tran- the industrial sector are still the most sit of cargo from China to the ports of Vladivostok and Nakhodka. popular and comprise 39 % of all res- Construction of these logistical routes may be a first step in the cre- idents). “Aviapolis Yankovsky” can ation of new quality infrastructure in the Asian-Pacific region. “Pri- be pointed out as a milestone project morye-1 and Primorye-2 projects represent a practical coupling of (with investments of 1 billion rubles) the Silk Road and the Eurasian Economic Union. This is of benefit to and warehouse premises occupying both the north-eastern provinces of China and the whole of Russia, more than 92 hectares. including East Russia and the Primorsky Krai,” said Minister Alexan- The Primorsky Territory continues der Galushka. to be the leader for the development “The transport corridors should be presented at the Forum as of warehouse infrastructure in the understandable, transparent investment projects that will ensure a macro-region. However, the ongo- return on their investment. We are yet to hear the investors’ opinion, construction of bridge crossings ing spread of the free ports regime but I think that there is every possibility to commence construction across the Amur River between Rus- in the Port of Vanino in Khabarovsk in 2016,” said Deputy Prime Minister Yury Trutnev. sia and China. One of them links Arctic region as a whole, which Territory, the in According to the Governor of Primorsky Krai Vladimir Miklushevsky, Tongjiang City in the Chinese prov- Sakhalin Region, the Port of Pet- joint Russia-China working groups on integration of transport cor- ince of Heilongjiang and the Rus- the Russian government has ropavlovsk-Kamchatsky in Kamchat- ridors in the international logistical network have already been cre- sian port Nizhneleninskoye in the ka Territory and the in ated: regarding Primorye-1 – with Heilongjiang province, regarding Jewish Autonomous Region. Chi- focused a lot on in recent years Chukotka has contributed to the fur- Primorye-2 – with Jilin province. na has completed the construction ther development of the logistical of its part of the bridge, and Rus- system of the Far East and the inflow sia plans to complete construction The development of the North- lot on in recent years. Together with of investments into the relevant vices. A multi-modal transport and regional economy of the Far East, by the beginning of summer 2018. ern Sea Route could be a separate analytical centers, the federal gov- ports. In this way, a support network logistics complex will be built here promoting better integration of Rus- This bridge is required for exporting topic for discussion. The freight traf- ernment is working on a concept for of free ports is being formed, stretch- that will be attributable to the “Primo- sia with China and other Asia-Pacif- iron ore concentrate from the Kim- fic via the NSR grows every year from the development of the NSR, to be ing across nearly all of the coastal rye-1” corridor. One of the projects ic countries. The creation of trans- kano-Sutarskoye mining complex, 2.6 million tons in 2013 to 5.43 million presented at the Eastern Economic regions of the Far East. The Port of to be implemented in this ASEZ is portation corridors and cross-bor- the largest mining enterprise in the tons in 2015. The main advantage of Forum this year. Vanino boasts the biggest potential concentrated around the transport der bridges, as well as the con- JAR expected to reach its projected the NSR is the considerable amount Therefore, the NSR is yet anoth- with 15 resident companies express- and logistical complex “Southern Pri- struction of warehousing infrastruc- capacity in the years ahead. In the of time saving compared with, for er important logistical vector in the ing interest by offering a total of 70 morsky Terminal” (total investments ture allows for the creation of a Amur Region, a project of a high- example, the popular Shanghai-Rot- Far East that has so far accounted for billion rubles worth of investments. of 8.5 billion rubles) which is planned single economic zone, connecting way bridge is underway to connect terdam route. the least developed and least used Vanino is the final point of the Bai- to be developed as a dry port. The Northeastern China and the south- and Heihe in Chi- At the same time, in view of the share of it. But the existing develop- kal-Amur Mainline; new terminals are ASEZ “Khabarovsk” also specializes ern part of the Russian Far East. na. The project was first mentioned difficult climatic conditions, the NSR ment plans for the eastern part of the being built in this port complex, that in transport and logistics, it is where Currently, the main logistics hub is in 2011 but a relevant concession could hardly compete with the Suez NSR and, in particular, the conversion are intended mainly for exporting the industrial-logistical park project located in the Primorsky Territory, agreement has been only recent- Canal and attract a large number of of Petropavlovsk-Kamchatsky into a coal from Yakutia. “Avangard” will be realized on a terri- however with the implementation ly signed, whereby the bridge is to foreign companies, but for Russia this powerful port complex and the east- Quite a lot of logistical projects tory of 51.7 hectares. of free ports and “ASEZs” there is be built in three years, by 2019. The route creates many advantages for ern gateway to the NSR, may change are being implemented within the Thus, the logistics sector in the potential for other regions, espe- construction of this bridge will help the country’s internal traffic, ranging the situation. framework of Advanced Special Far East is on the rise and is going cially the Khabarovsk Territory. Tak- strengthen trade and economic from reduced delivery times to deliv- This, in turn, facilitates the devel- Economic zone (ASEZ), where the in two directions in terms of devel- ing into account all the announced relations between the border areas, ering supplies to remote northern ter- opment of warehouse logistics and leading position is held by ASEZ opment: transportation services initiatives, the Far East has every and contribute to the development ritories and the development of the promotes the use of free ports and “Nadezhdinskaya” in the Primor- and warehousing. The implemen- chance to become the largest of tourism which is what the Amur Arctic region as a whole, which the Advanced Special Economic zone sky Territory, that primarily focuses tation of logistical projects will be transportation and logistics hub of Region authorities are focusing on. Russian government has focused a mechanisms. Of particular importance on transportation and logistical ser- one of the drivers of growth in the the country.

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infrastructure that is necessary for the supporting the goals and targets that transshipment of coal. It is located on were set by the government. At the context a 54-hectare territory and includes same time, the development of the port n August, Alexander Novak, Head of the construction of four warehous- infrastructure in the Far East will also be Ithe Ministry of Energy, announced es for the simultaneous storage of profitable for the port itself. Long-term an important event for the Vostochny around 800,000 tons of cargo, of contracts for 3 to 5-year periods, which Port JSC during a meeting with Rus- two stackers, four reclaimers, rail- guarantee cargo loading volumes, and sian President Vladimir Putin. “This way wagon defrosting devices for great work experience on the Russian year, for the first time in our history, the simultaneous heating of 80 open coal export market, allow us to mini- Vladimir Vladimirovich, our overall wagons, conveyor belt systems, mize the financial risks associated with volume of exports of coal going to and two tandem rotary-type wagon the significant increase in capacity – to the East has exceeded exports to the dumpers. The project also includes almost twice the present level – of the West. That means that the Western di- the construction of a deep-water JSC. rection used to be dominant, but this dock, which is intended to host ves- “The third phase of Vostochny year, we have exported 51 % of our sels with dead weights of up to 180 Port JSC, including the additional rail- coal to the East, mainly to countries tons, and the installation of two pow- way parks, is being built without any like Japan, South Korea, India, and erful vessel-loading devices. government financing,” Anatoly Laz- Vietnam. This direction is being devel- Currently, 90% of the main equip- arev told the EastRussia News Agen- oped, the port infrastructure is devel- ment of the third phase has already cy. “The overall investments amount oping, and exports are growing, de- been installed. Four specialized buck- to approximately 27 billion rubles.” spite some difficulties when it comes et loaders (reclaimers) have already The Vostochny Port JSC devel- to pricing... Presently, the prices for been installed. The assembly work on opment project has secured a long- our coal are somewhat low,” said Al- 2 stackers (machines that form coal term cargo loading volumes. “In exander Novak. stockpiles in warehouses) is in prog- order to ensure the successful oper- ress. In parallel, conveyor lines are ation of a company in this sector, Vostochny Port is being installed on the entire territory three important components are finally, the third component – in of the third phase. The next stage of required: an experienced team, reli- 2015, during the first Eastern Eco- this project will involve the construc- able equipment and a client base,” nomic Forum, we signed a num- increasing capacity tion of the wagon defrosting devices noted Anatoly Lazarev, Managing ber of agreements with the largest and railroad infrastructure. Director of Vostochny Port JSC. “We coal producing companies in Russia After completion of the third phase, have the first component, and our (Kuzbassrazrezugol Coal Compa- «Восточный Порт» Next year, the third phase of the specialized the Vostochny Port sea terminal ware- company has always been proud ny OJSC and Siberian Coal Energy удваивает мощности coal terminal of Vostochny Port JSC will become houses will have a capacity of 1.6 mil- of its qualified personnel. As for the Company JSC) on cooperation and Уже в следующем году lion tons, and there will be full intercon- second component – the equipment collaboration in terms of organiza- в Приморском крае operational in Primorsky Krai. After its commissioning, заработает Третья nection capabilities between all pro- for the third phase of the coal-han- tion and provision of transshipments. очередь специализи- the cargo traffic at Russia’s largest stevedore company duction complexes of the terminal. dling complex is supplied by the These agreements already guaran- рованного угольного терминала АО «Вос- will increase from 22.8 million tons of coal in 2015, The uniqueness of the third phase world’s leading producers of spe- tee to load a part of the capacity of точный Порт». to 39 million tons in 2019. At the end of that year, this is not only due to its large scale. It cialized technology solutions. And the third phase up until 2030.” is expected that it will become the company will account for about 50% of the overall  「ボストチヌイ港」は能力を倍加さ most eco-friendly coal terminal in Pri- せている。 cargo traffic of all coal ports in the Far Eastern Basin. morsky Krai. Right from the start of Vostochny Port 来年、沿海州地域内 operations, it will be equipped with ostochny Port JSC is the largest specialized coal terminal in Russia, which is の港湾会社 JSCボス he total investments amount to commissioning has been planned the most modern aspiration and dust equipped with conveyor belts, wagon dumpers, vessel loading machinery and a トチヌイ港が運営す V る石炭専用ターミナ approximately 27 billion rubles. for the year 2017. The new plat- suppression systems, and a multi- unique multi-level magnetic coal purifying system that has no analogues in Russia. ル第3施設が操業す The construction of this high- form of the specialized coal produc- stage filtration system that is able to The cargo turnover of the company in 2015 amounted to 22.8 million tons of る予定。 T tech terminal is being carried out tion and handling complex includes purify wastewater to such a degree, coal, which is one fifth of all coal that is export from Russian seaports, and about 32% without any government financing. two railway parks near the Nakhod- that it would meet fishery pond stan- of the coal turnover of Far Eastern ports. 보스토치느이항은 수용 능력을 두 배로 확 Currently, about 75% of this largest ka-Vostochnaya train station, one of dards. This is similar to the equipment Vostochny Port JSC is implementing a large-scale investment project involving 장하고 있다. port investment project in the Far East which will be handed over to Russian and installations that are already in the construction of the third phase of a coal complex, including the creation of fed- 내년에는 JSC «보스 has been completed. Railways CJSC without any com- place and operating at other facilities eral railway infrastructure. In 2017, objects of the third phase will become operation- 토치느이항»의 석탄 The construction work on the pensation, in accordance with the of the Vostochny Port JSC. al, which will increase the cargo turnover of Vostochny Port JSC to 39 million tons of 전용 3번 터미널이 가 동된다. third phase of the coal terminal of technical connection contract. This According to Anatoly Lazarev, coal by the year 2019. The entire planned capacity is secured by the cargo base of Vostochny Port JSC in Primorsky project involves the creation, from Managing Director of Vostochny Port Russian coal mined in the Kuzbass and other coal basins of the country. Krai started in December 2012. The ground-zero, of an entire railway JSC, the private sector is presently

58 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 59 ▶ ????overview

he Far East might not play marked by lawsuits between Gaz- tional» natural gas, which previ- the leading role in Russia’s prom and Rosneft. As a result, ously had only local significance. Tfuel and energy industry, Rosneft decided to choose anoth- The «Power of Siberia» gas trans- conceding that to Siberia, but it er location for «Far East LNG» portation system, which is now shows a strong positive trend as and now plans to place it in the under construction and will cross the main center of new industrial Khabarovsk Territory, near the the territory of the Irkutsk region, development in the country. The De-Kastri oil terminal. Further- Yakutia, the Amur region, the Jew- macroregion’s share in the coun- more, in the Primorsky Territo- ish Autonomous Region and the try’s oil production is about 4.4%. ry another Gazprom project for Khabarovsk Territory, has become Gas production is at approximate- the production of liquefied natu- the main project there. The sys- ly the same level and amounts ral gas, «Vladivostok LNG», was tem will deliver gas from Yakutia to about 5%. The macroregion planned. However, due to the and Irkutsk gas production cen- accounts for 8.7% of all coal unfavorable economic situation, ters to Far Eastern consumers and FUEL & ENERGY exports, and there was an overall this project has had to be post- for export to China. Delivery is set 18.1% increase in coal produc- poned. At the same time, plans to begin in 2019. The total length tion in 2015, up to 6,165.7 thou- for construction of of a new third of the pipeline will be around sand tons. However, the Far East stage of the existing LNG plant 4,000 km, with a design capaci- remains in last place for electricity on Sakhalin, which remains the ty of 61 billion cubic meters of gas production among Russian ener- flagship of the industry, are being per year. The principal field of the gy zones, with a 4.5% share (47.7 implemented. Yakutia gas production center is billion kW/h). At the same time, the very important transit role of the Far East, through which exports of oil and coal from other regions of the country pass, especially from Far East is gradually becoming Siberia, should not be forgotten. Indeed, oil transportation through a major producer and exporter the unique Eastern Siberia-Pa- cific Ocean pipeline is constantly growing, and the capacity of coal of «conventional» natural gas port terminals in the Primorsky and Khabarovsk Territories is In addition, the government the Chayandinskoye oil, gas and The Road to Leadership being expanded. of Russia recently suggested the condensate field, containing large In recent years in the Far East building of new plants for liquefied reserves of natural gas. Its devel- fuel and energy sector, special natural gas production on Sakhalin opment will turn Yakutia into one The Far East will become a leader in the emphasis has been placed on the and along the route of the «Pow- of Russia’s leading gas-producing production of liquefied natural gas er of Siberia» gas pipeline to Jap- regions. (LNG), which has become a kind anese companies. However, the At the moment, project is fuel and energy industry in upcoming years of «calling card» of the macrore- situation on the global LNG mar- being implemented according gion. The most successful proj- ket has become more challenging. to the schedule; in 2016 con- ect is the first LNG plant in Rus- The revenues of Sakhalin Energy, struction of 400 km of pipeline sia, built as part of the «Sakha- the operator of the «Sakhalin-2» is planned. However, Gazprom, Дальний Восток в ближай- The Far East, which has become a new center of шие годы станет лидером в lin-2» project (in which Gazprom project, from LNG exports con- which is implementing this proj- сфере ТЭК industrial development, is gradually turning into one and Shell are engaged). In 2015, tinues to decline. In the first half ect, is believed to be facing diffi- Дальний Восток, of the leading producers and exporters of oil, gas the volume of LNG production in of 2016 the company received $ culties with its financing. With the став новым центром the framework of the «Sakhalin-2» 1.7 billion, which is 34% less than slowdown of China’s economy, промышленного and coal in the country. Active development of new освоения, постепен- deposits and construction of processing plants project came to 10.8 million tons. during the same period last year. there may also be problems with но превращается в As for future LNG projects, In these circumstances, it is look- the sale of natural gas. However, одного из ведущих is underway. The macroregion holds enormous производителей и Rosneft plans to build the «Far ing for new markets (for exam- «Power of Siberia» has not yet had экспортеров нефти, reserves of energy resources in its depths, East LNG» plant, although the ple, China) and is not abandoning serious difficulties which could газа и угля в стране. and even the negative trend of recent years in company has already encoun- plans to expand production. prevent the implementation of tered certain difficulties at the Meanwhile, the Far East is the project. Moreover, construc- connection with the lower cost of raw materials is stage of idea development. For gradually becoming a major pro- tion of the Amursky gas process- not affecting the vector of its development. example, the year 2015 was ducer and exporter of «conven- ing plant in the Svobodny district

60 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 61 ▶ focus

The coal industry of the Far East is developing and increas- ing production and export

designs for «Inaglinsky-2» and watt/hour to 9.2 rubles, while the «Inaglinsky-3» plants are being average rate for the country is prepared. 3.19 rubles. Conversion of gen- In addition, coal companies, eration in the Far East to cheap- working for export contribute to er gas fuel has started recent- the construction of large port ter- ly. And in general, development minals, mainly in Khabarovsk Ter- of the energy sector in the Far ritory. The Siberian Coal Energy East is proceeding with a serious Company and Sahatrans (Volga delay. The regions have a prob- Group) are engaged in increas- lem of retiring capacity, which ing the capacity of the coal termi- the projects of RusHydro and its nal in the Bay of Muchka in Vanino subsidiary JSC RAO ES East are port, which will make it possible to meant to resolve. At the moment deliver up to 24 million tons of coal they are carrying out construc- per year to Asia-Pacific countries tion of four new power facilities by 2020. The Sahatrans project is in the Far East: a thermal power also one of the projects supported station in Sovetskaya Gavan in by the federal government. the Khabarovsk Territory, Sakha- Other regions of the Far East lin state district power station-2 are also gradually becoming (1st stage), Yakutsk state dis- major coal producers. The Aus- trict power station-2 (1st stage), tralian company Tigers Realm and Blagoveshchenskaya ther- Coal Limited, which will develop mal power station (2nd stage) in the Fandyushkinskoe Field cok- Amur region. In addition, struc- ing coal deposit (this project is tures of Rosatom are planning of the Amur region, which will be including gas condensate, which the extraction and export of raw deposit by 8% compared to the being implemented on the terri- to install a floating nuclear pow- a resident of «Svobodnenskaya» is 13.3% more than during the materials. The development of oil same period last year, up to 2 mil- tory of the «Beringovsky» ASEZ), er plant (FNPP) off the coast of Advanced Special Economic zone same period. However, the pro- refining in the Far East (which for lion tons. Despite the known finan- plans to expand its presence in Chukotka, which will be able to (ASEZ), is starting. The plant is to portions of the main projects in now is concentrated in the plants cial difficulties of Mechel, this proj- Chukotka. Completely new oppor- replace the decommissioned become the largest in Russia and Sakhalin are changing. A decline in the Khabarovsk Territory) will be ect continues to be implemented, tunities for the coal industry of the Bilibino NPP. one of the largest in the world, with in production is expected on the facilitated by the «Eastern Petro- but with the participation of state- macroregion could be opened In part the problem of pow- a design capacity of up to 42 bil- «Sakhalin-2» project in accor- chemical Company» (VNHK) com- owned banks (primarily Gazprom- by the development of the Ger- er supply in the Far East can be lion cubic meters per year. dance with the development plan plex in the Primorye Territory, con- bank). Secondly, another major bikano-Ogodzhinsky deposit in solved using its powerful hydro- Offshore oil production is for the Piltun-Astokhsky field. At trolled by Rosneft. It will become industry player, Colmar, is pre- the Amur region, which is seen power potential. RusHydro is another area of consistent devel- the same time, production growth the basis for the future «Petro- paring for the launch in Yakutia of as part of the powerful coal-ener- constructing the Nizhne-Bureya opment for the Far Eastern fuel is planned on the «Sakhalin-1» chemical» ASEZ. the Inaglinsky integrated coal min- gy project of Russia and China, hydroelectric power station in and energy sector. The Far East project. The coal industry of the Far ing and processing works, which focused on electricity production the Amur region, the launch of has become the main center of New prospects of oil indus- East is developing and increas- is a part of the priority investment and its export to the neighboring which is scheduled for December Russian offshore production, try in Far East are connected with ing production and export. Yakutia projects supported by the state. country. 2016. Installation of two addition- which is also its unique feature. the development of more remote remains one of the main points of Last year, it received state sup- However, high electricity rates al hydraulic units is planned at the The main producer, the Sakha- areas of shelf, primarily in the growth in this industry. Firstly, pro- port for infrastructure develop- still remain an acute problem in Ust-Srednekanskaya HPP in the lin region, continues to increase north of the , near duction at the Elga deposit of the ment in the amount of 560 million the macroregion. The cost of Magadan region. However, the production (last year it grew by the coast of the Magadan Region. Mechel company is increasing. In rubles. In the summer of 2016, the electricity in the Far East, which long-standing idea of making the 14.3%), which during the first half As in the case of the gas industry, the first half of 2016 the company «Inaglinsky-1» coal preparation is an isolated energy system, is in Far East a major exporter of elec- of 2016 came to to 9.6 million tons, the Far East is focused not only on increased coal production on this plant was put into operation, and the range of 3.34 rubles per kilo- tricity (primarily to China) is still just

