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Arctic: Back to “Normalcy”

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When a year draws to a close, tradition dictates that we take stock of the past 12 months and plan for the future. What developments has 2018 seen in the Arctic and, to paraphrase Pushkin, “what fate is our next year brewing”?

2018 did not bring with it any unexpected solutions or, conversely, any dramatic events prompting a sharp exacerbation in the region. For instance, the President of Finland’s “breakthrough idea” of an “Arctic summit” did not materialize. Finland will continue to chair the Arctic Council until the spring of 2019, and such a summit would sound a powerful chord at the end of the country’s northern “work.” However, Donald Trump’s sceptical attitude to such events, where he would be wary of attempts to talk him into going back to the 2015 Paris Agreement and convince him to conclude some new multilateral agreements on the Arctic, truly put the notion to bed.

On the other hand, the grim predictions of some Western analysts to the effect that the Ukrainian and Syrian crises would produce a negative effect on other regions, including the Arctic, where various powers would step up their struggle for control over natural resources, and that the military confrontation between NATO and Russia would expand, did not come true either. The forecasts of China’s expansion in the Arctic under the slogan of developing the “Polar Silk Road” initiative, part of the larger “One Belt One Road,” also came to naught. Beijing was quite constructive and demonstrated in every possible way its respect for the sovereignty of the Arctic nations.

As for Moscow, it continued the consistent implementation of its socioeconomic development of the Arctic Zone of the Russian Federation (AZRF) programme in 2018. The Yamal LNG plant reached its design capacity. Seven out of fifteen icebreaker-class LNG carriers capable of delivering freight to customers all year round already sail the Northern Sea Route (NSR), transporting gas from the Port of Sabetta. Novatek plans to build another LNG plant (Arctic LNG-3) at the Salmanovskoye (Utrenneye) oil and gas field in the north of the Gydan Peninsula. In summer 2018, Novatek discovered the large Severo-Obsk field in the Gulf of Ob that might require building a third LNG plant.

Russia’s bilateral relations with individual states involved in Arctic affairs developed in a satisfactory manner. Joint steps are being taken with Norway to protect the marine biological resources of the Barents Sea, prevent poaching and improve collaboration in search and rescue operations for persons suffering distress in the Barents Sea.

In 2018, Russia and the United States achieved an agreement on approving routes for vessels travelling through the Bering Strait and in the Bering Sea. Information on the agreement was submitted to the International Maritime Organization. The parties agreed to establish six bilateral lanes and six areas to be avoided for safe navigation in the Bering Sea and the strait between two oceans. The map of the lanes will allow countries to avoid the many shallows, reefs and islands beyond the lanes and reduce the risk of environmental disasters.

On the whole, the situation that has shaped up in the Arctic in 2018 can be generally described with the English saying “back to normalcy.”

When a year draws to a close, tradition dictates that we take stock of the past 12 months and plan for the future. What developments has 2018 seen in the Arctic and, to paraphrase Pushkin, “what fate is our next year brewing”?

2018 did not bring with it any unexpected solutions or, conversely, any dramatic events prompting a sharp exacerbation in the region. For instance, the President of Finland’s “breakthrough idea” of an “Arctic summit” did not materialize. Finland will continue to chair the Arctic Council until the spring of 2019, and such a summit would sound a powerful chord at the end of the country’s northern “work.” However, Donald Trump’s sceptical attitude to such events, where he would be wary of attempts to talk him into going back to the 2015 Paris Agreement and convince him to conclude some new multilateral agreements on the Arctic, truly put the notion to bed.

On the other hand, the grim predictions of some Western analysts to the effect that the Ukrainian and Syrian crises would produce a negative effect on other regions, including the Arctic, where various powers would step up their struggle for control over natural resources, and that the military confrontation between NATO and Russia would expand, did not come true either. The forecasts of China’s expansion in the Arctic under the slogan of developing the “Polar Silk Road” initiative, part of the larger “One Belt One Road,” also came to naught. Beijing was quite constructive and demonstrated in every possible way its respect for the sovereignty of the Arctic nations.

On the whole, the situation that has shaped up in the Arctic in 2018 can be generally described with the English saying “back to normalcy.”

As for Moscow, it continued the consistent implementation of its socioeconomic development of the Arctic Zone of the Russian Federation (AZRF) programme in 2018. The Yamal LNG plant reached its design capacity. Seven out of fifteen icebreaker-class LNG carriers capable of delivering freight to customers all year round already sail the Northern Sea Route (NSR), transporting gas from the Port of Sabetta. Novatek plans to build another LNG plant (Arctic LNG-3) at the Salmanovskoye (Utrenneye) oil and gas field in the north of the Gydan Peninsula. In summer 2018, Novatek discovered the large Severo-Obsk field in the Gulf of Ob that might require building a third LNG plant.

