APEC summit 2012: big expenses, false expectations, forecasts
4.09.12 13:24 By Pyotr Kanaev,edited by Karina Ayvazova
Some Soviet building project are still in search of investors Photo: ITAR-TASS
Three out of four priorities which Russia put at the forefront while chairing the APEC 2012 summit turned out to be impossible to do. Russia failed to agree on free trade zones, the project of renting out agricultural lands of Far East was not supported, exchange of innovation will only be made in the framework of the current agenda. The only real result of the summit is a pack of 20 infrastructure projects worth 12,3 trillion rubles which includes such major projects as the Baikal-Amur mainline and the Trans-Siberia railway.
"There is not one APEC country that has put so much effort into preparations for a summit," Viktor Ishaev, the minister of development of Russia's Far East admitted before opening the summit.
A source in one of federal agencies who took part in preparing the summit, the final sum spent on preparation was about 680 billion rubles
Russia expected something in return for this sum. While chairing APEC Russia declared four main topics: the liberalization of trade and investment, food trading security, transport and logistics, and the facilitation of innovative exchanges.
Liberalization of trade and capital movement is a traditional goal of APEC, but no agreements are planned on this topic under Russia's chairmanship. "Even the most ardent supporters do not expect such agreements," an unnamed source said, adding that Russia does not have bilateral free trade agreements with any of the APEC countries.
As he said, special expert groups have been working on creating free trade zones with APEC members.
But after making some calculations it became clear that Russia is unprepared to adapt to a free trade system - trade growth potential is limited to 2% with a significant risk for agriculture, the source said. A senior government official confirmed this.
Russia's contribution to food security may be cooperation with APEC countries in joint agricultural programs. The Ministry of Economic Development and industry experts were asked to rate and possibly extend the practice of leasing agricultural land in Eastern Siberia and the Far East, where up to 50% of arable land is not used. In particular, the possibility of co-production of biofuels was discussed.
Exchange of innovations was also an important topic, but it will not go beyond the current agenda during the summit, said a source familiar with the preparation of documents for the summit.
Russia has already been working with APEC in the spheres of biotechnology, nuclear energy, and space. Most partners in these spheres are South-East Asian countries. "The ability to transform this into a new quality of interaction is doubtable," the source says.
The only beneficial topic to be discussed on APEC summit is a pack of more than 20 transport and infrastructure projects worth some 12.3 trillion rubles.
The main projects are linked with railway building – the Trans Siberia railway and the Baikal Amur Mainline(BAM). In the framework of modernizing the Trans Siberian, a creation of a united company is planned that would attract investors. It is also planned to expand the powers of BAM. Today the mainline ships 22-24 tons a year. Only coal shipping is planned to increase to 70 tons a year.
The package of transport initiatives of Russia in APEC summit also includes the Northern Sea Route - the transport corridor between the ports of Western Europe, Russia, the Far East and South-East Asia and the Trans-Korean Railway
The "transport package" also includes a road network like the Chita- Khabarovsk road and Khabarovsk-Vladivostok road.
Experts offered to include the 'Bering' project in the summit's agenda – the building of a tunnel under the Bering Strait. But a source from Economy Ministry did not confirm the project in the summit agenda.
Aviation and shipbuilding projects will come in a separate package. Along with the Korean company Daewoo, Russia is planning to build a dry dock for the construction of large ships - up to 500 thousand tons - for oil and gas transport.
Another project includes Russian gas giant Gazprom and Japanese groups Itochu and Japan Petroleum Exploration. The agreement provides for the building a of liquefaction factory in Vladivostok, a Nikkei source said.
All the projects in the summit have been announced in advance, a government consultant who took part in the summit preparation says.
Transsib and BAM now focus on budget investment. But earlier the Ministry of Transport Russian Railways recommended some priorities be set: choose between capacity expansion or the financing of BAM highway construction.
Foreign companies prefer not to transport freights on the Trans-Siberian railway. Transporting a container from East Asia to Europe is more expensive than marine transportation. Customs control in Russia takes 3-4 days and costs $500, the same procedures in Singapore lasts one day and costs $3.
Thr Northern Sea Route was "poor navigation and rescue facilities, and a lack of centralized search and rescue responders," a source says.
According to him, "Russia's willingness to actively participate in cooperation priorities of APEC is not high."
"No matter how many contracts are signed. And they may be signed within six months. People will see the result, and the invested money will work ", said Ishayev. A source in the expert community does not exclude that in the months following the summit, Russia might hold a ministerial meeting of APEC economies.
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