Experts: EEF in Vladivostok to attract more foreign investment
31 August 2019. PenzaNews. More than 70 business events will be held as part of the 5th Eastern Economic Forum (EEF), which will traditionally be held in the capital of Primorye, Vladivostok, on September 4–6.
According to the organizers, the EEF program will include four main thematic pillars: ‘New Solutions for Accelerating Economic Growth,’ ‘Improving the Business Environment,’ ‘The Far East and Asia Pacific: Fostering Collaboration,’ and ‘New Solutions for Improving Quality of Life.’
“The Eastern Economic Forum is a respected discussion platform that brings together heads of state, leading Russian and foreign entrepreneurs, and experts. At the anniversary of the Forum, participants will discuss important issues that aim to expand international cooperation in the Asia-Pacific region and develop the economy of the Russian Far East. The EEF 2019 business programme features a variety of formats that help to ensure that discussions are held at the highest level and that the Forum is productive”, Adviser to the Russian President and Executive Secretary of the EEF Organizing Committee Anton Kobyakov said.
The ‘New Solutions for Accelerating Economic Growth’ pillar will consist of sessions on new tools for economic growth of the Far East, measures to provide financial and non-financial support to investors, and prospects for the development of key industries in the region.
The ‘Improving the Business Environment’ theme will be devoted to national jurisdiction improvement and protection of investors’ rights, transformation of the public administration system within the context of digitalization and development of small and medium-sized businesses.
The participants of ‘The Far East and Asia Pacific: Fostering Collaboration’ sessions will discuss international scientific and technical cooperation and trade, the future of the Russian Arctic, and new transport corridors.
The main topics of the ‘New Solutions for Improving Quality of Life’ pillar involve issues of the Russian Far East social development, including attraction of private investment, development of a modern urban environment and cities of the future.
The central event of the EEF will be a plenary session attended by Russian President Vladimir Putin, Japanese Prime Minister Shinzo Abe, Indian Prime Minister Narendra Modi, Malaysian Prime Minister Mahathir Mohamad, and Mongolian President Khaltmaagiin Battulga.
Moreover, the EEF will include panel sessions, discussions, business breakfasts and roundtables with entrepreneurs from India, China, Japan, South Korea, ASEAN and Europe.
In his greetings to the participants, organizers and guests of the 5th Eastern Economic Forum, Vladimir Putin stressed that Russia as a key player in Eurasia is very supportive of a dynamic development of the Asia-Pacific Region and welcomes equitable dialogue, both on a bilateral and multilateral level within the EAEU, the SCO, and APEC.
“I am confident that discussions of the upcoming Forum will be highly productive and will lead to new projects contributing to the expansion of mutually advantageous cooperation. I believe that the unique platform of, the Forum will provide federal and municipal government officials, as well as members of the business and expert communities an opportunity to deliberate and agree roadmap for the implementation of the National Far East Development Program to the benefit of the Far East residents and the entire country. I wish you successful work and all the best,” said Russian leader in the message published by the Kremlin press service on August 21.
Commenting on the upcoming major event in Vladivostok, Lak Chansok, Researcher at Cambodia Maritime Silk Road Research Center (CMSRRC), the Royal University of Phnom Penh in Cambodia and at Democracy Promotion Center, Research Center for Asia Pacific Studies (RCAPS), Ritsumeikan Asia Pacific University in Japan, said that the EEF has been one of key international economic forums since 2015.
“This forum serves as a main platform to discuss a wide range of pressing economic issues ranging from socio-economic development to technological innovation in this fourth industrial revolution. It also helps promote regional economic cooperation and integration. On the top of that, the EEF is not merely limited to economic realm but has far reaching political effects. The forum has indeed contributed to restoring political and strategic confidence among participating states, enhancing security against common threats, and addressing other non-traditional security issues,” the expert told PenzaNews.
He also pointed to the improvement of a number of economic indicators over the five years of the existence of this international platform.
“Last year, it was witnessed that the regional industrial outputs increased by almost 22% and its economy accounted for over 25% of FDIs in Russia. This economic growth is estimated to be positive through establishing more companies, creating more local jobs, advancing local special economic zones, expanding physical infrastructure, and signifying the trade port,” the analyst explained.
In his opinion, the EEF is very important instrument to strengthen not only socio-economic but also political relations between Russia and other countries in the Asia Pacific region.
“This forum will grow more significant, amidst the growing US-China trade tension and US nationalistic economic policy, to push for more trade cooperation and liberalization in the region. Therefore, aside from geopolitical rivalry, it is very important for Russia to make the forum more open and inclusive for all countries across the globe for achieving mutual economic benefits,” Lak Chansok stressed.
In turn, Pasquale Terracciano, Italian Ambassador to Russia, noted that Italy will for the first time participate in the Eastern Economic Forum in Vladivostok with a delegation this year.
“This proves that Italian institutions and businessmen have started attaching concrete importance to the Russian Far East, an area where important opportunities are opening up. Italian companies are not afraid to undertake a long journey to bring their know-how and technology to this area, in order to contribute to its long-term industrial development,” the diplomat said.