LNG is mostly shipped to countries in East and Southeast Asia, but some LNG shipments go to European customers, which prompted a sharp reaction from the United States, which intends to sell its own LNG to Europe; thus far, however, the United States is behind Russia in shipment volumes and cannot compete with Russia pricewise. In November 2018, the U.S. Department of State expressed concern over Europe purchasing Russia’s LNG, believing that it increases Europe’s dependence on Russia and in the final analysis allegedly undercuts Europe’s energy security.

Solving its own energy problems in the remote regions of the AZRF, Russia intends to site a floating nuclear power plant (FNPP) in Pevek (Chukotka). Currently, nuclear fuel is being loaded on the FNPP in Murmansk, and in 2019, it will be transported to Pevek. The FNPP is intended to replace the Bilibino Nuclear Power Plant and the Chaunskaya Thermal Power Plant in Pevek, which have nearly exhausted their lifespan.

Moscow continues its course to actively develop the Northern Sea Route as both a national maritime route and an international transportation route. There has been a significant increase in the activity of ports connected with energy commodities supplies: Sabetta (Novatek), Novy Port (Gazpromneft) and Varandei (LUKOIL). Compared to 2017, the volume of freight carried over the Northern Sea Route has grown by 80 per cent. The Northern Sea Route infrastructure is gradually being upgraded. This includes ports and infrastructure needed for search and rescue, navigation, meteorology, etc. Novatek has decided on a site for an LNG transhipment terminal in Kamchatka. The terminal will be built in the Bechevinskaya Bay, where Arctic LNG will be transhipped to customers’ vessels and subsequently delivered to East and Southeast Asia. This is profitable for both the company, whose ice class LNG carriers will not have to sail warm seas, and for Asia Pacific customers, who will be able to use ships without ice strengthening.

Of course, international transit shipments along the Northern Sea Route are not developing as fast as had been hoped, but certain progress has been made in this area.

To prevent and relieve emergencies along the Northern Sea Route and in the Arctic as a whole, the Ministry for Civil Defence, Emergencies, and Disaster Relief of the Russian Federation formed a unit that entails building 11 comprehensive Arctic rescue and emergency centres Currently, five centres are in operation in the Northwestern Federal District (Naryan-Mar, Arkhangelsk, Vorkuta and Murmansk) and one is in operation in Dudinka in the Siberian Federal District. They are on standby to provide immediate response to emergencies in the Arctic.

The Ministry for Civil Defence, Emergencies and Disaster Relief of the Russian Federation in collaboration with Roscosmos established joint centres in Murmansk, Dudinka and Anadyr for receiving and processing space information.  In October 2015, the first Arctic Centre for Remote Earth Sensing was established at the Murmansk Region Main Office of Russia’s Ministry for Civil Defence, Emergencies and Disaster Relief together with Roscosmos, and is functioning successfully. The Centre makes it possible to provide prompt information on all risks significant for the region: deteriorating ice, forest fires, flood situations, emergencies stemming from oil and oil product spills in marine basins.

The Northern Sea Route management system has undergone major changes. In 2018, the Ministry of Transport of the Russian Federation and Rosatom agreed to divide their powers on the management of the Northern Sea Route. The Ministry will retain its powers with regard to: the legal regulation of navigation on the Northern Sea Route; Russia’s compliance with its international obligations; supervising and monitoring functions, including the approval of navigation safety standards and requirements, etc. Meanwhile, Rosatom will have the powers of the principal operator of the Northern Sea Route, the manager of budgetary allocations, and the head administrator of budget revenues and the public procurement authority for state programmes to develop the Northern Sea Route, sustainable operations and the Northern Sea Route port infrastructure. Rosatom will also be vested with the power to ensure year-round navigation and piloting along the Northern Sea Route. Rosatom has established a Northern Sea Route directorate. A draft law on the management of the Northern Sea Route is currently under consideration in the State Duma.

New land infrastructure is also being established alongside the maritime infrastructure to service the AZRF. In May 2018, construction started on a bridge over the Ob River between the cities of Salekhard and Labytnangi, the key part of the so-called Northern Latitudinal Railway. The new railway in the Yamalo-Nenets Autonomous District will be 707 kilometres long, running along the Obskaya – Salekhard – Nadym – Novy Urengoi – Korotchayevo route and linking the Severnaya (Northern) and Sverdlovskaya railways.

Another project involves building a new Belkomur (White, or Beloye, Sea – Komi – the Urals) railway along the Arkhangelsk – Syktyvkar – Solikamsk route. The railway will be 1161 kilometres long and will cut the delivery distance for freight from the Urals and Siberia down to 850 kilometres. It will have a capacity of up to 35 million tonnes of freight annually. Thus far, the project is searching for investors. It is worth noting here that foreign investors have already shown interest in the project. For instance, China’s Poly International Holding is ready to invest $5.5 billion.

