YURI TRUTNEV AND ALEXANDER GALUSHKA HOLD THE FINAL PANEL MEETING OF THE MINISTRY FOR THE DEVELOPMENT OF RUSSIAN FAR EAST

3 June 2016

YURI TRUTNEV AND ALEXANDER GALUSHKA HOLD THE FINAL PANEL MEETING OF THE MINISTRY FOR THE DEVELOPMENT OF RUSSIAN FAR EAST

Deputy Prime Minister and Presidential Envoy to the Far East Federal District Yuri Trutnev, and Head of the Ministry for the Development of Russian Far East (MDFE) Alexander Galushka have reviewed the results of the department’s work and designated the main priorities for further efforts. This information may be found on the site of the MDFE.

The panel meeting of the Ministry for the Development of Russian Far East began with an introductory address by Yuri Trutnev, who pointed out that, in 2015 and in the first quarter of 2016, the Region had made a significant leap forward in its development. “The terms coined in the course of our joint efforts and perceived as exotic phrases a short time ago are now real activities targeting development of Russian Far East. Advanced Special Economic Zones and investment projects, Free Port Vladivostok, the mechanism of regional investment programmes have become real instruments boosting development of Russian Far East”, he stated.

“Use of all available development mechanisms and instruments, such as the Far East Development Foundation, the “Far East Hectare”, Eastern Economic Forum and others, have had tangible results corroborated by statistics. The manufacturing industry grew by 4.5% in the Far East during the first four months of this year. The outflow of local residents has almost come to a halt. Construction of 200 new plants is soon to be launched. The problems that had accrued over many years are now being addressed. Yet a lot remains to be done for the instruments used to work seamlessly and for the process of Far East development to become irreversible”, Trutnev stated.

Minister for the Development of Russian Far East Alexander Galushka also sounded positive when estimating the results of his department’s efforts: “The tasks we set a year ago have been fulfilled. When words are backed up by action, this is the best evidence that, in our work, we endeavour to observe such principles as honesty, professionalism and service quality. We seek maximum effectiveness in implementing the momentous and responsible project: development of the Far East.”

In the Minister’s opinion, the key factor influencing development of the Region is the integrated approach: “It is important to stimulate the economy and improve the investment environment, creating favourable conditions for doing business. For this to happen, an integrated approach is needed to development of the Far East, as well as state funds invested in the macro region.” The socioeconomic dimension therefore deserves special attention. Agriculture is seeing an upturn and the growth of manufacturing output in the Far East during the first 4 months of this year reached 4.5%. Furthermore, we’ve successfully implemented a number of instruments for developing the Far East and created 12 special economic zones. The infrastructural support for investment projects got under way and the Far East Development Fund has started operating. On 1 October 2016, all instruments specified in the law “On Free Port Vladivostok” will switch into full gear.

Mr. Galushka specifically mentioned the balance of public and private investments in the Region. “RUB 1 trn 46 bn have already been invested in the Far East, including RUB 966 bn of private investments and RUB 80 bn from the federal and regional budgets, as well as investments from the Far East Development Fund. It is apparent that government injections are highly effective, since RUB 12 in private investments are attracted per RUB 1 of budgetary funds”, he noted. In the Minister’s words, by the end of 2016, the volume of private investments must exceed RUB 2 trn.

As regards the advantages of the Far East for investors, the head of the Ministry for the Development of Russian Far East reminded that “on 1 June, the law on tax breaks for regional investment projects took effect. All investors implementing projects outside the Advanced Special Economic Zones and Free Port Vladivostok will also be eligible for preferential taxation.” Under the new law, an investor putting RUB 50 m during three years into a project in the Far East or RUB 500 m during five years will be entitled to property and mineral tax benefits. For more information about the tax breaks, see here.

In his speech, the Minister also dwelt on the issue of fishery development in the Region. According to Mr. Galushka, a new draft bill on fisheries may be debated in the State Duma during the spring session. As follows from the text of the document, “the matter concerns quotas with investment commitments. Along with fishing rights and quotas, the investor assumes the commitment either to buy Russian ships or create fish processing capacity. Tuning this mechanism constitutes a significant part of our joint work with the regions and other public authorities this year”, the head of the department clarified.

The Minister emphasised that, in planning Far East development, account must be taken of the specifics of different territories. Mr. Galushka gave the example of implementing the plan for long-term integrated socioeconomic development of Komsomolsk-on-Amur. “This important and innovative document has been readied and approved”, he said.

Let us recall: the integrated plan includes 60 events, including implementation of 33 organisational ones and the creation of 27 infrastructural facilities. The total level of investments stands at RUB 62.9 bn.

YURI TRUTNEV AND ALEXANDER GALUSHKA HOLD THE FINAL PANEL MEETING OF THE MINISTRY FOR THE DEVELOPMENT OF RUSSIAN FAR EAST

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