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Second Eastern Economic Forum results meet all expectations of guests and organizers

23:45 | 08.09.2016 | Analytic

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8 September 2016. PenzaNews. Investors and businessmen, politicians and experts, journalists and commentators continue to discuss the results of the second Eastern Economic Forum (EEF) in Vladivostok, which was attended by 3,500 people from 56 countries.

Second Eastern Economic Forum results meet all expectations of guests and organizers

Photo: Michael Metcel, TASS

A total of 201 agreements valued at more than 1.63 trillion rubles were signed at the Forum, which is significantly more than last year.

“The second Eastern Economic Forum showed that it was much-in-demand. We see that business has a desire to come here and this livens up the business environment. So the forum is being held in the right place at the right time. As a result, new projects and enterprises will emerge in the Far East,” said Yury Trutnev, Deputy Prime Minister of the Russian Federation, Presidential Plenipotentiary Envoy to the Far Eastern Federal District, and Chairman of the Eastern Economic Forum Organizing Committee.

According to him, the Forum indicated that the new development mechanisms for the Far East are effective.

“We definitely won’t stop with the package of proposals and laws for the Far East that were presented at the forum. There is an understanding that the third Eastern Economic Forum should be different, so new development mechanisms will certainly appear next year”, Yury Trutnev stated.

“The Eastern Economic Forum is being held in order for the Far East to develop more rapidly. If you look at the growth rates, the number of new investment projects and the inflow of investment to the region, you could say that this process has begun. But there is an understanding that this is only the start of the journey. We hope that in two to three years the system will get going and became comprehensive and competitive. We understand that the region is above all being developed by people who are establishing new enterprises here. For them to keep doing this, they need to know that the Far East is developing and that it is truly better to work here,” he added.

Analyzing the main results of the event, Lak Chansok, Research Fellow at Cambodian Institute for Cooperation and Peace (CICP), Lecturer at Department of International Studies, Institute of Foreign Languages, Royal University of Phnom Penh (RUPP), said that the Forum resulted in several remarkable economic and political-strategic achievements.

“To expand its market in the Russian Far East, Russia has supported investors by providing subsidies for building and developing transport and hard infrastructure, promoting digital telecommunication technologies or e-commerce, and push for more free trade zones especially with South Korea. 34 investment projects totaling more than 23 billion dollars were achieved particularly in energy, high-tech industry, agriculture, transport and infrastructure development,” the expert told PenzaNews.

According to him, amidst the growing tensions Moscow’s role in the Asia-Pacific region has increased.

“Russia with its strategy towards the Asia Pacific region might be of significance to some major and middle power countries, particularly Japan and South Korea, as Russia would be able to persuade North Korea to return to negotiation table to resolve Korean Peninsula crisis, to resolve long-standing maritime territorial disputes, and to contain or balance against China’s growing military assertiveness in the region,” Lak Chansok explained.

From his point of view, Russia also remains crucial for China as a result of China’s deteriorating relationships with other major countries particularly in the contexts of Senkaku (Diaoyu) Island and South China Sea disputes.

“For Russia, this Forum signifies not merely Russia’s growing cooperation with regional powers including US age-old allies, but also its political-strategic engagement as to counter US growing presence in the region,” he said.

In turn, Nobuhide Hatasa, Associate Professor, Nagoya Keizai University, stressed that this year’s Forum has gained more attention than the previous one by being able to invite two top leaders of important neighboring economic partners in the region, Prime Minister of Japan Shinzo Abe and President of the Republic of Korea Park Geun-hye.

“In addition to the US and EU sanctions against Russia, recent price decline of resources and energy and China’s economic slowdown have been damaging Russian economy but those economic and investment agreements signed during the forum will at least positively contribute to future economic growth of Russia,” the analyst said.

According to him, Russian Far East is the most attractive resource wealthy area for Japan and Korea which are resource scare countries.

“They both also need Russian cooperation in addition to China with regards to the North Korean crises including missiles and nuclear development. In case of Japan, the northern territories issue is the most important political agenda in relation with Russia. Prime Minister Abe’s participation in the forum and his proposal of meeting with Putin once a year in Vladivostok articulated in Abe’s speech during the forum show a part of his strong determination that the territorial dispute between Japan and Russia must be resolved in near future,” Nobuhide Hatasa added.

In his opinion, one of spectacular features of this Forum is a number of economic events held during the EEF.

“These economic outcomes definitely benefit the Far Eastern region and develop economic relations of Russia with neighboring Asian countries including China, Japan, Korea, ASEAN, and India. These Asian nations will become much more important economic partners for Russia as more Eastern European countries are being incorporating into EU and its relationship with the West is becoming worse. In addition, these Asian countries of ASEAN and South Asia in particular are now the center of growth, playing a leading role of developing the world economy, while the economy of EU has been stagnant for a long period of time,” the expert explained.

