Prime Minister Vladimir Putin addressed the Russian-Japanese Business Forum
Opening address:
Mr Chairman, Mr Oka (Motoyuki Oka, Chairman of the Japan-Russia Business Cooperation Committee at business association Nippon Keidanren, CEO and president of the Sumitomo Corporation), Mr Shokhin (Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs), ladies and gentlemen,
I am happy to have this opportunity to address this representative forum of the Russian and Japanese business communities.
Since the previous meeting in November 2005, we have boosted bilateral economic relations considerably and implemented a substantial part of the projects we discussed three and a half years ago.
My colleagues - former Prime Minister Yoshiro Mori and former Prime Minister Junichiro Koizumi - and I have just now been talking about the time when we made these plans.
I would like to say that our countries' business communities invariably received full support of the political leadership of Russia and Japan, and we are grateful to our Japanese colleagues for that. This pragmatic approach to bilateral cooperation was sealed in the Action Plan we signed in 2003.
Mr Oka has said here that last year bilateral trade approached $30 billion, according to our calculations, and exceeded $30 billion according to the Japanese figures. Of course, this is not high given the scale and potential of the Russian and Japanese economies. But it was barely $10 billion not very long ago, in 2005. This means that it has tripled since then, which points to a high tempo.
We can say confidently that our interaction has advanced to a new level, and nobody now doubts the long-term prospects of Japanese business in Russia. Many large Japanese corporations, such as Toyota, which has built a car assembly plant in St Petersburg, have decided to localise production in Russia, and banks and insurance companies have since followed in the wake of the real sector.
Ladies and gentlemen,
During the global financial crisis, the Governments and business communities must focus their attention on ways to overcome its negative consequences and overhaul their long-term plans of economic and social development.
Late last year, the Russian economy was hit twice. I am referring to the financial crisis and the dramatic worsening of the environment for foreign trade, plunging demand for and prices of Russia's traditional exports.
Therefore, we forecast a decline in GDP growth, industrial production, foreign trade and several other economic indicators in 2009.
However, I can assure you that the Russian market and social institutions have affirmed their stability and viability, and the ability to weather the destructive trends of the crisis.
The Russian Government has drafted an anti-crisis programme, with aggregate financing of 3 trillion roubles (some $90 billion) to be allocated by the Government and the Central Bank. We know that the Japanese authorities are taking what amounts to unprecedented measures to fight the crisis, measures that are probably among the largest in the world. Opinions on the Japanese Government's actions may differ, but I think that they have so far been very effective, by and large.
The Russian authorities are mostly allocating funds to support the banking system, the real economy, the labour market and consumer demand, which amounts to direct support to the people.
The implementation of the anti-crisis package has allowed us to prevent the worst-case scenario in the economy. I hope very much that these actions by the Russian Government will ensure the resumption of stable economic growth in Russia.
Ladies and gentlemen,
The global downturn has shown distinctly that stability and predictability cannot be ensured in the global economy by any one state, even a very powerful leader.
We need to take collective efforts to attain this goal. Here is what Mr Konosuke Matsushita, the founder of Matsushita Electric, said on this score: "A way to a happy, peaceful future through prosperity looks like a dream, but I would like to collect the wisdom of many people together to make this dream a reality."
It is this philosophy that we need today. Russia intends to develop direct dialogue with the business quarters of the world's leading countries, including the Japanese business.
We should also remember that the crisis, despite its negative elements, offers a unique opportunity to reform the economy, rehabilitate the global financial system, and formulate a modern agenda that should adequately reflect the growing role of the new centres of economic growth and political influence. Being here in Tokyo, I am referring above all to the Asia-Pacific region.
The global crisis will also affect Russian-Japanese trade and economic cooperation. At the least, trade may slump a little in 2009, and we should speak about this openly.
However, many Japanese corporations are still interested in setting up production in Russia and are working hard to implement their plans, taking decisions based on long-term calculations and despite the current difficulties.
I have spoken about Toyota, which is building a plant in St Petersburg. Nissan plans to commission its plant in early June.
We know that not all problems created by red tape have been overcome. Moreover, red tape is not a national feature. But the Russian Government will invariably support projects of this kind.
It would seem appropriate now to speak about the outlook for bilateral cooperation.
Russia has formulated an ambitious task of restructuring its economy and transiting from a commodities export economy to an economy based on innovative development. This is a strategic choice, which should change not only Russia's economy but also its image.
This choice implies a huge potential for Russian-Japanese cooperation in the sphere of innovations, above all in nuclear generation and information and telecommunication technologies.
