MIL OSI Translation. Region: Russian Federation –
The Far Eastern hectare program will be expanded, fishermen will be allocated places for amateur fishing, and the residents of the North Caucasus will be given plots for construction in a single architectural style. Deputy Prime Minister – Plenipotentiary of the President in the Far Eastern Federal District Yuri Trutnev spoke about this at the “Business Breakfast” in “RG”.
Question: The Far East has been provided with unprecedented measures to support the economy and population, and infrastructure is being built. But people keep leaving. Apparently this is not enough?
Yury Trutnev: There is an outflow of residents from the Far East, but it is decreasing. In 2013, the outflow was 45 thousand people, in 2018 – already slightly more than 30 thousand, in 2019 – 10.5 thousand. In 2020, due to the pandemic, among other things, the outflow will be even smaller. We can already see this in the statistics of half a year. Of course, it’s bad that people keep leaving, but I don’t think the problem can be quickly resolved. It’s not a question of agitation. A person chooses a place to live and create a family based on where his children will study, who he will work for, what kind of medical assistance he will receive, and which roads he will travel on. Today, most of these indicators, especially those related to schools, hospitals, kindergartens, roads, in the Far East are significantly worse than in the central regions. It is, of course, impossible to reverse this situation instantly. In fact, we need to rebuild the entire Far East.
Let’s be honest, in order to spend money – and all social items are expendable – you must first learn how to earn it. In this respect, we have come a good way, because the system of support for investment projects that is currently operating in the Far East is unique. It is definitely the best in Russia, it is competitive in relation to preferential regimes in other countries. During this time, we began the implementation of more than 2,600 investment projects together with investors, and 1.3 trillion investments were made. Our actual multiplier today is 24.4 rubles of private investment for one budgetary ruble invested in infrastructure. This is a record figure.
I do not see an opportunity today to quickly stop the outflow of the population, but we are on this path. I am sure we will achieve that people in the Far East will live comfortably.
We need to work together
Question: The Far East is notable for its free-thinking. Here and there, people come out to rallies. Do they hear them in Moscow?
Yury Trutnev: We understand very well that we serve the population and are obliged to respond to the wishes of the people. As for the love of freedom and going out to the streets, I still believe that we are together responsible for the future of Russia. Each person creates his own destiny every day: going to work or sitting down on a student’s bench. We need to work together, consult, look for the best ways of development. Going out and waving posters is probably permissible when they don’t hear you and don’t communicate with you. But when there are no big problems with this, I do not fully understand it.
I communicated with people more than once or twice in such spontaneous manifestations of the free will, but only in the early 1990s. And the salary in the country was $ 30 per person per month – for those who received it. And I had to go to production teams where people did not receive wages for six months. It was tough and difficult there.
Question: You often note that the President’s instructions on the development of the Far East are not being fulfilled. For example, dams and bank protection structures in the Jewish Autonomous Region and Khabarovsk Territory have not yet been built. Maybe people don’t like it?
Yury Trutnev: Absolutely, there is every reason to be dissatisfied. The construction of dams in the Jewish Autonomous Region and the Khabarovsk Territory was the direct responsibility of the regions, since the Ministry of Natural Resources transfers money for the construction of protective structures to the constituent entities, and they already play tenders, hire a contractor, and control his work. I believe that in this case both were in the answer. Both the ministry and the governor. Governors have already changed there. The leadership of the ministry also.
Question: The Far Eastern Hectare program was created to get people to move to the Far East? After all, if so, then it probably did not work.
Yu. Trutnev: “Far Eastern hectare” was never conceived as a tool that would suddenly stop the outflow of the population. This is the degree of economic freedom. Whatever you want – to build a house, create an apiary or organize a business – it is impossible without land. Unfortunately, the average time for obtaining a land plot in Russia is calculated in years. Three or four years, people suffer in different ways. For me, it was fundamentally important to create a mechanism within which people can receive a plot in a matter of days. Today, this period ranges from 32 to 34 days. This is a very good result. This is a program for economically active people who are ready to work, take risks, build houses, start families. So that these people do not knock around a bunch of officials, do not collect papers, but simply press a button, form a plot, send an application and receive it first for rent and then for ownership.