“The Italian business delegation that I will lead includes the Italian-Russian Chamber of Commerce, a solid and energetic institution which has recently celebrated its 55th anniversary, Enel – the main Italian investor in the Federation – and Maire Tecnimont, which two years ago was awarded the largest ever contract in the gas treatment sector in the Far East of Russia,” Pasquale Terracciano added.
According to him, the EEF meets the political and economic policies implemented by the Russian authorities.
“The Russian government is carrying out an ambitious economic modernization program and implementing an ‘import substitution’ policy. In this framework, investing and localizing in the Russian Regions are essential keywords for any foreign company approaching the Russian market today. The Russian authorities are encouraging this approach through economic incentives and bureaucratic facilitations. As far as Italian companies are concerned, I can say that their Russian counterparts greatly appreciate the Italian know-how and we have several ‘Made with Italy’ success stories,” Italian Ambassador to Russia said.
“The Russian Far East is a land of new opportunities. I believe that nowadays the European businessmen willing to succeed in the Russian market cannot limit the geographic boundaries of their action to traditional Regions and Cities like Moscow and Saint Petersburg. But in order to attract European companies to geographically remote areas, we need to make them aware of the potential for development and the important incentives made available by the local administrations. The Italian delegation has high expectations on the EEF and I am confident that the outcome of the Forum in terms of new partnerships will be very satisfying,” Pasquale Terracciano added.
Meanwhile, Hironori Fushita, Research Fellow at Japan Institute of International Affairs, called the EEF a unique platform in the Asia-Pacific region, which allows the business elite and political leaders from different countries to demonstrate their experience and discuss the possibilities for further cooperation.
“The Japanese delegation participating in the event will be led by Prime Minister Shinzo Abe. It will include a variety of government and business representatives, some of them will speak at special sessions. I expect active discussions between leading experts from Russia and other countries,” the analyst said.
From his point of view, economic cooperation between Russia and the Asia-Pacific countries is gradually expanding.
“According to the data on the number of PDA and the free port residents, as well as on the volume of investments, the Far East is getting closer to foreign investors. At the same time, it should be noted that from a psychological point of view Western sanctions against Russia and, in particular, the unstable exchange rate negatively affect investors who are willing to deepen ties. In their view, full cooperation with Russia carries some political risks and has barriers. So, I believe that Japan’s recent decision to participate in the Arctic LNG-2 project will be an impetus and a turning point in cooperation between our countries,” Hironori Fushita said.
He also emphasized the importance of such events as the EEF that can provide relevant information on the business conditions in Russia.
“Japanese businessmen often speak about the difficulties connected with obtaining information on rules like the PDA and on potential partners. Participating in such events, investors can directly familiarize themselves with these rules and share their feedback with the EEF participants from Russia, including representatives of the government,” the analyst explained.
In addition, in his opinion, economic cooperation can favorably affect political relations of Japan with neighboring states, including South Korea.
“Unfortunately, today Japan has not very good relations with its neighbors, in particular with Korea. However, economic ties and cooperation can mitigate political confrontation. Russia is in a unique position and can create a joint project for the development of the Far East and the Arctic, which would involve Japan, Korea, and China. Such a project will unite the countries of this region. Using the EEF platform, Russia will be able to strengthen its influence in the Asia-Pacific region. This is consistent with the external strategy and interests of the country,” Hironori Fushita said.
Meanwhile, Professor Nobuhide Hatasa, Faculty of Economics, Nagoya University of Economics, share the opinion that the EEF has three important objectives in terms of both economic and geopolitical strategies in the Kremlin.
“The first and the most straightforward target is the development of the far eastern region of Russia. Compared with the western area around the capital, economic prosperity of Russian Far East had tended to be passed over for a long time by the past political leaders but this time Moscow finally decided to tackle on it as one of eye-catching economic policies of the Putin administration,” the expert said.
“The second purpose, which is more or less political reason, is to establish closer ties with Asian nations after economic sanctions were imposed against Russia over Ukraine issues in 2014 by Western countries. In particular, China and some of ASEAN members, who insist on the principle of non-intervention in internal affairs without taking care of Western norms and values, are precious friends for Russia to maintain an intimate and deep relationship,” Nobuhide Hatasa added.
At the same time, the most significant EEF goal is to “connect Russian economy with growing Asia.”
“Russian economy is not at all robust on the whole not just only because of economic sanctions by the US and EU but also structural and strategic problems. Currently Asia is the most rapidly developing region in the global economy and has infinite economic potentials and innumerable business opportunities with abundant resources including capital, labor, technology, and know-how,” the analyst said.
“The EEF is a timely and effective platform for the national economy of Russia to enlarge trades with Asian countries and attract more investments from them. If Russia can effectively access and utilize the impetus of growth in Asia and functionally accommodate the process and fruit of Asian economic development, that will definitely benefit its whole economy and give positive impacts on the current government,” Nobuhide Hatasa concluded.