Putin pledges 'best conditions' for foreign and domestic investors in Russian Far East

Russian president Vladimir Putin promised the country's Far East is fully open for business and investment as he showcased ambitious plans for development in a vast region that until now failed to gain from its location close to the Asian economic powerhouse. 

'Our main priorities in the Far East are the expansion of economic freedom, providing better business conditions for domestic investors, so that there is an effective capital flow and the Russian Far East can compete successfully with leading [world] business centres,' he told the first Russian Eastern Economic Forum in Vladivostok on Friday. 

He announced that Russian oil giant Rosneft plans to invest 1.3 trillion roubles ($19 billion) in various projects in the region, creating 100,000 new jobs. 

The event is seen as a platform for dialogue between international investors, the Russian government and countries of the Asia-Pacific Region at a time when the government is seeking to pivot towards Asia to boost an economy hit by low oil prices and Western sanctions. The Kremlin leader made clear he sees the Asian-Pacific as 'a locomotive of the world economy'.

'Today we see the future of the Far East as one of the key centres of socio-economic development of the entire country, a centre that should be effectively integrated into the quickly developing Asia-Pacific region in general,' he said. In this context, Russia is committed to its foreign investors and is set on boosting the effectiveness and competitiveness of its business, he made clear. 

Putin vowed to provide competitive transport and energy costs for the Far East, issues which have been seen as a brake on development. 'It is necessary to prepare specific measures that would lead to the lowering of transport and energy costs of doing business in the Far East,' he told an international audience. Electricity tariffs must be 'attractive to consumers and investors,' he demanded. 

Putin confirmed plans to extend free port status from Vladivostok to other cities in the region. 'I think that we have succeeded in developing a successful and competitive free port formula, using both our own historical and foreign experience,' he said.

He confirmed a 500 billion rouble - $7.4 billion - upgrade to key rail arteries in Siberia, Trans-Siberian and Baikal-Amur Mainline (BAM). 'Before 2017 we plan to spend about 500 billion rubles on the modernisation and expansion of BAM and TSR,' he said. 

He urged foreign countries to establish major research bases in the Russian Far East - 'so-called megascience projects that will allow true scientific breakthroughs'.

The president called for his government's radical policy of giving free land in the Far East to Russian citizens to move and work in the region to go-ahead with a minimum or red tape. He called for 'the simplest procedure of land plots distribution'. 

The Russian Far East region, bordering on the Pacific Ocean, is a vast territory that covers almost 40 percent of the country. The region, apart from containing huge national reserves, borders on economically expanding countries, including Japan and China.

The forum has heard of plans from Rosatom for new nuclear plants in the Russian Far East, while hydropower giant RusHydro is working on extending exports from its Far Eastern facilities and plans to launch power stations with a combined capacity of 4,500 megawatts (MW) in the next four years.

The Japan Bank for International Cooperation (JBIC) announced it is ready to provide around $100 million for the development infrastructure for the new Vostochny cosmodrome in Amur region. 'This is almost a done deal. We're on the verge of providing funds,' said  JBIC Senior Managing Director, Tadashi Maeda.

South Korean company Joeun Mulsan Co. Ltd is planning to invest about $10-$50 million in a fish and seafood processing factory in Vladivostok, it was announced.

Singaporean companies should grab investment opportunities in Russia's Far East, said Raphael Chua, vice president of the Singapore-based Jurong Consultants Pte. Ltd. 'Of course, definitely, I would recommend [Singapore firms] investing [in the Russian Far East],' he said. 

China's Huaqing Housing Holding signed an outline agreement for the creation of an IT Park in the Republic of Sakha - also called Yakutia, the largest Siberian region. 'This agreement is very important for us, and the fact that it is signed at Easternn Economic Forum gives it even more importance,' said head of Huaqing Housing Holding Zhu Chunyu.

'We are now negotiating on cooperation on a number of projects in the republic, including the construction of the Aldansky oil refinery, a number of projects in oil industry, construction sector, a cooperation project with Almazergienbank and a number of other enterprises of Yakutia,' he said.