62 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 63 ▶ focus Australian company to mine coal in Chukotka An agreement on co-operation was signed between the Aus- tralian company Tigers Realm Coal Limited and the govern- ment of the Chukotka Autono- mous Area on the sidelines of the St. Petersburg Internation- al Economic Forum. The com- pany plans to engage in mining energy and coking coal with- in the scope of the Beringovsky Advanced Special Economic zone, according to the Vostok Media portal. According to the documents, Tigers Realm Coal Limited undertakes, in the first phase during 2016–2017, to finance construction of the first stage of facilities for mining energy and coking coal in the amount of up to RUB 1 billion and to create at least 100 new jobs. The Chu-

RIA NOVOSTI kotka administration, in turn, committed to provide compre- Verkhoyansk district in the Sakha wind park with a capacity of 1 MW gradually transforming the mac- hensive support to the foreign Republic (Yakutia), with a capaci- in the arctic village of Tiksi. roregion into one of the leading investors. At Kamchatka geothermal ty of 1 MW, which is the largest of Meanwhile, Kamchatka has manufacturers and exporters of It is anticipated that the first its kind beyond the Arctic Circle. In another unique resource - geo- oil, gas and coal in the country. A batch of coal will be mined energy provides for about 40% May, Sakhaenergo (a subsidiary thermal energy, which provides for number of major projects of the this year. of Yakutskenergo, which is a part about 40% of the electricity needs Far Eastern fuel and energy sector Previously, geological pros- of OJSC RAO ES East) began con- of the region. Preparations are now are taking place in Advanced Spe- pecting work was carried out of the electricity needs struction of solar generation sites in underway for the launch of a new cial Economic zones or have the along the coastline of the Gulf three remote and inaccessible vil- well, which will increase the capac- status of priority investment proj- of Anadyr in the , of the region lages in Yakutia. For the Republic, ity of the Mutnovsky Geothermal ects supported by federal author- revealing several major coking development of renewable energy Power Plant, one of the main pro- ities. The Far East has also its own coal fields. Open-cast mining, an idea (like the project for an ener- Region and Chukotka) is also sources is indeed very important, ducers of electricity of the Central distinct specialization, such as the proximity to the sea and possi- gy bridge connecting Sakhalin with planned. as due to the use of diesel power Kamchatka generation system. It production of LNG, and offshore bility of transporting the coal by Japan). The development of alterna- stations in the Arctic zone of Yaku- should be noted that the topic of oil and gas extraction. Difficulties sea potentially place the Chu- Meanwhile, the federal gov- tive power generation in Far East tia, average electricity rates are alternative energy in the Far East in the development of the fuel and kotka coal fields among the ernment is working on various during recent years should be not- twice those in the central areas. is at the center of the federal gov- energy sector were connected most competitive in the world. options for reducing energy rates ed. It will provide remote areas with In addition, wind-power engi- ernment’s attention. In the spring both with the financial problems in Far East, whose high level hin- energy and reduce its cost, and in neering is gradually developing. of 2016 Deputy Prime Minister and of individual business players and ders economic development and addition, replace the retiring diesel For example, OJSC «RAO ES Presidential Plenipotentiary Envoy with external factors of the chang- increases the cost of any produc- power capacities. OJSC RAO ES East», in conjunction with Japa- in the Far Eastern Federal District ing situation on the world energy tion in the macroregion. However, East is working hard in the Far East nese companies Komai Haltec Inc Y. Trutnev emphasized the impor- market. In general we can say that the final decision on this matter is to create alternative power gener- and Mitsui & Co, built wind parks in tance of geothermal energy in the industry has been resistant still pending. Construction of new ation; it has built eight solar power Ust-Kamchatsk of the Kamchatka Kamchatka and called for further to challenges and has adapted energy bridges and power lines, plants and three wind power gener- Territory and Novikovo village in the development of this type of renew- to the existing conditions. Mean- which are necessary for the imple- ation facilities in the period of 2013- Sakhalin region in 2015. Yakutia’s able energy in the region. while, the problem of high electric- mentation of major raw materials 2015. Recent projects include a government is implementing a joint Thus, the fuel and energy sec- ity rates, which seriously limit the projects (in particular, an energy solar power plant commissioned project with Komai Haltec Inc for tor of the Far East has been devel- potential of the Far East’s econo- bridge connecting the Magadan in 2015 in Batagai village of the the construction of an experimental oping successfully in recent years, my, is yet to be solved.

64 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 65 ▶ megaprojects

The implementation of projects Developing energy was entrusted to RusHydro for development PJSC and its subsidiary com- of Far East pany RAO ES of the East PJSC the most time-sensitive and crucial mafrost (perpetually frozen soil). thing for the region is to complete After it is completed, the new energy the “presidential” federally funded capacities will fully satisfy the city’s construction of new power stations growing demand. New residen- as soon as possible. The implemen- tial districts will be connected to the tation of these projects was entrust- heating system, and electric power ed to RusHydro PJSC and its sub- will be available to new enterprises, sidiary company RAO Energy Sys- including the Kangalassy Industri- tems of the East PJSC – an integrat- al Park Advanced Special Econom- ed center responsible for the region- ic zone. al energy sector. Each of the four Perhaps the development proj- electric power stations will make it ect most closely connected with possible to develop particular sec- the region is the CHPP in the city of tors in the respective territories. Sovetskaya Gavan in Khabarovsk The first facility of this program Krai. Here, a new maritime and is the second phase of the Bla- logistics cluster is being formed goveschensk CHP plant. The con- and a Port Special Economic Zone struction work has already been has been created. In the neighbor- completed, and its equipment has ing city of Vanino, a Free Port Zone been put into operation. The need has been established. However, for expansion here was dictated by a vital need – the capital city of Amur Region has suffered from a lack of heating for many years, and the deficiency was so high, that new heat consumers were not able to connect to the heating sys- tem. Now, the heat can flow into he Far-Eastern energy com- residential clusters with their apart- The Far-Eastern energy complex witnessed huge plex in Russia is extremely ment blocks rising above the city, Развивая энергетику, развиваем Дальний Восток momentum in 2012, after a long period without any Tcomplicated, as only a part of and into the greenhouse facilities of renovations. During that year, public funds were the territory is currently consolidat- local agricultural enterprises, which Крупнейшие энер- ed into an integrated system. Kam- are ready to compete with Chinese гетические стройки allocated for the construction of four new electric в ДФО близки к chatka, Magadan Oblast, Chukot- vegetable suppliers, and into many завершению. Новые power stations in the region, by the decision of ka, Central and Western Yakutia, other businesses as well. The effect станции дадут им- пульс развитию всего Vladimir Putin, the President of Russia. Today, and Sakhalin Island are all sepa- of this capacity increases will be региона. construction works are in their final stages, and the rate autonomous energy systems. seen very soon. This factor makes the prime electric The construction of the pow- stable operations of these new stations will not only energy cost rather high, higher than er station in Yakutia has entered its enhance the existing energy system, but also provide in the European part of the coun- final stages. Today’s Yakutsk is the the energy needed for growth, i.e., satisfying the try. Power producing facilities in the fastest growing city in Russia’s Far Russian Far East have not had any East. This is a unique construction demand of investors who keep coming into the region. renovations for over 30 years. Thus, project, as it is taking place on per-

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with points of economic growth – PJSC using its own resources and the southern part of Primorsky Krai loan capital. This project, in its own It was impos- was declared a Free Port Zone, way, is unique – because the cred- and in close vicinity to the city itself itors, including the European Bank sible for the three ASEZ (Advanced Special for Reconstruction and Develop- Economic zone) have already been ment, made it a strict condition that established; these are the Nade- this power facility must comply with energy pro- zhdinskaya ASEZ, Mikhailovsky the most stringent environmental ASEZ and Bolshoi Kamen ASEZ. requirements. As a result, Vladi- gram to ignore To satisfy growing demands, a new vostok will receive one of the most CHPP called Vostochnaya is being modern and safe electric power Vladivostok built in the city by RAO ES of East stations in the country.

briefs Five largest energy development projects ederal Fbudget CHP provided target financing for the In Sovetskaya construction Blagoveschensk Gavan of 4 priority CHP(2nd stage) thermal power plants 3 the existing station, Maiskaya State are a long-lasting source of major Vladivostok, one of the largest Regional Power Plant (SRPP), was concerns for utility providers, it is far-eastern cities and capital city of built almost 100 (!) years ago. This important that the new station be Primorsky Krai. The capital city of new station will provide energy to located at the intersection point of Primorsky Krai has long been con- a multi-functional port and ship-re- main high-voltage power lines. This sidered a weak point when it came pair center, container and coal ter- will provide a substantial increase to its electric supply – the larg- minals, help develop fish and sea- in the sustainability of energy infra- est energy-producing facilities are 2 food processing, and satisfy other structure of the electrical grid infra- located in the northern part of the Total electric capacity requirements of businesses operat- structure of the entire region. region, while the main consumers Sakhalin ing in the Free Port. The benefits for Naturally, it was impossible for are in the south. Moreover, Vladivo- of the plants under SDPP-2 (1St Stage) local residents are also important – the new energy program to ignore stok is being gradually surrounded today, the centralized water-supply Yakut SDPP-2 construction: 692,5 MW system operates only from Octo- (1st stage) Total heat capacity: ber to May, during the heating sea- briefs son, but after putting the CHPP into 1296,2 Gcal/h operation hot water will be available Connecting ASEZ projects to the to residents throughout the year. The new station in Sakhalin is power supply is the top priority for of particular importance for the CHP region. The mining and process- power engineers “Vostochnaya” 4 ing industry is developing rapidly on the island, which is why a reli- ar Eastern Grids Company, which services the energy grid complex in 1 able electric power reserve is des- Fthe southern regions of the Russian Far East, has received requests to perately needed, and all the more connect ASEZ facilities to the 210 MW power lines by the end of 2018. In the 5 so as the current SRPP has almost Kamchatka Peninsula, the power supply connection needed is estimated at exhausted its calculated service 43 MW, and in Yakutia at 4 MW. In other regions, the requests are still being life. For the island, notorious for prepared. its destructive cyclones, which

68 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 69 ▶ megaprojects

Survival issue The Russian Far East has a huge potential for renewable energy development. The sun shines on From a major part of the region’s terri- tory 250–300 days a year. More- over, there are big opportunities to barriers to use wind energy and an immense number of small rivers (on Sakha- lin Island alone, there are almost 40,000 rivers). And this is not possibilities including its volcanoes and geo- thermal sources. The prospects The most powerful Russian solar power plant are unlimited. In spite of economic difficulties, is currently operating in Crimea, which is alternative power generation in the by no means surprising. However, the Far Far East keeps developing system- East remains an absolute leader in terms of atically. Today on Kamchatka Pen- insula, 40 percent of energy con- construction speed and commissioning of new sumption is supplied by geother- projects in the field of renewable energy. Only mal sources. Wind power farms here, thanks to the efforts of RAO ES of the have been built in Ust-Kamchatsk and on Sakhalin. Thirteen solar East, the implementation of RES technologies power plants have been built and is systemic and allows solving the most acute are operating successfully in Yaku- regional problems today. Solar, wind and tia, including the biggest solar pow- geothermal sources bring electricity to isolated er plant north of the Arctic Circle, in the settlement of Batagay, com- settlements, and allow saving millions of state missioned in December 2015. The North life is sustained on local pow- mobile road operable during win- and the load on the power sys- budget funds annually. capacity of this plant, consisting of er generation, mostly running on ter only), or the unfreezing of the tem at the expense of liquidation 3,360 polycrystalline modules (on a diesel fuel. Considering the cost of northern rivers. This leads to high of the cross-subsidies program territory of 4.3 hectares or four soc- diesel fuel and long delivery peri- costs per kilowatt-hour.” and the use of other sources of cer fields) is one megawatt. With ods, in some settlements the cost Cross-subsidies make the situ- energy. According to Alexey Kolo- the project costing almost 200 mil- of one kilowatt-hour reaches 383 ation with tariffs even worse – the deznikov, it is obvious right now lion rubles, it has led to diesel fuel rubles, and often at some diesel price load on maintenance of local that under the prevailing condi- savings (the only energy source in stations it almost doubles – up to power generation is redistributed tions of the Republic, with its cli- the settlement) of 300 tons or near- 685 rubles per kilowatt-hour, says to consumers of the central pow- mate and distances between pop- ly 16 million rubles annually. Vice-Chairman of the Government er supply zone. The load on pop- ulation centers, renewable ener- Power engineers consider the of the Republic of Sakha (Yakutia), ulation and enterprises under the gy sources are very beneficial. Republic of Sakha (Yakutia) as the Igor Nikiforov. cross-subsidies program reached Local stations with a capacity of center of RES development in the “Fuel delivery to some settle- 6.8 billion rubles in 2016. up to one megawatt may become region. For a region with a territo- ments takes up to two years,” says Local authorities acknowledge sources of energy in remote com- ry exceeding that of France by four the first deputy prime minister of it is possible to decrease tariffs munities. times, a population of only about the Republic of Sakha (Yakutia) one million people and a tempera- Alexey Kolodeznikovs. “First the ture range of 110 degrees (from fuel is transported down the Lena minus 70 degrees in the winter River, then it is stored in the base 13 SOLAR PLANTS, to plus 40 degrees Celsius in the station until the beginning of the summer), renewable power gener- Arctic Navigation Season over the ation is not a tribute to fashion, but Arctic Ocean. Afterwards, when 3 WIND PLANTS with a total an issue of survival. the Northern Sea Route opens, There is no unified energy sys- the fuel is forwarded to other stor- capacity of 3.6 MW operate tem in Yakutia, in the Arctic Zone age points, and after this, we wait and in the regions of the Extreme for either the winter roads (an auto- in the Far East 70 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 71 ▶ megaprojects RENEWABLE ENERGY IN THE FAR EAST

The biggest SPP north of the Arctic Circle. A joint proj- BATAGAY SPP Power, enee enery ccty Diesel V ect of RAO ES of the East and the Government of the kW cossonn yncs fuel saving, GROWTH RATES tons Republic of Sakha (Yakutia) is officially recognized IN ISOLATED res OF THE FAR EAST as the world’s most northerly photovoltaics facility. 4000 +135 2000 A respective record is made about the site in the Guin- +2735 3500 +57,63 ness World Records. +1099,9 Capacity: 1 MW 3000 1500 Area of SPP: 4 hectares Operating temperatures: from -45 °C to +40 °C 2500 Equipment composition: 3360 polycrystalline 2000 1000 panels, 300 W each Year of commissioning: 2015 1500 +31,2 Service life: 25 years 500 +385,6 1000 +590 +95

500 +90 +23,3 WIND POWER PLANT The largest-scale project in the field of wind power gen- 0 0 IN UST-KAMCHATSK eration in the North of . This is a joint Years 2010 2011 2012 2013 2014 2015 2016 Years 2010 2011 2012 2013 2014 2015 2016 project of RAO ES of the East, the Government of the Kamchatka Krai and the Japanese government’s New Energy and Industrial Technology Development Orga- nization (NEDO). Republic to attract investments and Installed capacity: 900 kW to develop renewable energy. How- By estimates of RAO ES of the East Tower height: 41.5 m ever, the ruble’s weakening against Wind-wheel diameter: 33 m foreign currencies also affected Wind speed operating range: 3-25 m/s energy projects. According to the PJSC, construction of solar and Operating temperatures: from -50 °C to +40 °C estimates of specialists, the pay- Storm rated wind speed: 70 m/s back period of investments in this wind generation is reasonable in Equipment composition: 3 wind turbines with a sphere is 7–10 years, but due to the capacity of 300 kW each, network stabilization system foreign currency exchange rate, the 178 population centers of the Far Year of commissioning: 2015 cost of equipment has increased, and the payback period has been East. Total capacity of RES facilities increased respectively. Nevertheless, interest in the may reach 146 MW. Republic from the side of foreign The first solar power ates 70 percent of the energy con- lion rubles, with almost the same companies is not decreasing, and plant sumed by the settlement, and in amount being spent on storage this is not just a question of profits. examples of RES development in work and create conditions for the The first solar power plant in Yaku- the winter, it generates nearly 40 elements. Natural and climatic conditions of isolated regions. For instance, in development of renewable ener- tia was installed in the settlement percent. All the rest is provided by There are 13 SPPs (1,335 kW) Yakutia pose not only a challenge, the city of Kodiak, Alaska, where up gy sources. The hope remains of Batamay, the population cen- a diesel generator. in total operating in Yakutia today, but also provide certain advan- to 99% of energy is generated by that RES development will start a ter closest to the Republic’s capital This SPP is constructed out of but this is definitely not enough tages for the Republic, which has alternative sources. We just need little bit before the hydrocarbons city, isolated from all power grids. imported equipment – Chinese for a huge territory with a limited become a unique site for the devel- to consider obstacles as opportuni- run out. The road from to the set- solar panels and German invert- infrastructure. A unique regulato- opment of innovative technologies ties,” the expert stresses. tlement down the Lena River by ers. The installation cost six mil- ry framework was developed in the in the field of RES, or, as power In addition to economic fea- motorboat takes nearly four hours, engineers say – the place where sibility, the adoption of the Par- which for the locals is considered nature tests not only people, but is Agreement on Combating Cli- rather close. The plant consists equipment as well. mate Change also forces Rus- of 258 panels with a total planned The overall effect of the sia to develop RES. According capacity of 60 kilowatts, and allows From problem to solution to the document, member states saving 15 tons of diesel fuel annu- Patrick Willems, the head of IFC’s must decrease greenhouse gas ally (nearly 600,000 rubles), stat- program is savings exceeding program on Developing Renew- emissions by 25% from the level ed Alexander Yefimov, head of able Energy in Russia, is convinced of 1990, and decrease all emis- Alternative Energy Sources Unit of 46 thousand tons of diesel that the alternative power gen- sions by 5 percent by 2030. This Sakhaenergo. During the season eration has a promising future in means that Russia can be expect- of active sunlight, the plant gener- fuel per year the Far East. “The world has good ed to improve its regulatory frame- 72 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 73 ▶ overview

he Far East provides about 82% of the fish produced in TRussia, but many problems have accumulated in the indus- try lately which require an urgent solution. The problem is that the Far East is mainly just a raw mate- rials base, and mostly for foreign countries at that, whereas the macroregion itself lacks capaci- ties for fish processing. Accord- ing to official statistics, about 90% of all fish caught is exported, primarily to Asian countries. For example, in the first seven months of 2016, only 352,000 tons of fish out of the 1,863,600 tons caught were sent to the inner regions of

the country, which means the rest LORI PHOTOBANK was exported. Federal and regional authorities are seriously worried about situa- tion taking shape, and the last year In the first seven months of has been distinguished by seri- FISHERY ous changes in the development 2016, only 352,000 tons of of the fishing industry. A lack of investments, deterioration of oper- fish out of the 1,863,600 tons ative assets, a deficit of capacities for processing and storage, and focus on export to the detriment of caught were sent to the inner the domestic market – these are the problems which the initiatives regions of the country currently being implemented must help solve. not have their own fleet and do not ing sites. This initiative is intended Amendments to the federal catch fish, but receive and resell to solve the problem of the seri- Fish Will Not Swim Away law “On fishing and the preserva- fishing quotas. ous deterioration of the Far Eastern tion of aquatic biological resourc- fishing fleet, which is up to 80%, es”, which were adopted in spring If you want to catch as well as provide a workload to A reform of the law on fishing is aimed at 2016, were of great significance something, build Russian shipyards. At the same to the industry. They aim to attract something time, there is still a risk that the investments and eliminate quo- After long discussions, a legis- redistribution of quotas will harm solving the problems of the industry ta “rentiers” from the industry. lative regulation was adopted on small fishing enterprises which The principle of long-term assign- investment quotas, so called “keel cannot invest in ships because ment of resources was introduced, quotas”, which are designed to of their high cost and could lose Рыба не уплывет на Восток The Russian Far East has vast marine biological which means that quota shares will stimulate the building of ships for their quotas. Furthermore, at this resources. About 20 of all fish in Russia is caught be assigned not for 10 years, as the fishing fleet, as well as coast- moment the large national ship- Реформа закона о in Kamchatka alone. However, not only does had been done since 2008, but for al enterprises for processing of building enterprises do not have рыболовстве призва- 15 years. In addition, the thresh- aquatic bioresources. It is antici- free capacities, as operating ship- на решить проблемы the catch not reach the central regions of the отрасли. old for development of aquatic pated that 20% of quotas will be yards are booked with orders for country; it does not make it to the market stalls of bioresources was raised for two distributed for investment purpos- several years in advance. Never- coastal regions either. Practically all fish caught years in a row, from 50% to 70% es, which may include the pur- theless, there are reasonably good of the volume of allocated quotas. chase of new fishing ships built at options for the development of is exported. Urgent measures adopted by the This measure serves to fight quo- Russian shipyards, as well as the shipbuilding directly in the Far East authorities should change the current situation. ta “rentiers” – enterprises which do creation of domestic fish process- (one of the last initiatives appeared