Russian regions interested in developing the AZRF are stepping up collaboration. For instance, in May 2018, Governor of St. Petersburg Georgy Poltavchenko concluded a bilateral cooperation agreement with several AZRF regions: Yakutia, Krasnoyarsk Krai, the Komi Republic and the Murmansk Region. The decision was made to establish a Committee on Arctic Affairs at the St. Petersburg city administration, which will become fully functional in 2019.

The State Committee on Arctic Development has been reshuffled. Former Deputy Prime Minister of the Russian Federation Dmitry Rogozin will be replaced as the head of the Committee by Yuri Trutnev, a new Deputy Prime Minister in charge of the development of the Far East and Siberia.

New and impressive plans for exploring the Arctic were unveiled at a recent governmental meeting in Sabetta on the development of the Arctic, which was chaired by Prime Minister of the Russian Federation Dmitry Medvedev. In the period 2019–2024, Moscow intends to attract 5.5 trillion roubles in public and private investment for the purpose. This amount will reach 13.5 trillion roubles by 2050. Following these developments, the voices of “Arctic sceptics” on the state’s waning interest in the region and the inevitable decline of the AZRF have been far less noticeable.

Along with the socioeconomic development AZRF, Moscow has continued to bolster Russia’s defence capabilities in the region. For instance, the military infrastructure of the Russian Arctic is being improved by reconstructing several polar airfields and military bases that will be used as dual-purpose facilities (for both military and civil purposes). In all, 13 airfields, a ground aeronautical range, and ten radar locations and air direction centres will be built in the AZRF.

The army and navy are being rearmed with new weapons. For instance, rocket artillery units of the Northern Fleet are being rearmed with new Bastion and Bal coastal defence missile systems to protect the Arctic coast. In 2018, the Russian military received new Tor-M2DT mobile systems capable of operating in low temperatures (as low as −50 degrees Celsius). The first military icebreaker – Ilya Muromets, which is now part of the Northern Fleet – completed its ice testing programme, and on its return to home port piloted the strategic missile cruiser Yuri Dolgoruky through the ice fields of the White Sea. The Border Service of the Federal Security Service of the Russian Federation are set to receive new Polyarnaya Zvezda (Polar Star) ice class vessels.

In 2019, a new naval base will open in Tiksi on the coast of the Laptev Sea. In 2019, the Knyaz Vladimir Borei class strategic submarine and the Kazan multipurpose nuclear submarine will join the fleet.

As for the international situation in the Arctic in 2018, it was characterized by rather contradictory trends.

On the one hand, NATO stepped up its activities in the region in 2018. The alliance continued to build up and strengthen its military activities in the Arctic by preparing forward airfields, modernizing sea ports and creating a system of prepositioned stockpiling. Provocative military activity was recorded close to Russian borders.

NATO started holding regularly military exercises in the Arctic. In 2018, the alliance held its largest ever drill in the north. 50,000 troops, 250 aircraft and 65 large surface ships from 31 states participated. The drill failed to have an intimidating and provocative effect, though. Moscow reacted rather calmly and did not respond in kind, for instance, by holding an exercise on a similar scale.

The new U.S. administration did not act in a manner that is conducive to increasing Arctic cooperation. Soon after moving into the White House, the new President announced the withdrawal of the United States from the Paris Agreement on the grounds that it went against the national interests of the United States by holding back the development of American industries. In his national security strategy published in December 2017, Donald Trump announced his intention to conduct a policy of “energy dominance” (in contrast to Barack Obama’s energy safety policy). An integral part of the policy is to produce oil and gas in those parts of Alaska where production had been virtually prohibited before, that is, in the National Petroleum Reserve and the Arctic National Wildlife Refuge, on the Alaska shelf and in the basins of the Chukotka and Beaufort seas.

Donald Trump has also repeatedly voiced his criticisms and claims he was “not satisfied with the outcomes of international bodies it engages with” in the Arctic. Although the new administration did not block the agreements on expanding scientific cooperation in the Arctic (May 2017) and prohibiting unregulated fishing in the Central Arctic Ocean (November 2017) developed with the participation of Obama’s “team,” it was made clear the United States was not going to actively promote their implementation. It is no accident that polar research financing was cut by a total of 10.3 per cent in 2018 compared to the 2016 fiscal year. Arctic research financing fell by 18.1 per cent over the same period. The changes in the Arctic policies of the President of the United States resulted in major personnel reshuffling in the Trump administration. Over 2017–2018, virtually all key officials of the Department of State in charge of the U.S. Arctic policy resigned, as they had advocated the active participation of the United States in Arctic cooperation programmes. The United States has noticeably reduced its activities in the Arctic Council, the principal regional institution. Washington’s partners in the Arctic dialogue do not yet have a clear idea of the contents and priorities of the Trump administration’s Arctic Strategy.

