President Hotel, Moscow, March 12, 2008 -The meeting was chaired by Mr. Victor A. Zubkov, Prime Minister of the Government of the Russian Federation. In attendance were some 40 regular members of the Council on Forest Sector Development, including federal ministers and heads of the federal agencies and services, governors of the major forest regions of Russia, representatives of Russian business and academic community, professional associations, as well as about 35 invited international participants (CEOs and senior managers of major international forest sector companies, World Bank and International Finance Corporation). Russia's Prime Minister Victor Zubkov addressing the international conference said that the country’s forest industry was open for international cooperation and foreign investment. He also emphasized that a Council on developing the forest industry was set up at the Russian Cabinet to launch dialogue between the state and businesses. Mr. Zubkov pointed out that last year foreign investment in Russia reached a mind-boggling 80 billion dollars. The Russian economy, the Prime Minister said, has grown stable and predictable. According to the Prime Minister Russia is set to build 30 new biofuel plants."Existing plants will be overhauled and 30 new ethanol producing plants [will be built]," he said on Wednesday during an international conference on the development of Russia's forest industry."The Russian government this year is planning to pass a program to develop biofuel production by increasing ethanol output to 2 million tonnes per year", he said.
"The Russian government plans to allocate about 1 billion rubles from its Investment Fund to regions for building roads leading to logging areas.The first allocations are expected to be disbursed in August-September," added Zubkov.
Mr. Zubkov's words were complimented by Mr. Andrei Belousov, Deputy Minister of Economic Development and Trade, by saying "The lack of roads hinders the development of the country's timber sector. About 70% of the country's potential logging area cannot be used because of the absence of suitable roads". Klaus Rohland, World Bank Country Director for Russia, highlighted the roles of the World Bank and IFC as the biggest providers of multilateral long-term financing and technical assistance in forestry and forest products sector. He underscored the special role the World Bank Group plays in the transfer of knowledge (analytical and advisory services), quoting as an example the Russia Sustainable Forestry Pilot Project which provided critical advisory support to the Government in the development of a Russian national forest certification system that would be compatible with leading international systems. IFC has also identified the forest products sector as the priority target sector for its investments in Russia. IFC's strategy in the Forest Products sector in Russia mirrors the Government's policy to encourage downstream investment to better utilize the vast forest resources. Speaking about the challenges ahead in the Russian forest sector development and drawing upon the applicable international experience, Mr. Rohland stressed the crucial role of a predictable economic policy and competition as the key enabling factors for the industry modernization and innovation. He further identified the following strategic priorities where Government continued attention would be critically needed in order to further improve the investment climate in the forest sector, and where the World Bank Group can also play a role: (1) invest in forest information and monitoring systems that can produce credible, freely accessible data; (2) improve human resources in forest sector (basic and professional education and training of forest managers and workers); and (3) develop forest infrastructure ("smart" forest road networks). Keynote speakers also included representatives of the Federal Forestry Agency, Siberian Accord Inter-regional Association, Karelia Republic, Kostroma Oblast, Vnesheconombank, Mondi Europe (Austria), Taiga Asset Management (Sweden), Ilim Group (US-Russia JV), Stora Enso (Finland), and UPM-Kymmene (Finland). The speakers highlighted the Government's current plans and instruments for attracting long-term, responsible investments into the forest sector modernization and innovation, as well as the remaining problems and bottlenecks in the sectoral investment climate. Among the most critical issues listed were: (i) the continued lack of stability and predictability of Government's economic policy and enforcement measures in the forest sector; (ii) acute shortage of sectoral human resources, including, in particular, specialized design, engineering and workers skills (resulting in a dramatic shortage of 'bankable' investment proposals and business plans); and (iii) insufficiency of forest infrastructure, especially forest road networks. In this context, it was emphasized that accessible forest resources in Russia are in fact significantly smaller that the total size of resource, and that in a number of regions that have been traditionally viewed as 'forest-rich' the actual shortage of resource is already affecting investment decisions. Also noteworthy was a proposal by the Ministry of Economic Development and Trade to link the application of budgetary subsidies for commercial credit with a requirement to have the credited operations subscribed into a voluntary third-party forest certification scheme. # # # Internet resources: http://www.government.ru/government/rfgovernment/rfgovernmentchairman/chronicle/archive/2008/03/12/7076838.htm
http://www.worldbank.org/forests The meeting's agenda, list of participants and selected presentations (most of them in Russian language) can be downloaded from the World Bank's Public Document Library related to Europe and Central Asia Forestry. |
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