President of Russia Dmitry Medvedev: Good afternoon dear colleagues. Today in this district-wide meeting in the Far East we will discuss two important and of course interrelated subjects: the general development of Russia's eastern regions and the prospects for cross-border cooperation with our closest neighbours, the People's Republic of China and Mongolia.
First a few words on the overall development of our eastern regions. Of course we consider the development of our country's eastern regions as one of our most important priorities. I was just chatting with some students and we talked about precisely this subject. Interest in such development should manifest itself in many different ways, not only in the form of visits by heads of state to the Far East, to Eastern Siberia (although such visits do need to be carried out on a regular basis), but also by visits of government ministers and heads of major companies. This will enable them to make decisions on various issues on the basis of real-life situations, as opposed to Moscow's ideas about how life should be set up in the Far East and Eastern Siberia. We have to keep our finger on the pulse of the regions at all times.
In recent years we have tried to develop a variety of investment programmes. We have worked on social programmes, and here I have in mind education, medical care and acceptable housing. And I believe that we have had good results in this regard. You yourselves know what has been done.
As part of the visit to the Khabarovsk Territory, I saw the Cardiovascular Surgery Centre that is being built and Pacific National University. These are the programmes that we must work on in the future. But of course we understand that the success of the development of the Far East depends on the development of transport and energy infrastructure. This infrastructure development will create new jobs.
The Government Cabinet is currently finalising a Strategy for the Development of the Far East and Siberian Regions. Projects are being carried out under the relevant federal target programmes and a number of operational decisions have already been made. Some of these decisions will have a major impact. I am referring to the idea of reducing the cost of flights between the cities of the Far East and central Russia. This programme is already up and running but it must be extended.
Of course because of its natural resources and the advantages of geographic proximity to the Asia-Pacific region the Far East has huge potential. Obviously we have to change our priorities, get beyond the primitive stage of being an exporter of raw materials for processing, and create modern processing facilities that will enable us to make the most of our cooperation with other states. Of course here I am talking about a wide range of products that we produce here. I mean our oil and gas, timber resources and metals – all the riches of our land.
Now we're in the midst of a difficult situation, a crisis, but we must not abandon these projects on which we have worked so hard and so long. We must not stop work, even if some of these projects are not yet fully functional. This is that much more important since in 2007 and 2008 there were so many positive signs. Large-scale projects in the Far East and Siberia, major projects such as Sakhalin-2, the East Siberia-Pacific Ocean oil pipeline and others were responsible for so much economic growth. We know that there are other major projects, promising projects such as the construction of the Eastern Oil Refinery – one of the largest in the world – gas processing plant and fertilizer production facilities. We will be working on other projects in this area. In any case, this is perhaps the most important and most significant part of our concerted efforts here today.
Now a few words about cross-border cooperation with China and Mongolia. Already the countries with which we share a border provide a large part of our foreign trade. Unfortunately this year the volume of trade has begun to decline. During this recent period trade with almost every state, all our trading partners, has declined – sometimes by a third, sometimes a bit less, sometimes a bit more. We are not happy with these statistics. In some places I think we can win back some ground on specific products, in others we probably will not be able to. But in any case we need to try to reach those targets that we set for ourselves, including the amount of foreign trade. And, of course, for us it is crucial to create an investment environment for mutually beneficial projects, not only in the primary sector but also in high technology.
We need to change other things as well. On the one hand, it is very important to maintain a respectful attitude towards those coming from abroad to work here. Without this we cannot do business. Without this foreign workers and investors will not respect our laws and our culture.
Now concerning the specific priorities of cooperation. One of our most important and economically promising partners is of course China. Trade with China not only has far-reaching implications for our industry but China also has significant financial resources that can be invested in our economy. We need to identify priorities for cooperation with the Chinese and think about how to structure our financial relationship in the current circumstances. By the way, I believe that it is a good idea to learn from China's experience in trading in national currencies. We have explored this issue and discussed it with China's leadership, and we must follow their lead in this regard.
In addition, our plan is to create jobs by developing the Far East and the Trans-Baikal in coordination with development programmes in the North-East of the People's Republic of China. As you know, our Chinese partners have responded positively to this proposal. I have personally discussed this issue with Chinese President Hu Jintao. A special draft of a cooperation programme has been prepared, and we have also made specific counter-proposals, on which the various experts are now working. This work must be continued.
We have seen good results from a number of regional and integrated programmes. In April this year in Beijing we signed an intergovernmental Agreement on Cooperation in the Oil Sector which created the conditions for construction of a pipeline branch to China as part of the East Siberia-Pacific Ocean Pipeline, and also enabled us to work out a very large loan agreement amounting to 25 billion dollars that was concluded between Rosneft, Transneft, and the China Development Bank. These are very big, very important projects.
We have a great many other agreements in the energy sector. We need to encourage Chinese investment in oil refining, petrochemicals, coal mining, cargo transfer ports in the Far East and the creation of generating capacity in the Trans-Baikal Territory and the Far East. We have a fairly wide range of possibilities regarding combined heat and power plants in Nakhodka, Vladivostok, Ussuriysk and a number of other places.
Significant opportunities are also opening up with our long-standing partner and ally Mongolia. We have a lot of experience in working on major Russian-Mongolian (formerly Soviet-Mongolian) joint ventures such as Erdenet [an ore mining and processing company], Mongolrostsvetmet [a fluorspar and gold mining company] and the Ulan Bator Railway. These are major projects and companies. They represent a crucial component of Mongolia's annual budget. And we must develop new forms of cooperation along these lines.
Our Mongolian partners have approached us with their own initiatives. One of them in particular is a project called Altai Development. Its aim is to stimulate cooperation between Mongolia, Russia, Kazakhstan and China in developing mineral resources, and improving transport and energy infrastructure, developing tourism and protecting the environment. Our respective experts must continue to study this idea and come up with specific programmes.
The exploitation of natural resources also presents important challenges. The agenda includes several projects, in particular the activities of the companies Renova and Basic Element in the development of Mongolian coal. I hope that this will create more work for some of our enterprises and open up new prospects for cooperation.
Another area in which we are making concerted efforts is transport. For the effective development of these regions we need full-fledged transport corridors for the transit of Chinese goods through the ports of the Far East and on the Trans-Siberian Railway, and we must improve the Mongolian rail network and help optimise routes and traffic flow in transportation of minerals. We must deal with the supply of equipment and rolling stock, its eventual repair and the provision of spare parts. All this is part of our sphere of interests, and it is in such areas that I think we should be working at building relationships with our partners.
At the conclusion of these opening remarks I would like to note one thing. Of course in some areas Russia is the direct competitor of China, Mongolia, and other nations in the Asia-Pacific region. But this is normal in a market economy and should not be thought of as surprising in any way. The main point is that despite being competitors in various areas, we remain close and – as we've come to say – strategic partners. This is the reason that our cooperation and the mutually-beneficial development of our relations must lead to stronger partnerships in every area. I think that these are the issues that we will be taking up today.