Potential investors from the Asia-Pacific region are watching these developments with interest while some of them are already taking part in specific projects, experts say.
Despite the crisis, the Far Eastern region is demonstrating good results in the economy and the social sphere, President Vladimir Putin said at a meeting on the Far East development on Friday.
Industrial production in the Russian Far East grew by 5.3% last year compared with 1.7% across the country while agricultural output in the region expanded by 18.7% compared with the country’s average of 3.7%, the president said.
In his address to both houses of Russia’s parliament back in December 2013, Putin called the rise of Siberia and the Far East a top priority task for Russia in the 21st century.
The Russian Far East is situated on an area of over 6.1 million square kilometers or about 36% of Russia’s total territory while its population is 6.3 million people or about 5% of the country’s population.
The Russian president said on Friday that the law on advanced development territories, which had come into force earlier this week, should work in full in the country’s Far East.
"This law stipulates a whole range of privileges, including reduced or even zero rates on a number of taxes, accelerated and simplified administrative procedures, the provision of ready engineering infrastructure and other benefits," Putin said.
Russia will start creating a free port of Vladivostok already from 2016. The port is set to become a major project to spur the economic growth of the Primorye Territory and the entire Russian Far East. Putin called the idea of the free port’s creation in Primorye "a good proposal" and urged to expedite the project’s implementation.
At the first stage, 14 advanced development territories are scheduled to be established in the Russian Far East. Russia’s promising plans to develop the country’s Far East make emphasis on cooperation with countries of the Asia-Pacific region.
Russia’s Far East Development Minister Alexander Galushka said at a meeting on Friday that foreign investors "perceive our law on advanced development territories very positively."
"Some 20 memorandums of mutual understanding and investment memorandums were signed precisely with foreign investors before it was adopted," Galushka said.
Besides, all major Japanese trading houses officially signed corresponding memorandums with the Far East Development Ministry and confirmed their readiness to invest in the Russian Far East, the minister said.
"New projects in the Far East evoke great interest of investors from China, Japan, South Korea and lately, from Singapore, and advanced development territories play a special role here," Head of the Regional Economy and Economic Geography Department at the Higher School of Economics Alexey Skopin said.
"An advanced development territory will center on a particular project, around which infrastructure will be built, which is attractive for investors, the expert said.
"As compared with existing special economic zones, the law on advanced development territories stipulates additional financing from the federal budget and considerable support from local authorities and these advanced development territories cover broader areas. It is especially important that both investors and the federal government will implement programs," Skopin said.
"Quite substantial investments are already coming, first of all, in the port infrastructure as these projects can be quickly recouped. Korea, Japan and China are investing quite actively in port projects. All projects in the coastal area are quite attractive while problems with infrastructure begin in areas located some 1,200-200 km from the coast, the expert said.
Russia’s representative in the China Overseas Development Association (CODA) Mikhail Udovichenko said in an interview with TASS that "Chinese investors closely watch Russia’s efforts to increase the investment attractiveness of the Far East. China certainly has interest in the implementation of projects in the Far East."
"I can’t say that a sharp leap has occurred in investment sentiments but interest is rising — step by step, gradually in accordance with Asian mentality." The largest hurdle that stops potential investors so far is the absence of the required infrastructure, he said.