74 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 75 ▶ focus

in Sakhalin, in the city of Nev- domestic market with fish, as the elsk), as well as in other regions of product obtained will most like- the country (at the facilities of the ly be exported. At the same time, industry leader, United Shipbuild- it could be effective for attract- ing Corporation) for the benefit of ing investments and will solve the the Far East. problem of producing fish prod- The law also establishes that ucts with high added value, thus fishing territory is one whole bringing in additional revenues to and the user makes the choice the industry. between industrial and near- shore fishing at his own discre- Fish will return tion. However, within the scope of to the country near-shore fishing, only refrigerat- Important steps are also being tak- ed fish should be delivered to the en for the purposes of increasing of shore– delivery of frozen near- accessibility of fish products for the shore fish, which usually does not population and decreasing its cost. enter the domestic market, but Among the innovations it is worth is exported abroad for process- mentioning the creation of an elec- ing, is prohibited. The opinions of tronic fish exchange in the Sakhalin experts concerning this initiative Region, which will allow consum- differ. Some state that it will neg- ers to obtain fish products directly atively affect near-shore fishing. from suppliers by participating in At the same time, these measures auctions. As a result, fishing com- will make it possible to change panies were able to sell 420 tons the status of near-shore fishers, of aquatic biological resources for which in reality exported frozen 230 million rubles, which overall is fish abroad. Now they will have to considered a positive result. The take up industrial fishing, and the exchange is to launch full-scale Far East regions will have access activities by 2020, after the mod- to a larger volume of refrigerated ernization of the port of Korsak- fish. On the one hand, the con- ov – a large logistic complex will sequences of adoption of the be created there. It is worth noting law could actually be harmful for that there are hopes of spreading some part of players on the fish the positive example of Sakhalin to market, but on the other hand, other fishing regions of the coun- now can fill in the ship’s fishing increased by 145% compared to a qualitative change in the fish- try as well. log already on shore, at unload- 2014, to 60,600 tons. ing industry is impossible without The above-mentioned near- ing centres determined by the Fishing of this species of fish The driver of development of these steps. shore fishing, whose development regional government. Second, for the Far Eastern fishing industry is The problem of insufficient is one of the priorities of the feder- the purposes of developing mul- has increased by 145% com- to be a fishing cluster, the crea- investments could be solved al and regional authorities, should tispecies fishing, incidental catch tion of which was initiated by the through cooperation with foreign also help to provide the population of so called TAC objects (species President of Russia, V. Putin, as companies, primarily Japanese with refrigerated fish at low pric- for which a Total Allowable Catch pared to 2014, to 60,600 tons early as 2013. Initially the idea of and Korean ones. In particular, es. Sakhalin has become a pilot has been determined) has been localizing the entire cluster in the in exchange for fishing quotas, region, where new rules for reg- increased from 2% to 10% (aside Among positive changes, a ban kind of fishing, which threatened the bay of Sukhodol in the Primorski Asian partners will be offered the ulating fishing in the near-shore from mammals, crabs of all kinds on drift fishing, i.e., fishing with nets absolute devastation of spawning Territory was being developed, opportunity to build fish process- zone came into effect this sum- and prawns) and limits on inciden- in upper waters, introduced as of areas, and thus the end of fishing. but this idea had to be discarded. ing capacities in the Far East or mer. First, a simplified scheme for tal catch of species for which no January 1, 2016, is worth pointing The result of the limitations can be In winter 2016 the Russian Fed- invest funds in the purchase of reporting catches was introduced. Total Allowable Catch has been out. Drift fishing in Russian waters seen already. As a result of the ban, eral Fisheries Agency present- Russian ships. The idea is cur- According to the changes, fish- established have been lifted for was actively used by Japanese and migration of humpback salmon has ed a new concept of the fishing rently being actively discussed ermen registered in the Sakhalin small fleets. Furthermore, start- Korean fishing companies, which increased in the Sea of Okhotsk, cluster, which will include four by Russian and Japanese par- Region who engage in near-shore ing in 2019, fishermen involved in intercepted a significant part of sal- and Magadan fishermen received divisions consisting of Primorsk ties. Criticism of this approach fishing only in the six-mile zone near-shore fishing will be able to mons from Russian near-shore a catch quota which is 2.3 times Territory, Sakhalin Region (with consists in that it does not solve of Sakhalin and the Kuril Islands claim state support in the form of enterprises. In addition, fish was larger than the initial one. Eventual- the Kuril islands as a separate the problem of providing the on ships up to 24 meters in length additional quotas. unable to spawn because of this ly, fishing of this species of fish has zone), and Kamchatka Territory.

76 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 77 ▶ focus

The leading role will still belong The first agreement on exporting fish via to Primorski Territory, where Project will provide an inflow exchange and auctions will be signed at the the implementation of five large Eastern Economic Forum investment projects is planned: The Vladivostok wholesale dis- of private investments in the The preliminary brokerage agreement was concluded between the tribution centre, which will make Far Eastern Auction Fish House and China’s Donggang Zhunzen it possible to solve the critical amount of 17 billion rubles Group. The document was signed in Vladivostok in the presence problem of overloading refriger- of the vice governors of Primorsky Krai and Liaoning province. The ation capacities; a flagship plant revenue will amount to 1.6 billion opened in the Nikolaevsk district final agreement will be concluded at the EEF. specializing in producing pol- rubles. In addition, 1300 new jobs of Khabarovsk Territory, one of The use of exchange and auction trade for sales of Russian fish and lack fillets; an enterprise special- will be created. which is the largest in the Far East products from the seas, including for export, became possible after izing in frozen semi-finished fish The Advanced Special Eco- (investments amounted to 1 billion Vladimir Putin introduced changes to federal law. This document products; a multipurpose fish nomic zone mechanism will also rubles), which contributed to the authorizes foreign parties to be part of deals on the exchange. processing complex for small be used for the development of emergence of an initiative to cre- enterprises within the scope of the fishing industry and attract- ate a new Advanced Special Eco- hi-tech facilities for fish process- the “Nadezhdinskaya” Advanced ing investments – the “Kurily” nomic zone. Individual projects in ing (pilchards and mackerel), the A russian-chinese agreement on exchange Special Economic zone; and an Advanced Special Economic the area of fish processing will be Prim Khunchun Corporation will innovative science park with a zone, specializing in fishing, may implemented within the scope of engage in the creation of a com- trade in fish to be sought at the Eastern business incubator and a ven- be created in Sakhalin before the other ASEZ. plex for processing and storage Economic Forum ture fund. According to the pre- end of the year. In addition, the Furthermore, four residents of marine products; the Vladiv- A special Forum session “Aquatic Bioresources in Exchange for liminary calculations of the Rus- authorities of Khabarovsk Territo- of the recently created free port ostok Fish Terminal will involve Investment” will be devoted to development of the fishing industry sian Federal Fisheries Agency, ry sent a request for the creation of Vladivostok will be engaged in the construction of a specialized complex. A number of agreements will be concluded at the EEF with the project will provide an inflow of a “Nikolaevsk” ASEZ, where “fish” projects for a total invest- refrigeration complex for stor- investors for fishing industry projects, according to the press services of private investments in the residents will be engaged in fish ment amount of 3 billion rubles, age and transshipment of fish of the Primorsky Territory Administration. amount of 17 billion rubles, the processing, shipbuilding and which will make it possible to cre- products, and SeaLife will build In particular, the Far East Fish Auction House and the Liaoning indus- annual contribution to GDP will logistics. It is worth noting that ate about 866 jobs. For example, a facility for farming of Far East- trial corporation Jun Tsen Group are to sign a contract on exchange come to 4 billion rubles, and tax two fish processing enterprises the Khoral Company will create ern trepang, scallops and mus- transactions in the fishing sphere, involving investment of RUB 2 bn. sels. Thus, new institutions of TINRO Center plans to open an enterprise for catching and process- development created in Far East ing Far East sardines and Japanese mackerel at enterprises of the Far are mainly oriented towards the East fishing basin, with investment of RUB 7.2 bn. development of the fishing indus- After the Forum, a project will be launched for creating a high-tech try and create tax and other pref- production enterprise for processing sardines, mackerel, Japanese erences for enterprises. anchovies and Pacific squid, with investment of RUB 1.6 bn, a project Expansion of our own fish pro- for construction of a complex for basin breeding of fish with a capac- cessing capacities by building ity of up to 200 tonnes a year, and a project for creating a technopark and modernizing facilities instead for Antarctic krill. of exporting raw materials to other countries, as well as providing the domestic market with products at About 130,000 tonnes of salmon caught in moderate prices, are the main pri- Russian Far East orities of the development of the commercial fishing industry of the Since the start of the salmon season, 128,000 tonnes of Pacific Far East. Over the last year a num- salmon have been caught in the Far Eastern basin.This is a 36% ber of legislative initiatives were improvement over 2014.Kamchatka Territory achieved the best adopted which changed regu- figures. The health of the salmon fishery was discussed at a regu- lation of the industry significant- lar meeting of the fishing season head office, which was conduct- ly and for the better, and created ed via videoconference by Deputy Head of the Russian Federal incentives for attracting private Agency for Fisheries Vasily Sokolov. He noted that 84,000 tonnes investments in various investment of salmon have been caught in Kamchatka Territory, which is projects. However, a lot more time 27.4% more than the level recorded in 2014. In Sakhalin Region, and effort will still be needed to 9,800 tonnes were caught, and in Khabarovsk Territory, the figure accomplish fundamental trans- was 34,400 tonnes. The total catch of salmon in Primorsky Terri- formations and obtain concrete tory, Magadan Region, and Chukotka Autonomous District was

RIA NOVOSTI results. 4,196 tonnes.

78 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 79 ▶ regions

Oleg Kozhemyako: The agree- ments “The construction of a Marine reached at station in Korsakov is crucial for the Economic the region” Forum give us great hope for – Which pro- them. Throughout the year, we jects and agreements presented at moved on to the implementation the successful the Eastern Economic Forum 2015 stage of these agreements. were developed during the past For example, the Fish Stock year? How would you assess their Exchange project has been being implementation implementation and importance carried out since September of last for the region? year. The agreement for its creation of large – In 2015 the delegation from was reached with Sberbank. The the Sakhalin Oblast entered into a auction section for biological water total of 11 agreements and Intent resources was launched on Sber- projects «Строительство вокзала в to Cooperate protocols. These bank’s universal electronic platform Корсакове жизненно span the development of differ- referred to as the Automated Sys- put out of business. This is a totally al cooperation. As a result, coop- According to the agreements необходимо для региона» ent areas of the island’s economy: tem for Trading. A direct dialogue new project for Russia as a whole, eration was solidified between reached at Eastern Economic Интервью с губерна- fisheries, coal and forest indus- between fishery companies and and it will be carried out in several business structures: now there Forum 2015, two big projects in тором Сахалинской tries, agriculture, transport infra- trading enterprises was success- phases. The next step is the forma- are direct deliveries of Prioskolie the Yuzhnaya Advanced Special области Олегом Кожемяко structure, and also interregion- fully established, and the numerous tion of a genuine fishing cluster in and Yasnie Zori chicken products Economic zone were launched in al relations. I dare say that there middlemen who had been direct- the Port of Korsakov that contains from Belgorod Oblast to Sakha- the agricultural sector. The initia- isn’t a single minor or low-priori- ly responsible for the constantly an industrial cold-storage plant for lin Oblast, and also Sloboda fat- tors for these projects were Merci ty agreement or protocol among increasing prices of seafood were products, processing capacities and-oil products, vegetables and Agro Sakhalin Company and the and a ship repair area. canned dairy products. Khankaisky Agro-Industrial Com- Another agreement – this one The agreements reached at plex Green Agro Sakhalin. The with the The Far East and Baikal the Economic Forum give us great first is a pig farming complex with There are Region Development Fund – is hope for large projects in the coal a capacity of 62,000 heads locat- also currently being implemented. and agriculture sectors of Sakha- ed in the village of Taranay in the no minor or The funds necessary to finance the lin. Currently, the exploitation of the Aniva District. The other is two Sakhalin investment projects were Solntsevsky Coal Field by the East- livestock farming complexes with low-priority invested in the authorized capi- ern Mining Company is moving to 1,900 milking cows each, located tal of the company, and now these a new level of technological devel- on state owned farms in the south- projects are part of the Advanced opment. With support from the Far ern part of the island. The dead- agreements. In Special Economic zones of Gorniy East and Baikal Region Develop- line for the completion of the first Vozdukh and Yuzhnaya. ment Fund, they plan to build the project is 2017, and the second total, we have Common interests have largest coal mine conveyor belt in one will be finished by 2018. As a allowed us to tighten our ties with the country to connect the Solnt- result, Sakhalin Oblast’s economy the geographically remote Belgo- sevsky Open-Pit Mine with the Port will be significantly bolstered. In more than 15 rod Oblast. I would like to recall of Shakhtyorsk. Coal will be deliv- all, about 500 new jobs will be cre- that the governments of the two ered 28 kilometers to the and ated, and annual milk production of such agree- regions have already signed an then loaded onto ships. The design- will reach 33,000 tons (and dairy agreement on trade, economic, er for this conveyor belt is currently products up to 22,000 tons). The ments scientific, technological and cultur- being selected. level of local pork supply to local 80 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 81 ▶ regions

There will also be a complex with Construction of a marine 1,900 cows for meat livestock passenger terminal with a farming, and a beef processing plant is planned to be constructed dock to receive ocean-class nearby. Green Agro Company will cruise ships be the project’s investor. – The participation of Sakha- lin Oblast in the Eastern Economic Forum 2015 was remembered for its large gift of red caviar. What will 2,5–3,0 be the highlight this year? – This time Sakhalin Oblast BN RUB came up with an ingenious solu- tion to interest any attendee: a hologram. We will discuss the tourist attractiveness of Sakha- lin Oblast using art objects. A 3D visualization will allow visitors to become immersed in many parts of the region and to get to know its natural heritage. Visitors will be and ski slopes in the hologram. Project promoter: JSC Morskie Vorota Sakha- Numerous middlemen, which able to travel virtually through the Moreover, in the Sakhalin Oblast lina Gorniy Vozdukh (Mountain Air) pavilion located on Far East Street, Construction of two Site: The Port of Korsakov, Sakhalin region Construction of the Marine Passenger Termi- had been directly responsible sports/tourism complex, which will we will have a special simulator livestock complexes nal at the port of Korsakov will create a secure become the base of the Advanced that imitates skiing down mountain transport corridor for the all-year-round ferry Special Economic zone sharing slopes. These types of simulators service between Sakhalin and the mainland for the constantly growing pric- the same name. Visitors from dif- are used by professional athletes on one side, and the Kuril Islands on the oth- er side, as well as increase its tourist appeal ferent Russian regions and oth- as they prepare for competitions. and allow receiving ocean cruise liners. In es of seafoods, were put out er countries come every winter to What’s more, it can give budding addition, it is planned to maintain the current go skiing on its slopes. Currently, enthusiasts an insight into this kind ferry lines of Sakhalin-the Kurils and Wakka- of business it’s undergoing a bit of moderniza- of sport. We hope that later we nai (Japan)-Korsakov, as well as a new Vladiv- tion: the length of the trails is being can see visitors to our pavilion on ostok-Korsakov ferry line. Project period: 2016—2018 light two of them. They are includ- struction will start next year. The increased and new cableways are the ski slopes of Gorniy Vozdukh. Payback period: 25 years ed in the total 28 projects of the Far project will be carried out with the being built. This work should be This will be the very start of their Industry: transport and logistics East regions that will be presented support of three investors: the Kor- complete by 2020. Visitors will be acquaintance with the only island to all potential investors during the sakov Marine Trading Port, Sakha- able to see Bolshevik Mountain region in Russia. pitch-sessions. lin Marine Gates Company and the residents will also increase from One of the Sakhalin projects is Corporation for the Development of 27 to 67%.” very important for the development the Sakhalin Oblast. – What will the region present of the regional transport infrastruc- The second project is aimed at this year’s Eastern Economic ture: the construction of a passen- at ensuring the food security of Forum? Which projects are cur- ger Marine station with a pier in Kor- the Sakhalin Oblast. Two livestock 8 BN RUB rently being prepared to be fea- sakov so ocean cruise ships can farming complexes will be built tured? Can we already discuss dock. This will be a modern building with a total capacity of 3,800 ani- Project promoter: JSC Green Agro – Sakhalin certain agreements that might be to serve passengers at a qualita- mals. One will focus on dairy farm- Site: Troitskoye village, Bereznyaki village, signed at the Forum? Which pro- tively new level. Marine passenger ing, and this complex is already Sakhalin Region transportation to the Kuril Islands being built. Specialists have start- Creation of two livestock complexes with 3,800 jects would you like to highlight? dairy cattle, construction of milk processing – We have many plans, and will be conducted through this port, ed to create the forage base, and facilities with the capacity of up to 120 tons of we also have preliminary agree- and ferries will come here as well significant areas have been plant- milk per day and construction of facilities for ments with the representatives of from Wakkanai, Japan. In addition, ed with the required grain crops. fattening, slaughtering and meat processing Russian and foreign companies. cruise ships with a large number of Several dozen modern agricultur- of cattle. Project period: In total, we have more than 15. As tourists can cast anchors regular- al machines have also been pur- 2016—2018 Industry: agriculture and food industry far as projects for the presentation ly in the port. The pre-project works chased. The enterprise will own are concerned, I would like to high- are currently underway, and its con- its own milk processing facilities.

