Opening Remarks at a Meeting on the Kamchatka Region’s Social and Economic Development 2007-09-05 14:24:47 Vilyuchinsk President Vladimir Putin: Good afternoon, colleagues. First, I would like to say a couple of words about our venue today, about Vilyuchinsk and the submarine base. I have seen how the instructions I set out in 2004 are being implemented. At that time the base was in a difficult situation, to put it mildly. Much has been accomplished over these last three years. This concerns the docks, the headquarters, the seamen’s club, the officers’ club where we are now, the sports and recreation centre and several residential buildings that have all been renovated. I hope that work on the hospital and the medical centre will also be finished soon. The medical centre will be one of the most modern in the Far East and will have all the very latest equipment. But there is still a lot more work to be done. 1,800 officers are living in unsatisfactory conditions. Russian officers should have decent living conditions. Several buildings built in the 1960s, I think, have been reconstructed. People are happy with this, of course, because previously they had no housing at all. The buildings are clean and light and everything is not bad, but this is absolutely not enough today. I draw the Government and the Defence Ministry’s attention to the fact that, based on what I have seen, for the main part what needs to be done is to demolish the old buildings and build modern new housing. Vladimir Anatolyevich [addressing Regional Development Minister Vladimir Yakovlev], help the Defence Ministry and draw up new projects. There is no need for anything exceptional; what is needed are modern apartments, modern housing. Some buildings can be reconstructed, of course, but for the most part these old buildings need to be demolished and we need to build modern, comfortable and fine new housing worthy of Russia’s officers. I also ask the minister to draft a programme, a programme for the whole Far East region too. Sergei Borisovich [First Deputy Prime Minister Ivanov] and I discussed this matter. We will return to Moscow and I ask you to come back to this issue so that the Government can take the relevant decisions regarding housing construction for servicemen, not just seamen but all servicemen in general in the Far East. Turning now to the subject of today’s meeting I want to say that we have looked at the issue of strengthening the newly formed Kamchatka Region’s economy and social sector on a number of occasions in the past. The situation in this region has been examined at meetings on the Far East in general. We have discussed the situation in specific districts and some work has already been accomplished. The federal targeted programme, An Energy-efficient Economy, has made it possible to change the electricity supply structure and draw on local sources to bring new production capacity on line. Industrial development of new deposits has begun and this made it possible to increase mineral production by a third last year, including coal production. Progress has been made in education and healthcare. The national projects have helped to bolster material resources for schools and medical centres, especially primary healthcare facilities. Facilities in the region now have modern computer and medical equipment. But there are still a lot of problems to address. Subsidies from the federal budget account for more than half of the region’s overall budget revenue. The unemployment level has come down but is still almost a third higher than the national average. Business and investment activity in the region are hampered by underdeveloped transport and communications networks. The mineral wealth and recreation potential that constitute the region’s competitive advantages are not being effectively used because of the lack of necessary infrastructure. All of this means that economic problems are directly affecting people’s lives and are the main reason for the continuing outflow of people and ongoing decline in the region’s population. Kamchatka has one of the highest rates of population decline in the country, twice that of the Far East and the Far East Federal District and 7.5 times higher than the national average. In order to get the region on to a sustainable growth track today we need to take a new and systemic approach to the region’s management and to the programmes for its development. The merger of the Kamchatka Region and the Koryak Autonomous District gave the region a new status as of July 1, and the aim of this merger was precisely to improve the quality of the region’s management and give a boost to its economic development. The Government is currently examining a draft resolution on comprehensive long-term regional development. I think that the principles and approaches it sets out will enable us to tackle more effectively the social and economic issues facing the Kamchatka Region. The primary issue is that of radically increasing the region’s own energy potential. We know that two thirds of the region’s energy supplies come from outside and that energy costs are on average triple the national average. At the same time, more than 90 percent of energy consumers in the region are households and public sector organisations. This makes it essential to ensure stable and affordable energy supplies in the region and to achieve this, the region needs to develop production of its own energy resources and make greater use of non-traditional renewable energy sources. Experts estimate that known gas reserves are sufficient to cover the heating needs of Petropavlovsk and the Yelizosky District for 25 years and even up to 50 years. A mainline gas pipeline from the Sobolevsky District to Petropavlovsk will optimise the regional energy network’s structure. This pipeline’s construction should ease the energy problem. But we talked about this issue three years ago and the pipeline has still not been built. This pipeline is federal property. Everyone is busy nodding in each other’s direction. The Government cannot or is unable to set development priorities for the country’s regions, in particular for such vital regions as the Far East and Kamchatka. And nothing has been done about building the gas pipeline! If Gazprom had control then it would probably already be built. They are only picking their nose over there, but it is hard to know what they are actually picking out. I apologise for my rudeness, but the number of years that have gone by is simply offensive. Also on the agenda is the construction of a mini thermal heating plants, the development of a central heat supply system and the introduction of advanced geothermal energy technology. This will all make it possible to replace energy supplies from outside with local energy sources, which will bring down electricity and heating costs for consumers. I would also like to mention another important issue related to use of the region’s natural resources: making the fisheries sector more effective. The fisheries sector plays a predominant part in Kamchatka’s economy and accounts for almost 20 percent of the region’s gross regional product. It is also the primary basis of the region’s export potential. We just recently discussed the fishing industry’s development at the State Council Presidium meeting in Astrakhan. The key conditions for the sector’s development were defined as effective state supervision and management, increased powers for the regional authorities, incentives for investment, and the introduction of modern fish and seafood processing technology, technology that would enable us to sell not the raw materials but high value-added processed products. I think that Kamchatka has all the conditions for expanding development in this area. It is particularly important for the region to develop a modern transport network, which would help make the active population more mobile and would also help to open up tourism routes and inject new life overall into this extensive region’s economy. A convenient transport infrastructure is also extremely important in order to boost the region’s cooperation with other countries, and not just its closest neighbours in the fast-growing Asia-Pacific region. Kamchatka’s geographical location makes it possible to service marine and air transit routes. The Transport Ministry and the relevant regional bodies need to study in detail the economic and technical conditions for transport projects. This work has strategic importance because without it the region’s economy will not be able to make full use of its natural advantages and will end up being less competitive than its neighbours. Igor Yevgenyevich [addressing Transport Minister Igor Levitin], I ask you to draw up a relevant programme as part of the plans currently being drafted for the Far East. Work needs to begin now on rebuilding the airport and sea port in Petropavlovsk and also the airports in a number of regional centres. A number of federal targeted programmes allocate considerable funds for these purposes. These are just the main issues I propose we discuss in detail together today. Of course, we will also examine other important matters such as housing construction, the situation in the housing and utilities sector and the outlook for agriculture development, and I hope that practical measures in all of these areas will be proposed today. I repeat that our main task is to open up the region’s immense potential on the basis of systemic decisions appropriate to the current situation and help the region move towards long-term strategic development that will ensure new sources of revenue and growing prosperity for the region’s people. I conclude with this and propose that we begin our work.