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Putin was delivering the annual Presidential address to Russia’s Federal Assembly.
Putin has called for tax breaks and improved investment conditions in Siberia and Russia’s Far East on Thursday.
Energy hungry Asian markets, bordering its Far East, are attracting Russia’s strategic focus.
“Russia has plans to move into the lucrative Asian gas market, by diverting current supplies away from Europe and developing new supplies aimed at China, and Asia generally,” says financial market expert Sam Barden.
Putin on Thursday said Russia’s business development toward the Pacific Ocean is a national priority of the century.
Putin said he has ordered the government to set up a slew of tax discounts for energy and export industries in the Far East and Siberia, including a five-year grace period for income, land and property tax and discounted insurance premiums.
Development in Siberia and Far East regions is high on the agenda of the Russian government. A Far East development ministry was established last year.
Expansion in the regions is also an attractive component of the country’s campaign to improve its investment climate and image.
China and Japan border Russia’s Far East region and are expected to be major investors in projects.
The Russian Direct Investment Fund and China Investment Corporation established the $2 billion Russia China Investment Fund (RCIF) when President Putin visited China last June.
The RCIF has said that it is keen to invest in Russia’s Far East.
Putin on Thursday also said the state should also relax other business-related conditions, like building-permit applications and customs procedures, to encourage development and bring the regions to a level competitive with rivals in the Asia-Pacific area.
Putin excluded oil and gas companies from the proposed break on mineral extraction tax, however, saying the industries were already profitable.
During his state visit to Seoul recently, Putin backed a new Asian-European rail trade route, a transport corridor linking the Asia-Pacific region, Central Asia, and Europe.
“We have decided to modernise the Baikal-Amur and Trans-Siberian railways and are putting considerable money into these projects, including from our reserve funds.”
“This marks the first practical steps towards carrying out the possible trilateral project of joining the Trans-Korean Railway to the Trans-Siberian Railway. We hope that South Korean investors will get actively involved in this big project,” urged the Russian President.
This could make Russia a major cargo and fuel carrier between East Asia and Europe.
TBP and Agencies