Sochi gives a boost to Vladivostok

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MOSCOW. (RIA Novosti economic commentator Oleg Mityaev) - An ambitious program for the development of the Far East is one of the highlights of Sochi-2007, an international investment forum, meeting from September 20 to 23.

The boost is being patterned on the lines of Russia's Black Sea coast miraculous transformation to prepare it for the 2014 Winter Olympic Games. Aside from the Olympics, Russia is also going to host an Asia-Pacific Economic Cooperation summit in 2012, and Vladivostok is being tapped as the capital and high point of the Russian Far East.

To host the summit, the region, which is most remote from central Russia, will receive huge government investments totaling 427 billion rubles ($17 billion), almost as much as the Sochi Olympics. Out of this amount, 148 billion rubles ($6 billion) will be used to build summit infrastructure. By investing such sums in the region and city, Russian authorities hope to attract equally large private investments, including from overseas. Already the Sochi-2007 forum has begun discussing 46 investment projects expected to cardinally alter the Far Eastern economy.

It looks like Russian policymakers are toying with the idea that massive once-off financial injections can give an impetus to the economic development of whole regions for years ahead.

Acting Economic Development and Trade Minister German Gref confirmed this at the September 2007 APEC summit in Sydney, Australia. His logic was paradoxical. He argued that since Vladivostok's infrastructure was totally unprepared for the event, it was the most suitable reason, according to Russian authorities, to make it the APEC capital.

Sergei Darkin, governor of the Primorye Territory, of which Vladivostok is the capital, appears to share this philosophy. He expects his region's gross output to rise 150% by 2012 and more than sixfold by 2020. Such a stupendous growth in the gross regional product - fueled by the construction of summit facilities in Vladivostok - is feasible. But the idea that the city will thrive and prosper after 2012, with foreign guests gone, has no basis in fact yet.

However, in order to hold the summit in 2012, Vladivostok will have to overcome tremendous odds. Like Sochi for the Olympics, Vladivostok will have to provide facilities for the summit from scratch. City infrastructure in Vladivostok is in a worse state than in Sochi, which is a major Black Sea resort. Russia's Far Eastern outpost has no guaranteed water supplies; it has only one take-off strip for civilian and naval aircraft; and lacks major highways. The city's visiting card - the port - also needs major upgrading.

On top of everything else, corruption scandals continue to rock the city. Federal authorities no longer trust the regional administration: ring-fenced sums will bypass the Primorye administration - the sole chosen government contractor to develop Vladivostok is Rosstroi, the Russian Agency for Construction, Housing Maintenance and Utilities.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

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