Now the elections are out of the way, investors are waiting to see if Vladimir Putin has any new ideas up his sleeve to promote the development of Russia and avoid economic stagnation.

One of the country’s leading political scientists has come up with a bold scheme: build a new capital at Vladivostok.

The creation of a new capital at the Pacific port would spur the development of Russia’s eastern regions and position the country to take advantage of its strategic location at the gateway to the vibrant markets of Asia and the far east, Sergei Karaganov, dean of the faculty of world economy and international affairs at the Moscow Higher School of Economics, wrote in the state newspaper Rossiskaya Gazeta on Thursday.

“A town with some of the functions of a capital in the far east would …make Russia part of the rising world,” he said.

Sitting on a bay not far from Russia’s borders with China and North Korea, Vladivostok is run down and plagued by unemployment. But the city has had strategic importance for Russia ever since it was conquered by the Tsars in the late nineteenth century. It is home to the Russian Pacific fleet and the terminus of the Trans-Siberian Railway.

As a capital Vladivostok would become the focal point for the the development of Siberia and the Russian far east that have so far seen little investment outside natural resources. As it grew in importance the city could attract business and young educated professionals from central Russia, who frustrated by the lack of opportunities in their home regions, are crowding into Moscow or emigrating to the west.

Karaganov is not suggesting that Russia should give up on Moscow. To become a modern and globalised country Russia needs three capitals to reflect its historic and cultural ties with Europe and the new economic imperatives of the east, he said.

On his map, the government’s political, defense and diplomatic establishment would remain in Moscow, St Petersburg would be the seat of culture and “New Vladivostok” the economic base.

“If Peter the First (the founder of St Petersburg) were living today he would, without any doubt, build the capital not on the Baltic but on the Pacific Ocean.”

New Vladivostok would be an expensive project but Karaganov cites examples of other modernizing nations that have benefited economically and strategically from splashing out on new capitals.

Brazil for instance saw a spurt in economic growth after shifting its capital from Rio to the new city of Brasilia. Kazakhstan, central Asia’s biggest economy, has built a new capital at Astana in the north of the country to bolster its authority in lands close to the Russian border.

Vladivostok is beginning to see better days as Russia prepares to host the 24th Asia Pacific Economic Summit in the city this September.

More than Rbs600bn has been invested in new infrastructure including the longest cable bridge in the world linking Vladivostok with Russia Island where the meeting will be held. APEC will give Russia an opportunity to showcase Vladivostok to the world.

Karaganov would like the government to unveil the New Vladivostok project at the summit to boost flagging confidence Russian economy.

“Russia needs a project grander than the Olympic Games or even flying to Mars. It needs a new project to develop the Asian part of the country and create a third capital there.”

Vladimir Putin was ceremoniously reinstated as Russia’s head of state last week. The country is relatively more stable and prosperous than when he first assumed power in 2000. Nonetheless, Putin’s six-year term will still be wrought with serious challenges to the welfare of the nation and tenuous economic growth.

In his short inauguration speech, Putin noted that the Russian Federation was “entering a new stage in [its] national development” which depended on, among other things, the country’s “determination in developing its vast expanses from the Baltic to the Pacific”.

Indeed, Moscow affirmed its intentions to foster developments east of the Urals when it signed 27 contracts, collectively worth US$15 billion, with Beijing during Chinese Vice Premier Li Keqiang ‘s visit to Russia in April. This, alongside Russia’s aspirations to increase energy exports to South Korea and Japan, sets the stage for the new Putin administration’s active economic engagement in the far east.

Exploitation of Eastern Siberia and the far east is a national imperative because the wealth beneath the unforgiving landscape could propel the Russian economy forward for decades to come. In fact, output of natural gas from Asian Russia will exceed that from European Russia by 2030. [1]

With Northeast Asian economies voraciously seeking energy supplies, the opportunities for development and cooperation in the region are boundless. It is simply the matter of policymakers in Moscow effectively taking advantage of the resources and conditions before them.