At the same time, these negative trends were partially offset by a series of positive developments in international Artic cooperation.

The Agreement on Enhancing International Arctic Scientific Cooperation between Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States that was concluded in 2017 entered into force in May 2018.

In October 2018, an agreement prohibiting commercial fishing in the Central Arctic Ocean was officially signed. The principal parameters of the agreement were approved by the Arctic “five” (Canada, Denmark, Norway, Russia and the United States), Iceland, China, South Korea, Japan and the European Union back in November 2017, but it took time to fine-tune some technical details.

Russia’s bilateral relations with individual states involved in Arctic affairs developed in a satisfactory manner. Joint steps are being taken with Norway to protect the marine biological resources of the Barents Sea, prevent poaching and improve collaboration in search and rescue operations for persons suffering distress in the Barents Sea. The United States Coast Guard and the Kamchatka Territory Border Guard Department of the Federal Security Service of the Russian Federation have accumulated significant experience in the joint maritime and air patrolling of the Chukotka Sea basin and monitoring the navigational situation on the Bering Strait. In March 2018, officials of the coast guard services of eight countries agreed on holding the second live exercise of the Arctic Coast Guard Forum (established in 2015) in Finnish waters in early 2019.

In 2018, Russia and the United States achieved an agreement on approving routes for vessels travelling through the Bering Strait and in the Bering Sea. Information on the agreement was submitted to the International Maritime Organization. The parties agreed to establish six bilateral lanes and six areas to be avoided for safe navigation in the Bering Sea and the strait between two oceans. The map of the lanes will allow countries to avoid the many shallows, reefs and islands beyond the lanes and reduce the risk of environmental disasters.

South Korea continued to implement an ambitious project to build 15 ice class LNG carriers for Russia.

The development of Russia’s relations with China was particularly dynamic. Back in 2017, Beijing proposed the Polar Silk Road initiative, part of China’s larger “Belt and Road” initiative (the Silk Road Economic Belt and the 21st century Maritime Silk Road). In January 2018, China published its White Paper on the Arctic, offering the first explanation of its strategy in the North. Much attention here is given to cooperation with Russia.

On the whole, 2018 laid some good groundwork for the future both in ensuring the sustainable development of the AZRF and in bolstering international cooperation in this strategically important region.

First published in our partner RIAC

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Russia’s Blueprint For Success in the Middle East

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As a tradition in the modern world the Middle East remains unstable. Continuous political turbulence in the region extinguishes all of previous leaders and appoints new ones, who with the Fortuna’s blessing were able to use their opportunities efficaciously. During the last couple of decades we have witnessed a number of coups d’etat, revolutions, counter revolutions and international interventions each with varying degrees of success. Regional power balance has lived through constant change however one of the players has managed not only to stay on top but overtake his counterparts. That powerhouse became Russia, the influence of which has grown the most compared to other parties in the Middle East.

Certainly, the Russian authorities didn’t have to start from scratch. Moscow took advantage of Soviet inheritance of friendly relationships and military cooperation with Arab countries. However, the modern strategy of Russia is far more sophisticated. Within the framework of developing its presence in the region the Russians combine political prowess, military might and soft power. All of the mentioned are a part of hybrid warfare concept, which is not an exclusive Russian stature, but Kremlin excels at it. Besides, Russia has one clear advantage against other world superpowers – consistency.

A great example of those principals is the Russian engagement in Syrian conflict. The first stage in the grand plan was a military operation, which stabilised Bashar Assad’s grip on power, restricted influence of the armed opposition and diminished capabilities of ISIS. The distinguishable features of the operation were active use of the aviation and precision weaponry in addition to the use of the newest types of weapons and advanced tactics. The success achieved by the military means was further developed by Russian political initiatives most notably during meetings in an unprecedented Astana format, which gathered together at a negotiation table Russia, Turkey and Iran. As a consequence this format became a substitution to the dead-end UN Geneva process. Along with that, to protect its interests Moscow has successfully capitalised on bilateral relations. The agreements made between Russia and Turkey became a main factor to reconciliation of situation in the Idlib province. Additionally, Russia serves as a mediator between Iran and Israel in the southern regions of Syria.

Whereas in Libya Russia did not believe it was necessary to conduct a full-scale military operation, however the principles stayed the same. The Russian side, which from beginning has supported Halifa Haftar’s Libyan National Army, regularly receives representatives from both sides of the conflict and notably Russian Ministry of Defence plays an active role in the negotiation process. LNA has gained some crucial allies such as Egypt and United Arab Emirates in consequence of the efforts of the Russian military.

