First of all I would
like to thank you for meeting and I would like to
speak about work of new krai administration. Old
krai administration was concentrated on internal
problems. And as far as we understand new administration
does its best to go out to the new level, to open
Primorsky krai. You welcome investors, APEC has
just been held - some kind of new milestone, what
are your further actions?
Thank you very much for your question. It is very
deep, but I'd like to dwell on the latest results.
I will start with investment forum APEC, which was
held in September 2002 in city Vladivostok. During
the preparation of the forum the examination and
evaluation of Primorsky krai branches was conducted.
The key problem typical for most Primorsky krai
companies is low rate of profitability in comparison
with neighboring countries of Northern-Eastern Asia.
To raise effectiveness of national economy complex
four main directions of activity have been determined.
First, to ensure the stability and dynamic growth
of GNP in 2003 to 2005 at the level of 4.5 -5% and
7-8% in 2006-2010. First of all by means of external
demand expansion. We plan the share of regional
export to be 38- 40% by 2005, and by 2010 -50-52%.
Second, to change the industrial structure of the
Krai economy. It is necessary to decrease the share
of raw material products in GRP up to 25% by 2005,
and up to 18-20 % by 2010.To increase the share
of service sector up to 55% by 2005, and up to 68-70%
by 2010.
Third - to increase by 2005 the profitability of
regional production in raw material industries,
up to 12-15 %, in industry up to 16-18%, service
industry -22-25%.
Forth- to maintain the stability of consumer's demand.
By 2005 the share of salary in structure of GRP
must constitute 40-42 %, and by 2010 - 55-58%.
On what our plans are based. During 1990-es in spite
of the transfer to the market conditions of economy,
the industry structure of Primorsky region economy
has not been changed. It was loaded with enterprises
of armaments industrial complex, the share of which
in regional output constitutes more than 50%. Today
the potential of these enterprises is used only
for 20-22%. The fishing industry is going through
serious crisis. In Soviet times the structure of
capital goods of Far Eastern enterprises of fishing
complex was formed without taking into account market
factors. The transfer to the system of paid resources
led to the situation of enterprises non-profitability.
Volume of the production was reduced even more than
twofold.
The real steps of structural change of krai administration
practically started only in 2001. The beginning
always has the negative impact on the economy. At
the present time there are changes of management
system in majority of companies - new managers are
at the head of companies. At this transferring period
the volume of raw material industries was reduced
by 20%. But in service industries it increased by
15-18%.
In 2002 the share of international transport sector
in GRP reached 25%. Dynamics of transport and communication
sector constitutes 25-28%. Unfortunately this growth
has not compensated the total decrease of industrial
production.
For compensation of fishing companies losses caused
by reduction of quotas for fishing in the open ocean,
the infrastructure of coastline fishing and deep
sea fishing production is being developed very fast.
The level of deep sea fishing profitability is 2.5
or 3 times more than ocean fishing.
Our approaches to the priorities changing of industrial
structure development of Primorsky economy have
been exhibited at the investment forum APEC. More
than half of investment plans presented by Primorsky
region enterprises are innovation projects in the
field of bio-technologies, new materials, transport
and communication, deep refinery of raw materials.
All projects are ready for introducing. This fact
was marked by the participants of forum as very
vital condition for growth investment attractiveness
of the region. Specially I want to single out projects
in the sphere of tourist business.
Some of them are attributed to the world values.
These are unique ecological routs round the national
parks of Far Eastern taiga. This is Vladivostok
fort -the monument of Russian military fort art
of the end 19 X1X.
The important thing is to attract investments
into the region, but to be honest it still has this
negative image from the past of difficult criminal
situation and also the situation where some of the
joint-ventures have failed. What are you doing to
change the image of Primorsky krai?
The investment image is first of all defined by
the confidence of the investors in the fact that
their capital will be maintained, second that the
political and economic conditions will let capital
grow, third -that the territory has the advantages
which promote the investment competitiveness growth.
But if speak briefly about each factor, it is necessary
to mention that we have very difficult inheritance.
In 2000 the international experts estimated our
system risks of Primorsky region economy as crucial.
There were objective and subjective reasons on the
basis of such evaluation. Today the risks of losses
because of political reason are almost zero. And
this is the achievement not only of krai government,
but also of the state on the whole. For the last
year and a half no one case of direct government
interfering into the economic dispute between the
Russian and foreign investors has been registered.
Some contradictions exist and they may take the
form of the conflict. Their base is in differences
of management systems, accounting, in the way of
solving the economic and labor disputes. But now
these disputes will be solved not in the offices
of officials but in the courts. In 2003 the arbitration
courts will come into action.
In krai for lowering the economic risks the system
has been developed. Within the framework of this
system the investment projects at the value more
than 1 million of dollars are supported by the krai
administration on the level of expert evaluation
of economic partners reliability, before the project
realization. Today we propose to the businessmen
our experts evaluation, our vision of future development,
in order businessman investing money is able to
choose his own correct strategy.
In krai for the lowering the risks of costs the
program of modernization the business infrastructure
has been developed. I would like to dwell only on
one branch of this work. This is tourism. The program
stipulates the increase of foreign tourist flow
by 2.5 or 3 times and by 2010 we will reach the
quantity of 1 million of tourists.
We believe that this program will be the serious
impulse for of improvement of all components of
market infrastructure- the developing of border
check points, hotels, transport, communication,
banks, insurance companies. At the present time
we are working at one of the complex programs of
developing check points and bordering territories,
that will give an opportunity to the business, tourists
improve mobility through lines of border, through
sea parts and land parts. These programs are developed
for the time of governor term and they will be realized.