China will be Russia’s key economic partner in the region and trade between the two countries is booming. The Wall Street Journal reported that trade between the two countries increased by over 40% in 2011, amounting to $12.6 billion. However, as Ambassador M K Bhadrakumar noted last week, Russia does not seek to be a mere resource appendage to China. China sets out on Putin presidency, Asia Times Online, May 5, 2012.)

Although the recent deal with Beijing included projects in transport, communications, and other investments, until further development takes place around Vladivostok, energy exports will dominate Russia’s economic interaction in Northeast Asia; and Moscow will seek to diversify its clients. Having controlled the export of resources from Central Asia since the dissolution of the Soviet Union, Russia recognizes the power of monopsony better than any other country.

And timing could not have been better. The general insecurity that plagues the oil supply from the Middle East is driving up the demand for Russian suppliers. In addition, Japan will be more reliant on oil and natural gas as its 54 nuclear power reactors are currently offline for safety checks. While Prime Minister Yoshihiko Noda appears intent on reactivating the nuclear plants after the inspections, with more than half the population opposing such measures and 80% distrusting government safety measures, it will be politically difficult for Tokyo to return to nuclear energy in the near future. [2]

The Noda government is certainly aware of the need to develop energy relations with Russia. Earlier this month, Democratic Party of Japan policy chief Seiji Maehara and the vice president of Russian natural gas company Gazprom, Alexander Medvedev, agreed to study the possibility of laying a gas pipeline linking Hokkaido and Sakhalin Islands. [3]

Some analysts have raised concerns about the state of economic cooperation between North Korea, South Korea and Russia after Pyongyang’s rocket test in April of this year. [4] However, the double attacks on South Korea in 2010 did not derail proposals for a trans-Korean gas pipeline, which was given a nod of approval by both Korean governments in 2011.

Although Moscow has the difficult task ahead of enticing investors from the South while also maintaining a good relationship with the North, growing economic ties with Seoul and continued cooperation with Pyongyang show Kremlin’s adroitness in the balancing game.

There are also many other challenges ahead; however, the key obstacle to Russia’s success in the far east is not going to be external factors such as North Korea’s provocative behavior but Moscow’s own inefficiencies created by heavy handed state intervention in regional development.

In 2006, presidential envoy to the Russian far east, Kamil Iskhakov, suggested creating a state commission on the far east that was directly overseen by the prime minister (which would have placed Putin in charge of the project when he took over the premiership in 2008).

This April, the Economic Development Ministry finalized a bill to create a state corporation that will control the distribution of licenses for mineral extraction in 16 regions in Eastern Siberia and the Russian far east. [5] Nicknamed the “Far Eastern Republic”, the corporation will be partially exempt from federal legislation, receive massive tax breaks, operate outside regional state control, and receive shares of other state companies as investment.

The corporation is similar to Iskhakov’s original proposal – only this time the project is subordinate to the president who will have the power to appoint the head of the company and name the supervisory board. Clearly Vladimir Putin is bent on staking his reputation on the development of the Russian far east. No doubt, the new president intends on highlighting Russia’s role in Asia-Pacific when he hosts the Asia Pacific Economic Cooperation summit in Vladivostok later this year.

Despite the dedication that the Russian state is showing with its involvement in the growth of its most underdeveloped regions, former finance minister, Alexei Kurdrin, heavily criticized the “Far Eastern Republic” as something that will devastate the investment climate in the country.

According to Kudrin,

The creation of such a market player capable of implementing any private project, considering the state’s administrative resource and [special preferences], means that any other investor in this area must be aware that another player with special preferences, special administrative resources and special access to finances may come to the market at any moment.

State intervention is particularly damaging for the Russian far east because conditions appear very favorable for free enterprise to be more active. When 73% stake in the Vanino seaport in Khabarovsk Krai was privatized and auctioned in May 2011, the successful bid offered 10.8 billion roubles (US$354 million) after the bid started at 934 million rubles ($30.6 million). [6] Although the winning company is mired in lawsuits resulting from its inability to make the down payment on the seaport, it is an example of how much the assets in the Russian far east are in demand.