Turkey became a main adversary of Russia in both Syria and Libya. Moscow and Ankara have managed to secure their cooperation despite periods of escalated tensions between the countries, i.e. after a Russian jet was shot down by Turkish-backed militants. Unchallenged success was Turkey leadership’s decision to purchase S-400 missile complex in spite of pressure from US. In addition to that, Turkey has chosen Russia as partner to build a nuclear plant in Akkuyu. Even president Erdogan doesn’t allow himself to openly badmouth his Russian counterpart, whereas the Turkish leader voices bitter complaints about a “bad start” in the relationship with the head of the White House.

Along active interference in the aforementioned domains Russia manages to sustain its relationships with the countries of the Persian Gulf. This concerns not only the Organization of Petroleum-Exporting Countries but also military technical cooperation including the participation of Arab countries in the “Army Games” organised by the Russian military. The vast network of contacts allows Russia to play on contradictions between Saudi Arabia, United Arab Emirates, Qatar and Turkey.

Russians became firmly entrenched in the Middle-East by dual-wielding their diplomatic and military capabilities. Thanks to clever positioning Russia can now secure its goals by simply waiting for their opponents to make a mistake. This is what happened in Afghanistan where the political vacuum left after the US withdrawal provided Russia with an opportunity to declare its readiness to facilitate the settlement process. Contacts with the Taliban established beforehand and Russia’s solid relationships with China and Qatar became an additional advantage.

Ultimately, consistency and succession of Russian middle-eastern policy at the head of which is usually the Armed Forces of Russian Federation, has provided numerous solid opportunities for Moscow to promote its interests in the region. Opposed to its rivals Russia has achieved the consolidation of its position and that is undisputed argument for the effectiveness of Kremlin’s strategy.

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Russian Authorities Going Forth and Back with Migration Policy

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Deputy Mayor of Moscow for Economic Policy and Property and Land Relations Vladimir Efimov, in an interview published this mid-September in the newspaper Izvestia, a widely circulated and reputable Russian media, lamented that Moscow is still experiencing a shortage of labor migrants at various construction sites, now there is a shortage of about 200 thousand people.

“This problem remains today Moscow lacks about 200 thousand migrants. And we hope that in the near future the restrictions on their entry into the country will be softened,” Yefimov said, answering the question of the publication whether the issue of the shortage of migrant workers for construction sites in Moscow.

According to him, “the lack of labor resources leads to the fact that employers, primarily developers, outbid employees from each other, which increases the cost of their services. If we talk about the period before the pandemic, for several years, housing prices in Moscow have hardly grown. Against the background of the pandemic, the cost of housing has increased, actually catching up with inflation in previous years,” said the Vice Mayor of Moscow.

The announcement simply highlighted the inconsistency dealing with migrant policy and complete lack of foresight, especially what to do with migrants from the former Soviet republics. Thanks to these migrants, mostly employed in the construction fields and (cleaning, sewage disposal or removal services) in various neighborhood or districts, Moscow has won awards for being modern and clean smart-city in Europe. These migrants play an important role, most often underestimated, in building infrastructure and in general development of the society.

According to a survey of Promsvyazbank (PSB), Opora Rossii and Magram Market Research conducted in June 2021 found out that 45% of small and medium-sized businesses in Russia need new employees. Entrepreneurs still consider the unfavorable economic conditions caused by the pandemic to be the main obstacle to business expansion, and employing new staff requires extra cost for training in the social services sector.

Opora Rossii, an organization bringing together Russian small-and medium-sized enterprises (SMEs), and the Institute for Social Analysis and Forecasting of the Russian Presidential Academy of National Economy and Public Administration (RANEPA), among other business organizations and institutions, have been very instrumental on the significant role by migrant force, its combined objective and beneficial impact on the economy of Russia.

Several experts, in addition, have explained that migrants from the former Soviet republics could be useful or resourceful for developing the economy, especially on various infrastructure projects planned for the country. These huge human resources could be used in the vast agricultural fields to boost domestic agricultural production. On the contrary, the Federal Migration Service indiscriminately deports them from Russia.

Within the long-term sustainable development program, Russia has multibillion-dollar plans to address its infrastructure deficit especially in the provinces, and undertake mega projects across its vast territory, and migrant labor could be useful here. The government can ensure steady improvements are consistently made with the strategy of legalizing (regulating legal status) and redeploying the available foreign labor, the majority from the former Soviet republics rather than deporting back to their countries of origin.

Moscow Mayor Sergei Sobyanin has been credited for transforming the city into a very neat and smart modern one, thanks partly to foreign labor – invaluable reliable asset – performing excellently in maintaining cleanliness and on the large-scale construction sites, and in various micro-regions on the edge or outskirts of Moscow.

