NP "League of financial institutions"

In Russia’s Far East, A Frayed Link To Moscow

ADMIN — Sat, 21 Jan 2012 01:54:00 +0000

by David Greene

Compared to many of the dynamic economies in Asia, development is Russia’s Far East is limited. Here, men wait for a ferry to take them to Russky Island just off Vladivostok, on Russia’s Pacific Coast. In the background, a bridge to the island is being built.

January 13, 2012

After a train journey of nearly 6,000 miles from Moscow, the Russian Pacific port of Vladivostok can feel like a different country. The people and the language are still Russian, but the strong Asian influence is undeniable. And many residents say the bond to the rest of Russia has been growing weaker, while the ties to Asia have been growing stronger since the Soviet breakup two decades ago. NPR’s David Greene has this report as he wraps up his journey on the Trans-Siberian railway.

The last of three stories

“Russia, where are you going?” The question was posed nearly two centuries ago by novelist Nikolai Gogol.

Last month, Russians I spoke with during my journey aboard the Trans-Siberian railroad can’t fully address that question, or predict their country’s future. And after traveling across all of Russia, I can see why.

This is a country in transition, just two decades removed from the traumatic collapse of the Soviet Union and still coping with rapid changes. It is a country in search of an identity — no longer a communist state, but not a democracy either.

And the farther east I traveled, the more apparent it became that there’s not much holding the country together. In the U.S., if you asked someone what it means to be an American, most people would have an answer, even if it’s not always positive. But you’d likely hear phrases such as “freedom,” “democracy” or “land of opportunity.”

Many Russians don’t seem to have a sense of what defines them as a nation. The former president and current prime minister, Vladimir Putin, has overseen a system that has made a few people very wealthy with a national economy based on energy and minerals. But much of Russia feels no connection to that; in fact, they feel little sense of pride or identity about their country at all.

That sense of detachment is strong in Siberia, a vast frontier of wilderness, industrial towns, timber and mining production, and tragic history. For most people, Siberia conjures an image of an icy wasteland where exiles and political prisoners were sent to live out their days during tsarist and Soviet times.

The view out the train windows confirms the bleak view: the same repeated scene, a snow-covered landscape with the occasional village whirring by. On the short whistle-stops made by the train, conductors chop accumulated ice off the bottom of the rail cars.

A Land Of Exiles

Deep in Siberia, north of the border with Mongolia, the Lake Baikal region is an important landmark in Russian history. People were exiled here — political activists, dissidents, religious minorities. They would stop at the shore and wait for the dead of winter for the water to freeze, so they could cross the lake on horseback.

I lost my faith in this government, and I lost my faith in our youth. We do not have a replacement, [there's] no worthy replacement for us.

- Inna Khariv, a 62-year-old Russian woman, on the country’s need for a stronger national identity

It’s a beautiful but unforgiving landscape, especially in winter, and it binds the residents.

“Here, it’s very cold. And they have to help each other,” says Alisa Sukneva, one of many descendants of Soviet-era exiles still living in the area. Her grandmother’s family was forced to start over in this region in the 1930s.

Sukneva works as a tour guide here. Asked about her thoughts of Moscow and the people running Russia, she says: “I’m not really sure the connection with Moscow is very close.”

Lyudmila Nazarova is a member of a religious community whose forebears were exiled here in the 1600s, when they broke with the Russian Orthodox Church. Her feelings on Moscow echoed Alisa’s.

“Moscow is just a city,” she told me. “It’s just a capital, but that’s about it.”

It wasn’t always this way, though. During Soviet times, for better or worse, there was an identity.

Nostalgia For Soviet Times

On a brief stop on the train platform in the city of Amazar, I met a fellow passenger, 62-year-old Inna Khariv. She worked on a mink farm in Soviet times, and now lives on a pension of $300 a month. She is one of many Russians who feel nostalgia about the Soviet era, when many Russians felt a common national purpose, and a welfare state provided employment and health care, however modest compared with Western standards.

“You can argue with me, but this is what we had — we lived with it — we had one faith, one goal,” she says. Today, “nothing holds us together.” She doesn’t like Putin, and she’s also disappointed that no other inspiring political figure has emerged.

“I lost my faith in this government, and I lost my faith in our youth,” she explains. “We do not have a replacement, [there's] no worthy replacement for us.”

Looking To Asia

As their trust in the government has faltered, Russians have begun looking away from their country for opportunities elsewhere — especially in Russia’s Far East, where Tokyo and Beijing are literally much closer than Moscow. In this region, Asia is a logical choice.