The problem is rooted in the ill repute that privatization gained in the 1990s, when oligarchs and corrupt government officials drove the country to the ground. Many public figures point out that the chaos of the 1990s did not bring development to the far east, thus they argue that the state must spearhead and command projects in the region.

The government certainly has a role to play in curbing both criminal activities and corruption in the region, but adding hierarchy and bureaucracy will not jump start the entrepreneurship necessary for the whole region to become more dynamic. [7] In fact, simply pouring resources into the region might make the existing problems worse.

The Putin administration is probably unwilling to allow development to occur organically because it recognizes the deep correlation between domestic support for the government and real gross domestic product growth; and Russia’s economic is intrinsically tied to energy exports. [8]

In its impatience and shortsightedness, the Kremlin is going to dictate the pace of development in the region so that Russia can more rapidly tap into its reserves of natural resources. But if Russia wants sustained development in the far east, then its companies must become more productive.

Such change will require the government to allow for more competitiveness in the domestic market which will foster both efficiency and entrepreneurship among businesses. President Dmitry Medvedev’s administration had taken small steps towards lessening state control over energy companies, but it is unlikely that President Putin will continue these measures alongside his massive plans for the far east.

For now, Moscow will probably relegate development to bulking up the infrastructure of Vladivostok as a showcase for the 2012 Asia-Pacific Economic Cooperation summit. Improvements in infrastructure and establishment of industry in the depressed city will be lauded, but there won’t be a model that the rest of the region can adopt. The Russian state may have enough resources to invest in the region’s most important city, but it cannot bankroll the development of a region that makes up 60% of its entire national territory.

For the sake of Russia’s future, Putin should consider giving privatization a second shot; it may be the only shot that Russia has for a prosperous future.

Notes
1. Adam Stulberg, “Russia’s Energy Security Dilemmas in Northeast Asia”, PONARS Eurasia Policy Memo No 170, September 2011.
2. “Asahi poll: 80% distrust government’s nuke safety measures”, Asahi Shimbun, March 13, 2012.
3.“Maehara, Gazprom eye laying gas pipeline”, Daily Yomiuri Online, May 5, 2012.
4.Troy Stangarone, “What Happens to the North Korea Pipeline Now?”, KEI, April 24, 2012.
5. “Russian Gov’t Plans ‘Far Eastern Republic’” RiaNovosti, April 20, 2012.
6. “Watchdog allows Mecheltrans to acquire seaport”, RAPSI, March 21, 2012.
7. Gilbert Rozman “Strategic Thinking About the Russian Far East: A Resurgent Russia Eyes Its Future in Northeast Asia”, Problems of Post-Communism 55, 1 (January – February 2008).
8. Andrew Barnes “The Political Economy of Oil in Russia” PONARS Eurasia Policy Memo No. 168, September 2011.

Yong Kwon is a Washington-based analyst of international affairs.

(Copyright 2012 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Russian Prime Minister Vladimir Putin listens to explanations as he looks at a scale model of the construction project at Russky Island in Russia’s Pacific port of Vladivostok. Putin was visiting to inspect the building of resorts, dinner and entertainment facilities, on Russky Island, the site of the 2012 APEC summit, along with checking the renovation and upgrading of Vladivostok International Airport.

VLADIVOSTOK, Russia — At its eastern fringe, 4,000 miles from Moscow, Russia is building a bridge to nowhere. Two giant pairs of concrete support pylons tower over the glassy waters of the Eastern Bosphorus strait, the first stage of a project that will link the port city of Vladivostok to Russky Island. The scrub-covered island is mostly empty, home to just a few thousand grizzled residents and a collection of moldering military barracks. Basic infrastructure — sewers, roads, electricity — is largely non-existent.