82 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 83 ▶ new horizons

During World War II, Matua Matua Island Island was one of Japan’s staunchest fortifications. The as a new small island was a base for Eastern major military units ing the island, yet still the research- These include bunkers in coast- Matua island ers have more questions than al and lowland areas, observation outpost the answers. Only a small coast- points, range-finder stations, and al section of the island has been artillery and machine-gun pillboxes. explored, so the main discoveries Specifically, 50 of 86 artillery and lie ahead. machine-gun pillboxes have been examined so far. Fieldwork Exploration of the coast of Ainu Остров Матуа как новый The deputy commander of the Bay on Matua Island is also fin- восточный форпост Pacific Fleet, Vice Admiral Andrei ished. During World War II, it housed Ryabukhin, said the expedition’s a set of 127-mm all-purpose guns О развитии военной task is to explore the island’s infra- on six positions and nine machine- инфраструктуры на structure and see whether it can gun and artillery pillboxes that were дальневосточном острове still be used today. Next, research- part of the Japanese garrison’s bat- ers will scout out the engineering, talion defense station. Detailed radiochemistry and bacteriology of examination provided information the area. for blueprints of underground and It took the expedition only a above-ground fortifications as well When the Sea of Okhotsk became “domestic” in 2014 and 52,000 square their submarine fleet, a top-secret month (the expedition left Vladi- as the overall defensive space. research lab and even a repository vostok on May 7 and arrived on Expedition members think this data kilometers of formerly international waters came under Russian jurisdiction, for the Empire’s treasures. Exactly the island on May 14) to conduct might reveal the plan of defense the country had to take a fresh look at the defense of its eastern borders. what was there remains to be dis- a vast amount of work. Explora- conceived by the Japanese garri- It needed to build a full-fledged military base on one of the Kuril islands to covered because all that the Sovi- tion of the coastal and lowland son commanders. Military histori- et troops found there in 1945 was parts of Matua Island is complete. ans on the expedition analyzed the ensure the safety of waters of the Sea of Okhotsk and a large part of the a bunch of military construction Overall 97 sites were examined. condition of pumping, diesel, and eastern coast of Russia. Matua was the obvious choice. In May and June, the workers whose job was to mothball Defense Ministry and the Russian Geographical Society made an exploratory the facility. Yevgeny Vereshaga, head of the Kamchatka-Kuril reg- expedition to the island. ular expedition, said the Japanese RGS expedition garrison had obviously prepared the island for surrender to Soviet Expedition of the Russian Geographical Secrets of Matua Island nese to surrender the island with- astounds the imagination. Huge troops. All the really valuable stuff During World War II, Matua Island out a fight. Compared with the less fortifications, underground bunkers was probably burned, blown up or Society and the Ministry of Defense was one of Japan’s staunchest for- fortified islands of Paramushir and with walls 3 feet thick, large-caliber sent to the bottom of the ocean. people took part in an expedition led by the deputy commander tifications. The small island was Shumshu, Matua was a real for- guns and plenty of equipment. A But it’s possible that something 200of the Pacific Fleet, Vice Admiral Andrei Riabukhin. Besides a base for major military units. It tress and Soviet troops risked seri- military airfield with three runways was left inside the island. Under- representatives of the Russian Geographical Society, the Ministry of Defense, was equipped with all necessary ous losses assaulting it. that were probably heated by hot ground utilities were found carved and various scientific organizations, servicemen from the Eastern Military infrastructure and a multi-layered It remains unclear what the Jap- springs... into basalt and finished with wood. District and the Pacific Fleet and members of the S. M. Kirov Military Medical defense system was deployed anese were guarding so fierce- According to various accounts, The Russian Geographical Academy joined the expedition. The expedition also involved six vessels from there. Fortunately, the success of ly, but even the small part of the the Japanese may have built a Society and the Defense Ministry the Pacific Fleet led by the large landing ship Admiral Nevelskoy. the Kuril landing forced the Japa- fortifications that was examined secret transshipment base for expedition recently began explor-

84 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 85 ▶ new horizons

drilling stations as well as tanks for cleaning up the underground utili- Overview storing water and fuel. Each site ties. Very soon, the coastal area of was described and mapped. Some the island will be prepped to handle Matua Island sites may have potential for future a large amphibious assault ship so use, assuming they are brought up additional equipment can be deliv- atua is an island in the mid- to date and outfitted with today’s ered there. However, the expedi- Mdle group of the Greater Kuril technology. A concrete runway at tion doesn’t expect its work to be Ridge. As an administrative divi- the airfield will be the first of these finished anytime soon. According to sion, it is part of the North Kuril mu- sites to get up and running in the Defense Ministry representatives, nicipal district of the Sakhalin re- near future. that will take more than a year. gion. Uninhabited. Area: 52 square In addition, the island was par- kilometers, about 11 km long from tially scouted, namely the pres- The Key to the Sea northwest to southeast and about ent landscape of the southeastern of Okhotsk 6.4 km wide. On the island are part. Researchers studied the ori- The official expedition has not yet Sarychev, an active volcano 1,446 gins of the low-lying surfaces and provided answers to the myster- m high, and the Hesupo, a small heights up to 200 meters. They ies and secrets of Matua. Nothing

stream with potable water. Bushes also cleared dirt from a number sensational has been found -- no RIA NOVOSTI and elfin wood cover the island. Al- of coastal cliffs up to 30 meters underground bunkers, no labs, no der bushes grow in narrow gullies. high and bookmarked key sec- weapons. No matter how things Some experts think that “only Foxes and small rodents inhabit tions (drill pits) to a depth of 4 turn out, though, as the main prize the naval component of the expe- the island. It’s a breeding ground meters to determine the age of is the island itself and its special dition makes sense,” said Vlad- Matua is almost the midpoint of for sea lions. Ringed seals are the island. The total length of the geography. Matua is almost the imir Gorlov, associate profes- found nearby. Guillemots, gannets exploration route was about 300 midpoint of the Kuril islands and is sor of the Russian economic and the Kuril islands. This spot might and seagulls nest there. The island kilometers. The explorers saw right next to the Krusenstern Strait. social geography division of Mos- is separated from Raikoke island, ancient lava and weathered crust This spot might be called the lock cow State University’s geogra- 18 km to the north, by the Strait of that scientists estimated to be on the gate into the Sea of Okhotsk. phy department. “And first of all, be called the lock on the gate Golovnin and from Rasshua island, tens of thousands of years old. Controlling the straits between the you need to get the island’s infra- 28 km to the southwest, by the The research and survey groups islands makes it possible not only structure in order and completely into the Sea of Okhotsk Strait of Hope. The island is char- also determined that Matua Island to ensure the safety of the interi- restore it to meet the needs of the acterized by the unusually cold had suffered at least 30 tsunamis or waterways but also to guaran- modern Russian armed forces. The lem in the Kuril islands now is air that the naval component of the climate of the Northern Kurils, with throughout its existence. tee free passage of one’s own fleet island holds promise when con- connection. All aircraft coming to expedition achieves by year’s end plenty of precipitation, cloudiness, The work of the expedition is to the Pacific Ocean. At the same ceived of as a stopping point. But the islands from the mainland have will likely need clarification on some frequent fog and strong winds. going on. Scientists are examin- time, the island can be considered not so much for the navy as for the to turn around almost immediately details, but they’ll be enough for a ing the fortifications in detail and a focal point of air force strategy. air force. The most pressing prob- and fly back because they’re run- final decision on establishing a Mat- ning low on fuel. A new airport on ua base as a defense at Russia’s Matua seems very promising due to borders,” said Victor Pavlyatenko, Russia’s need to strengthen its mili- the lead researcher at the Center tary position in the Far East. for Japanese Studies. According to one expert, the “Remember how fast the naval expedition is necessary to offer a base in the Arctic, on Kotelny public “cover story” for construc- Island, was rolled out two years tion of modern military infrastruc- ago. “An approach for ships; roll- ture. “For the naval component of out of an airfield; aircraft intake; island development to take shape, another approach for ships; a it needs to be scientific to some garrison wintering there. And the extent, like maybe studies of near- process is underway.” That’s the by currents and the geology of the example scenario another Eas- island. They could take it a step fur- tRussia interviewee offered. “The ther and try to uncover the secrets decision on Matua has probably of Matua, said Gorlov. been made already. So in the near Experts surveyed by EastRussia future, the country will see a lot believe that the island infrastructure of exciting stories about the mili- will be used for military purposes tary infrastructure on the Far East in the very near future. “The results island.”

86 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 87 ▶ overview

Oblast is also showing rather good as the Khabarovsk ASEZ and Kom- Eastern Federal District, and in the in growth (+5.3%), where the agro-in- somolsk ASEZ in Khavarovsk Krai, the long term, achieve enough pro- dustrial sector has traditionally been the Kamchatka ASEZ and Nadezhda duction to export products. In addition of great importance. Another three ASEZ in Primorsky Krai and the Kan- to that, projects in the area of soybean regions showing a slight increase are galassi ASEZ in Yakutia); these will be and corn, milk and beef production will the Magadan Oblast (+2.0%), Kam- in the agricultural sector with the total be implemented in the Mikhailovsky chatka Krai (+0.9%) and Khabarovsk investment of 13 billion rubles. ASEZ. Krai (+0.7%). It is well known that the Currently the major part of Currently the Yuzhnaya ASEZ of authorities of the two remote and rath- all investments is made in the the Sakhalin Oblast has one official- er closed regions - Kolyma and Kam- Mikhailovsky ASEZ – according to the ly registered resident, who repre- chatka have been paying increased applications of 12 investors, at pres- sents the same business-group that AGRICULTURE attention to the development of their ent, the total amount of investments is operating in the Primorsky Krai - own agricultural production capac- amounts to 61.7 billion rubles. About the Merci Agro Sakhalin. The size of ities, and this is yielding positive 40 billion rubles will be invested by two the Sakhalin project is significantly results. However, there are regions, anchor investors, who will be respon- smaller: there the company intends where the agro-industrial sector plays a significant role and the majority of the population lives in villages, that have slightly worsened their perfor- mance: this happened to the Primor- Three of the Advanced Special The Far East can sky Krai (-1.0%) and Yakutia (-0.5%), and the Jewish Autonomous Region Economic zones, out of the 13 has experienced the most significant potentially produce and alarming decrease (-6.3%). The Advanced Special Economic established, have an agricultural zones have been created to contrib- ute to regional development of agricul- specialization. enough food to feed itself tural production capacities, and allow each region to focus on its competi- tive advantages in the agricultural sec- sible for pig farming. The huge suc- to invest 2.3 billion rubles into the cre- tor. At the moment 44 out of the 270 cess was the fact that a major player in ation of a second phase of pig farm- Currently the Far East highly depends on its food sup- Дальний Восток обеспечит projects, proposed and being imple- the agricultural sector Rusagro, oper- ing complex for 62,000 pigs. How- себя продуктами plies coming from other Russian regions or imports mented within the framework of the ating in many Russian regions and ever, in the near future other anchor Advanced Special Economic zone, earlier not interested in the Far East, investors should be attracted in this В ближайшем from abroad. However, the situation in macro-re- будущем ситуация в are food manufacturers with a total was attracted as a resident to this Advanced Special Economic zone, сельском хозяйстве gion’s agricultural sector will start improving in the production capacity of up to one mil- Advanced Special Economic zone. A mainly from the regional players. The макрорегиона изменится в лучшую near future, due to the attraction of investors, includ- lion tons. It is estimated that the total subsidiary company of the agrohold- Sovkhoz Zarechnoye and Green сторону благодаря ing large national players and foreign companies, into amount of investments into these pro- ing Rusagro-Primorie, created in the Agro-Sakhalin Company are planning привлечению инве- jects will constitute 86 billion rubles. Far East, is planning to build 10 pig to invest about 4 billion rubles into the сторов в проекты ТОР. Advanced Special Economic zones projects. At this point, three of the farms with the productivity of 700,000 construction of two livestock farming Advanced Special Economic zones, thousand pigs, and also a complex complexes with total annual process- n 2015, the share of the Far East- specialized industry, whose gross sia, compared to the same period out of the 13 established, have an for producing animal feed and ele- ing capacity of almost 20,000 tons of ern Federal Region was very small, yield accounted for more than half of last year. Moreover, there has been agricultural specialization. Two of vators. The total amount of invest- milk, and the Teplichny Sovkhoz will Iaccounting for only 3.1% of the total all Russian soybean production last a tremendous growth (+35.8%) in them are located in the «most agrar- ments by 2020 will amount to 22 bil- build a greenhouse complex at a cost agricultural output in Russia. Among year. As far as the provision of other the Chukotka Autonomous Okrug, ian» Far Eastern regions - in the lion rubles. The local company Merci of 1 billion rubles. These projects are the Far Eastern regions, more than products, especially meat products, though commonly this region is char- Primorsky Krai and : Trade is keeping up with Rusagro, it is important for Sakhalin, because they 50% of total agricultural output is pro- is concerned, these quantities are acterized by small and unsustain- these are the Mikhailovsky ASEZ also building complexes that will hold are aimed at import substitution and vided by the Amur Oblast and Primor- quite small at the regional level. able production volumes. Particu- and Belogorsk ASEZ, respectively. a total of 700,000 pigs, investing near- raising the level of food security in the sky Krai -- and together with Yakutia Meanwhile, in January-June lar mention should be made about The Yuzhnaya ASEZ, created in the ly 20.3 billion rubles into its projects. region. Thus, it is expected that the and Khabarovsky Krai, their share 2016, the Far Eastern Federal Dis- the success of Sakhalin (+18.1%), Sakhalin Oblast, also has an agricul- The implementation of these two pro- region will be self-sufficient in local- reaches 82%. However, only pota- trict demonstrated growth (+2.2%), where new regional authorities start- tural specialization. Apart from that, jects is expected to increase pork pro- ly produced pork by 67% (at pres- toes and corn are produced in suffi- according to the agricultural produc- ed placing greater focus on the agri- there will be 10 Advanced Special duction 14-fold in the region by 2018, ent - only by 15%), milk - by 58%, and cient quantity in the Far East; tradition- tion index, which, in general, is simi- cultural sector, in which they invested Economic zone projects realized with satisfy the existing needs of Primorsky greenhouse vegetables - by 81%. ally soybeans have been this region`s lar to the normal rate (+2.6%) in Rus- large state budget funds. The Amur a more diverse specialization (such Krai, organize large supplies to the Far These indicators are considered to

88 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 89 ▶ focus

and insufficiently large sugar manu- Far Eastern Hectare», launched start- facturer in the Far East- the Primorsky ing in June 2016 in the Far East, per- Agricultural projects in ASEZs set to yield Sugar Plant in . This new mits Russian citizens to receive one 1 million tonnes of produce project is notable for several reasons. hectare of land for free in one of the First of all, a large foreign investor will Far Eastern regions. If the land is Over the medium term, the elim- carry out the construction, secondly, developed successfully within five ination of shortages of key food the project will facilitate reanimation years, than the hectare will become products in the Russian Far East of the SEZ regime (which thus far was the property of the participant of the will significantly lower prices. hardly developing in the Far East), program. The land can be used for the Investment projects in Advanced thirdly, huge funds will be invest- construction of housing, entrepreneur- Special Economic zones will ed. Though this is only one project, it ial activities or farming. The appear- enable annual production of more gives a great signal, encouraging oth- ance of private farms at these «hec- than 1 million tonnes of agricultur- er foreign investors to come in, and tares» do not change dramatically the al produce. At a retreat dedicat- increasing the attractiveness of the situation in the agriculture of the Far ed to issues of national security in Khabarovsk Krai in general. East, but will certainly help solve the the Russian Far East, Deputy Min- In addition, the Russia-China Fund actual local issues concerning provid- ister for the Development of the for Agro-industrial Development will ing the population with local products. Russian Far East Sergey Kachayev stated that the new agricultural also be assisting the development of Thus, the Russian government capacity would yield 250,000 tonnes of meat and 60,000 tonnes of the agricultural sector. The initial cap- has set high hopes for the implemen- dairy products, 240,000 tonnes of feedstuffs, and 500,000 tonnes ital of the Fund has been set at 13 bil- tation of projects in Advanced Spe- of crops, as well as processed fish and meat products. lion rubles, which consists of invest- cial Economic zones, which, among ments by the management compa- other things, are helping address the ny of the Asian-Pacific Agricultural food security issues of the Far East. Russian-Chinese fund for agro-industrial Fund in the amount of 11.7 billion Many experts and government offi- rubles, and investments by the Far cials suppose that in the medium development officially registered East Development Fund of 1.3 billion term perspective, the local product The idea of establishing the fund was announced at the first East- rubles. It is expected that the projects deficit is likely to be virtually eliminat- ern Economic Forum, the Ministry for the Development of the Rus- The most attractive region in will be financed mainly by Chinese ed, and food products in the Far East sian Far East said in a press release. partners - 90%, and the rest 10% will will become much more afforda- The Russian-Chinese Fund for Agro-Industrial Development has the Far East for agrarian inves- be provided by the Russians party. ble. However, this process has just received a certificate on the state registration of a legal entity. It In order to protect the national labor begun, and it is too early to guarantee was established with the support of the Far East Development Fund market, it has been stipulated that the results. If we assess the current and the Asia-Pacific Food Fund Management Company (China). tors remains the Primorsky Krai no less than 80% of all the employ- results, we can see that, at present, a The fund was established as a result of agreements on the joint ees implementing this project should great deal of work has already been development of agricultural production in the Far East reached by be quite good, given the fact that technologies Company will invest 334 be Russian citizens, meanwhile, the done, though, the search for inves- the Ministry for the Development of the Russian Far East and Chi- nearly 75% of all Sakhalin food prod- million rubles and the Belogorsk Bread share of the foreign employees will not tors, including foreign ones, must na’s National Development and Reforms Commission. The agri- ucts come from the mainland. Factory - 18 million rubles). At present, exceed 20%. This condition will help continue, as the potential of exist- business fund will have capital of up to USD 10 billion and RUB 13 Unlike the Mikhailovsky ASEZ, the Amur ASEZ is facing the press- create a sufficient number of jobs for ing projects is unlikely to change the billion during the initial stage. Chinese investors will generate 90% which was established to significant- ing problem of attracting of significant the inhabitants of the Far East. Cur- current food supply situation of the of the fund’s capital, while Russian investors will make up 10%. ly reduce the deficit of meat produc- investors, however, the organization of rently the Russia-China Fund for Agri- Far East. The most attractive region tion in the region, the anchor resident even three production plants, coupled cultural Development is examining 27 in the Far East for agrarian investors of the Belogorsk ASEZ focuses on an with the unique project of Amuragro- projects with investments amounting remains the Primorsky Krai, and it will Far Eastern hectare programme supported already developed area - soybean center are quite good results. to more than 190 billion rubles, these certainly continue increasing its agri- production. Amuragrocenter Com- Besides, it is important to note projects are aimed at the develop- cultural production through new pro- by 81% of russians pany is planning construct a unique the large project in the Special Eco- ment of plant production (cultivation jects in the Mikhailovsky ASEZ and The results come from a survey conducted by the Russia-based soybean deep processing plant in nomic Zone (SEZ) in the Soviet Har- of soybean, corn, rapeseed), cattle consolidate its leadership positions construction and country life network ForumHouse. The survey Russia, with the total value of invest- bor of Khabarovsk Krai, where the farming (pigs, dairy stock) and the in the macro-region. Besides this, involved around 2,000 participants. Ninety-three percent of ments reaching 1.1 billion rubles, Thai company Sutech Engineering creation of agro-industrial infrastruc- the agricultural development in the respondents had heard of the programme, and 81% believed it to which amounts to more than 70% of is planning to build a sugar process- ture (creation of transshipment and Far East might be stimulated by pro- be a worthwhile endeavour. the total quantity of investments in this ing plant at a total cost of $200 million. storage capacities). The first projects jects recently supported by the newly The problems and concerns identified by respondents in Advanced Special Economic zone. The company intends not only to pro- that are being supported by the Fund established Russia-China Russia-Chi- implementing the Far Eastern Hectare programme included In addition to that, during the next two vide the Far East with sugar, but also will be presented at the Eastern Eco- na Fund for Agricultural Develop- the need for greater state safeguarding, a lack of access to years, the first animal feed factory will export its products. This project will nomic Forum this year. ment, as well as by the mechanism of information, and fears about relocation. be built in the Belogorsk ASEZ (Agro- destroy the monopoly of the single Finally, the famous program «The Priority Development Areas.

