Russian President Vladimir Putin outlined Moscow's main economic priorities during the plenary session of the Eastern Economic Forum in Vladivostok. Among them are stimulating private investment, deeper processing of raw materials in the Far East, infrastructure development and a careful balance between the fight against inflation and economic growth.
The Eastern Economic Forum is being held in Vladivostok from September 1 to 4 under the motto “The Far East - development for the benefit of the people“. Representatives of 80 countries have confirmed their participation.
Putin warned against excessive “cooling” of the economy
One of the main focuses of Putin's speech was the state of the Russian economy. The president said that the authorities continue to fight inflation, but must be careful that the measures taken do not lead to an excessive slowdown in economic activity.
The topic is particularly sensitive for business because of the high costs of financing. At the forum, the head of Sberbank German Gref also said that in his opinion the Russian economy is already “overcooled“ and enterprises need support.
The budget deficit is not critical
Putin also commented on the state of public finances. According to him, Russia's budget deficit is not critical, as the state debt remains among the lowest in the world.
The president said that the authorities are trying not to increase state loans excessively, because this would limit the private sector's access to financing.
“Our main task is to create conditions for private investment,“ Putin said.
According to preliminary data from the Russian Ministry of Finance, the federal budget for January-July has a deficit of 6.455 trillion rubles, or 2.8% of GDP. The current budget for the entire year initially set a deficit of 3.786 trillion rubles, or 1.6% of GDP.
More raw materials to be processed locally
Putin paid particular attention to the economic model of the Far East.
According to him, resources extracted in the region and in the Arctic should increasingly be processed locally, instead of being exported in raw form.
This implies expanding production in metallurgy, oil and gas chemistry, fertilizer production and other industries with higher added value. “Interfax“ announced this priority immediately after the start of the plenary session.
The approach aims to build longer production chains in the region itself, create new jobs and increase revenues in local budgets.
A new mechanism for financing infrastructure
Another topic in the speech was attracting private capital to infrastructure projects.
Putin tasked the government with monitoring how the so-called model of concession bonds and, if necessary, make adjustments to the mechanism.
The idea is to attract long-term funds for transport, logistics and other infrastructure projects through the capital market, some of which are implemented through public-private partnerships.
This is important for the Far East, where long distances and insufficient infrastructure continue to be among the main constraints to industrial development.
The first oil from “Vostok Oil“ should soon reach the market
Putin also announced an upcoming important step for one of the largest Russian energy projects - – “Vostok Oil“.
According to him, the first quantities of oil from the project should soon be sent to consumers. “Interfax“ places the announcement among the key economic highlights of the plenary session.
“Vostok Oil“ is a large-scale project of “Rosneft“ in the northern part of the Krasnoyarsk Territory and is part of Russia's strategy for developing the resource base and transport infrastructure in the Arctic.
The Far East must attract new investments
According to Putin, the current model for the development of the Far East must be preserved and expanded. Moscow is trying to create a preferential environment for business through tax incentives, special economic regimes and infrastructure support.
Even before the plenary session, Putin said that the state is building a “new model“ for the development of the Far East and the Arctic, including more favorable conditions for enterprises and new legal mechanisms to improve the investment climate.
Asia remains the focus of Russia's economic strategy
The Vladivostok forum once again shows Russia's increased orientation towards Asian markets.
Putin met with Indonesian President Prabowo Subianto before the plenary session and identified Indonesia as one of Moscow's key partners in Southeast Asia.
The plenary session also includes representatives from China, Mongolia and Myanmar, further underscoring Moscow's drive to attract capital and technology from Asian economies.
In economic terms, the main message from Putin's speech is that Russia is trying to simultaneously maintain macroeconomic stability and avoid an excessive slowdown in investment. For the Far East, this means deeper processing of raw materials, development of infrastructure, attraction of private capital and stronger integration with markets in Asia.