Meanwhile, according to Valentin Timakov, Director General of Agency for the Development of Human Capital in the Far East, the Forum provided new opportunities not only to foreign partners, but also Russians.

“The EEF was effective for the Agency for the Development of Human Capital in the Far East. We held two key sessions with the participation of government officials, investors, experts and non-governmental organizations. One of them was devoted to staff attraction to new enterprises in the region, the other was about the Far East Hectare program. As a result of these activities we have signed resolutions containing a list of specific recommendations, the implementation of which will enhance the speed and efficiency of the Far East development. In particular, we decided to modify labor mobility program, develop special state support for the recipients of Far East Hectare, and synchronize these measures with the existing programs of social assistance to large families and those moving to the Far East. [...] In addition, we signed a number of agreements on cooperation in the field of attracting staff to the enterprises located in the areas of advanced development, as well as a trilateral agreement with RAO Energy Systems of the East, the Government of Khabarovsk Krai to attract highly qualified personnel through the construction of affordable housing for power engineering specialists in the Far East,” Director General of the agency said.

He also stressed that there is a list of government support measures for the Far East residents and citizens who wish to move to the region.

“Basically, this is social support, relocation assistance, and providing employment, including in the form of self-employment and small business development. In particular, these measures involve preferential and special loans, property support, payments to the unemployed during the registration of the legal entity, etc. One of the key support measures is the possibility of every Russian citizen to get the Far East Hectares for free — more than 370 applications for hectares have been filed to date, 130 land plots have been transferred to citizens for free use,” Valentin Timakov said.

Moreover, he praised the prospects of further region development.

“According to our estimates made on the basis of 500 investment projects analysis, by 2021 there will be created 80,000 new jobs. Enterprises that are built here are the best and even unique in technology used in the production. Innovation will inevitably lead to the change in the quality of life and ways of doing business,” the head of the agency said.

In turn, Liew Chin Tong, member of the Malaysian Federal Parliament for Kluang, member of Democratic Action Party Central Executive Committee, called the EEF an important effort to explore business opportunities in Russia’s Far East.

“It should continue and expand the scope of discussions to initiate a dialogue between Eurasian Economic Community and ASEAN, energy and technology cooperation between Russia and ASEAN and etc. The setup of advanced special economic zones and the free port of Vladivostok serve as catalyst to the development of Russia’s Far East and give more access to energy rich areas. For the time being, the EEF and Russia’s Far East is still new to Southeast Asian countries, more introductory programs and dialogues are needed,” the politician said.

He reminded that the Forum was held under two strategic situations, namely the western economic sanctions against Russia and the rise of China economic power as well as increasing demand on fossil energy of East Asia.

“This Forum was meant to break the western economic sanctions on the Russia's western front by developing its Far Eastern front. Through inviting East Asian investment, Russia hopes to earn more foreign hard currency and develops its vast and idle land resources. The underdeveloped Russia’s Far East which is incompatible to the rapid rise of China and Korea economic power needs to be changed,” Liew Chin Tong said.

“In terms of regional strategic outlook, Russia who is one of the victors of Second World War and security balancer in East Asia has its own important role to play. The efforts to achieve nuclear free Korea peninsula and maintain the post war order of East Asia in peaceful situation depend very much on Russia’s commitment. Only a strong and developed Russia’s Far East can provide power base for it to fulfill its commitments,” member of the Malaysian Parliament added.

According to Termsak Chalermpalanupap from the Institute of Southeast Asian Studies, Singapore, the significant outcome of the EEF was Russia’s proactive move to showcase the economic potential of the Far East as yet another alternative destination of foreign direct investment.

“The business conditions in Russia’s Far East can continue to improve when there are more contacts and exchange of visits with business people from East Asian countries, including those from the ASEAN region, such as Singapore, Malaysia, Thailand and Indonesia. […] I would wish to see Russia do more publicity of the Far East in the ASEAN region, and to see direct flights between Singapore and Vladivostok,” the expert said.

According to him, one of the most important results was positive response from Japan, particularly from Japanese Prime Minister Shinzo Abe in the huge economic potential of Russia’s Far East.

“The long-term political effect is a reaffirmation of Russia’s wish to promote equal security and shared prosperity in East Asia – which Russia’s Far East is and must be counted as an important part of,” Termsak Chalermpalanupap concluded.

The Eastern Economic Forum (EEF) was established by a Presidential Executive Order in 2015 to promote the accelerated economic development of the Russian Far East and the expansion of international cooperation in the Asia-Pacific region.

The EEF focuses on enhancing the investment appeal of the Russian Far East and offers broad opportunities for cooperation between Russian and foreign business partners.

The First Eastern Economic Forum was held in Vladivostok on 3–5 September 2015. It was attended by 1,800 visitors and 32 official foreign delegations; more than 80 large investment contracts worth more than 1.3 trillion rubles have been signed.

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