Russia's Far East, plagued by poorly-developed infrastructure and corruption, has proved a problem area in the government's development efforts. The large inflow of illegal immigration from neighboring China into the region, whose population is dwindling, has also aroused serious concerns.
"The Far East is poorly linked to the economic, information and transportation network of the rest of Russia," Vladimir Putin told a Security Council meeting in Moscow.
Putin also criticized the region for failing to take advantage of its natural resources. The Far East has vast oil and gas resources, particularly on the Sakhalin Island off the Pacific coast, and some of the world's largest diamond and precious metals reserves in Yakutia.
"The region is using its natural competitive advantages, including transit corridors, very ineffectively," the president said. "All of these things pose a serious threat to our political and economic positions in the Asia-Pacific region, and to Russia's national security, without exaggeration."
Putin put the critical situation in the region down to the lack of a comprehensive approach to strategic development in the Far East, and called for a socioeconomic commission to be set up in the region and devise a development strategy.
"It is crucial to improve coordination between all levels of power for the sake of successful development of the Far East," Putin said.
In response to the president's instructions, the National Security Council decided to set up a state commission for the Far East to be led by Prime Minister Mikhail Fradkov, Putin's envoy to the region told the meeting.
"The commission will have the status of a governing body, and could be a ministry for the Far East," Kamil Iskhakov said.
In further remarks on the region, the president said another solution for the Far East could be to revise local tariff and fiscal policy to encourage business development.
"It is important to work carefully to provide a favorable business environment in the region, and perhaps even to improve the tariff and tax policy," he said, adding that investment should also be stimulated.
Investment projects could be energy companies, exporters of highly-processed natural resources, modernized defense sector enterprises, or a center for innovations and high technologies, Putin said.
The president also called for developing the region's infrastructure.
"Serious efforts must be made to get rid of infrastructural obstacles to the socio-economic regeneration of the Far East," he said, adding that these would be development of the energy sector, communal and border infrastructure, the transportation network, modern logistics and telecommunications hubs.
"Such ambitious and costly projects require the use of budget funds, partnership between the government and the private sector, concessions, and special economic zones," Putin said.
The president also called for stepping up efforts against corruption in the Far East and monitoring the use of its vast natural resources.
"The Far East economy must be well protected against organized crime and corruption," he said.
Russia has proposed Vladivostok, a port city in the Far East, as the venue for the 2012 Asia-Pacific Economic Cooperation forum.
