"Turning East means new opportunities and new challenges"

Investment activity, the development of transport and energy infrastructure, as well as rethinking the role of the Far East and the Arctic in the global economy have become key topics of regional development in recent years. Alexey Chekunkov, Minister of the Russian Federation for the Development of the Far East and the Arctic, spoke to Izvestia on June 5 on the sidelines of the St. Petersburg International Economic Forum (SPIEF) about the dynamics of investments, new industrial projects, the transformation of perception of the eastern regions of Russia and their growing importance on the international agenda.

"The Far East was the heart of Europe in Asia"

— In the current economic and geopolitical situation, is the development strategy of your region being adjusted? What are the main challenges you face today?

— It was customary a few years ago to talk about the so-called turn to the East. It sounds a bit ridiculous to us, because the Far East has been the heart of Europe in Asia all its life. Nevertheless, this creates a number of new opportunities and challenges: cargo traffic is growing, mutual investments and trade turnover are growing. We trade almost $240 billion together with China alone. A new figure has already been set — to reach $300 billion in mutual trade.

Of course, our Far Eastern regions are now growing as an outpost in the East. They carry a special burden, a special responsibility, but they also present new opportunities. Despite all the challenges and limitations of recent years, our investments have not faltered or slowed down. Every year, the investment rate was higher than the national average.

Currently, the investment portfolio that accompanies our ministry and the corporation has already exceeded 15 trillion rubles. A significant amount. 4 thousand investment projects represent the Far East and the Arctic in total. And every year, in fact, more than a trillion are already invested. This is only an investment with state support.

These are exactly the investments that would not have been made if it had not been for a focused system for the development of these regions. If 4 trillion rubles are invested in the Far Eastern Federal District every year, and a trillion are state—supported projects, we can say that these are the same 25% increases that the president's policy of advancing the development of the region has given.

These include tax incentives, assistance in providing projects with infrastructure, land, human resources, social programs, and programs that attract and retain people. This whole package of measures makes it possible to increase the pace of development of the region by at least a quarter.

— So investors generally remain interested in the region and continue to implement projects, despite the geopolitical and economic difficulties? Or do they still need additional support measures today?

— Investors — what are they asking for? There is less interaction with the best companies. The strongest ones are pretty self—sufficient. The fact that the Far East has been chosen more and more often is really noticeable. At the same time, complaints about remoteness, lack of infrastructure and a shortage of population are becoming less frequent.

However, there is still a shortage of personnel, and this is already a nationwide problem. With an unemployment rate of about 2%, there is simply nowhere to hire workers — neither for shift work nor for permanent work. As a result, competition for labor is intensifying, and wages are rising.

At the same time, new opportunities and the proximity of Asian markets also mean the proximity of sales markets, sources of components, and all components — this is important for any production. This is the proximity of financial centers, remoteness from tension zones.

Obviously, security issues are coming to the fore today. And we are witnessing an increase in investor interest in creating new industries and launching projects that have remained "on the shelf" for many years.

— Which investment projects are being implemented in the region today, do you consider the most significant and promising? What economic and social impact do you expect from their implementation?

— First of all, I want to say that this is my personal opinion, formed over almost a quarter of a century of working in investments in the civil service. I think it's very wrong to be shy about natural resources — you need to be proud of them.

That's when they say "raw materials appendage" — it's shameful, stupid, and this is amateur reasoning. People who have not experienced serious large-scale mining, with serious large oil and gas reserves, can afford it. They're tempted to call it a low-tech business. However, this is a very high-tech business.

Finding and exploring a field, drilling an oil or gas field, and creating a transportation system means billions and billions of dollars of investment. And there are some projects that have been around for decades. For example, the deposit, which was discovered in 1949. In Soviet times, they even thought of laying a nuclear charge in order to bring the rock mass into line and extract it.

It was only in 2018 that we got close to developing it. More than 300 billion rubles have already been invested. This is not a concentrate, but a highly processed product — cathode copper. This is what is needed now for all renewable energy and electric vehicles. Copper is needed for the entire economy of new technologies.

When you see such projects, first of all you feel proud. They are extremely important for the economy. And, most importantly, they create new jobs. As economists say, with high labor productivity, or in other words, with higher wages.

The average salary in government-supported projects is 62% higher than the national average. Higher salaries mean that people have more money left for housing and living. We have made housing cheaper in the Far East and the Arctic thanks to the Far Eastern mortgage.

This means that people have more money left, and they give birth to more children. In the Far East, the birth rate of third and subsequent children is almost twice as high. Every third child in the Far Eastern Federal District is born in a large family. And this is very cool, because having many children is, in my opinion, the key to such social happiness, the key to people staying in the territory, the key to the development of the country.

— What measures are being taken today to attract private investment in the region? And if we talk about foreign investors, do they still have an interest in implementing projects?

— Foreign investments account for slightly less than 10% of our portfolio — about 1.2 trillion rubles out of 15. And 80% of this amount is Chinese investments in the Far East. I expect this share to grow.