90 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 91 ▶ society CAVIAR The inhabitants of the Far East cannot be surprised with caviar that is sold in met- al cans. There this delicacy is sold by weight: 0.5–1 kg. The fresh, amber preserva- tive-free caviar of coho, sockeye, chum, pink salmon and chinook found on the mar- Assorted Far kets – will make it difficult for you to decide which one to buy. Do not worry, every- where they’ll let you try before you buy. Apart from the red caviar, there is the caviar of sea urchins, echinoderms, mainly from the Kuril Islands. This delicacy is highly valued in Japan, but it is gradually gain- Eastern Cuisine ing its share of enthusiasts in Russia as well. It is difficult to imagine a more diverse gastronomic region than the Far East. CRAB There is no single cuisine, and there cannot be – as there are extremely strong To be in the Far East and not to try crab means you have wasted your time going there. There differences between the various regions. However, no matter where you find is no shame in adjusting your trip to coincide with the season when these arthropods are being yourself in the Far East, the food will be delicious, and above all else – unique and caught: it is well known that they are eaten, as are oysters, in those months of the year, which have the letter “r”in their name. Here are some more secrets: it is better to buy crabs over-the- healthy. counter, and do not forget to feel the phalanges – not to end up with an empty one. And after that, everything depends on your fantasy – crabs are cooked, steamed or grilled, added to an Что такое дальневосточная ed with the variety of gastronomic shrimps), and cephalopods (squid, inexhaustible variety of salads, snacks, or simply eaten boiled. кухня? delights, thus, it is simply impossi- octopus). Various algae are also ble not to unify them all. Kamchat- obtained – the famous sea cab- Все разнообразие ka crab, red caviar, sea scallops, bage (laminaria) and ahnfeltia (the COLT MEAT кухонь региона – shrimps, colt meat, sea and river raw material used for the produc- в нашем материале. fish – with dietitians considering tion of agar-agar). The rivers are Yakut horse meat is a traditional dish, which is considered as a gourmet dish. Contrary to all Far Eastern cuisine as one of the rich in other species of fish – such expectations, colt meat is not prepared dried and tough, in contrast to venison. It is consumed healthiest and most delicious cui- as the Siberian sturgeon, whitefish either raw or after heat treatment. sines in the world. and omul. In the forests of the Far Far Eastern Cuisine cannot be Marine areas along the Sea of East, wild herbs in large numbers separated into various segments. Japan and Sea of Okhotsk coast- are gathered: actinidia, magno- Having their influence are the vast- line are incredibly abundant with lia-vine, pine nuts, ferns, wild gar- STROGANINA ness of the territory, the diversity of culinary delicacies. The most lic, mushrooms and berries. Meat climatic zones – from arctic des- valuable species of fish, such as products are an integral part of Far Stroganina is a national, and one of the main dishes of the indigenous northern people. There erts to subtropics, and the nation- salmon, cod, halibut, flatfish and Eastern cuisine. Reindeer meat, is nothing difficult in the preparation of this dish, with the crucial thing being speed. Fresh-fro- al traditions of almost a hundred smelt are caught here. There is colt meat and also wild game – zen fish should be cut quickly – shaved into long thin slices 2 mm wide, sprinkled with salt and different indigenous communities an abundance of bivalve mol- boars, elks, and various kinds of pepper and eaten quickly, before the dish has had time to melt. This is very convenient under inhabiting the region. At the same lusks (scallops, mussels, oysters), fowl. There are also the delights, conditions of eternal frost, and besides this, it is tasty and nutritious. Stroganina is also prepared time, on the associative thinking echinoderms (sea urchins, sea such as meat of marine animals – from meat – colt meat or venison. level, the Far East is firmly connect- cucumbers), crustaceans (crabs, seals and whales. TREPANG RED FISH An echinoderm, elongated, slightly flattened trepang – is also a sea cucumber – which at first Far Eastern sight it does not seem to be a gourmet dish. However, do not be deceived. Not only does the Pacific Salmon is the calling card meat of this mollusk have a nice and unique taste, it also goes well with sea salads, soups and of the Far East. Rivers, seas and cuisine as stews, as well as being used in folk medicine. In Asia, the sea cucumber is valued along with oceans do not just feed residents, ginseng, and its infusion with honey is a sure way to strengthen one’s immune system. Two but also the entire countryside, spoonfuls a day – and you can fear no cold. along with bears, guarding their one of the salmon trophies in spawning area. In the Far Eastern rivers there are healthiest and SAKHALIN OYSTER pink, sockeye, chum, coho, chi- nook and other species of salmon. Sakhalin Oysters are harvested in the open sea, they are not grown on the farm, There are a lot of recipes for pre- most delicious and thus, it is difficult to encounter them in the European part of Russia – where paring red fish. It can be consumed they are delivered rarely. It is worth visiting the Far East to savor this marvelous raw, smoked, dried, salted, grilled – cuisines in the gourmet dish. The most striking thing about Sakhalin Oysters is their size: some of everybody chooses his/her favorite them are especially big species – palm-sized, weighing up to 800 grams. method of preparation. world 92 Специальный выпуск к Инвестиционному форуму «Дальний Восток – 2014» • Камчатский край Журнал EastRussia • Сентябрь 2014 • eastrussia.ru 93 ▶ business

for business, but not the only one. It is important to form a comfortable set- tlement and payment infrastructure. I Evgeny Titov: mean mutual accounts. Now we are opening correspondent accounts for the Harbin Bank. In the nearest future, they will be opened to serve “To enable the businesses of two the clients of another seven banks of China. An effective chain of cor- countries to be jointly fruitful, it is respondent accounts will allow mak- ing payments between the channels, and will make them cheaper twice. important to prepare the financial – Speaking about efficiency. Quite recently, Sberbank FinLine remote bank service system was groundwork and nurture trust” started in Yekaterinburg as part of Russia-China EXPO. Please tell us why it is so special? – I can say with confidence that Евгений Титов: «Чтобы Evgeny Titov, the Сhairman of PJSC Sberbank on instant payments between Russia бизнес двух стран давал the Far East Russia, spoke to East Russian News совместные плоды, важно the oil refineries. This is quite a big pare the financial groundwork and and China have become a reality for подготовить финансовую Agency on prospects of cooperation between project, which is fully financed by the nurture trust. To do this, face-to-face the Far East. We signed an agree- почву и взрастить доверие» Russian and the Chinese banks. Chinese, and most oil product ship- talks at a convenient platform are ment with the Harbin Bank. It pro- Председатель ments will also be performed by Chi- considerable. Our delegation not- vides extensive opportunities for Дальневосточного Сбербанка рассказал na. Some products will be localized; ed the high level of organization of development of settlements using о перспективах only during meetings, but also on a sia is now cheaper than in China, it is planned to sell about 50% of the this Forum. The Chinese colleagues national currencies for business- сотрудничества рос- сийских и китайских day-to-day basis. We plan to discuss based on the exchange rate differ- products in the territory of Amurska- always give a very warm welcome. At es of Russia and China. Our clients, банков important cooperation issues at this ences. This situation provides certain ya Oblast. Besides this, the region the meeting, together with the Fund just like the clients of Harbin Bank, new platform in Vladivostok. RCFC opportunities for development of the will get new jobs and a high-tech pro- for the Development of the Far East pay great attention mostly to speed, 叶夫格尼·季托夫： 为两国商贸带来 already includes the representatives local manufacturing sector, in partic- duction site. and the Chinese partners, we signed transparency and the cost of pay- 共同的果实，需要准备金融基础条件， 并培养信任 from 49 banks of Russia and China. ular in the Far East. In the first quar- – The previous meeting of the agreements that have not only the- ments. High technologies and our 远东储蓄银行主席叶 Despite the fact that the Council was ter of 2016, the volume of payments participants of the RCFC took place oretical prospects, but make provi- partner relations with the Asian finan- 夫格尼·季托夫向 formed only a year ago, it has already involving trade operations in the Far in Hainan. Forum of Innovation sions for practical steps to be taken cial world help us ensure this. Even East Russia 新闻分 achieved a great deal. During the Eastern Bank of the Sberbank of as well. For example, synchronizing now the geography of the services is 析社讲述了俄罗斯 Cooperation was organized by the 与中国银行合作的 session, we will summarize our work Russia grew by 30%, in comparison Chinese side. What task did it help the actions of clients of the two large almost unlimited. Sberbank FinLine 前景。 for the reporting period, will discuss to the fourth quarter of the previous to solve? banks. In the territory of the Russian system was chosen for mutual settle- our plans for the second half of 2016 year. This bears evidence of a real – The key topic that we discussed Far East, this is Sberbank, in the terri- ments – it is one of the most modern and the year 2017. Together with our revitalization of the economy and our with our foreign colleagues is the tory of Heilongjiang, the province that solutions. It will help perform bilater- – Evgeny Viktorovich, as part colleagues, we share information external connections with foreign measures that may become a cat- is the closest to us, this is the Harbin al exchange of payment documents of the Eastern Economic Forum, a and analytics both on the banking counterparties. Today, around 70% alyst for developing Russia-China Bank, which is a leader in China’s and information between the Russian meeting of the Russia-China Finan- industry and in general on the eco- of these operations are performed in relations in general, and trade rela- northern province. In this area, we and the Chinese banks, and obtain cial Council (RCFC) is expected to nomic conditions of our two coun- the Amurskaya Oblast. We see that tions in particular. For this reason, we are organizing several activities that the necessary set of online services take place in September. This will tries. As part of the investment road- the structure of transaction balances discussed the issues involving more will be aimed at introducing clients of in real-time mode. not be the first meeting in this for- show, we plan to made a presenta- is changing. While earlier we import- active integration of Chinese busi- two banks to each other. – China’s share in the foreign mat. What questions would you like tion of the largest investment projects ed many goods, now significant nesses in our development tools in – Do the clients need this? economic trade balance of the Far to discuss with your foreign col- and investors from China. product volumes are being export- the Far East. Also we discussed the – Yes, no doubt. During many East in a short time has grown to leagues? – Do businesses of the People’s ed from the country and, in partic- possibilities offered by the Free Port years of work with business repre- 30%. How has the structure of pay- – Information exchange between Republic of China invest willingly in ular, from Blagoveschensk – from of Vladivostok. We understand what sentatives, we noted that a lack of ments in settlements between the partners must be continuous. Dis- the Russian economy? those territories that have a simplified activation of relations in this area, trust and mutual understanding in two countries changed? tances and differences in time zones – The main tendencies in the Rus- visa regime. There are new invest- what advantages are required, what relations between partners from dif- – While in the beginning of 2015, do not prevent us from being in a sian economy are related now to ment processes occurring, such as steps need to be taken for the devel- ferent countries is often a stumbling 98% were payments in USD and 2% single information environment. I changing oil prices and the unstable interaction in the Amurskaya Oblast opment of the economy. To enable block. Banks act as reliability guaran- were national currency payments, would like to note that members of position of the ruble. It is no secret to with regard to financing of a project the businesses of two countries to tors. They create the factor of trust. this structure changed by the end of the RCFC exchange information not anyone, that the cost of labor in Rus- involving the construction of one of be jointly fruitful, it is important to pre- This can be called the main element last year. Dollar transactions amount-

94 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 95 ▶ business www.eastrussia.ru The certificate of registration News&Analytics Agency ed to 90% of the market, while 10% an opportunity to reduce the final will also be carried out in the nation- of mass media №FS77-55885 were made in the national currencies. financing costs for the client. By the al languages soon? from 10.30.2013 The rate of growth of settlements in way, today we are observing growth – Many of our employees speak national currencies in 2016 acceler- of demand for trade financing in Chi- Russian, English and Chinese. It is ated in the first quarter of the current na’s commercial markets. In the first high time that I, and my colleagues, year by 100%, while the ratio of pay- half of 2016, the volume of the letters the heads of banks that are part of ments in rubles and yuans is 50% to of credit with post-import financing in the RCFC, master the partner’s lan- 50%. These numbers highlight the yuans rose by 80%, in comparison to guage. After all, it is never too late Modern view necessity to develop the financial the same period last year, while the to study. Especially, from each oth- infrastructure for faster transactions transactions grew by three times. er. Here, art can help. We and the using national currencies with low- – During the internship of repre- representatives of Harbin Bank er costs. sentatives of the partner bank from had a calligraphy class under the on the Russian Far East ▶ – One of the missions of the the People’s Republic of China, was thoughtful guidance of a mas- RCFC is strenhthening relations emphasis made only on studying ter: the foreign colleagues wished between the partners. Are there the business model? Does only this good luck in the , special initiatives that contribute to experience help to learn about, and and we to them – in Chinese. I am Actual news bringing the parties closer? understand each other better? sure that the practice of experi- – Yes, we are already actively implementing these. During a meet- ing in Moscow between German Expert analyst Gref, the President and Chairman Our cooperation will leave of Sberbank, and Guo Zhiwen, the Chairman of the Board of Direc- Reputable speakers tors of Harbin Bank, an agreement no barriers for businesses on intern exchanges was signed. We have been partners with Harbin – The “full immersion” effect is ence exchange will continue and Bank for a long time now, it was with important. Guests had an oppor- will become a guarantee of reliable Exclusive content them that we opened one of our first tunity to experience the internal life partner relations of the member correspondent accounts. The intern of our bank, they learned its corpo- banks of the RCFC. Our coopera- exchanges will help each party learn rate culture, philosophy and values, tion will leave no barriers for busi- EastRussia newsletter – the cultural peculiarities, customs and the client-centric business mod- nesses. Despite the differences in and business models of their part- el. By the way, our colleagues from cultures and traditions, our peoples your weekly guide ners. This summer, representatives Harbin Bank during their internship rely on identical basic foundations of Harbin Bank completed a week- in the Far Eastern Bank of the Sber- of human relationships. The tandem long internship in the Far Eastern bank of Russia noted the similari- of two largest corporations that Bank of the Sberbank of Russia. In ty of corporate cultures of the two want to and can cooperate fruitful- the course of experience exchange, banks. Such an international experi- ly, based not only on the numbers, they discussed the differences ence exchange between the finan- but on understanding, respect – in when it came to corporate lending cial organizations is a good and use- addition to material benefits, will and project financing approach- ful practice. We obtained a great deal also produce a more important es in the two countries. Guests from of new information, and so did our benefit. This cooperation results Harbin Bank learned what capabil- colleagues from Harbin Bank. They in firm and friendly ties. In front of ities Russian businesses have for were especially impressed by the us is opening a huge opportuni- global market activities, and what technical upgrade of banking pro- ty to become closer – in reality and demands of Far Eastern corpora- cesses – the way to the client’s heart not only in word. The prospects of tions are implemented through Sber- is now through high technologies. We partner relations are limitless, and bank services. Especially relevant certainly agreed to meet again – on this is not an exaggeration. Realiz- was the exchange of experience in the other side of the Amur. ing what approach we are starting implementing trade financing tools – What about the language bar- with, makes thrilling the anticipation and correspondent relations: such riers? Do they pose a problem for of the power of their development. banking service helps regional busi- communication? If banks are mov- There are present all prerequisites CONTACTS: nesses obtain financing out of the ing towards settlements in their for this to become a historic exam- 119334, 3-5 Vavilova st., funds attracted by the bank in the national currencies, is it possible ple of synergy for our contemporar- Moscow, Russia international market, which provides that interaction between partners ies and for future generations. Tel: +7 (495) 661-18-26 96 Eastern Economic Forum Special Edition E-mail: [email protected] ▶ geopolitics

instance, the agreement provides for preferences for products with at The TPP is least 45% localization, so that bodes well for Russian industry’s coopera- an important tion with the TPP member states in bringing joint products to market in other member states on favorable part of a new terms. That is especially applicable to cooperation with Vietnam, which world has a free-trade agreement with the Eurasian Economic Union. such as rice, meat and dairy prod- Moreover, we should consider THE TRANS-PACIFIC ucts, and the issue of long-term phar- the TPP’s significance in a broad- maceutical patents for countries that er context. First, it is an element have been importing drugs and can- of a comprehensive American for- not produce their own ones. eign trade strategy, aimed at creat- PARTNERSHIP The standard general equilib- ing new rules for international trade rium models show that for Russia and for economic interaction as a the direct impact of the TPP agree- whole. If the project is implemented, ment is minimal. The member states the rules will be made without Rus- AND ITS SIGNIFICANCE account for less than 10% of Russian sia’s input. Given that certain provi- trade turnover. Key Russian exports, sions of the TPP – including provi- hydrocarbons and defense indus- sions on state-owned companies, FOR RUSSIA try products, in particular, do not government procurement, intellec- depend on the preferences provided tual property rights, etc. – conflict by the TPP. TPP countries’ exports with the Russian economic mod- to Russia are also quite unlikely to el, the gradual spread of their rules The signing of the Trans-Pacific Partnership sia, Mexico, Peru and Vietnam) are shift to other member states after the around the world could become a Транстихоокеанское developing countries, and their eco- agreement enters into force. Most of serious challenge for the Russian партнерство и его значение agreement was a landmark event that has a для России и мира nomic standards have a significant the potential losses will be borne by economy. Подписание significant impact on the economies of its member distinction from those of the more Russian agricultural producers, who Second, the TPP could fuel other соглашения о states and their trading partners, changes the developed economies of the TPP. supply products to Asian markets. processes and initiatives that have a транстихоокеанском The largest trade flow subject to Nevertheless, this flow of goods is direct bearing on Russia. For exam- партнерстве изменит course of the integration processes in the Asia- курс интеграционных the TPP, which is not regulated by already not that big. ple, China could speed up its west- процессов в Азиат- Pacific region, as well as is capable of transforming previously established free-trade However, in this case the models ern advancement, a key element of ско-Тихоокеанском регионе. the whole system of international trade regulation. zones, is the US-Japan trade chan- cannot fully reflect all aspects of the which is the One Belt, One Road ini- nel. As for the rest of the member TPP’s impact on the Russian econo- tiative. Negotiations on the Region- states, the biggest beneficiaries my. Russia has ambitious integration al Comprehensive Economic Part- he execution of a mega-region- existing free-trade agreements of the TPP among those with a less- plans in the Asia-Pacific region. The nership (RCEP) are ongoing, and al agreement in the Asia-Pa- between the TPP member states, er share of the trade volume may be implementation of these is impossible unlike with the TPP, Russia can take Tcific region is not just the result and together they cover about 60% Vietnam (due to expansion of textile without accelerated development of part in them, especially the grow- of the targeted efforts of individual of all the trade flows addressed by and footwear export), Brunei (due to the Far East and economic diversifi- ing support for comprehensive eco- countries, but a reflection of external the TPP. Second, each country is greater foreign trade and economic cation. Based on the current concep- nomic cooperation in Greater Eura- processes taking place both in the granted an individual transition peri- diversification), and Malaysia (having tion, the plan is to develop regional sia. Finally, the TPP’s success may region and in the whole world econ- od lasting up to 30 years from the the largest number of trading part- production of goods with high add- become an important incentive for ▶ AUTOR Igor MAKAROV, omy. However, what does the TPP date of the agreement. ner countries being added in the TPP ed value for export to the Asia-Pacif- a long-overdue reform of the WTO, Ph.D. in economics, Associate mean for Russia? The TPP unites countries that area). The proliferation of US stand- ic region. These plans are somewhat which is in a protracted crisis. professor in the Global Economics Department at the Higher School of The TPP is primarily a free-trade account for 40% of the world’s GDP ards in investment regulation is also threatened by the TPP. We, though, Even though the TPP’s direct Economics; agreement. It means that customs and 28% of the world’s trade. How- likely to stimulate the inflow of Amer- should not exaggerate this danger, impact on the Russian economy duties for 95–98% of commodity ever, these countries are extreme- ican investment into the TPP coun- as the main market for this potentially is small, considering it irrelevant to AUTOR▶ Anna Sokolova, Research in- tern at the Center for Comprehensive items will drop to zero. This number ly different. Just two of them pre- tries. For most of the countries, the new Russian export is China, which is Russia would be counterproductive. European and International Studies seems impressive, but the extent of dominate both figures: The USA and downsides of the agreement have not affected by the TPP. The TPP is an important part of a at the National Research University duties liberalization should not be Japan. The fact is that half of the to do with the opening of domes- At the same time, the TPP gives new world; and it is high time Russia Higher School of Economics exaggerated. First, there are 42 member states (Brunei, Chile, Malay- tic market for agricultural products, Russia new opportunities as well. For thought about its place in it.