Upon completion, Russian state media are ever keen to point out, the Russky Island Bridge will be the longest cable-stayed suspension bridge in the world, spanning 1,104 meters. On the island itself, there are plans to build hotels, a university campus, and facilities for hosting next year’s Asia-Pacific Economic Cooperation (APEC) summit.

The federal government in Moscow has billed the September 2012 summit as something of a coming-out party for Vladivostok, the largest city in the Russian Far East and the home of Russia’s Pacific Fleet. The formerly neglected region is awash with cash. A total of 426 billion rubles (just over $15 billion) is being poured into the Primorsky region ahead of the summit — an amount equivalent to 60 times Vladivostok’s annual city budget. Highways leading into the city are being chewed up and expanded; in addition to the Russky Island bridge, another massive suspension bridge is reaching out across the Golden Horn Bay, the hook-shaped inlet in the city center.

The huge injection of cash represents Russia’s renewed attention towards its Far Eastern territory, a region long plagued by neglect and economic stagnation. In Soviet times, the vast region — four-fifths the size of Australia — was heavily propped up by state subsidies, but as Asia’s economies have boomed, the region has fallen into precipitous decline.

The once-proud Pacific Fleet has shrunk to a fraction of its size, while a large part of the region’s defence industries, the lifeblood of many towns and cities, have long ceased production. In their place, corruption has flourished. David Satter, a Russia expert at the Johns Hopkins University School of Advanced International Studies, told me that in the years after 1991 the Primorsky region was subject to “criminal looting” under the governorship of Evgeny Nasztradenko, a former Soviet official backed by powerful local oligarchs. “During the 1990s, it was the most criminalized enclave in the whole country,” Satter said. “It became a law unto itself.”

Low fertility, high death rates, and collapsing infrastructure added to the rot, leaving much of the region barren. The population of Vladivostok, the capital of the Primorsky region, has contracted from a peak of 648,000 in 1991 to 578,000 last year, while the population of the Far East as a whole has dropped from 8.05 million to just 6.44 million, according to official statistics.

“There was a huge system that provided employment, money, and everything for this region, but the market reforms happened, and the plants stopped work and the population started moving,” said Alexandr Latkin, an economist at the Vladivostok State University of Economics and Service, a major institution here. The exodus has included some of the region’s best and brightest. As one recent analysis of the Far East put it, the intellectually vibrant Vladivostok of Soviet times has turned into “an ordinary provincial city where uncouth and boorish traders dealing in used Japanese cars now set the tone”.

“This is why the Russian government is putting huge amounts of money into the Far East and into Vladivostok,” said Latkin. “They want to bring back the status of the Far East that was lost during the ’90s.”

The first thing that strikes visitors to Russia’s Pacific capital is how defiantly Russian it looks. The imperial-era heart of the city stretches out along an axis formed by Svetlanskaya and Aleutskaya Streets, running north and east along the Golden Horn Bay like diminutive copies of St. Petersburg’s Nevssky Prospekt. Where the two boulevards meet, gazing over the glittering Sportivnaya Harbor, is a symbol of a more recently departed empire: a towering plinth of white marble housing the headquarters of the regional administration. This monstrous edifice — ironically termed the “White House” by locals — dwarfs the rather more moth-eaten “Pentagon” that sits nearby: the longtime nerve center of the Russian Pacific Fleet.

For years, Vladivostok was a closed military city, and few foreigners were allowed to settle there. (One of the city’s first foreign restaurants was opened by the North Korean government, then on friendly terms with Moscow). Though China is just five hours away by car, there are surprisingly few Asian faces to be seen on the city’s streets.

But its Slavic appearance belies a strong — and growing — Asian presence in the Far East. Approximately 70 percent of the produce in the Primorsky region now comes from China, the economist Latkin said, and nearly all of its vehicles are right-hand drive vehicles imported from Japan. In recent years, Chinese firms have set up special economic zones in places including Amur oblast and the Primorsky and Khabarovsky regions, investing $3 billion in a range of new projects including iron ore mines. (By comparison, allocated state investment from Moscow was less than $1 billion for 2011). Tens of thousands of Chinese migrant laborers — no one quite seems to know how many — now work in agriculture and construction across the Far Eastern territories.