Following my talks with Prime Minister Taro Aso today, we plan to sign a cooperation agreement for the peaceful uses of nuclear power.
Practical discussions of our common plans for the information and telecommunication technologies sphere will be held tomorrow during the Third Russian-Japanese ICT Forum.
Other important spheres of cooperation include space exploration, including the International Space Station programme, where we are working jointly, remote Earth sensing, renewable sources of energy, energy saving, and nanotechnologies.
Cooperation in the fuel and energy sphere remains a priority and is crucial for sustainable supplies of energy to Asia-Pacific countries and for strengthening the global energy security.
In particular, we are implementing successfully the Sakhalin-1 and Sakhalin-2 projects, where Japanese companies hold substantial stakes.
In February this year, an LNG plant was commission on Sakhalin. The first batch of Russian LNG has been delivered to Japan. This is only the beginning of our joint work.
Japanese companies may take part in completing the construction of an oil pipeline from East Siberia to the Pacific, near Vladivostok. I would like to say that the first part of that major project is nearing completion, with the pipeline expected to reach Skovorodino soon. From that site, we will carry oil by rail, but the construction of an oil terminal on the Pacific coast is almost finished, with oil reloading to start there soon.
Given the growth of oil production in East Siberia, we will start implementing the second part of the project, continuing the pipeline to the Pacific Coast. By the way, Japanese partners could contribute to the projects to develop the pipeline transport and similar infrastructure. I am referring to the pipeline from Sakhalin to Khabarovsk and Vladivostok.
We hope that Japanese business will be interested in our plans to establish joint commodities processing companies in Russia's Far East. In particular, an LNG plant and a gas chemical plant are to be built in the Primorye Territory, with raw materials for them to be supplied from the offshore fields of Sakhalin and from East Siberia.
The Russian Government supports the challenging projects to create new production facilities in Russia's Far East, which are being implemented by several Russian companies, including Rusal. We are convinced that these plans will be implemented despite the economic downturn. By pooling the efforts of Rusal, which I have just mentioned, and Japanese partners, we could greatly enhance the effectiveness of our cooperation in the region.
We intend to strengthen the innovation element in another, also traditional, sphere of our cooperation, in the timber industry.
We are glad that the Japanese business promptly reacts to changes taking place in Russia. Japanese companies have duly noted the Russian Government's measures to reform the timber industry; they have dramatically increased investment in timber processing and cut the import of round timber. This is a move in the right direction. This is the constructive attitude we expect our partners to show.
I want to reiterate: We intend to consistently modernise the commodities segments of our economy, and to create modern highly technological industrial plants on this basis.
Russian-Japanese cooperation in transport also has a bright future.
I am referring to the possible use of Japanese high-speed train technology in Russia and modernisation of the Trans-Siberian Railway.
I also want to attract the attention of business to agriculture, which, despite the global economic crisis, is demonstrating a commendable growth rate and stability. In particular, there is a possibility of exporting Russian grain to Japan. In this sense, the export potential of Russian agriculture keeps growing.
You have mentioned the planned APEC summit in Russia in 2012. We will be glad to welcome Japanese companies in the corresponding tenders.
We also hope that the visit by a group of Japanese business leaders and representatives of government departments, to Russia's Far East in June will promote the development of interregional cooperation.
At the same time, I would like to remind you of an obvious fact - integration processes in Asia Pacific concern Russia as a whole and not only its eastern regions. I think delegates from the major Japanese corporations, which are working successfully in European Russia, know what I am referring to.
Mr Mori and I have discussed the planned commissioning of a plant in Yaroslavl, in European Russia, which has been fully financed by the Japanese partners.
Meanwhile, we expect Japanese business to diversify its regional presence in Russia. A representative forum of Russian and Japanese regional heads has started working in the next room today. We will support these efforts at the Government level.
As you know, Russia is preparing to host the Winter Olympics in 2014. It is a challenging regional and nationwide project. We would welcome your contribution to the preparation of Olympic facilities.
In conclusion, I would like to say that the presence of a ramified infrastructure of dialogue between the Governments of our two countries is a major factor stimulating the development of Russian-Japanese economic relations. We hope very much that this spirit will be preserved also in the future.
I want to use this occasion to invite you to continue discussing problems of importance to our countries and the world's economy at the International Economic Forum in St Petersburg in June. We hold it regularly, and it has been growing dynamically, with discussions held openly and at a high level, which, I think, could be of interest in terms of bilateral cooperation.
I wish you success and thank you for our attention.
Thank you very much.