98 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 99 ▶ direct speech

arrangements for “ASEAN Com- mon Market” would be created. Ten countries of Southeast Asia – with a “There is a total population of 625 million peo- ple (excluding China), or 9% of total world population with GDP (at pur- chance, and it is chasing power parity) of $6.48 trillion (at the beginning of 2015), or about 6% of GDP of all the countries of the world – were uniting their markets considerable...” and removing trade barriers on their borders. Something similar to the Europe- an Union (which went through this Will Russia fit into Chinese projects? process 20 years ago) was spring- ing up. However, without the Euro- pean bureaucracy and with the rate A well-known regional economist, the head of the Far Eastern of economic growth 5-6 times high- Center for Economic Development and Integration of Russia er than in Europe. What will China into the Asia-Pacific Region, FEFU (Far Eastern Federal be for these countries – a “driver” or a passenger that bought a ticket University) Professor, Alexander Abramov, thinks that Russia in time for a comfortable seat – only has an opportunity to successfully fit into the projects of time will tell. China, a superior country, in terms of economic size. The New Silk Road is also the project for Russia ment environment – security, uniform ic Belt megaproject, or in the trans- even now, when our long-term rela- Announced by the President of the legal procedures, and transparent portation system of China, which «Шанс есть, и он нема- China: an “economic лый...» Впишется ли Россия tions with our traditional Western driver” and more... People’s Republic of China Xi Jin- financial monitoring. ensures the export-import of Chi- в проекты Китая? partners are being put to the test, the From the idea of reintegration of for- ping, the concept of Silk Road Eco- In this situation, the partner coun- nese trade, the transportation sys- Профессор ДВФУ economic outcomes remain pos- mer Soviet Republics into the Eur- nomic Belt and the principle of “one tries of the Silk Road Economic Belt, tem of Russia plays merely a sup- Александр Абрамов оставляет за Россией itive: despite the crisis and sanc- asian Economic Union (EAEU) and belt, one road” stemming from it are which could include Russia, would porting role. возможность удачно tions, foreign trade with these coun- creation on its basis of the Eurasian the foundations of Eurasian integra- also benefit from the same opportu- Maritime transport accounts for вписаться в проекты превосходящего ее tries remains significant, and in Union, involving a more extensive tion – Chinese-style, representing the nities. However, whether they will be the major part of China’s trade, and в экономическом some cases it is growing, including interaction of the member states, we involvement of a number of countries able to use these opportunities prop- this will remain so in the foreseea- плане Китая. with such a significant opponent of have arrived at the idea of relations in the process of interconnected erly – this is not a question for Chi- ble future: out of the approximately Russia as the United States. Thus, that exist on the continent in general. development. na to answer, but the participating 50 million containers, in which goods Russia is open to various trade between Russia and the Unit- The economic strength and stability It is more appropriate to speak countries, and particularly Russia. are transported around the world, associations ed States grew by 5.6% in 2014, of China, largely shaping the over- of “Eurasian integration” as an addi- 30 million pass through the south- The geographical location and the amounting to $29.2 billion. all Asian momentum, is certainly one tional option of the megaproject of Complementary role of east coast of China. The sea route is history of Russia predetermine the Another point is that the level of the most powerful economic driv- the Silk Road Economic Belt, but not the Trans-Siberian Railway cheaper, safer and easier to operate. involvement of this country in the of development of Asian countries ers, first of all, of Eurasian economic as its goal. The Russian transportation system In addition, there is the “prob- creation of qualitatively new allianc- and the countries of the Asia-Pacific integration. In fact, China is acting as any pru- is becoming the backbone of inte- lem of cargo imbalances”: As the es in the Asia-Pacific Region (APR) Region, the extent of their integration China is definitely an “economic dent business manager who has gration, its energy resources ensure “world’s workshop” China annual- - political, economic, cultural, etc. into the global economic process- driver”. However, it should be clari- accumulated some saving would: it stable development of the Chi- ly exports approximately 20 million In the context of the planned large- es, have reached levels that simply fied that there is no “common railway is seeking to profitably invest these nese economy and Chinese mon- containers with finished goods, and scale geopolitical and geo-eco- cannot be ignored. An indicative fact track” in Asia, and even the width savings. ey is flowing into modernization and imports only 9 million containers with nomic turn, and the growing need is that in 2013, China’s foreign trade of railway tracks varies in different Today, China’s gold reserves development projects in Russia. semi-finished products and a small for multi-polarity to solve the world’s volume was almost equal to that of countries. The Western tradition of amount to nearly $4.0 trillion, Other countries also receive specific number of products that it is not yet problems, the pole of development the United States ($4.16 trillion com- dividing the world into “senior and i.e. twice as much as aggregate benefits, in the form of military, finan- producing internally (this data does and search for new partnerships is pared to $4.03 trillion, respectively), junior”, “developed and developing” reserves of the European Union and cial and other assistance. not include the “American destina- shifting towards Eurasia. and despite the general slowdown in countries does not work in this part the United States ($1.805 trillion). We do recognize the importance tion”, where there is no ground alter- Perhaps one should not abuse global trade, China continues to hold of the world. That kind of money requires suitable of the Russian transportation sys- native to sea transport). the term “turn” - since Russia is not this position. For example, at the end of 2015, investment projects. These projects, tem and the Trans-Siberian Railway. Risks and opportunities for Rus- “turning away” from anyone. And expectations were that final legal in turn, need a supporting invest- However, in the Silk Road Econom- sia on the way towards integration

100 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 101 ▶ direct speech

Russia should undertake more effective measures to increase tran- sit capacity

may arise within its zone, which is being formulated by the BRICS coun- tries, and it may be supported by the Our task is to identify not only the be recognized as insufficient by the EAEU. In case of a general agree- positive aspects of such a process, Chinese leadership itself. On the ment, this order can also be extend- but also to test it for the existence one hand, this is based on the fact ed to the “belt” zone, but this requires of difficulties, to identify a real set of of an extremely unstable situation considerable efforts to identify and benefits and potential losses for the in Western Asia (ISIS, Taliban, and “link” the interests of stakeholders. Russian Federation from entry into their penetration into the countries In general, any large-scale pro- full-fledged relations with a sovereign of Central Asia). The creation of a ject carries some risks (and the pro- China, powerful and focused on its transportation infrastructure is fairly posal for exports by China of pro- own development. The interaction risky under such conditions. duction capacities in 12 priority sec- between the Silk Road and EAEU is On the other hand, Russia should tors of the economy is certainly a also an important issue. undertake more effective measures proposal within the Silk Road Eco- The participation of Russia and to increase transit capacity, simplifi- nomic Belt megaproject). Economic EAEU in the Silk Road Economic cation of procedures for documen- mechanisms are an effective coun- Belt project presents both risks and tation and reduction of the delivery termeasure to economic risks. opportunities. time of cargo to the West. Political institutions or “people’s The risks include the following Participation in the Silk Road Eco- diplomacy” should not be overload- concerns: nomic Belt project is also opening ed with economic efforts. 1) Russia is not in the position of a new opportunities for Russia, in gen- With regard to the agenda of the strong partner, and China will not fail eral, and for the Russian Far East, in Silk Road Economic Belt megaproject, to take advantage of this to promote particular, for example: Russia, and especially the monetary its model of creation of a single eco- 1) Russia is among the coun- authorities of this country, have a lot of nomic space. tries with high sovereign yield of work to do: they must mobilize the cor- 2) The logistic component of the the national economy. Thus, public responding tools in the stock market, project bears the risks of bypassing investment in this country, even from the insurance services market, mobi- Russia via other transport routes. the monetary point of view, can bring lize the monitoring functions of the Min- For example, taking into account significant benefits. At the same time, istry for Development of Russian Far China’s plans to build the China ‑ the return on investment is ensured East, and the regional authorities. Central Asia ‑ Western Asia Railway, by the material growth of the Rus- The principle of “the rich get there is a threat of further outflow of sian economy, and the factor of its richer” is reasonable here as never cargoes transiting via the Trans-Si- inevitable revaluation “upwards”, the before – only that part of the Chinese berian Railway to China. growth of price of investments, made money, which we can diligently and To prevent the development of in advance, is predefined. prudently manage, will work effec- the situation along this scenario, it 2) The Silk Road Economic Belt tively in Russian investment pro- should be ensured that the feasibil- project has not yet developed a defi- jects. Anything in excess can turn ity of implementation of these plans nite shape. A new economic order into a debt burden for the country.

102 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 103 ▶ society Victor Sumsky: “Cooperation in the area of education is the most important reserve for strengthening relations with ASEAN countries”

Victor Sumsky, Doctor of History, the Director of the ASEAN Center at MGIMO (Moscow State Institute of International Relations) University run by the Ministry of Foreign Affairs of Russia, talks about the upcoming Russia-ASEAN University Forum at the EEF

– Victor Vladimirovich, Russia – This initiative originated dur- mulated by mankind, generators will have yet another platform for ing the preparations of the pro- and distributors of new ideas – dialogue with ASEAN countries: gram of activities to celebrate they have a direct relation to lit- “In Vladivostok on September the 20th anniversary of the Rus- erally everything that happens in 1-2, the Russia-ASEAN University sia-ASEAN Dialogue Partner- the modern world, they have an Forum will be held at the Eastern ship, which we are celebrating enormous potential for analysis Economic Forum. Please tell us in 2016. Not so long ago, a sim- and the evaluation of the direction more about this initiative.” ilar forum was held on the occa- towards which this world is mov- sion of the BRICS Summit in Ufa. ing. It is natural to expect from the «Сотрудничество в сфере Now we are trying to apply this people, whose lives are linked образования – важнейший positive experience to the Rus- to universities, competent fore- резерв укрепления отноше- sia-ASEAN Partnership. There casts in relation to various areas ний со странами АСЕАН» are two answers to the question of human activity, unconvention- О предстоящем в рамках ВЭФ of why we want to bring togeth- al recommendations on how to The choice of location, which Университетском фо- er the officials of the education approach the solution to various will host this Forum, is symbol- руме Россия-АСЕАН The campus of the FEFU – рассказывает доктор sector, science and culture, rep- problems. Considering these, the ic. The campus of the Far Eastern исторических наук resenting our countries. One of ASEAN-Russia University Summit Federal University (FEFU) – the Виктор Сумский. them is related to the fact that uni- provides an excellent opportuni- newest and most well-equipped the most well-equipped cam- versities are very complex organ- ty to discuss the progress of our campus in contemporary Russia – 《教育领域合作-强化东盟国家间关系 最为重要之基石》 isms, and the discussion on their cooperation in politics, security, is seen as the clear confirmation of pus in Russia – is seen as the effective management, and best the economy and culture, as well the country’s interest in the devel- 关于当前面临的形 prevailing practices in this area, as to turn it into a full-fledged stra- opment of its eastern territories, 势，历史学博士 维克 are of independent interest for tegic partnership. After all, this and the strengthening of ties with clear confirmation of the coun- 多 苏姆斯基，将在东 方经济论坛框架下举 professional managers. Howev- is the goal that the leaders of the its Asian neighbors, including ASE- 行的俄罗斯-东盟国 er, another thing is also evident: Russian Federation and ASEAN AN countries. try’s interest in the develop- 家大学论坛上作主题 演讲。 universities are the keepers of countries have set following their Along with the FEFU, as the vast amounts of knowledge accu- Sochi Summit in May this year. host of the EEF, other universities ment of its eastern territories 104 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 105 ▶ society

– What is the current situation er education would be complete recent past and currently the Dep- of Russian cooperation with ASE- without mentioning the contribution uty Minister of Foreign Affairs of AN countries in the area of higher of MGIMO to this effort, and here Cambodia. Saleumxay Kommasith, education and research?” What is why. In the case of MGIMO, it is also an MGIMO graduate, this year does it look, if you compare us appropriate to speak not just about became the head of the Ministry of with other partners of the Asso- the training of national specialists, Foreign Affairs of Lao PDR. These ciation? but about the education of national examples encourage us to reflect – Let us say that today the num- elites – political, business, and intel- on the great opportunities we have ber of students from ASEAN coun- lectual. Today, the list of the alum- to enhance mutual understanding tries studying in Russia is signif- ni of our University includes almost and cooperation with ASEAN coun- icantly lower than in the United four hundred Vietnamese, about tries – as, indeed, other external States, China, Japan or Austral- a hundred of Cambodians and partners as well – that arise due to ia. However, it is quite evident that approximately the same number of exchange of students and teach- Russia is popular in its own way, Laotians, and in many cases, these ers, together with other joint initia- as well as being competitive as a are high-level diplomats, manag- tives in the area of education and country that provides high-quality ers, party and government leaders. science. I have no doubt that this and relatively inexpensive educa- Among our outstanding alumni we topic will be one of the key topics tion in the area of medicine, exact count Ms. Soung Ratchavi, ASEAN at this University Forum in Vladiv- and natural sciences. We can train Deputy General Secretary in the ostok. engineers of various profiles, our students steadily excel in interna- tional competitions in computer science and programming; Rus- The question as to what fur- sian traditions and competence in disciplines related to aeronautics and astronautics are well known. It ther actions can be taken to is natural therefore that in Russian medical universities – not only in the attract students from ASEAN capital city, but also in such cities of Siberia and the Far East – and as Volgograd and Nizhny Novgo- of course those of Moscow, St. rod – one can easily meet students countries Petersburg and other institutions for In Vladivostok our rectors and from Malaysia, and students from higher education of Russia – will be Myanmar in the Bauman MSTU and widely represented. In conclusion, professors will meet with very the Stankin Technical University. it should be noted that the manage- As for the leaders, in terms of the ment and experts of MGIMO, lead- total number of students studying ing this project in close partnership serious and respected col- in Russia, today these are Vietnam, with the Far Eastern Federal Uni- Myanmar and Malaysia: year after versity, are involved in the devel- leagues from Southeast Asia year, several thousands of students opment of the Forum`s concept, its from these countries are trained in organizational preparation. our universities. In my opinion, the – Since the Forum will be there are universities that have countries, the personification of prerequisites for achieving the simi- attended by representatives of received recognition in the region their countries to an extent similar lar levels of attendance by students universities from the ASEAN and sometimes beyond, due to to that of the Moscow State Uni- exist in Thailand and Indonesia. The countries, please tell us about the the high level of teaching, inter- versity and St. Petersburg State question as to what further actions state of higher education in these national team of students, strong University. However, these are can be taken to further attract stu- countries.” international relations and good not all the educational institutions, dents from ASEAN countries to – It is known that the ASEAN conditions for research activities. which the ASEAN countries can be Russia, and young Russians to in brings together ten countries that The universities of Chulalongkorn proud of. Thus, in Vladivostok our the best universities in South-East are very different from each other and Thammasat in Thailand, the rectors and professors will meet Asia ( by the way, where a number in terms of size, level of econom- National University of Singapore, with very serious and respected of Russian students could be high- ic development and political sys- Ateneo de Manila and the Uni- colleagues from Southeast Asia, er) will be discussed at the Forum. tems. However, in each of them – versity of the Philippines are the and their discussions promise to No review of Russian-ASEAN from tiny Brunei to vast Indonesia – national pride of their respective be truly meaningful. cooperation in the area of high-

106 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 107 ▶ overview

Jack London Lake due to the lack not forget that a flight, for exam- of roads. And for travelling to the ple, from Moscow to the ski resort Kuril Islands one needs to purchase in Yuzhno-Sakhalinsk takes quite a Cross-border Tourism a paper motor ship ticket: this trav- long time – about 8 hours. Hence, a el document can be bought only at tourist will probably choose a closer a particular ticket-office in Sakha- place for holiday. The majority of tourists lin, it shouldn’t be purchased online. The launch of the Advanced A huge number of stunning natu- Special Economic zone intensified ral sites and places of interest still the formation process of attractive in the Far East remain inaccessible due to the lack regional travel brands, however, of basic infrastructure and transport. currently the major focus is on the are Chinese As a result, the major part of «megaprojects» and the attraction tourists in most areas are basical- of foreign tourists. ly travelers and enthusiasts from regions adjacent to the Far East Visitors from the East and from its territories, who are The major foreign tourist flow in ready to face the challenges. the Far East includes tourists from Another essential problem is the the Asian region, mainly from Chi- remoteness of the Far East from na, who actively visit the Primorsky the European part of Russia and Krai. According to 2015 results, the the high cost of travel. The Govern- Primorsky Krai is the leader in the

The Primorsky Krai takes the third position after Moscow and by the number of Chinese tourists

ment attempts to maintain aviation Far Eastern Federal District by the accessibility of the regions by sub- number of foreign visitors – near- sidizing the Far Eastern transporta- ly 465,000 people. Chinese tour- tion. So called «flat tariffs» are being ists make up the overwhelming introduced. These are single tariffs share – approximately 329,000 TOURISM with a fixed price, independent on people (70%), which is by 14,9% The Far East with its wide range of natural resources the date of purchase. However, in more than in 2014. In 2015 there Большинство туристов на The Absence of a Brand Дальнем Востоке – китайцы is considered one of Russia’s major resource assets. Speaking of the current situation summer time flying to the Far East were considerably fewer visitors Дальний Восток, in the sector, it should be noted is quite problematic – the prices go from South Korea – 22,000 people обладая широким However, this macroregion has a significant tourism спектром природных that the Far East doesn’t have any up 2–3 times because of increas- in total. The Primorsky Krai takes богатств, по праву potential, which currently is not fully disclosed. The well promoted world-class trav- ing passenger traffic and the small the third position after Moscow является одним из el brands. This issue is not being number of carriers. Besides, «the and Saint Petersburg by the num- главных ресурсных recent legislative initiatives and currently implement- активов России. ed development instruments, such as the Advanced addressed operatively, thus, no flat tariff» is unprofitable for the com- ber of Chinese tourists in the coun- Однако макрорегион sharp increase in the number of pany, as it was repeatedly declared try. The second place in the Far имеет и серьезный Special Economic zones and the free port regime, туристический foreign tourists is expected in the by Russia’s largest airline – Aeroflot. Eastern Federal District occupies потенциал. are expected to improve the tourism and recreation- majority of the Far East regions. Thus, these measures contribute to the Amur Oblast, which was visit- al sector and make the Far East a center of attraction For instance, it is almost impos- the accessibility of air transportation, ed by 70,500 foreigners (+32%), sible to visit one of the most beauti- but have little effect on the growth almost all of whom – 67,000 peo- for compatriots and tourists from abroad. ful places of the Magadan Region, of the tourist flow. Besides, we must ple (+43%) arrived from China on

108 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 109 ▶ focus

interest not only to the residents of cial economic zone (SEZ) was cre- from the state budget for the pro- the Sakhalin Oblast and the rest of ated on the island, where no res- gramme lifetime), simultaneous- the Far Eastern regions, but also, ident has been registered since ly three Primorye projects – the according to the designed plan, 2010 and now it is to be closed. «Emerald ring», «Primorye ring» become an international ski resort We should acknowledge the and «Pidan» (750 million rubles for by 2020. Anchor investors of the state support of the Far Eastern all the projects), the Yakut «Noth- ASEZ «Mountain Air» are plan- tourism sector in the framework ern Mosaics» (279 million rubles) ning to implement seven invest- of the federal target programme and Khabarovsk cruise cluster ment projects, amounting to more «The development of domestic «Grand Ussurian Island – Shan- than 6,1 billion rubles. A «Tylyach» and inbound tourism in the Rus- tary»(177 million rubles). recreational center will be built in sian Federation for 2011–2018», The Federal Government also «Kamchatka» Advanced Special which assumes federal co-financ- tries to remove administrative bar- Economic zone in the Kamchat- ing of engineering and transport riers as much as possible and sim- ka Krai, which will comprise a hotel infrastructure construction. The plify the entry of the foreign tour- complex, and, in the perspective, programme includes four proj- ists. Firstly, tourist preferences are there is also a ski resort planned. ects: the tourist and recreational envisaged under Vladivostok Free The total investments will comprise cluster «Amur» in the Amur Oblast Port regime. At the moment a visa- about 1,3 billion rubles. The sana- (1,076.8 million rubles allocated free regime of 8 days at the territory torium «Pearl of Kamchatka» was also granted a resident status in the Advanced Special Economic zone. It possesses two thermal wells. The 2 out of the total 13 estab- initial investments amount to 50 mil- lion rubles. Unfortunately, the devel- opment of the Russky Island in the lished ASEZs possess a travel sia and raised its attractiveness for Primorsky Krai remains underval- foreign tourists, which significantly ued by the investors. Earlier a spe- and recreational profile The increased popularity of influenced the growth of tourist flow travel to the Primorye and Rus- in recent years. Government Support sia correlates with the simplified Today the Far East has also a lot of its own growth drivers of the tour- ism industry. In the long run, the visa regime for tourist groups tourism growth in the Far East will be maintained due to the projects a visa-free regime. Next comes the ritory for 15 days. Such a «visa-free of the Advanced Special Econom- Khabarovsk Krai, which was visited regime» with China has been oper- ic zones and Vladivostok free port, by 23,500 foreign tourists in 2015, ating since 2010, and since then the creation of tourist casters in the 12,000 of whom were Chinese. the tourist flow has increased by 4,3 framework of the state programme, Unfortunately, all the other regions times – from 158,000 to 677,000 in the elimination of visa barriers, and of the Far East aren’t character- 2015. Currently the Far East occu- also due to the development of the ized by high rates of inbound tour- pies the second place in Russia transport infrastructure. ism, despite, for example, the long- by the number of «visa-free» vis- Currently 2 out of the total 13 standing interest of many foreign itors – the macroregion accounts established Advanced Special tourists in Kamchatka and its pop- for 36% of such trips (about half of Economic zones possess a trav- ularity among fans of extreme and them are to the Primorsky Krai), the el and recreational profile. In March ecological tourism. Central Federal District is in the first 2016 the ASEZ «Mountain Air» was The increased popularity of place (55%), the Siberian Feder- established in the Sakhalin Oblast, travel to the Primorye and Russia al District falls significantly behind which involves the moderniza- correlates with the simplified visa the Far Eastern Federal District with tion of the ski resort complex of the regime for tourist groups, according only 9%. same name. As a result of the sport to which groups consisting of 5 to 50 Ruble devaluation resulted in and leisure infrastructure recon- people can stay in the Russian ter- the reduced cost of leisure in Rus- struction, the complex should be of