Gradually, the economy of the Far East is reorienting itself away from European Russia. “Vladivostok’s economic strategy is different from Russia’s strategy,” said Latkin. “You can ask a businessman here, and he will say, I’m not looking at Moscow. I have more partners here in China, South Korea, Japan, Singapore.”

But the booming Chinese economy is also a source of consternation. China’s northeastern Heilongjiang and Jilin provinces alone are home to around 65 million people — nearly ten times the population of entire Russian Far East. This has prompted popular concerns, salted with the historical memory of imperial Chinese domination of the region, that the vacuum of the Far East could suck in China’s rising population.

“If we do not step up the level of activity of our work [in the Russian Far East], then in the final analysis we can lose everything,” President Dmitri Medvedev said in a September 2008 speech, warning that Russia’s presence in the Far East could “end in an extremely dramatic way” akin to the fall of the Soviet Union itself. The “loss” of the region has become a common trope in the local tabloid press, which regularly publishes hysterical articles about the quickening flood of illegal Chinese migrants. “It is a challenge for the government,” the economist Latkin said of the region’s development, “because in a moment the Far East of Russia could be cut from the European part, and then it would no longer be the Russian Far East — it would be the Chinese Far East.”
In this light, one begins to sense the symbolism of the colossal Russky Island Bridge project. Satter of Johns Hopkins said the APEC projects were largely intended to “counter the impression of irresistible decline” in the Far East. Such frenetic periods of construction have been seen before. In the years preceding the 1904-05 Russo-Japanese War, the Tsarist regime heavily fortified the coast around Vladivostok. When the USSR’s relationship with China turned sour in the early 1960s, Khrushchev promised to turn the city into a “Soviet San Francisco”, covering its hills with dozens of krushchevka — boxy Soviet-style apartment blocks. Each time, Moscow’s attention has come as a response to the threat posed by rising Asian powers.

But is Russia really in danger of losing its Far East? My translator here, an economics student at the Vladivostok State University of Economics and Service named Andrey Zaytsev, said the tide of anti-Chinese sentiment peaked in the 1990s, when conditions in the region were at their most desperate. While many people might be “more ungracious” to the Chinese if they knew the extent of their involvement in the local economy, rumors of the death of the Far East — or its loss to China — have been greatly exaggerated. “There’s no need for China to invade us,” Andrey said in his fluent, American-inflected English. “For the next 20 years or so the PRC is guaranteed with a supply of natural resources from the Russian Far East.”

Popular attitudes, especially among the young, also seem to be changing. Marina Rashchepkina, a second-year translation student at the Far Eastern Federal University, said many people in her hometown of Amursk, around 500 miles north of Vladivostok, held prejudices against Chinese migrants. The older generation especially were “apt to underestimate mental abilities of Asian migrants,” she said. But with growing economic interdependence has come an acceptance that, like it or not, China has come to play a central role in the future of the Far East. Marina said, “Most Russians, thinking rationally, would reject the total absence of China in the life of the Russian Far East.”

Maria Lebedko, a professor of English at the university who also teaches courses in inter-cultural communication as part of an arrangement with universities in Japan, China, and other neighboring countries, told me the region had no choice but to come to terms with its geographic reality — something she tried to impart to her students. “We are in Asia. … We are not in Europe,” she said. “I think we have to know each other better.”

In a bid to stem the region’s decline, the federal government has introduced incentives for ethnic Russians in Central Asia to shift eastward, and has offered subsidized airfares between Moscow and Vladivostok. But there is a Eurocentric cast to Russian policymaking that remains an obstacle to increased Asian investment and migration. Early last decade, in response to local sentiment, the government of the Primorsky region banned Chinese merchants from selling in local produce markets. Chinese migrant workers also face difficulties getting temporary work visas.