I am critical of my work, but “Far Eastern Hectare” is what I am proud of. I think we did a very good job. More than 86.5 thousand people used the hectare. Is it a lot or a little? So many people wanted to take on additional hassle and risks.
Question: Are you planning to expand the program?
Yury Trutnev: Mikhail Mishustin gave such an order on a trip to the Far East. We are disciplined people, the documents have already been prepared. People who received one hectare, mastered it and need the next one to develop their project, will have this opportunity.
Question: For the Far East, the fishing industry is the main one, but at the same time there is little fish in the central part of the country. What needs to be done to change this?
Yury Trutnev: More than half of the Russian catch is caught in the Far East. At the same time, 60% of the fish caught by the Far East goes to the regions. Not such a small figure, but maybe more.
The Far East is separated from the central part of Russia, where the main demand is thousands of kilometers. And fish is a perishable commodity, the speed of delivery is of great importance. Now the business, together with Russian Railways, is creating a system for the delivery of fish from the Far East to the center of the country, which takes into account the train schedule and the type of wagons. We support this work, we hope that it will affect the amount of fresh and high-quality fish in the central regions.
Question: Maybe the Far Easterners should be allowed to fish as much as they want? The same crabs for yourself? Maybe you should give them economic freedom?
Yury Trutnev: I always like everything related to economic freedom. This is the correct thesis, when we do not take extra money from somewhere and enroll people, but give them the opportunity to earn themselves. Probably, it will not work as much as they want, because it is difficult to stop people on this path, and little will remain. But it seems to me that when large fishing companies entered the Far East market, we crossed the balance point. Because it turns out that a person lives in Kamchatka, where there are spawning rivers around, but where he can actually catch fish is already difficult to understand. People make their way to hard-to-reach places where no one will catch them, but this is not the right situation. We must once again think very seriously about coastal fishing. Still, from coastal fishing a lot went to the coast of the Far East.
Our large fishing companies will not become impoverished if we allocate some small part of their lands, assigned to them sections of rivers, for amateur fishing. Moreover, we will do this precisely near cities, with roads, so that people have the right to legally fish. Because it really does not climb into any gate when a person lives on the bank of a river, but cannot fish. Therefore, we will definitely take care of this, we will try to do it in a fairly short time. Companies rebel a little against these decisions, but I think we are still right.
There is nothing near
Question: How good is the Arctic for public investment? How risky can this investment be?
Yury Trutnev: We are not engaged in public investment, but in attracting private ones. State money is spent on infrastructure in accordance with the support system. In the Arctic, when a person builds a new enterprise, as a rule, there is nothing nearby – no roads, no power lines, no water supply. Sometimes the construction of port facilities is required. Based on a multiplier of no more than one budget ruble per ten rubles of private investment, we will provide this support. Less than half a year ago, a system of preferences was created, but we have already registered 165 projects for a total amount of more than 270 billion rubles. For the first step in a few months, it seems to me very good.
Question: Mainly oil and gas projects?
Yury Trutnev: Different. These are projects related to hydrocarbons, services, small and medium-sized businesses. Oil and gas 165 will not be typed in any way. A frequently asked question: why do you support projects in the field of mining, if we need to develop high technologies? A theoretically beautiful idea. There is only one problem: the business is so arranged that first of all it comes to the place where the money will return faster. And it’s okay that first we develop mineral deposits and build LNG plants. They create infrastructure and jobs. On the basis of this, other types of business will develop as a second layer. But developing a low-margin business without infrastructure will not work that way.
Question: You are actively promoting the idea of private investors’ access to the shelf. Are we sure that this task will be solved, because the working conditions on the shelf today are clearly less interesting than even 10 years ago?