110 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 111 ▶ focus

of the Free Port is being elaborat- Duty-free zone proposed for Primorsky territory ed for foreign citizens of any state. It is expected that tourists can get It is expected that the tourist The pilot project is being planned for a visa at the border, while enter- launch as part of the Primorye Inte- ing the territory. The internal visa flow in the Amur region will in- grated Entertainment Zone. “Many regime should have worked since residents of Primorsky Territory who January 1, 2016, but, unfortunate- crease from 70,000 to have been abroad will be familiar ly, its launch was delayed because with the concept of a duty-free zone. of organizational constraints, This sometimes takes the form of a inter-ministerial approvals, and 1 million people per year tax-free regime, where VAT on pur- also risks of uncontrolled migra- chases is returned at the airport. There are various options available, tory flows. In any way, in the near for tourists. ists will no longer need to receive the Amur region will increase from and we will choose the one which suits us best”, explained Vladimir future this idea will come to life and Secondly, in the future a tour- passes into the bordering zone. 70,000 to 1 million people per year in Miklushevsky, Governor of Primorsky Territory. it will make its own contribution to ism growth will be achieved due to The law has come into force since the long run. In the Khabarovsk Krai The choice of venue for the project launch was made in accordance the development of the Primorsky the adoption of the federal law sim- June 2016, so, the first conclu- there is a project of tourism develop- with global best practice. According to the Governor, such practice Krai tourism sector. In conjunc- plifying the rules for foreign cruise sions can be made this autumn, ment on the Grand Ussurian Island, shows us that a significant part of the income flow into resorts is now tion with the visa-free regime, we ship entrance into the ports of the and we should certainly expect an situated near Khabarovsk, border- coming not from casinos, but from related services. With this in mind, should expect an increase in the Arctic and Far Eastern Federal Dis- increased number of cruise lines ing with China. local authorities intend to develop the hospitality, entertainment, busi- number of tourists due to the devel- trict. The administrative barriers are and growth of the tourist flow. A To summarize, the federal and ness tourism, trade and retail sectors. opment of the integrated enter- being eliminated: there has been special focus is on Kamchatka and regional authorities are faced with tainment zone «Primorye», which established «a one window» prin- Sakhalin, where the authorities a real challenge of developing the includes the casino Tigre de Cristal, ciple for obtaining authorization intend to develop the cruise tour- tourism sector in the Far East. Cur- Trutnev attributes delay inintroduction of simplified a yacht club and other attractions for organizing cruises, and tour- ism and, therefore, reconstruct the rently tourism in the Far East is lim- visa regime for Free Port of Vladivostok to migration port complexes. ited mainly by the Primorsky Krai, risks Thirdly, it should be mentioned it is represented predominantly that in the summer of 2015 the by Chinese travelers, although it Yury Trutnev explained that the introduction of a simplified visa regime international airport of Vladivostok demonstrates a positive dynamic for foreigners, which was supposed to go into effect for the territory «Knevichi» was the first and the due to the initiatives already oper- of the Free Port of Vladivostok on 1 July, has been postponed due to only airport in Russia to be granted ating in the region. Today the main recent international developments. “The simplified entry procedure is the status of «open sky». Foreign objective is not only to boost the an agenda item for which we have exceeded the previous deadline”, airlines have the right to fly freely tourist flow but also its diversifica- he said. The reason is simple: the international situation is changing, as to the capital of the Primorye and tion: a) through different regions have the migration flows we are now seeing, including in the Far East.” can operate transit flights with a of the Far East; b) through coun- To prevent certain migration risks, the design of the simplified visa stop in Vladivostok, which should tries from where the visitors come; regime has been adjusted. also contribute to the growth of the c) through different types of tour- inbound flow. ism. Although the implementation Currently the poor infrastructure of new projects of Advanced Spe- The Eastern Economic Forum to highlight of the border crossing points, the cial Economic zones may satisfy investment in Kamchatka’s tourism industry lack of automobile roads and bridg- the demands of tourists from the es hamper the development of the European part of Russia, the prob- During a visit to the peninsula, the Ambassador of the Grand Duchy of land’s inbound tourism. The prom- lem with long distances and expen- Luxembourg to the Russian Federation Pierre Ferring gave a positive ising routes are the ones over the sive airline tickets will prevent the appraisal of the region’s tourism potential. The EEF will host an in-depth river Amur for visiting Blagovesh- internal tourist flow from increasing discussion of prospective investments coming from Luxembourg into chensk, Khabarovsk, etc. The con- significantly. There is a potential Kamchatka’s tourism industry. struction of a bridge crossing across for travelling from one region of the “Kamchatka is home to a completely unique and unparalleled natural the river Amur in the regions of Bla- Far East to another, but it is limited beauty, and the peninsula is also very attractive from the point of view goveshchensk and Heihe (China) due to the small population. In gen- of tourism,” Ferring said at a meeting with Governor of Kamchatka is also intended to contribute to the eral, the sector development in the Territory Vladimir Ilyukhin, which focused on possible areas of tourism development. It should be macroregion will be supported by cooperation between the peninsula and the European nation. built by 2019 – a concession agree- inflows of foreign tourists and trips According to the ambassador, Kamchatka is sure to draw in visitors ment was signed between the Rus- of the Far Eastern travelers, driven from Europe. Ferring also noted the importance of the region taking sian and Chinese parties. Due to by all the latest initiatives of the fed- part in various tourism industry fairs, showcasing Kamchatka in an the implementation of the project it eral authorities. efficient way and welcoming tourists from Europe in search of new is expected that the tourist flow in experiences.

112 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 113 ▶ regions Vladimir Ilyukhin: “Interest in Kamchatka Peninsula is growing” – Vladimir Ivanovich, it is impos- sible to resist Kamchatka and its Nature, and especially the pro- beautiful nature. It is small won- der that the region keeps attract- ing tourists. Even the first surf- tected one such as ours, ing school in Russia has opened in Kamchatka. How many tourists requires a careful approach come to Kamchatka every year? How do you attract them? Yes, interest in Kamchatka is – Maybe it is better for the – And yet, the main industry in growing significantly. Over the past environment that millions of the region remains fishing. Is it true year, the number of tourists has tri- tourists are not coming to Kam- that one of the oldest companies pled–to more than 180,000 people. Интерес к Камчатскому chatka... in this sector is still called the Lenin полуострову растет The Kamchatka Krai pavilion–at the “Streets of the The region offers a wide range of – You are right, nature, and Collective Farm? recreational opportunities: we have especially the protected nature – Yes, it is true. Irrespective of Far East” Festival, held during the Second East perfect conditions for skiing and such as ours, requires a care- how archaic this name may seem Интервью с губерна- тором Камчатского Economic Forum–will be designed to resemble snowboarding–you can ski on vol- ful approach. However, we are to you, the Lenin Collective Farm края Владимиром a volcano. Anyone entering it will experience the cano slopes almost all year round. confident that tourism volumes has just launched the construction Илюхиным. Fishing and hunting here are also will grow all the same. In addi- of the latest, state-of-the-art vessels effect of being in a volcanic crater. amazing. Event tourism has recently tion to large projects, small and in Russia. It is the only company in gained momentum. More and more theme hotels are being built. This post-Soviet Russia that is building guests come to see significant Kam- year, Kamchatka enthusiasts sur- a new series of vessels of this class or that purpose, there will be the “Faces of Kamchatka”, artful- not only in Russia, but also world- chatka festivals. The main attrac- prised tourists with a new kind of at a Russian shipyard. And it has pieces of real volcanic lava ly expressing the spirit and charac- wide. Even those who have nev- tions include our Beringiya, the tra- extreme recreation–offering them invested 4.5 billion rubles into this Fplaced inside, and lava flows ter of people living in the region, will er been there have heard about its ditional extreme dog-sled race, and the chance to stay in an igloo-ho- project! will also be simulated. The first thing complete the impressions of visitors. volcanoes and geysers, mountain “Volcano Days” with mass ascents tel. This was the first such project Generally speaking, the fishing guests will see in the pavilion will be Kamchatka Governor Vladimir streams, and pristine nature. Howev- of the active giant volcano. in Russia. Guest houses were built industry has always been the back- the exhibition of sixteen 3D photos Ilyukhin is confident that this exhibi- er, few people know that today, this Of course, a major hurdle for tour- entirely of snow and decorated in bone of our economy. Kamchatka is of the beautiful nature of the penin- tion will arouse considerable inter- is not only a land of beautiful land- ists is the lack of infrastructure. Every the traditional style of the north- a fishing realm of Russia. We catch sula. Each of them will be of record est among visitors and participants scapes, but also a region of new year, we allocate money for these ern indigenous peoples of Kam- around one million tons of aquatic size–2 meters wide and 1.2 meters of the EEF. Kamchatka is one of economic opportunities and almost purposes within the framework of the chatka. They were all fully booked biological resources, which is about high. Two-dimensional portraits of the most amazing nature reserves, limitless investment potential. state tourist development program. every single day. one quarter of all Russian fish. We

114 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 115 are the leaders in terms of invest- are mining about 4.2 tons. economic indicators ment as well. Last year alone, our – Almost all major projects fishermen invested 2.6 billion rubles “Free port” re- in Kamchatka are supposed to into fleet renewal and fish process- Gross Regional Product per person in 2015 Structure of Gross Regional be implemented as part of the Product, 2015 ing. We expect that this year the gime will make Advanced Special Economic zone. dynamics will remain at the same It was created one year ago. What Public administration; military Fishery RUB security; social security – 18,6% and fish farming – 12.2% level. Currently, the volume of invest- has been achieved in this time? 491,077 ments has already been confirmed it possible to The special economic regime Trade – 9.6% at 2.5 billion rubles, and the con- of the Advanced Special Econom- Social and economic development Processing industries – 9% in 2015 struction of three new, state-of-the- attract about ic zone in Kamchatka combines Healthcare system – 8.7% art factories has begun in the north several spheres of activity: trans- Gross Regional Product, mln rubles 155520,5 Other – 8.4% of Kamchatka. port and logistics, tourism and rec- 7 billion rubles Investments into capital stock, mln rubles 25949,7 Transport & We also expect to see growth reation, and agriculture. Today we communications – 7.6% Generation and distri- of investment activity in connec- have 25 applications from inves- Agricultural products, mln rubles 8469,6 bution of electricity, tion with cluster projects. There are to statistics, this was made mainly tors with a total investment volume gas and water – 6.6% Freight traffic: 11 investors who intend to carry out due to the volume of mining oper- of 22 billion rubles. Thirteen inves- • Automobile transport, thous. t-km 16,302.6 Education – 5.7% Real estate projects for the production of the ations, which doubled in just six tors have already been granted res- • Sea transport, thous. t-miles 723,307.6 transactions – 5.6% most popular frozen products and months. This occurred because ident status. Their volume of invest- • Air transport, thous. t-km 503,2 Agriculture – 4.2% caviar, as well as advanced fish pro- the modern Ametistovy Mining and ment is closing in on 7 billion rubles. Retail turnover, mln rubles 50432,4 Construction – 3.8% cessing products, and the estab- Processing Plant, located in the These are projects aimed at devel- lishment of waste-free production north of the peninsula, reached full oping small aviation, fish and mineral Average nominal accrued salary of organizations' Structure of exports in Petropavlovsk-Kamchatsky and capacity. Geotekhnologiya, another resource industries, and agriculture. employees, RUB 56482,9 Fish products – 94% coastal areas. They plan to invest 7 major mining enterprise, resumed In the sphere of tourism, it is planned Gross Regional Product, mln rubles billion rubles into these projects. its operations. In addition, the con- to create new spa resorts and mod- 155520,5 Mineral – Another industry that has struction of another large facto- ern hotel complexes. 145419,9 products – 1.4% 135604,8 experienced a fantastic boost is ry, a mining and processing plant We are now working on infra- 126984,3 Metals and metal at the Ozernovskoye deposit, is structure development at the ASEZ 114375,9 mining. What are the reasons for 103123,2 products – 1% scheduled to begin this year. With sites. The federal and regional bud- 106,9 such positive developments? 94643,2 107,2 – Kamchatka has recently tak- the launch of new projects and the gets will provide 8 billion rubles for 101,9 Machines 101,9 and en the lead in terms of growth in development of deposits, in a few this purpose. For instance, region- equipment – 0.2% the industrial production index in years, we will be able to increase al budget funds will be spent on the Other – 0.1% the Far East. It grew 25 % in just the volume of gold mining in the construction of transport and ener- 2009 2010 2011 2012 2013 2014 20132015 the first half of the year! According region to about 10-12 tons. Now we gy infrastructure at the Zelenovski- Annual Gross Regional Product as % to the previous year value

116 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 117 ▶ regions project on the basis of public-pri- mining and processing plant, facil- Ferma, LLC is an official resident vate partnerships. The project ities and infrastructure. The Ozer- of the Kamchatka ASEZ. Its pro- will be partly funded from federal novskoye gold deposit is situated ject will be implemented at the and regional state budgets. The in the , and is Zelenovskiye Ozerki Agro-Indus- airport is expected to become the largest in the Kamchatka Krai. trial Park, which is one of the sites one of the platforms of the Kam- The ore field covers an area of of the ASEZ. Now the initiator is chatka ASEZ, which grants tax about 100 square kilometers. After engaged in the process of obtain- preferences and other incen- reaching its full capacity, the min- ing the necessary approvals to tives for businesses. In addition ing and smelting enterprise of the receive permission to start con- to the construction of the airport Ozernovskoye deposit is expected struction. complex, the project is aimed at to produce up to 10 tons of gold the development of the main air annually. At the moment, the pro- hub of Kamchatka, including the ject’s initiator is conducting field opening of new hotels, improv- exploration works. ing road and engineering infra- structure, as well as other facil- ities needed for servicing pas- sengers. Overall, the project is expected to attract up to 10 bil- ye Ozerki and Paratunka investment – In your opinion, why should lion rubles of public and private sites. We plan to commission all facil- regions of the Far East, and Kam- investments. ities there by the end of 2017. chatka in particular, take part in the Investment – Not so long ago, Petropavlov- East Economic Forum? sk-Kamchatsky received Free Port – It provides a unique oppor- projects of status. How will the region benefit tunity to show our economic and Kamchatskiy krai from this? increase investment potential, both THE KAMCHATKA – The situation at the port of Pet- on domestic and international lev- 4 BROILER POULTRY FARM ropavlovsk-Kamchatsky today is dif- els. The EEF is a platform for region-  CONSTRUCTION PROJECT ficult, because of the reconstruction al authorities and investors to share 1 OF THE PETROPAVLOVSK- Initiated by Development Corpora- of federal sites. This issue has to be their views and suggestions, make KAMCHATSKY INTERNA-  CONSTRUCTION OF AN tion of Kamchatka, JSC. The pro- resolved before the Free Port can comments, and discuss all issues in TIONAL AIRPORT 3 ALL-SEASON GREEN- ject cost is 1.7 billion rubles. The become fully operational. And feder- detail. The main result of the forum Initiated by Petropavlovsk-Kam- HOUSE COMPLEX project aims at creating a mod- al funds that we receive mostly tar- for us is to attract investors to the chatsky Air Enterprise. The new Initiated by Zelenaya Ferma, LLC ern highly effective complex for get the reconstruction of the piers. region. We must showcase our proj- air terminal will be built taking into (Green Farm). The project cost the production and processing of This work has to be done in order to ects, so that businesses will wish account growing tourist flow. The is 1.2 billion rubles. The project poultry near the village of Razdol- ensure the development of cruise to get involved in them. And I am building is designed for passen-  MINING AND SMELTING provides for the construction of a ny in the Elizovsky district of Kam- tourism, and the regular mooring of talking about foreign businesses as gers of local, inter-regional, and 2 PROJECT FOR THE 5-hectare greenhouse complex in chatka Krai. The new poultry farm cruise ships. This year, the feder- well, because the forum is interna- international airlines. The highest EXTRACTION AND PRO- the village of Termalny in Elizovsky will be placed into operation in sev- al programs will provide for major tional. traffic capacity of the three-sto- CESSING OF ORE FROM THE district of Kamchatka Krai. After eral steps. The overall production repairs of several piers and, most – What projects are you going to ry terminal with an area of 22,620 OZERNOVSKOYE GOLD DEPOSIT reaching its planned capacity, the capacity of the farm will be 6,300 importantly, the design works for the showcase at the EEF? square meters is 400 passengers IN THE KAMCHATKA KRAI complex is expected to produce tons of poultry meat annually. The modernization and construction of – Construction of a new air ter- per hour. Along with departure Initiated by Sigma, JSC (Siberi- annually: 2,000 tons of cucum- poultry farm is expected to provide new pier facilities. minal at the Petropavlovsk-Kam- and arrival areas, there will be an Mining and Smelting Enter- bers, 1,000 tons of tomatoes, and local residents of the Kamchatka In general, the “free port” regime, chatsky Airport, creation of a mining aviation security services, bor- prise). The project cost is 12.5 bil- up to 400,000 heads of lettuce. Krai with chilled chicken and chick- even at its initial stage, will make it and processing facility at the Ozer- der and customs control, a med- lion rubles (Own funds: 9.24 billion Thanks to this project, vegetable en byproducts. Today, the popula- possible to attract about 7 billion novskoye deposit, and two agricul- ical center, post office, retail and rubles (1.9 billion has already been self-sufficiency level in the Kam- tion of the region consumes about rubles of private investment into the tural projects–construction of the consumer services. The design invested). Borrowed funds: 3.2 bil- chatka Krai may grow from 10 % 8,500 tons of poultry meat annually regional economy. We already have all-season greenhouse complex of the air terminal will include lion rubles). The project involves to 25 %. Currently the Kamchatka (and the major part of these prod- anchor residents, and we are work- “Zelenaya Ferma” (Green Farm) and national elements of the Kam- the construction of a pilot pro- Krai consumes about 17,000 tons ucts is imported). The project ini- ing on drafting the necessary agree- the Kamchatka Broiler Poultry Farm. chatka Krai. The construction of duction enterprise for the extrac- of greenhouse vegetables (toma- tiator has reached an agreement ments with them. The Free Port is Their total cost reaches approxi- the first stage of the air terminal tion and processing of gold ore in toes, cucumbers, greens) annu- to be given land for the enterprise, also attractive, because it provides mately 19 billion rubles. Moreover, will cost approximately 3.1 bil- the territory of the licensed area ally. Farm households and enter- and is now drafting design specifi- an opportunity to obtain preferential we will also show all our promising lion rubles. The project will take with an annual capacity of up to prises located in the Elizovsky dis- cations and estimates. The poultry treatment for those investors who, projects in the field of tourism and 4 years to complete. Potential 250,000 tons per year. The pro- trict produce no more than 2,000 farm is expected to begin produc- for whatever reason, were not able to transport on our interactive layout of investors are invited to join the ject requires the construction of a tons (10 %) annually. Zelenaya tion in July-August 2018. become residents of the ASEZ. the Kamchatka ASEZ.