“On our streets, how many people can you see with Chinese faces? Not many,” said Andrey Kalachinsky, a local television anchor and a former correspondent for several Moscow newspapers. “Russia is not a very good place for Chinese people to work or live. It’s not enough: we need to open our city.”

Some of the infrastructure will clearly bring benefits: the bridge over the Golden Horn Bay is set to slash travel times between the central city and its suburbs across the water. But the current emphasis on monumental infrastructure projects — part of a far eastern Great Game between the Asian powers — will do little to reverse the drain in population, Kalachinsky predicted. “Propaganda is good for foreigners, diplomats, journalists. But for local people, we need other things: jobs, good salaries, and the possibility to buy a new house or own apartments,” he said over coffee at a small cafe near the Vladivostok State University of Economics and Service, where he also works in public relations. Kalachinsky said his salary under the Soviet Union was 20 or 30 percent higher than the average wage in Moscow or St. Petersburg. “Now,” he said, “we have salary that is less.”

The fall of the Soviet Union is often described as a doubly traumatic experience for Russians, who lost not only the country’s status as an imperial superpower but also the subsidies and benefits that the bloated system provided. This is especially the case in the Far East, which is still dealing with the loss of its privileged Soviet status and the awkward reality of its location, on the exposed rim of a booming Asian continent. The region’s reorientation — literally, its shift back towards the East — has already taken two decades. It could yet take many more.

Among the bare branches in Pokrovsky Park, close to a gold-domed Orthodox church, I met Anna Mikhailovna, 55, a lifelong resident of Vladivostok. When asked about the city’s current changes, she grew nostalgic about life in the military city of the Soviet era, a time when Vladivostok was so clean “even the puddles on the ground were transparent”.

“If I was in charge of spending the money for [the APEC summit], I would do something about the prices of water, gas, and electricity,” she said, wrapping a hot pink scarf around her neck against the chilly April wind. She went on to complain resignedly about dogs fouling up the city’s parks and the problem of drugs and delinquent youths. “The city might be better for the next generation,” she added, “but I have many doubts.”

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Vladivostok, Russia

Heads of financial institutions recognized the important enlightening and preventive role of the Internal Affairs Directorate for the Primorye Territory in the effective instructing the population and businessmen in the sphere of economic literacy.

Special words were said about the participation of the press service of the Territorial Internal Affairs Directorate in holding seminars on economic protection of citizens’ rights in the “Ocean” All-Russian Children’s Center. Such classes have become a good tradition: the basics of financial literacy have been taught to high school students attending the “Ocean” Center for two years.

In a form of a game, using charts and spectacular life examples adapted to teenager audience, Alexander Ivashkin, a member of the Public Council at the Internal Affairs Directorate for the Primorye Territory, explains to children the principles of such concepts as risk and return, discount, inflation, which are difficult even for adults, discloses the nature and function of financial institutions. The basics of tax legal literacy are taught to children with the assistance of police officers.

Thanks to such activities, young attendees of training seminars are already able to freely orientate themselves in the lending system, can list dozens names of banks, have some knowledge on the most common types of fraud in obtaining consumer credits. In the future, the growing children will be able to effectively secure themselves and members of their families against unlawful encroachments of trespassers and organize their budget correctly in the complicated conditions of the market economy.

Classes for children will continue in the future: experts and specialists of the Territorial Internal Affairs Directorate will do their best to improve the legal awareness of residents and guests of Primorye.

The start of a new contest for media “Financial Literacy 2011” was announced during the solemn ceremony of handing the commemorative token; its results will be summarized during “The Week of Financial Literacy”

Press Service of the Main Internal Affairs Directorate for the Primorye Territory

 

Dear colleagues! Dear friends! 

I am delighted to welcome you on the site of our Partnership.

The forthcoming APEC 2012 Summit in Vladivostok imposes a special role for the regional financial institutions taking into account globalization and, first of all, competition between financial institutions.  Within the financial-banking system of the Primorski Territory and Far East region, the unrealized potential of the financial market is distinctly observed. Therefore the decision on the creation of LFI is a strong choice in favor of the development of a modern regional financial market that has a high degree of complexity, capable of attracting and sustaining internal and external investments for the benefit of the economy of region and to give to domestic and foreign business additional insurance upon various risks.