Yury Trutnev: I hope that the law will be adopted. Of course, the demand for the shelf now and in the early 2000s is fundamentally different, but it is still important to create a legislative envelope. The conjuncture of world prices is changing, but if we do not create an opportunity for competition, for attracting money and technology to this sector, then we will always lag behind. Today we are already ten times behind the pace of Norwegian shelf development.
Now there are sanctions, and suddenly it turned out that we didn’t have any technologies. But projects on Sakhalin work because they are joint projects. And the more we involve investors from other countries in our economy, the stronger we will have an economic lobby that says: there is no need to quarrel with Russia.
Question: The Arctic region is perceived as a territory where it is difficult not only to do business, but also just to live. How about a system of preferences for people?
Yury Trutnev: It seems to me that preferences from the point of view of the work of people should create companies that need workers. The chain of consistency, in my understanding: we help companies create new projects, companies already, having made investments and understanding that there is nowhere to retreat, create conditions for people. This principle is already working. We help Rosneft build housing for Zvezda employees. We help to equip the city of Svobodny for workers of gas processing and gas chemical plants. There, company owners are already beginning to think about how to create normal living conditions and a social environment for people. Somehow it will not work in another way – for example, to establish additional payments, as it was in the Soviet Union.
At the same time, we are not doing enough about hiring. It is necessary to create preferences in relation to local residents, otherwise the rotational process continues with us. In any case, at large construction sites in the Far East there are now a lot of residents of neighboring countries, including the former republics of the Soviet Union. There is nothing wrong with that, but we will try to ensure that residents of the Far East and the Arctic work there to a greater extent.
Question: The climate is changing, this year the Laptev Sea is not frozen. Before that, industrial fishing was opened in the Kara Sea, because there was no ice. Against this background, is it not dangerous to invest in the construction of an icebreaker fleet?
Yury Trutnev: If there is an apocalyptic scenario, few people will be interested in the risk of investing funds. But we still live today and cannot sit, wait for the warming and do nothing. The Arctic is a strategic territory for Russia. It gives us a whole host of new possibilities. After all, this is our outer border. We must master it, develop technologies. The fact that we are building powerful modern icebreakers, the fact that we are the leading power in the world here is great. It is sad when we are not able to build a drilling platform. We will build icebreakers, and if it gets warmer, the accumulated competencies will be useful for building non-ice class ships.
Question: The package from the Far East, Arctic and North Caucasus seems huge. How to deal with such different regions?
Yury Trutnev: It is extremely difficult to manage economic processes by parts. And if you create a system, then it starts to pay off. Not instantly, but it leads to continuous improvement. After a period of time, this becomes obvious. The Far East is full of problems, but the system for attracting investments is working, the region already accounts for 30% of foreign investments. In the Arctic, we are at the launch point. The legislative system has been created, the laws have been signed, you just need to establish this process.
In the North Caucasus, this is not yet closely observed. All this has to be created there – I don’t want to offend any of my predecessors – almost from scratch. The investment support system in the form in which it exists there today is opaque and ineffective. This is a serious challenge for me. Moreover, the path there will not be easy, but I will do my best to achieve a result.
Question: The problem there is completely different. The Arctic and the Far East are deserted, small regions, the North Caucasus is surplus labor resources, unemployment. Will the methods be different?
Yury Trutnev: The tracing paper will not work, there is no doubt about that. But the principles of attracting investments are the same everywhere – this is a reduction in all types of investor costs – both material and bureaucratic. Of course, the specifics are fundamentally different. If in the Far East and in the Arctic we are trying to implement large projects, sometimes even megaprojects, in the North Caucasus so far there are no such projects. There are several points where you can think about it. But in general, due to large projects, we are unlikely to be able to raise the North Caucasus.
And of course, it is necessary to somehow create conditions for people to get out of the shadows. Because it is quite obvious that statistical data on people’s living standards and the real living standards differ significantly.
Question: In the Caucasus, almost all regions have come forward with the intention to develop tourism clusters. Which of the planned resorts could really shoot?