We are seeing increased interest now, due, frankly, to the fact that Western companies have left. But Russia is still a giant market. We are the fourth economy in the world, and big smart companies not only from China, but also from India, for example, see that they need to occupy a niche.

And here, right at SPIEF, we have a number of consultations with Chinese and Indian entrepreneurs who are strong where they are — well, in particular, the Indians in pharmaceuticals, the Chinese in general in any industry, in mechanical engineering, in electrical products.

And for this purpose, international territories of advanced development have been created, where we understand that these are not only tax benefits, but also protection from sanctions and illegitimate attacks by third countries.

We have provided for such mechanisms, including a closed register of participants, the possibility of opening branches of foreign banks so that they can be conveniently serviced, a workforce without quotas, 15 years of stabilization of conditions, the so-called grandfather clause, that is, 15 years will not change working conditions.

We see high interest, the first projects are Chinese, but I am sure others will follow them.

"Infrastructure development is a top priority"

— For private investors, transport accessibility and availability of energy resources remain one of the key factors. How are these issues being addressed in the Far East today?

— Now we are finalizing and, on behalf of the president, this year we are introducing an updated strategy for the development of the Far East until 2036. Its first priority is infrastructure development, primarily the creation of new energy generating capacities and the development of logistics corridors.

In the energy sector, it is important to take into account three key factors, for each of which we are systematically working. The program has already been agreed with the Ministry of Energy.

The first factor is the efficiency of the existing energy sector. That is, not only to build new energy, we need to look at how we consume energy. And in some cases, the margin of efficiency improvement is up to 20%. That is, the same electricity that is already available, if used more wisely, for example, slightly shift the time of peaks in energy consumption, transfer energy-intensive production to the second or third shift, that is, unload the system a little.

It's energy, it depends on time: people sleep at night, which means it's more profitable at night. Tariffs can be adjusted, production stimulated, and work done when people are asleep. That is, the first component is energy efficiency.

The second component is the creation of new energy for those industries that have already been announced. There is an official SIPR program, which includes about 1.8 GW by 2030, which will be created under the energy development program.

And the third component is already promising energy for future projects. There are also such strategic facilities as new nuclear power plants in the Khabarovsk Territory and in Primorye. And renewable energy — solar, wind, and energy from isolated areas. This is a very detailed and carefully worked out issue, it is currently under implementation.

— How is the transport and logistics infrastructure of the Far East and the Arctic developing today, and which areas are becoming key?

— First of all, these are railways. I remember in my youth how they used to swear at BAM: they said it was some kind of Brezhnev whim. Then in the 90s they said that it should not be completed at all. There would be no country without BAM now. The battle is going on for each car to get to BAM.

Therefore, the expansion of the second and third stages of the development of the Eastern landfill is already underway. There are investors who, without waiting for infrastructure development, built their own railway.

Border crossings are very important, I think that we will see not only an increase in the efficiency of the border crossings themselves, primarily with China — 4 thousand kilometers of border — we will see new technologies, including unmanned ones. They will significantly increase the speed of cargo handling, transshipment and movement of goods.

Therefore, in total, logistics will certainly increase and accelerate. Coupled with the development of the Transarctic transport corridor, this will make it possible to handle significantly more cargo.

The Northern Sea Route is something that is currently of great interest in the light of the events in the Strait of Hormuz. The Suez Canal has already stumbled before, so an important new statement from Chinese colleagues that they want to transport 20 million tons through the NSR by 2030 is a lot. By 2030, we should significantly exceed the target of 100 million tons of total cargo flow along the Northern Sea Route.

"The Far East is becoming a forge of youth"

— Despite the economic and infrastructural changes, one of the key problems remains the outflow of population from the Far East. What measures are being taken today to keep people in the region and encourage them to move there?

— In 2024, we had a migration influx of 24 thousand people. Due to demographic trends, the population has decreased slightly anyway, but this is a demographic cycle in which the whole country is located.

I would briefly formulate the new attitude towards the Far East as a new incentive, motivation, why people go to the Far East.

Now young people are reaching out for education. We are very happy about this and have been working on it purposefully, investing in universities in the Far East. And over the past 3 years, the share of applicants from other regions of Russia has tripled. It is still small — only one in ten from other regions, but this is already an achievement for the Far East.

If a person comes to study at an institute, he usually makes friends, family, becomes a Far Easterner, finds a local job. Throughout his life, educational migration with a minus sign accounted for up to 50% of the population outflow — people left to study in other regions.

We have found for each university in the Far East its own niche, its own specialization, in which it is strong. And this makes it possible to attract students from other regions. So far it's 10%, we're aiming for up to 25% of students from other regions, and then the Far East is becoming such an interesting forge for young people.

— How do you assess the results of the work of Far Eastern Mortgage and are there any plans to extend or modernize this program?