In Russia’s eastern port city of Vladivostok — home to almost 600,000 people and the Russian Pacific fleet — cars have steering wheels on the right-hand side and come from Japan and South Korea. There are almost no Russian-made cars on the roads.

China, especially, has become a huge source of wealth and opportunity.

As one professor put it, “China is our everything.” But there’s a feeling that some of those opportunities are being missed. For many, the Russian government’s historic distrust of China is holding this region back.

Dmitry Granovsky and his wife, Olga, both 37, live in Vladivostok with their four children. They see Russia as too centralized and express hope that a new political system might develop — a federation of states, or something resembling the European Union or the United States.

They don’t fear their government, as Russian citizens in the past have, but they are disappointed in how little the government does to provide opportunities for its citizens.

The couple see leaders in Moscow as clinging to the carcass of Soviet times, trying to make it work in a modern era. They express a sense that the current system will collapse.

“Our society is sick,” says Olga. “It’s ill. It’s not healthy. We have no society.”

The two of them dream of taking their family to another country, to live and work somewhere that’s not so hard. Like so many Russians, they’re disappointed with their country, and they’re ready for change. But their patience seems as long as the train trip from Moscow to Vladivostok. They are willing to wait for the better system they want so much.

On Vladivostok’s Golden Horn Bay, two huge bridges are being built. They are supposed to be finished in time for Vladivostok to host the 2012 Asia-Pacific Economic Cooperation forum.

The structures under construction are awe-inspiring, but they’re still incomplete. They seem to be a metaphor for a country that has spent the past 20 years, since the end of Soviet times, trying to build something new — but not quite getting there yet.

http://www.npr.org/2012/01/13/144969204/in-russias-far-east-a-frayed-link-to-moscow

As Asia Rises and Europe Declines, Russia Invests Its Hopes in Its Far East

ADMIN — Wed, 02 Nov 2011 00:29:48 +0000

Vladivostok, a Pacific port city long in decline, is being revitalized by Moscow. But the city’s slow integration with China, Japan, and South Korea is clashing with its long-Slavic identity. Can a city be both European and Asian?

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.”

• • • • •
Vladivostok, which means “Lord of the East” in Russian, began its life in 1859 as a naval outpost on the periphery of the Russian Empire, and became the main garrison in the Tsar’s newly-acquired Pacific territories. There has always been something geographically implausible about the city: it teeters on the edge of the Eurasian landmass, separated from Moscow by thousands of miles of largely uninhabited wilderness, sustained for many years via the single narrow artery of the Trans-Siberian Railway. The distance encompasses seven time zones; when Muscovites are sitting down for lunch, easterners are drawing their shades.

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.”

• • • • •
The bigger question for many locals seems to be whether the current changes will bring any concrete benefits. Marina told me that, due to the lack of job opportunities in her nearby hometown of Amursk, few young people wanted to remain. “Hundreds of young people leave the town every year and they really don’t want to get back,” she said. “It’s difficult to understand what the region does need. Today they tell us that they need interpreters; tomorrow they will tell us they need people who can provide technical advice. … Everything is so changeable that it is difficult to predict.”

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.”

www.theatlantic.com

Corruption hobbles Russia’s Far East

ADMIN — Fri, 23 Sep 2011 06:36:15 +0000

Moscow is looking to Russia’s Far East as a region poised for better times, and a building boom aims to make Vladivostok an investment hub. But young residents are still leaving the city in droves.

Vladivostok, Russia

Mikhail Gorbachev once said that Russia’s Far East had a “glorious future,” describing it as a “land of colossal natural riches, huge social and economic potential, and a great international prospect.”

A quarter century after Mr. Gorbachev boldly predicted prosperity for Vladivostok, a city 5,300 miles from Moscow and just a five-hour drive from China’s border, this once-booming Pacific Ocean port is a rusted Soviet relic with a falling population beset by corruption and neglect.

But Moscow is once again looking to its eastern reaches as a region poised for better times. In fact, much of Vladivostok has been turned into a construction site as it is busily being rebuilt to accommodate the September 2012 Asia-Pacific Economic Cooperation (APEC) conference. Moscow wants the prestigious summit to be something of a coming-out party for the region, hoping to promote foreign investment and stave off perceptions that it will one day be dominated by China.