The fundamental basis of competitiveness of the regional financial market is the recognition that a stronger regulatory mode and market infrastructure are the most convenient in comparison with the same intraregional analogues.  One of the contributing factors of this process is the strengthening role of associations of professional participants within the financial market.  The pressing need for quality of regulation within the regional market – is a fact that is not unsubstantiated.

The origins of the collapse in 2010, of three major Primorye KPKG, each of which had a significant number of clients, largely lies in the lack of standards for financial performance and regulatory voids, capital rushed into investment, which has become an appreciable factor in inflation of a bubble.

Speaking about plans on League development according to the adopted strategy, we notice that one of the problems of the regional financial market is that it focuses on the internal market competition.  Instead, the League aims to help members to be focused on competition with the leading financial institutions of neighboring countries.  Thus solving some of the problems and challenges we face.  Among them:

-      We initiate, by necessity, the modernization of the regional financial industry and its advancing development in relation to the regional economy as a whole, balanced with the dynamics of the separate sectors (banks, insurance companies, stock market, the institutional investors working with capital of the population, etc.);

-      We advocate improving the quality of the regional stock market capitalization, and the development and consolidation of its infrastructure;

-      We directly influence the investment behavior of the population and its increased financial literacy in order to enhance its revenues, as well as the development of a funded pension system (in its mandatory and voluntary parts);

All these problems are interconnected, but nevertheless, everyone has their own reasoning as into the decision, assuming your tools, resources, responsibilities, time period of realization and so on.  If we ensure the implementation of these reforms we can:

-      Transform the regional financial and banking sector into a international competitive branch with the high added value;

-      Raise funds for individual investors;

-      Create within the region a homogeneous and equally accessible financial space;

-      To fix pricings on local actives.

The Achilles’ heel of regional financial institutions is the presence of the fact that the Customer focus of the financial-bank sector had began to lag behind considerably over time.  We do not seek to “ingratiate” the client, as though we are not concerned as into the competitiveness of others and anyway the client is going anywhere. But before financiers a new paradigm – clients have grown, from unsophisticated in financial knowledge, to regular consumers of financial services and thus they should be treated as such. 

Therefore we have headed for the orientation of the League to the new values in their work – honesty, dedication to customer needs and focus on results. For this purpose we launched the project “The Territory of Trust”.

“League of Financial Institutions” (NP “LFI”), established October 4^th, 2007, is intended to implement policies to protect the interests of the regional financial community, contribute to improving the legal and regulatory framework.  And though growth in the number of laws doesn’t necessarily lead to improvement of the quality of the legislative environment in which we operate, there are within the expert and professional community significant claims as into the level of transparency of financial policy and we should continue to raise these concerns with the appropriate authorities.  Indeed, sometimes as financiers we quite often have a different understanding of the importance and usefulness of information that explains the actions of the regulators.

Professional association NP “LFI” as presented in the financial market is a patrimonial sign of our region, who having united within the structure, leading financial institutions from three key economic branches (insurance, lending, investment), representatives of business, professional traders and expert community, became a small staff on planning and the organization of the future formation of a favorable and sustainable fiscal space within our region.

On our site you will find information and news that occurs in the League, as well as about developments within the financial and banking sector of the region.

The league is open to public dialogue within the region, as well as for constructive cooperation with the media and public authorities. Various committees and centers have become basic elements within the League structure; today there are five. These divisions provide effective communications between professionals within banks, credit cooperatives, insurance companies, realtors and investment companies, creating an atmosphere of trust and fruitful cooperation within the structures of the financial markets of the region, with similar associations, unions, and with the regulators.

I hope that materials on the site will be interesting and useful in your practice!

Yours faithfully,

Chairman of NP “LFI”

Alexander Ivashkin