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14 December '16

Yalta International Economic Forum Presentation on the Business Crimea Days in Moscow

Yalta International Economic Forum Presentation on the Business Crimea Days in Moscow

The YIEF Foundation took part in the forum of Moscow and Crimean business people and in the Crimean Free Economic Zone Conference at the Moscow Chamber of Commerce and Industry as part of Crimea Days in Moscow on 14 December.

Crimea Days in Moscow were organized by the Permanent Representative Office of the Republic of Crimea under the President of the Russian Federation and the State Autonomous Institution Business and Cultural Centre of the Republic of Crimea. The annual event, which is being held for the second time, also featured an exhibition of goods and services offered by Crimean entrepreneurs.

Gathered at the Moscow Chamber of Commerce and Industry were more than 150 members of the business community, politicians, representatives of the Crimean authorities and federal power bodies. Over 40 Crimean companies active in the main sectors of the Crimean economy: industry, agriculture, construction and the services, including Nikitsky Botanical Garden, natural cosmetics producer Kyimskaya Roza, the Crimean dairy farm Krymsky Molochnik and others, took part in the Business Crimea Days in Moscow.

“The aim of our event is to acquaint the Moscow business community with the business environment in Crimea and to help Crimean business find partners in Moscow”, Director of the Crimean Business and Cultural Centre and member of the YIEF Fund Board Yaroslav Ivanchenko said during the Business Crimea Days in Moscow. He went on to say that, because the main Russian investment banks are not operating in Crimea, local businesspeople often look for investment partners in other Russian regions. “The aim of the Business Crimea Days in Moscow is to help business establish such contacts”. Mr Ivanchenko explained, adding that many participants in the previous Crimea Days in Moscow continued their acquaintance with Crimea’s economic potential at the Yalta International Economic Forum.

CRIMEAS ECONOMIC DEVELOPMENT

Chairman of the Republic of Crimea State Council Vladimir Konstantinov said that, if the region sustains the current rate of economic development, it will be able to pay its way without federal subsidies in 5–7 years. “Crimea has some of the highest economic growth rates in Russia. This year, industry for the first time reported decent production growth thanks to launch of two construction material plants and state orders placed with defence industry enterprises. If we sustain this dynamic, Crimea will cease to be a subsidised region within 5–7 years”, Mr Konstantinov said.

He also noted that, once the bridge across the Kerch Strait is built, the flow of tourists to Crimea might double to 10 million a year, the all-time record registered in the 1980s.

“This is the benchmark we are seeking to achieve. The result, once it is reached, will give a big boost to development of the region as a whole”, Mr Konstantinov said.

Minister of Industry and Trade the Republic of Crimea Andrei Vasyuta told the Forum participants about the sector’s development. “Construction is under way of a major clothing factory in Simferopol and a shoe factory in Evpatoria. Seventeen big industrial enterprises are participating in the Free Economic Zone”, the Minister said. He stressed that, in addition to preferential treatment of FEZ participants, Crimea is implementing programmes in support of industrial enterprises. For instance, they may be compensated for 50% of the cost of buying new equipment. The Business and Cultural Centre of the Republic of Crimea, whose task is to assist Russian and foreign businesspeople looking to implement business projects in Crimea, notes increased activity by foreign investors, according to the Centre’s Director Yaroslav Ivanchenko. “The attitude of investors to Crimea is changing. They no longer come here just to test the waters, but to invest”, Mr Ivanchenko said. He attributes this to the phased elimination of infrastructure obstacles and completion of the reintegration of Crimea into the Russian Federation. “In previous years, business had reasonable doubts, as the issues of land ownership were not settled and there were power and water shortages. Today, the situation has changed, the energy and water situation has improved, significant progress has been made in addressing them, said Mr Ivanchenko.

FEZ PERFORMANCE

Another stimulus to investment activities, according to Mr Ivanchenko, is the Free Economic Zone. “Today, it enables Crimea to offer better conditions for investment projects than any other Russian region”, he said, proposing to enlarge the list of preferences for FEZ participants. He noted that the situation was different when the current law on FEZ was drafted at that time, Western countries had not yet imposed a total blockade of Crimea. The tightening of the blockade created additional difficulties for investors, so it was logical to introduce improvements to the law, said Yaroslav Ivanchenko. He proposed, among other things, introducing additional tax breaks similar to those available in Kaliningrad and in the Far East.

 

Alexei Vorobyov, Chairman of the Association of Participants in the Crimean FEZ, which consists of 140 companies, told those present about the actual conditions and the performance of FEZ residents. Preferential terms enable the companies to save on costs and increase profit margins. “Thanks to the preferences, the enterprises have been able to invest the money released in modernisation and retrofitting”, Mr Vorobyov said. He cited some success stories of companies in the Free Economic Zone. “Our colleagues in the agriculture sector import into Crimea flour mills and milk pouring equipment on preferential terms, which yields a tangible positive effect”, said the head of the Association of FEZ participants.

Sergei Kabachok, owner of the Krimsky Molochnik dairy, shared his experience of work as a FEZ resident: “We saved about RUB 10 m in the first 9 months of the year. That is a significant sum for us. As a result, we were able to set up new production facilities, create new jobs and, today, we employ twice as many workers as 18 months ago”, the company’s head said.

PRESENTATION OF THE YALTA INTERNATIONAL ECONOMIC FORUM

Director of the YIEF Fund Sergei Lazutkin spoke about the potential and prospects of the biggest business event in Crimea. Reporting the results of YIEF 2016, he dwelt on implementation of agreements on major investment projects, including building of a new RUB 32 bn air terminal at Simferopol Airport and an agreement on building a RUB 7 bn poultry farm in the steppe part of Crimea. “The poultry farm will be a key element in the diversified Black Sea meat cluster being created in Crimea”, said Mr Lazutkin.

The YIEF Fund director noted that the media coverage reflects the growing influence of the Forum. “This year, we registered more than 7,500 references to the Forum in international, federal and Crimean media”, he said.

Sergei Lazutkin revealed that next year’s YIEF in April 2017 would, for the first time, include a discussion of nature conservation. “2017 has been declared Ecology Year and the YIEF is planning a serious discussion of nature conservation technologies. The Forum Organising Committee is preparing the event together with the Russian Ministry of Natural Resources”, the Director of the YIEF Fund said.

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