Yury Trutnev: More than 16 billion rubles have already been invested in Arkhyz. The resort can develop further. It already has normal potential for use, for riding. Everything was done according to the mind. The slopes are not very long and high, but everything that has been built, in terms of infrastructure, is not bad.
In the North Caucasus, there are simply unique places that can claim to be the leaders not only in Russia. Dombay, Elbrus, Mamison – there you can build world recreation centers for winter sports.
Mamison has great potential. There is no need to cut anything, the slopes are smooth, with good height and excellent length. The tracks can be as wide as possible. Below is a monument of historical heritage, which can give a certain charm to the resort, there are mineral water springs. It can all be packaged together into a very beautiful story. But there is zero, nobody did anything. Now he instructed the Ministry of Economic Development and Trade to work out a plan for the implementation of this project. We will watch, try to speed it up.
Dombay and Elbrus are a separate story. Where the lower villages of the resort should have been, such a conglomeration of buildings – without permits, without projects, some along, some across, some obliquely. But coming there with a bulldozer is a bad story. Local residents earn a pretty penny on this. I asked the Ministry of Economic Development and Trade to start this work as well, to make an inventory, to talk to literally every owner of this squatter, and find an acceptable solution.
In the end, a separate decision can be made. For example, provide them with a land plot for free and provide them with preferential financing, so that they understand that they can be built, that this will be their legal land. To create conditions for them to build, not to lose their business, but to build in the same architectural style. If we don’t, no systemic investor will go there. And if you build everything with public investment, nothing good will come of it.
Question: You recently visited Derbent, where you highly appreciated the work of the city administration. What did they do?
Yury Trutnev: I really want us all to think about the future. When we live in the present day, we do not see the further path, we do not set goals for ourselves, we have nothing to strive for, and there can be no success. In Derbent, I was pleasantly surprised by exactly what people think about the future. Despite the fact that it is an ancient city with a rich history, they think about how it will look in decades. They create living conditions for people, pedestrian streets, think about how to fit new ensembles into the historical heritage that already exists. I try to achieve this in almost all territories where I meet with the leadership. For example, I believe that Sakhalin has a unique opportunity to build a new Yuzhno-Sakhalinsk. There is money, but he is still in a state that is very far from comfortable.
Question: What multiplier should projects in the North Caucasus have?
Y. Trutnev: I don’t like the figure less than one to ten. If we can reach one in ten in the ice of the Arctic, then why should it be lower in the North Caucasus? But all my colleagues who work with me in this area say: if we manage to achieve one in five, then it’s already good! I do not know yet the answer to this question. We will think, consult, try.
Question: How can you attract foreign investment to the North Caucasus?
Yury Trutnev: When I went there, they took me to an apple orchard. I ask: what is your profitability? They say 40%. In another garden, where I asked the same question, 60%. Our oil industry has not been working with such indicators for a long time. If they have a real profitability of 60%, you have to drop everything and go to the North Caucasus to grow apples. There are natural benefits there. Everything is growing there, the climate is wonderful.
When we talk about the same ski resorts, I am absolutely sure that no private owner will solve the problems of unauthorized construction in the lower villages. It’s impossible. Because the respected owners of the squadron will set such conditions for him that he will cry and leave immediately. But if we can sort this out and create conditions for further development, maybe we will also invest in infrastructure – roads, power lines, then attracting private investors to the Caucasus is a real story.
Question: What are your plans for the Caspian Sea?
Yury Trutnev: We need to reconstruct the port in Makhachkala – I have given a corresponding order – because the port may have a completely different meaning than it has today. It doesn’t matter if it is a cargo or a tourist. The task of civil servants is to create conditions for the development of the economy. If we start deciding for investors what to carry, cargo or passengers, everything will break down. Everyone should work within their competence. And here I am very supportive of private investment. After all, I started with them in my time. I just know how a person who has invested their money works. Day and night he thinks about the project to take place. Because he understands that if the project does not take place, then everything will collapse for him.
Interviewed by Elena Berezina.
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.