118 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 119 ▶ ???? «Not only for

tasting fish: a trip to op a construction project that the industrial engineers who would avoid any negative con- underwent special training sequences for us, and local resi- and education. Foreign spe- dents, in case of an earthquake. cialists are also engaged in Kamchatka for the Our foundation is one solid plate the work, but these are rath- along the entire construction foot- er exceptional cases – for print with special reinforcement in example, we have a German tastiest beer» the area of fermenting tanks. The «Professor» of brewing with risks have been reduced to the work experience exceeding minimum. 28 years, who created his own Regarding internal equip- yeast strain. ment, it is produced and supplied – What are the future pros- by GEA Process Engineering – a pects of your business? globally recognized German com- – Today the capacity of the pany, the leader in its industry. All brewery is 60,000 Gcal per year. equipment was assembled accu- During the last stage of imple- rately and adjusted by German mentation, we are planning to specialists. Some unique solu- reach 150,000 Gcal and to tions have also been implement- achieve a planned capaci- ed – for example, a Swiss filter for ty of 240,000 Gcal per year. The Kamchatka Peninsula is a region of unique na- handcrafted beer. It is safe to say These figures seem to be tre- that our brewery is built at a state- mendous, but in fact, the current – Currently there are two: ture and the Eastern outpost of Russia. Many tour- of-the-art brewing level, the facto- capacity of 60,000 Gcal is sufficient Avachinskoye Light and Avachin- ists come here to take a look at volcanoes and hot ry is of the latest model and auto- to cover a 25 % niche in the brewery skoye Amber, and we are planning springs, to taste the seafood and have a rest away mated, having no analogues in products market in Kamchatka. And to expand our product line in the our country. as you can understand, is not too future. The basis of both brands from noisy megacities. The obligatory touristic pro- – Implementation of such a much. Our initial goal is to show our is the purest water of Kamchatka, gram will soon be supplemented with beer tasting – large-scale project is associated product to the people, and we count high-quality malt and a little bit of local masters will brew it from the pure waters of Ka- with high costs. Where did you get strongly on receiving feedback from hops! For reference: high-quality the financing? buyers. Actually, the timing of the beer has a transparent intense color mchatka, with love and expertise. – The state helped us signifi- implementation of the second stage and the foam in the glass of such a Eduard Sokolov, General Director of Kamchatsky cantly. The Ministry for Develop- depends on it. We should also note beer remains for at least 5 minutes, Pivovarenny Zavod LLC (Kamchatka Brewery LLC), ment of Russian Far East provided that our brewery will be producing with a height of at least 5 cm. a subsidy for infrastructure devel- non-alcoholic beverages, including Our brands meet all these provides more details. opment, we also were supported mineral water. For us, quantity is no requirements. And, what is rather by the authorities of the Krai and less important than quality. important, the prices of our beer the municipal government. Huge – What brands of beer do you are quite affordable. In short, try it, TEXT▶ Anastasiya PLATONOVA – How did the idea of estab- that the water in Kamchatka is assistance was provided by the offer? and you’ll not be disappointed! lishing a new brewery in Kam- the purest in all of Russia, and we Asia-Pacific Bank, we were grant- chatka appear? It is hard to say still can drink it from the tap. And ed a letter of credit for equipment that there is deficit of such prod- when it comes to the malt, our worth EUR 5,355,000 at a minimal ucts in our stores, rather to the main partner, Baltiyskaya Solo- interest rate. contrary... dovennaya Kompaniya (Baltic It is important to understand – Unfortunately, almost all Malting Company), is one of the that state support was provided beer sold here is imported. To best raw materials suppliers in for a reason: first we receive it, and be precise, the share of import- country. Just try our beer and you then we give it back. Once we are Не рыбой единой: В Петропавловск-Камчат- ed beer in Kamchatka Peninsu- will be surprised! in full operation, the Krai and fed- ский за вкуснейшим пивом la is almost 70 %, and of course, – The brewery was commis- eral state budgets will receive tax- Интервью с Эдуар- these are products with long shelf sioned after a long construction es in the amount of nearly 1.5 bil- дом Соколовым, lives and contain preservation lion rubles for ten years. Moreover, генеральным stage. Did something significant директором ООО agents. Our brewery brews beer occur during this period? thanks to our brewery, more than «Камчатский пивова- using local water and Russian – As you know, the Kamchat- 50 new jobs will be created in pro- ренный завод» malt, which gives it quite a differ- ka Krai is an earthquake-prone duction plant, in which the youth ent taste and quality. It is known region. It was important to devel- of Kamchatka are working now,

120 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 121 Инвестиционный проект:

Группа Компаний «Агротек» Развитие свиноводства успешная, динамично развивающаяся компания по производству мясо- колбасной продукции. в Камчатском крае «Агротек» начал свою историю в 1995 году с небольшого цеха по производству колбасных изделий, (ТОР Михайловский п Черниговка) и сегодня же он является лидером осуществлять экспорт зерна и сои предприятий пищевой отрасли Кам- за пределы ДВ региона в страны чатского края и Дальнего Востока. юговосточной Азии. В 2012 году «Агротек» запустил работу свинокомплекса «Экофер- The company invites field-oriented ма Сокоч» и отныне обеспечи- investment funds and banks to participate вает жителей Камчатского края in the project in the Primorye region. Local более, чем 1500 тоннами свежего site of the project offers the opportunity мяса свинины в год. И уже сейчас to develop 12,000 hectares of cultivated «Агротек» частично обеспечивает areas, build an elevator (in advanced Экоферму кормами собственно- special economic zones Mikhailovsky and го производства, выращенных на Chernigovka) and export grains and soy to своих землях в Приморье. southeastern Asia.

Компания приглашает профильные Владимир Ильич Рубахин инвестиционные фонды и банки к Vladimir Rubakhin участию в проекте в рамках При- Председатель Совета Директоров морской площадки, где имеется ЗАО «Агротек Холдинг» возможность расширения посевных Board chairman of Agrotek Holding площадей до 12000 Га, реализовать тел.: +7 (909) 838 11 10 проект по строительству элеватора e-mail: [email protected]

Общая стоимость инвестиций – Увеличение объемов производства Экологический свинины в Камчатском крае. паспорт техноло- гии производства При успешной реализации про- 1 млрд 800 млн рублей охлажденного екта нового свинокомплекса в мяса свинины ООО Приоритетный проект по реализации Камчатском крае, планируемый «Агротек» нескольких производственных задач на раз- прирост объема производимо- личных региональных площадках Дальнего го свежего мяса в Камчатском Востока, получивший поддержку правитель- крае увеличится втрое и соста- Создание собственной Международный конкурс IFFA Международный конкурс IFFA – ства РФ. Цель проекта – создание вертикаль- вит 3’400 тонн в год. В планах кормовой базы. – 2016г., ЗАО «Агротек Хол- 2016г., ЗАО «Агротек Холдинг», динг», колбаса сырокопченая колбаса сырокопченая «Камчат- но-интегрированного агропромышленного проекта – полностью заместить Уже сейчас в рамках проекта «Пармская» – золото. ская Охотничья» – бронза. холдинга. привозную импортную свинину «Черниговский агрохолдинг» в местным экологически чистым Приморье предприятие осваи- INVESTMENT PROJECT: DEVELOPMENT мясом. вает более 3 000 Га земель. Уве- OF PIG BREEDIND IN KAMCHATKA KRAI личив размер земель и постро- Overall amount of investments – Создание цеха первичной обработки ив элеватор в рамках инвестици- скота в Камчатском крае. онного проектьа, предприятие Осуществив модернизацию цеха сможет обеспечить своевремен- $ 27,7 mln первичной переработки скота, ное хранение более 20 000 тонн Russian government has supported the project. производство сможет обрабаты- сырья, а также осуществлять экс- ХVII Российская Агропромышлен- ХVII Российская Агропромышлен- Всероссийская марка (III тыся- ная выставка «Золотая осень», ЗАО ная выставка «Золотая осень» , ЗАО чилетие). Знак качества ХI века – It will be implemented in several Far Eastern вать 20 голов скота в час и обе- порт зерна и сои за пределы ДВ «Мясокомбинат Елизовский», кол- «Мясокомбинат Елизовский», кол- 2016г., ЗАО «Мясокомбинат Ели- regions. Its goal is to create a vertically-integrated спечить современный уровень региона в страны юговосточной баса варено-копченая «Салями баса сырокопченая «Камчатская зовский», колбаса сырокопченая agroindustrial complex. качества убоя. Азии. Северная»– серебро. Охотничья» – золото. «Романовская» – золото. ▶ ???? RULE NO. 2: DON’T LOSE YOUR HEART Cheer up even when you are one on one with the elements or force 2 majeure. Take it easy and cheer up, even if your ship breaks down, and the next one arrives in three days, go fishing or conquer one of the many mountain peaks. Look around, you’ll never find more optimistic people than those living in Sakhalin.

The Kuril Islands: 5 tips for a visitor

A trip from Moscow to Sakhalin, which once took Курильские острова: months, can now take a little more than eight 5 советов путешественнику hours, six of which you spend enjoying your sleep. Чего ждать путеше- Coming off the plane, people from the world of ственнику от этого offices and information technologies would think удаленного края? 3 that we finally learned how to resist the nature, but the stronger the confidence, the more disillusioned RULE NO. 3: the guests will be. Often, getting to the Kuril Islands ACT PROMPTLY Reference When you are is quite a challenge. If you’re eager to get to this away from civili- ‘sacred land’ you must follow some rules. Tourist zation, you have to be on the alert Information all the time. Be RULE NO. 1: PLAN AHEAD o travel to the Kuril Islands, careful, you may To get to the Kuril Archipelago, you’ll Tcitizens of the Russian encounter a snake have to overcome numerous difficul- Federation and foreign tourists or even a bear. But 1 ties. One of them is the unpredictable will need to apply to the Federal don’t be silly, and weather — fog, typhoons, and storms; Security Service (FSB) for a pass to everything will go another one is worn-out equipment, enter the near-border zone. It takes off all right. And which breaks down when it is needed one to four days, but the document never forget Rule most of all, and, of course, the notori- may be obtained beforehand. No. 2! ous Russian reality. Most of your plans Please mind that the pass is only won’t come true, but you must be valid for the islands specified in it. ready for anything.

124 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 125 ▶ photo-report

RULE NO. 4: ENJOY YOUR MEALS Once you have reached your destination, don’t deny yourself 4 anything. Try all kinds of seafood: caviar, shrimp, crabs, sea urchins, scallops, and sea cucumber... Remember: Nutritional wisdom is the best way to good mood!

RULE NO. 5: COME BACK AGAIN Once you’ve visited the Kuril Islands, you will want 5 to get back. Virgin nature, a feeling of harmony and a warm welcome will not leave anyone unmoved. Your impressions from the trip will remain in your heart forever, in your dreams; you’ll be wandering again and again through the thicket of Sasa Kurilen- sis amid Kuril fog.

126 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 127 ▶ guide A TRIP ACROSS VLADIVOSTOK

Прогулка по Владивостоку

Откройте для себя этот незабываемый город вместе с гидом East Russia.

ear the Korabelnaya in 2003 based on photos. Then-fu- Turning from the Korabelnaya It is better to start exploring Vladivostok from the historical part of the city, the Embankment, on Petra ture and the last Emperor of Rus- Embankment to the main and the Korabelnaya Embankment, which stretches from the dock, established by the NVelikogo (Peter the Great) sia Nicholas Alexandrovich visited oldest street of the city – Svet- then-future Emperor of Russia Nicholas II, along the picturesque Zolotoy Rog Street the Triumphal Arc is locat- Vladivostok in 1891 as part of his lanskaya, you can admire the ed, which is constructed in Rus- world tour. He arrived in the sea- facades of old buildings erected (Golden Horn) Bay. It is believed that it was here, on the shore of the Zolotoy sian-Byzantine style. The Trium- side city, a new naval and mer- at the end of the 19th – the begin- Rog Bay, that the founders of Vladivostok, headed by a warrant officer Nikolai phal gates were constructed chant harbor of Russia on the ning of the 20th centuries. The Komarov, landed in 1860. In memory of this event, in 1985 a stele was erected especially for the visit of Tsesarev- Pacific Ocean, from Japan. street was initially called Amer- on the Korabelnaya Embankment, opposite to the headquarters of the Pacific ich Nicholay, and were designed Upstreet in the Teatralny Skver ican – in honor of «America» by military engineer Nikolai Konov- (Theatrical Square) the Vladimir steamboat-corvette, on which Fleet, which was devoted to the pioneer constructors of the city. A little bit alov, notably, both at the expense Vysotsky monument was opened Count Muravyov-Amursky chose further, the «Military Glory of the Pacific Feet» memorial complex is located, of state funds and private dona- in 2013. A poet, singer and artist the place for starting Vladivostok which includes the Eternal Flame, a sculptural composition, a motor gunboat tions. The arch was a quadripartite visited Vladivostok in 1971. He is in 1859. In 1873 it was renamed structure, decorated with a vari- still remembered and loved here. as Svetlanskaya after the «Svet- turret, a naval gun, and the S-56 submarine, which was awarded a guard title ety of ornamental and symbolic The poet is depicted sitting with a lana» frigate, on which the Grand during the Second World War, and Krasniy Vympel (Red Pennant) – the first elements. The original arc (it was guitar. There is an inscription on Duke Aleksei Alexandrovich visit- ship of the Pacific Fleet, which used to hold a Soviet flag. Upstreet the «Military called Nicholaevskiy or Triumphal the granite quoting a line from the ed Vladivostok. Gates) was destroyed in the 30s «Moscow-» song: «The Svetlanskaya Street cross- Glory of the Pacific Feet» memorial is the Admiral Square. of the past century, and restored closed Vladivostok port is open». es the city from the West to the

128 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 129 ▶ guide What else is there to see? East in parallel to the Northern coast of the Zolotoy Rog Bay Aquarium and has almost the same func- rimorsky Aquarium, one of the biggest in the tion as Nevsky Prospekt in Saint Pworld, is located in the north-east part of the Petersburg. Many famous build- Russky Island. The exposition hall, stylized as a ings of Vladivostok are locat- shell, is a work of art in architecture and design. ed here, including the Versailles The complex of aquariums of different sizes allows Hotel, Museum, Primor- the visitors to get acquainted with the life of the sky Krai Administration, Zelyonye creatures, inhabiting the Russian waters (the Sea Kirpichiki Trade Center, Ussuri of Japan, the Sea of Okhotsk, the Bering Sea, Lake Cinema, GUM (department store) Baikal, the Amur River and Lake Khanka), cold polar of Vladivostok, Headquarters seas, warm tropical rivers and seas, as well as with of Siberian Flotilla (later – Terri- the dwellers of the open ocean. tory Committee of the CPSU), Gorky Theater, Presidium of the Far-Eastern Department of the Gambling Zone RAS, Circus of Vladivostok. Nev- he only gambling zone elsky monuments, monuments to Tin the Far East is located merchant seamen, various muse- in Muravinaya Harbor, ums, multiple restaurants and a 40-minute drive from cafes are also located here. ic style, unusual for this latitude. view of a temple in the style of Vladivostok. Casino Tigre de If you take right from Svetlan- Founded by immigrants, Vladiv- the late Gothic architecture of the Cristal and a five-star hotel are skaya Street or Muravyov-Amur- ostok has served as a place of Northern Europe in the St. Paul already open for the visitors sky Square, you will reach Push- interaction for representatives of Church. The building is construct- from all over the world. In the kinskaya Street. Here is St. Paul various faiths since the first dec- ed of German bricks imported nearest future some more Lutheran Kirche, the oldest sur- ades of its existence. Famous by the sea; even today on some casinos, hotels, restaurants viving construction in the city, Vladivostok architect Georg Jun- of them it is possible to read the and shopping malls will be which is also designed in Goth- ghandel embodied a classical inscription: “Ziegelwerk Hans built. This large-scale project is Mueller Saargemuend” (Hans under way. Mueller Brick Factory Sarregue- mines). If you move right from the Kirche in the direction from the center, you can reach Volodar- skogo Street, where a Roman Catholic church is located. Fur- ther, on Makhalina Street, build- ing 30, the Saint Nicolas Cathe- dral – the oldest surviving ortho- dox temple in Vladivostok is locat- ed. The temple was founded in 1907 and was hallowed already at the end of the same year. After observing this part of the city, take the funicular (its lowest station is located right here, the uppermost one – on Sukhanova The Far East Stage of Mariinsky Theater Street). The funicular appeared in he theater building was constructed in 2013, on The Grand Hall is executed in a form of a horse-shoe, Vladivostok in 1962 as a distant Tthe basis of a detailed acoustic project and cutting and has a capacity of 1580 places. Each spectator chair «relative» of the famous Ameri- edge technologies. The theater is unique in its technical is equipped with an individual air-conditioning system. can cable cars – the trolley-cars equipment: there are three underground and seven Chamber music concerts and short ballet performances moving up the steep slopes of overground floors, fourteen elevators, including two are staged in the Small Hall, the maximum capacity of San Francisco, driven by cables freight ones. which is 312 places. under the pavement.

130 Eastern Economic Forum Special Edition EastRussia Magazine • September 2016 • eastrussia.ru 131 ▶ guide

Where to grab a bite? phorus Bay, separating Russ- ky Island from the mainland, are Zuma observed perfectly. To the left he cuisine of Zuma restaurant is a there is a panorama of the city, Tmix of culinary traditions of Thailand, belting the bay around which it Laos, Vietnam, Korea, Malaysia, Japan, was erected, docks and work- Singapore, and Indochina. Here you can shops of ship repair facilities, try all kinds of seafood dishes: sushi, small cars hurrying along the rolls, dumplings, Japanese noodles with branchy streets. Straight ahead crab, etc. Zuma is famous for its open we see one of the best perspec- kitchen, which transform into a cozy bar tives of the bridge through he in the evening. Address: 2 Fontannaya St. Bay of Zolotoy Rog. A bit to the right, the warships of the Pacific Fleet are anchored at the docks. Michelle Further to the right you can see he guests of the panoramic restaurant the panorama of the historical TMichelle will be delighted by its center, seaport and railway sta- exquisite cuisine and the unique view of tion curving along with the coast- Zolotoy Rog Bay. The menu features the line berths of the trade port. best dishes of the European and Russian From the window, there is ed the city’s main observation Finally, at the far right, cuisine. Here you can taste such delicious a beautiful view of the bridge deck, which has long become can be seen with knolls on its dishes as a calf’s liver, fried tiger prawns through the Zolotoy Rog Bay. one of the sightseeing places of western shore, and somewhere with Sicilian garnish, salad with smoked This bridge is one of the five Vladivostok. The opening breath- far, but clearly visible, is China, duck breast, fillet of gray Mediterranean biggest cable bridges in the taking panorama makes it clear where the sunset sun falls. Even gilt-head bream and much more. Address: world. Its length is 2.1 km, and that Vladivostok, which carpets experienced photographers and 5a Uborevicha St., 8th floor transport capacity is 6 lanes of the Southern ends of the Mura- cameramen get dazzled by the traffic. The construction was initi- vyov-Amursky Peninsula, is sur- abundance of the astonishing Breathtaking panorama makes ated in June 2008 and completed rounded by the sea from three views and shooting angles. Novik Country Club in 2012. sides – except for internal city If you prefer to go back to it clear that city is surrounded he restaurant is located on the A little higher above the Zolotoy Rog Bay laying far down Svetlanskaya Street, then you Tshore of Novik Bay on the Russky upper station of the funicular, on underfoot, and Amur can easily get to the Central Island. The visitors are offered dishes Orlinoye Gnezdo slope is locat- Bay, as well as Eastern Bos- Square of the city from there. The by the sea from three sides of European and Russian cuisine, in particular, seafood delicacies. Not only can you try the seafood state-of- Central Square is the real ‘solar From the Central Square go to art dishes, but also buy fresh caviar, plexus’ of Vladivostok. At this Admiral Fokin Street, also known scallops, whelks, sea cucumbers, and point Svetlanskaya Street and as the Arbat. It is relatively short oysters. An open veranda is available in Okeansky Prospekt intersect, and (less than a kilometer), but one of summer, where you can admire the sea the sea, the ships of the Pacific the oldest streets in Vladivostok, view. Address: Russky Island, village of Fleet, the railway station and the its main embellishment being, of Melkovodniy seaport are seen from here. The course, the sea. Square is named after the Fight- Walking along the cafes and ers for Revolution. An impres- shops, admiring the fountains, Mummiy Troll Bar sive monument to the Fighters sitting on the benches, a pedes- he project was inspired by the for the Soviet Regime in the Far trian will never lose sight of it. At Tfamous Russian rock band Mummiy East was erected in the middle of the last intersection (with Pogran- Troll, which started its creative career the Square in 1961, which then ichnaya Street), Admiral Fokin path in Vladivistok. Mummiy Troll Music became a symbol of Vladivostok. Street joins with Sportivnaya Bar has the spirit of a classic music The bronze figures on the granite Gavan` (Sport Harbor), anoth- pub. The most famous bands of the city base remind of the events of the er favorite place of rest for city and the country perform on its stage revolutionary year of 1917 and dwellers. There are many restau- every day, and a new musical group of the fight against the interven- rants and cafes, from where the debuts in the club every week. Address: tionists and White Guardists from most marvelous sunsets can be 6 Pogranichnaya St. 1918–1922. observed.

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