Prime Minister Vladimir Putin addressed representatives of the business community from Russia and Finland
Dear friends,
First of all, let me welcome such a representative and authoritative audience.
It is well known that in today's world, the size and character of joint business projects to a great extent determine the future development of the entire panoply of relations between countries. Economic partnership is the foundation of political dialogue, and promotes the deepening of cultural, scientific and educational relations.
Therefore, we greatly value the opportunity to address such key representatives of both our countries' business circles, and in turn, we expect to hear your proposals for improving the efficiency of bilateral cooperation in the economy.
I would like to begin with the results of today's talks in Helsinki; the most important one being the clearly expressed mutual desire for the expansion of our partnership. We are united on the fact that it is vital to create an environment that is as favourable as possible to joint business initiatives, industrial cooperation, and joint investment streams.
Moreover, we have something to start from. Last year we attained a record trade turnover of more than $22 billion. Russia became Finland's most important partner, ranking first in terms of trade.
Cooperation on investment has seen a qualitative shift. Russia has become one of the six leading countries in terms of the volume of direct investment it has attracted from Finland.
I see this as evidence of the steady progress and positive attitude in the business community to the realisation of long-term business plans.
The Russian Government intends henceforth to promote trade and economic relations between our countries, first of all in relation to mutual investment in diverse sectors of the economy: in the real economy, in establishing modern manufacturing and infrastructure.
Russia's economic strategy priorities include generating a prosperous business climate and refining the legal framework governing the activity of foreign investors. This choice is not subject to any kind of trend, including economic trends.
I think that all those gathered here understand very well that this is indeed one of our priorities. And of course, in the conditions of the global economic crisis, we must make adjustments in line with events that are unfolding. Today all countries, to some degree, are experiencing economic variations. And our countries, Russia and Finland, are no exception. Inevitably, we ourselves have experienced the negative repercussions of the crisis.
There has been a drop in the demand for and prices of traditional Russian export goods. In 2009, we expect to see a distinct decline in GDP, industrial production, and other economic indicators.
Nonetheless, and this is evident, Russian market and social institutions have proved their sustainability and their ability to counteract the negative influence of the crisis.
The Russian Government has developed and is implementing a programme of anti-crisis measures. It is financed with 3 trillion roubles, approximately $90 billion. Overall, huge resources are being devoted to renewing the economy, in the order of 12% of Russia's GDP.
Above all, the resources are allocated towards supporting the banking system, the real economy and the labour market, supporting employment. Already today, we can see the first positive results of our work. In the last month, the number of people officially registered as unemployed has slowed and has even begun a small decline.
The rate of inflation has slowed. The Central Bank took the decision to lower rates. In conjunction with the Government measures, we hope this will make credit resources more accessible.
I emphasise that we are striving not only to mitigate the negative consequences of the global crisis, but also to build capacity for the renewal of sustainable economic growth, and to stimulate innovation and modernisation in industry.
The crisis did not shake Russia off course for its future integration into the global economy. I am certain that Russia's imminent accession to the WTO and the OECD, on mutually acceptable, non-discriminatory conditions, will promote increased stability in global trade and economic systems.
Incidentally, we spoke about this with our counterparts today. And our Finnish friends in the Finnish Government are most active in their support for these plans of the Russian Government.
I should admit that the consequences of the global crisis have not bypassed Russian-Finnish trade and economic relations. However, in my view, we have achieved the most important thing, which is not to allow the major projects we have outlined to collapse; this firstly indicates their relevance and demand, and secondly vindicates the choice of our cooperation model.
In this regard, I would like to mention, first and foremost, the organisation of high-speed passenger train links between St Petersburg and Helsinki, which aims to cut the journey time to 3.5 hours.
On the Russian side, this project is being implemented under a public-private partnership. Its overall cost is around $2.5 billion, over a third of which is allocated from budget resources. The positive experience accrued here could be successfully applied to other areas of cooperation.