But what is more important is that they are included
and synchronized with the programs of international
transport corridors development. |
Speaking about investment
attractiveness of Primorsky krai economy it is necessary
to emphasize the fact that attractiveness is determined
by the following factors- these are rare polymetall
ores, boron-containing raw materials, sea products,
transport complexes, employees. With the quantity
of 10 thousand specialists with higher and high
vocational education our krai has leading position
in Russia. The present educational system gives
an opportunity to prepare specialists almost in
any field, as well as on special programs.
What are some major projects you are working
on in order to give some strength to the words that
you are saying? One of them for example border complex
with China and Korea which was presented at the
APEC, another one is rail link with North Korea.
What are some major projects that you want to accomplish
in the next 3 years?
I would like to dwell on several projects and on
approaches of their development. There are eight
governors in our krai, each of them should control
three priority investment projects. All together
24 projects with the term realization of 4 years.
For such territory as Primorsky krai it is very
good. The value of each project is 10 million of
dollars.
I would like to dwell on transport investment projects,
as they are within my personal responsibility.
I want to mark that from 1930-es no one transport
project was financed in full measures. That is why
it is very important to find the balance of financial
resources opportunities, time parameter, and quality.
You have mentioned northern railway. So this project
of course is international and will be developed
on five-side level. And in this sense this project,
as was mentioned in the report of the governor at
APEC, is considered to be of priority importance.
There is some element of dispute between the transport
specialists how to coordinate the interest of sea
and railway transportation. The problem of cargo
base is also being intensively discussed, as we
have not enough cargo for providing stable development
of all types of transportation.
There are more than 27 million of 20-pound containers
in circulation in Asia Pacific region. About 100
thousand of containers go through transport net
of Prymorie. If we raise the volume of transportation
through railway till 400 thousands, it will not
make any harm to seaway. The carrying capacity of
Transsib is about 100 million tons of cargo. In
2003 we plan to implement new low platforms, that
will allow substantially reduce the transportation
costs.
The seaway advantages are determined by developed
net of port capacities, the carrying capacity of
which will constitute 1 million of containers by
2010. Port Vostochny is processing 15-16 tons of
different kind of cargo; it is planed to process
25 millions by 2010. Several investment projects
are being realized in port: the construction of
container terminals at the volume of 250 thousands
of containers, the construction of oil terminal
for refinery, the production of Siberia oil oriented
railway cars designed to carry liquid.
Sea transport is one of the most dynamically developed
branches. In 2002 the growth of increase is 25%.
Do you feel like this is crucial moment in the
history of Primorsky krai in odder to make sure
that the region takes its role in the Far East as
the leading region and that development does not
go South to China and North to Khabarovsk?
Of course there is some element of dispute about
Khabarovsky and Primorsky krai, and in this sense
everybody has right to claim for leadership. This
is good element for competition. But never the less
for the present day the volume of transferred cargo
in Primorsky region, if to speak about transport
components, is 56% from the Far Eastern region,
and 60% from all participants of external economic
activity. 30% of the density and 34% of Far Eastern
industry are in Primorsky krai. In this sense Primorsky
krai can be viewed as Eastern capital of Russia
and foundation of business activity of far Eastern
Region.
You are a successful business yourself in the
past - deputy director of some major trading companies,
head of the association of Siberians in the Far
East, and before the member of the board in "Vladkhleb",
you know how it works in business world here. What
would be your advice to potential business people,
the readers of our magazine who want to invest?
For acceleration of economic growth and maintaining
the stability in krai it is necessary with accelerated
temps to form small and medium business. We don't
have this streak of business. It is understandable
that it can be developed within those strategies,
which we have determined. The problems of small
business are understandable - this is low fixed
capital per worker and low density in the Far East
(7.2 million of people). We have expensive services
and low solvent demand.
But we are export-oriented with regard to other
territories. In this sense I consider project "Border
trade-economic complex" to be very promising.
The Russian side allocates 300 hectares of ground,
Chinese side-153 hectares. The construction will
be in three stages. For the first stage that will
take 2 years five star hotel for 1000 of rooms will
be build.
For the second stage is automobile and passengers
check points, campings, restaurants and sport complexes.
Costs for the realization of first and second stages
are 81million of dollars.
For the third stage - arrangement of production.
Construction of this BTEC will allow first of all
to increase the mobility of production factors,
and second the production of goods of high demand
both on Russian and Chinese boarder will be launched
inside this complex.
One of the most competitive directions of Primorsky
krai economy is food industry. Quick money circulation
is characteristic of this segment of market. It
has influence as on filling of the budget, so on
the dynamics of GDP. In the Far East we are the
leaders in food technologies. I think that we have
great perspectives here. We have also very huge
and promising starts in bio and food technologies
development in academy institutes FEMRI, universities.
Great perspectives are connected with development
of pharmacology. We have unique taiga wild growing
plants and sea products. Technologies of their processing
- are one of the main resources of our krai development.
As an example of success interaction of business
and science can be the example of mister Ghandi,
who is occupied with diamond polishing on the territory
of Russia. With his own strategy and understanding
how to lead business he actively attracts Primorsky
science. He is planning to conduct exploring work
of the valued stones.
The krai administration does its best to create
the best conditions in odder businessman feels comfortable,
in odder we could speak with each other freely as
in case of mister Ghandi. From the first moment
before the functioning of production he got everything
what he had wanted to get. In this case we are talking
about consulting support, open budget territories-
we have 38 territories, about the center of strategic
developments, the law support of foreign investments.
You have many challenges in the future.
In odder to have future the present must exist.
There is no manager without challenges - he loves
challenges.
We are also on the way of introducing software technologies
that will give to us more precise information. The
task is to be open and transparent. You and we know
that it is one of the keys of successful investment
activity. |