With its accumulated experience, the Moscow City Hall has now started hosting the Smart Cities Moscow, an international forum dedicated to the development of smart cities and for discussing changes in development strategies, infrastructure challenges and adaptation of the urban environment to the realities of the new normal society.

Kremlin Spokesman Dmitry Peskov has acknowledged that Russia lacks a sufficient number of migrants to fulfil its ambitious development plans. He further underscored the fact that the number of migrants in Russia has declined significantly, and now their numbers are not sufficient to implement ambitious projects in the country.

“I can only speak about the real state of affairs, which suggests that, in fact, we have very few migrants remaining over the past year. Actually, we have a severe dearth of these migrants to implement our ambitious plans,” the Kremlin spokesman pointed out.

In particular, it concerns projects in the agricultural and construction sectors. “We need to build more than we are building now. It should be more tangible, and this requires working hands. There is certainly a shortage of migrants. Now there are few of them due to the pandemic,” Peskov said.

The labor shortage is not only in Moscow but it applies to many regions including the Far East. During the 6th edition of the Eastern Economic Forum (EEF), the demography decline and labor shortage have been identified as factors affecting the development of the vast region. With plans to build residential blocks, establish industrial hubs and fix businesses, these depend largely on the working labor force.

The Russian government continues discussing a wide range of re-population program, hoping to attract in particular Russians there, even incentives such double income, mortgage system, early retirement and free plots of land, but little results have been achieved. Russia’s population is noticeably falling, and now stands at 146 million.

The Far East is almost the size of Canada with its current population (a mixture of natives plus legalized immigrants) more than 38 million. That compared, the Far East with estimated 6.3 million is one of the most sparsely populated areas in the world.

Kremlin has made this its absolute long-term priority, and the challenging task is to create an environment for investment and attract people. President Vladimir Putin acknowledged, at a meeting on the socio-economic development of the Far East, that the speedy outflow of the population from the Far East suggests that the region has not yet received enough support measures. “A lot is being done, but it is still not enough if we observe an outflow of the population.”

President Vladimir Putin has already approved a list of instructions aimed at reforming the migration requirements and the institution of citizenship in Russia, based on the proposals drafted by the working group for implementation of the State Migration Policy Concept of the Russian Federation for 2019-2025.

“Within the framework of the working group for implementation of the State Migration Policy Concept of the Russian Federation for 2019-2025, the Presidential Executive Office of the Russian Federation shall organize work aimed at reforming the migration requirements and the institution of citizenship of the Russian Federation,” an official statement posted to Kremlin website.

In addition, the president ordered the Government, the Interior and Foreign Ministries, the Federal Security Service (FSB), and the Justice Ministry alongside the Presidential Executive Office to make amendments to the plan of action for 2019-2021, aimed at implementing the State Migration Policy Concept of the Russian Federation for 2019-2025.

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Russia’s Far East: Transforming the Space into Modern Habitable Region

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Early September the 6th edition of the Eastern Economic Forum (EEF) under the theme “New Opportunities for the Far East in a Changed World” was held and considered as vital for strengthening especially economic ties among Asia-Pacific countries and the Far East region of Russia. What is known as the Far East covers approximately 40% of Russia’s territory.

 The Far East is almost the size of Canada with its current population (a mixture of natives plus legalized immigrants) more than 38 million. That compared, the Far East with estimated 6.3 million is one of the most sparsely populated areas in the world. The Russian government continues discussing a wide range of re-population programmes, hoping to attract in particular Russians there, even incentives such double income, mortgage system, early retirement and free plots of land, but little results have been recorded.

 The September forum, and all the previous ones, focused on raising sustainable development that primarily includes infrastructure, business investment and people. The question is on human habitation and sustenance, but this vast region of the country is sparsely inhabited. Kremlin has made this its absolute long-term priority, and the challenging task is to create an environment for investment and attract people.

 President Vladimir Putin acknowledged, at a meeting on the socio-economic development of the Far East, that the speedy outflow of the population from the Far East suggests that the region has not yet received enough support measures. “A lot is being done, but it is still not enough if we observe an outflow of the population.”

 “Our historical task is not only to keep people in the territories that were mastered by our ancestors for centuries, but to increase the population,” the Russian leader said. Putin stated that the rate of the outflow of people had decreased, but had not stopped. He called the growth of the population in the Russian Far East a “historical task.”

 For this purpose, it is necessary to develop production capacities, create jobs, and ensure people’s incomes. At the same time, Putin also called on using the resources that have already been allocated to the region. “Considerable resources have been allocated and they need to be used effectively,” he suggested, addressing the opening of the Far East Economic Forum.

 The September gathering brought together Russian and foreign entrepreneurs, politicians, experts, and representatives of the media as well as public organizations to exchange experiences and ideas, discuss the most pressing business and development issues and map out useful joint projects and initiatives for the region. Many of the speakers were very frank and objective in speeches, highlighted ways for developing the region.