— Yes, this is the most important program for us. It allowed 207 thousand families to upgrade their homes. The total amount of money raised under this program over six years is more than a trillion rubles. This is a landmark program that has doubled the pace of housing construction, and most importantly, people have received new, more comfortable apartments. By the decision of the President, this program will operate in the Far East and the Arctic at a rate of 2% per annum until 2030.

— How is the problem of energy shortage being solved in certain regions of the Far Eastern Federal District today? What measures are being taken to develop generation?

— Among other things, there are technological solutions, there are solutions related to renewable energy, new batteries, which now allow us to take a new approach to supplying remote isolated areas. That is, it is not only the northern import, not only, roughly speaking, diesel fuel and fossil fuels. These are already new technologies that make it possible to install combined hybrid power plants, increase efficiency and improve the environmental friendliness of energy.

"Eastern partners occupy the niches vacated by the West"

— You mentioned the development of cooperation with China, India and the ASEAN countries. At the same time, representatives of Western countries are also present at the forum. How is the dialogue with Western partners being built today — are there any contacts and has the format of interaction changed?

— The West is a generalized concept. There are always more sane people who maintain contacts: on the scientific and humanitarian lines.

We have cooperation with Norway in Svalbard. There are requests from the United States, primarily regarding cooperation in the Arctic.

Together with RDIF, we are working on a selection of investment projects for the Arctic Investment Fund. While the West's collective madness towards Russia has not stopped yet, and in this sense, the holy place is never empty, our Eastern partners are very carefully and consistently occupying the niches vacated by the West. We will do what is beneficial for Russia.

— How are relations with Norway developing today, including in the context of joint work in Svalbard, taking into account the current geopolitical situation?

— We have a strong ambassador to Norway, who used to be Russia's representative in the Arctic Council, Nikolai Korchunov. We have a very strong leadership of the Arktikugol Trust, which operates in Svalbard.

I believe that the guys are doing world-class work, and even foreign media are writing about them. They implement truly "humane" and beautiful projects. For example, they organized the world's northernmost Victory Day Parade with an aviation unit. They were fined 500,000 rubles for this, which we were proud to pay — there was no aviation unit even in Moscow that year. And an Mi-8-300 flew over Svalbard, and it was very touching and impressive.

— Well, is it possible to negotiate with the authorities of that country?

"You can't move us that easily.

"The Arctic is a geopolitical territory in which the whole world is involved"

— What other legislative initiatives is the Ministry of the Far East planning in the near future for the development of the region?

— The most important thing is the draft law on a single TOP, and the single territory of advanced development is an instruction from the president, who, I quote, at the last Eastern Economic Forum explicitly said to take the next cardinal step in the development of the Far East and the Arctic, combining them into a single preferential regime.

The next chapter opens up new decades, which takes all the best that has already been gained in the following regimes: the territories of advanced development, the free port of Vladivostok, the Arctic zone of the Russian Federation, the UEZ in Magadan, the Kuril regime and the INTC — the Innovative Scientific and Technological Center on Russky Island.

Here I have listed six preferential regimes that we have. We are making a combined one that brings together the best of them and will also give investors new alternative opportunities.

We have already agreed on this with the Ministry of Finance, and I think this will further increase the attractiveness of the region for investment.

— In addition to major investment projects, the Far East is increasingly being considered as a tourist destination. To what extent, in your opinion, is the interest in these territories growing on the part of Russian and foreign tourists?

— The tourist flow has increased by 12% over the year, and this is a high rate. We expect a doubling of tourist traffic by 2030 compared to 2024. These are presidential decrees and national goals, but I think we will even exceed this level, because, of course, people are discovering not just domestic tourism, but the Far East and the Arctic.

In total, 400 tourism projects are currently being implemented under all our preferential regimes. These are a variety of projects, from small glamping sites to large—scale projects such as Three Volcanoes in Kamchatka, Mountain Air in Sakhalin, a resort in the Khasansky district, and part of the Baikal — Five Seas federal project. This is the development of Lake Baikal.

And in general, of course, we see that the quality of tourism projects is growing. The people who try them are the ones who arrive once, then return, and the tourist flow is growing very steadily.

— What do you consider to be the main result in the development of the region since the last SPIEF? And more broadly, what is the most striking success of your entire career?

— I think this is a new perception of the Arctic and the Far East by people. Even when I started working, I had already been in the team of Yuri Petrovich Trutnev for 13 years, and I led the Investment Fund for the Development of the Far East for six years, and at first there was a misunderstanding.

People said, "Well, you have the law of the taiga, the prosecutor, the bear, what's the bear corner there, the Far East is such a wild Russian Texas." Someone was joking, someone did not understand, there were those who were in the subject, but there was such a stereotype: forest, fish, gold, tigers, bears.

Now everyone understands that the Arctic is a geopolitical territory in which the whole world is involved, that the Far East is a territory where we are neighboring China, Japan, Korea, that this is a fast—growing Asia, that the main processes of the world economy and politics are taking place there. And, in general, people's attitudes have changed a lot.

Accordingly, we are trying to convert this attitude into new investments, new interesting projects, and a new quality of life for Far Easterners and Northerners.