Related: Putin’s marquee moments

The building boom is visible just about everywhere. Two pairs of concrete support pylons tower over the Eastern Bosphorus Strait, part of a cable-stayed bridge that will link the city to sparsely populated Russky Island, which will host the summit meetings. Highways are being chewed up and expanded and new hotels built. Another bridge reaches out across the Golden Horn Bay, dwarfing Vladivostok’s imperial city center.

In Soviet times, Vladivostok – home of the Pacific Fleet – was a closed city run by the military, propped up by federal subsidies. When communism fell, subsidies ended, along with the military industries that had provided much of the region’s jobs. Since 1991, Vladivostok’s population has fallen from 648,000 to around 578,000, while the population of the Far East Federal District – a territory four-fifths the size of Australia – has dropped from 8 million to just over 6 million.

“This is why the Russian government is putting huge amounts of money into the Far East and into Vladivostok,” says Alexandr Latkin, an economist at the Vladivostok State University of Economics and Service. “They want to bring back the status of the Far East that was lost during the 1990s.”

Will the new construction help the region? Many locals say the influx of cash ahead of the summit – 426 billion rubles (just over $15 billion), or 60 times Vladivostok’s annual budget – is doing little to bring jobs or other long-term benefits. Marina Rashchepkina, a second-year student at the Far Eastern Federal University, says young people in her hometown of Amursk, a pulp-industry town 500 miles north, are leaving in droves.

“They really don’t want to get back,” she says. “Most of the young people I know, if they have knowledge of a foreign language … they are very willing to leave.” Like many others, Ms. Rashchepkina was unsure how the APEC Summit might benefit locals. “September comes, the summit takes place, and then what?” she says. “We are all skeptical.”

Andrey Kalachinsky, a veteran Vladivostok journalist, described the APEC construction drive as “propaganda.” While tens of thousands of workers have been employed on the new projects, he says a large proportion of them are outsiders and that little benefit was reaching locals.

“It’s good propaganda for Moscow people…. For local people, we need other things: jobs, good salaries, and the possibility to buy a new house or own apartments,” he says. “The economy is good when you have more money than before. Now I really don’t know any real businessman here who can say that he has more money than before. All the money is going back to Moscow.”

David Satter, author of “Darkness at Dawn: The Rise of the Russian Criminal State,” says corruption in the Primorsky region around Vladivostok – which he called “the most criminalized enclave in the whole country” during the 1990s – is still repelling foreign investment.

“One of the reasons why the Vladivostok region has problems is that it’s a very undesirable climate for investment because it’s so criminal,” he says. “That’s not going to change as a result of what they’re doing.”

Many recognize that the key to the region’s future – and tapping the region’s vast mineral wealth – is closer ties with China. The region is already dependent on Asia-Pacific trade: 70 percent of its produce is imported from China and nearly all of its cars come from Japan. But despite a recent number of Asian mining and energy deals, obstacles to trade remain.

China’s rising influence – and growing population – next door have stoked fears that the region will be “lost” to the Chinese. That concern was vocalized by President Dmitry Medvedev in 2008 when he said the region’s loss could occur as unexpectedly as the fall of the Soviet Union.

As a result, Chinese nationals face difficulty getting work visas, and in the early 2000s, regional authorities banned Chinese merchants from selling in local markets. Mr. Kalachinsky says such attitudes have to change if Vladivostok is going to truly prosper.

“Russia is not a very good place for Chinese people to work or live,” he says. “It’s not enough: We need to open our city.”

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Enlightening Activities of the Internal Affairs Directorate for the Primorye Territory Won Public Appreciation

admin — Tue, 26 Apr 2011 09:21:59 +0000

A commemorative token “For Financial Literacy” was handed to top officers of the Department for Information and Public Relations of the Internal Affairs Directorate for the Primorye Territory. A little more than one hundred people have become holders of this token all over Russia since the moment of its foundation.

This rare award was handed to employees of press services and representatives of popular media in Primorye by Vitaly Zhivotov, a representative of the Far Eastern Federal University and a member of the Supervisory Council of the “League of Financial Institutions” Non-commercial Partnership; Evgeny Detsik, the Chairman of the Primorye regional branch of the “Union of Borrowers and Depositors of Russia” All-Russia public organization, and Alexander Ivashkin, Chairman of the League of Financial Institutions of the Primorye Region and a member of the Public Council at the Internal Affairs Directorate for the Primorye Territory.

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

Welcome from the Chairman of NP”League of financial institutions”, Ivashkin A.V.

admin — Sat, 07 Feb 2009 09:24:42 +0000

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