 The average Far Eastern city fares about 10% worse than the Russian average in terms of housing provision and quality of medical services. “We need intensive breakthrough development. Master plans involving the integrated development of the region could provide the key to this development. What is required is a resource center for urban development covering the Far Eastern Federal District. Secondly, the region is facing a severe shortage of highly skilled workers, especially in architecture and urban planning,” Architect and Partner at KB Strelka, Alexey Muratov told the session on Urban Planning.

 The Far Eastern Federal District has significant economic potential and is of interest to both local and foreign business, but there is an imbalance between investment and economic potential in the region. For Artem Dovlatov, Deputy Chairman and Member of the Management Board of VEB of the Russian Federation, “the Far East is a very interesting region and of particular importance to the government. This is why the Russian President Vladimir Putin has declared that the Far East will be a priority region for Russia in the 21st century. From the perspective of investors, the region is of serious interest. It benefits from vast resources, proximity to the Asia-Pacific region, and diverse scientific and technological potential.”

 “There are certain barriers, of course, and investors still approach investing in the region with a degree of caution, since the barriers are objective. They are associated with the population (a lack of staff) and there are costs related to construction… The Far East is a highly urbanized region. This presents a huge challenge because we need to increase quality of life in the cities in order to prevent outward migration or attract new residents. Strategic planning in cities is needed here,” added Dovlatov.

 Further at the different session, Alexey Muratov, Architect and Partner at KB Strelka, simply puts it, “there aren’t enough people in the Far East. The region accounts for 40% of the country’s land mass but only 5.5% of its inhabitants. How can we solve the central challenge, which is to say the imbalance of economic and investment potential? The first and most obvious solution relates to rotation work. Modern workers’ settlements are in no way inferior to cities in terms of comfort. The second option is to attract residents to cities in order to create new jobs. The issue of the urban environment and quality of life is relevant here. According to all polls, quality of life is the key factor behind outward migration.”

 Nikolay Kharitonov, Chairman of the Committee for Regional Policy and Issues of the North and Far East, State Duma of the Federal Assembly of the Russian Federation, has, however, expressed worries about to curb migration from the Far East. “Getting a Far Eastern hectare helps people to get settled here [in the Far East] instead of leaving for the south or elsewhere,” he said, adding that for transforming the region, it need transportation network, good infrastructure and social facilities, employment opportunities and conditions for habitation.

 Admittedly, lack of social infrastructure constitutes a big hinderance to many projects. “Social infrastructure is of vital importance to the Far East. If people are fleeing the region, how can we motivate them to stay here? They need the right social infrastructure: health care, education, and everything in between,” according to the views of the Chief Executive Officer of VTB Infrastructure Holding Oleg Pankratov.

 The Far East offers a platform for Russia’s entry into global markets and attracting international investment. Russia is seeking to take its place in the global system of division of labor, so it’s concentrating on projects with high added value. “Russia currently has the best conditions in the world to attract human resources and financial resources and take the next technological step. Why would you just come to the Russian market? Let’s manufacture things here for the whole world to compete with other centres of power, relatively speaking. The Russian government has to provide the best conditions for this,” pointed out Arnika Holding President Alexander Generalov.

 Some foreign participants say it is necessary to expand support measures for business startups, consistently attempt to identify and remove development obstacles. “The Chinese experience is that high technologies and companies always play a very important role in the development of the local economy. We help them with resources, we allocate resources, and you do that too. The tech park should be connected to all resources and the international market. And human resources are very important. If you don’t have a good team to help startups, nothing will happen,” says International Association of Science Parks and Areas of Innovation Vice Chairman Chen Herbert.

 On one hand, entrepreneurs have little trust in the government due to its excessive control and supervision. There are still many problems including bureaucracy and red tape. On the other hand, based on the tasks defined by the country’s leadership, a set of measures is being implemented to enhance the business climate.

 The regulatory framework is being improved in the most important and problematic areas of government regulation. Institutions and infrastructure are being created for the development of investment activity. The best practices to support entrepreneurship are being introduced, including mechanisms for direct financial assistance, concessional lending, tax incentives, and moratorium on government inspections.

 Developing the transport and logistics infrastructure. The carrying capacity of the railways needs to be increased, to develop and upgrade the Trans-Siberian Railway. “Russia’s leadership also has concerns regarding the opportunities offered by the Trans-Siberian Railway. It is indeed a problem, because it is a major factor hindering economic growth in Russia, both in terms of foreign trade, and in terms of domestic transportation. We expect carrying capacity to be expanded in the near future,” believes Sergey Katyrin, President, Chamber of Commerce and Industry of the Russian Federation.