Comprehensive measures are being implemented under the established process to ensure that the Russia-Finland border operates effectively. Of course, now the workload at border crossing points has somewhat decreased, but this is a temporary quiet period, which must be used as efficiently as possible to streamline the infrastructure. Already at this point, we must be working towards a renewed trade flow increase in the foreseeable future.
In addition, today's difficulties prompt us to look together for innovative solutions, to improve the structure of our trade and economic relations, to join forces in those areas where Russia and Finland have the competitive advantage.
One such example is special-purpose shipbuilding. We can only welcome the fact that in this sector cooperation ties are developing throughout the entire cycle: from the blueprints to the end product. I am referring to icebreakers, tankers and other vessels for use in difficult icy conditions. Moreover, they are in demand, and even more will be needed for the development of deposits in the North.
New forms of cooperation are being established in the energy sector, the development of which requires significant resources. It is well known that the Finnish company Fortum bought the Russian power generating company TGK-10. There are also examples of the reverse, with Russian investment in the Finnish fuel and energy sector, mainly by LUKoil and Gazprom.
However, I would like to draw attention to the fact that Fortum opted for significant investment. In addition, in spite of the difficulties of today's economy, budgetary issues and cutbacks in budgetary funds, we are nonetheless implementing those plans that we announced with our investors previously, before the crisis began to affect the global and Russian economy. We sincerely hope that the investors, including Fortum, will fulfil everything as planned, when they settled the question of these investments.
Moreover, I would like to draw attention to other circumstances. Such significant, sizeable investment in the Russian economy is a very delicate area. This investment indicates that the Russian Government continues to follow a wholly liberal market economy policy.
Mr Kuula (Tapio Kuula, president of Fortum Power and Heat Oy) knows that this [Fortum] is one of the main power generating companies not only in Russia but also in Europe. Enterprises in the nuclear industry are closely tied with the company. Russia has put great trust in our foreign investors, including those from Finland. I truly expect this to be a good indicator for work in other areas.
Should the Finnish Government make a decision regarding the future development of nuclear energy, Russian companies would be interested in participating in the relevant tenders. And I do not doubt that the bids put forward by them will be competitive in their financial and technical criteria, and in terms of safety requirements.
Our countries can also make a significant contribution towards strengthening Europe's energy security, by diversifying gas transit supply routes. The strategic Nord Stream pipeline has an important role to play here.
We spoke a great deal about this today. I would like to stress that I very much expect the relevant Finnish Government and public structures to be led by national interests.
I would like to separately dwell upon our cooperation in the forestry sector. We took the fundamental decision to develop high-level timber processing in Russia. We announced these plans long ago, we set them out, and our partners recognise this. We will accommodate our traditional partners. However, I would like to stress again that the strategic plans to develop timber processing within the Russian Federation remain unchanged. And that means that we must agree in due course about how we will go forward and how we will build our relations in this sensitive area.
It is important for our Finnish friends to use the given rest period for the efficient expansion of high-level timber processing on the territory of the Russian Federation.
We expect considerate and comprehensive discussion of these issues to continue at the forest summit in St Petersburg in October. Its results can then be developed into strategic plans for joint action that takes into account our interests, and those of our Finnish friends.
And of course we associate the future development of economic cooperation with strengthening our cooperation in science-intensive and high-tech fields, for example in nanotechnology, something we also mentioned today.
Our meeting, as it is, should not remain a once-off event. I believe that dialogue between the executive branch of government and the business community in our countries could become a regular occurrence.
I am certain that the co-chair of the Russian-Finnish Intergovernmental Commission on Economic Cooperation and the leaders of entrepreneurs' associations who are present here, will be able to develop the optimum format for such meetings.
In conclusion, I would like to remind you that tomorrow the 13th International Economic Forum opens in St Petersburg. Businessmen from Finland are always welcome guests to Russia, and also to such events.
The St Petersburg Forum can help in resolving those problems that we have discussed today.
Russia, as I have already said, is open to partnership, joint projects, and initiatives.
I have no doubt that by joining forces we are certain to achieve great and substantial results that will benefit our countries and people.
Thank you for your attention.