 The potential exists for Russia and South Korea to cooperate across a broad range of areas, including industry, energy, and the environment. “We particularly want to highlight the cooperation that has taken shape in relation to smart city projects, industrial parks, and multimodal terminals for shipping in Primorye Territory. One of our assets is a joint venture with the Zvezda Shipbuilding Complex. We have also acquired a grain terminal and are developing this business in Primorye Territory. Collaboration between our two nations is increasing in energy, fishing, and other areas,” Christopher Koo, Chairman, Korea International Trade Association (KITA).

 “South Korea has traversed a fairly long path in relation to the creation of a waste management system in the early 1990s. Since that time, the system has come to closely reflect our own targets in terms of waste disposal. At the start of this journey, virtually 80% of waste in South Korea went to landfill sites. Today, more than 60% is recycled. In Russia, the President has set the objective of processing – i.e., sorting – 100% of waste, and utilizing 50% of it by 2030. Naturally, we would be delighted to employ technological solutions in this area which have been implemented in South Korea,” added Denis Butsayev, General Director, Russian Environmental Operator Public Law Company.

 Besides South Korea, a number foreign countries strike deals at the forum, most of from the Asian Pacific region. Russia and Japan signed deals. China also signed several deals there as Russia has fast developing bilateral relations and both are members of BRICS. For instance, China has the following from the documents:

 China Railway International Group and Primorye Territory signed a statement of mutual interest and intent to implement an investment project for the Construction of Vladivostok ring road in Primorye Territory. Stage 1: Russky Island – Yelena Island – Ulitsa Kazanskaya in Primorye Territory. Investment volume: RUB 75 billion.

 VEB.RF and the ZED Development project company (part of Region Group) signed a cooperation agreement for the construction of an aerial lift across the Amur river at the section of the Russian-Chinese national border linking the cities of Blagoveshchensk (Russia) and Heihe (China). The construction project is being implemented jointly by the Russian investor and its Chinese partner, the China Railway Construction Corporation. VEB.RF will invest RUB 2 billion.

 The Ministry of Labour and Social Protection of the Russian Federation and the Ministry of Human Resources and Social Security of the People’s Republic of China signed a memorandum of understanding with the aim of establishing and strengthening cooperation on labour and social security issues of mutual interest.

 Pharmeco and the Union of Chinese Entrepreneurs in Russia signed a partnership agreement with the aim of developing cooperation between Russian and Chinese organizations and Asia-Pacific countries in the field of pharmacology and the construction of healthcare facilities.

 Zeleny Bulvar and KitayStroy signed a cooperation agreement on the construction of residential real estate in Vladivostok. Two 25-floor apartment buildings are set to be built in the Zeleny Ugol neighbourhood of Vladivostok by 2025.

 Stroytransgaz and KitayStroy signed an agreement on the implementation of a project to build a museum and accompanying educational and cultural centre in Vladivostok.

Japan

 The Ministry for the Development of the Russian Far East and Arctic, VEB.RF, ECN Group and Marubeni Corporation signed an agreement to implement a project to produce ships using methanol fuel at the Zvezda shipyard.

 GTLK and Mitsui O.S.K. Lines signed an agreement for Mitsui O.S.K. Lines to make an equity investment in GTLK Asia Maritime.

 The Ministry of Energy of the Russian Federation and the Ministry of Economy, Trade and Industry of Japan signed a bilateral agreement on the supply of LNG and gas condensate.

 Novatek and the Japan Bank for International Cooperation (JBIC) signed an agreement on strategic cooperation on low-carbon projects.

 The Europlast Primorsky Plant and Ryozai Kaihatsu signed a memorandum of cooperation on the expansion of exports to Japan between the parties.

 The Europlast Primorsky Plant and Ryozai Kaihatsu signed a contract on the sale and purchase of PET preforms.

 It is expected that the Far East will continue attracting investments, both Russian and foreign. “We will continue to try to constantly create new development opportunities, thus securing for the Far East this status of a testing ground for management technologies associated with the development of the region,” Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev said at the conference following the forum.

According to the official forum documents: “More than 380 agreements were signed at the forum. International and foreign companies, organizations, ministries and departments have signed 24 documents – 9 with China, 6 with Japan, 3 with Kazakhstan, by one agreement each with Austria, Vietnam, Canada, Serbia and Ethiopia.” And that agreements totaling 3.6 trillion rubles (US$49 billion) were signed at the Eastern Economic Forum (including agreements, the amount of which is not a commercial secret).

Until 2000, the Russian Far East lacked officially defined boundaries, according to historical archival documents. A single term “Siberia and the Far East” often referred to the regions east of the Urals without drawing a clear distinction between “Siberia” and “the Far East” on the territory of Russia. That however, the Far East is generally considered as the easternmost territory of Russia, between Lake Baikal in Eastern Siberia and the Pacific Ocean.

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