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    VOLSKY: SOUTH KOREA MAY BECOME SOURCE OF BIG CAPITAL INVESTMENTS INTO RUSSIAN ECONOMY

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    MOSCOW, September 22 (RIA Novosti) - Russian business regards South Korea as a source of big capital investments into the Russian economy and also as a supplier of modern equipment and technologies.

    The head of the Russian Union of Industrialists and Entrepreneurs (RSPP), Arkady Volsky, spoke about it at the meeting of Russian and Korean businessmen, now underway in Moscow, a spokesman for the Union's public relations department told RIA Novosti on Wednesday.

    According to Arkady Volsky, presently, the Korean investments into the Russian economy total no more than 200 million dollars.

    He said that cooperation in the fuel and energy complex, in the power industry, the power-plant industry, the motor industry and container transportation of goods along the Trans-Siberian Railway is the main sphere of bilateral economic relations between Russia and South Korea.

    Speaking about transit freight traffic, the Union's president said that "the Russian services are already working out appropriate programs, that tariffs have been lowered and the customs procedures have been simplified." "Apart from that, negotiations are going on about uniting the railways of North Korea and South Korea and consequent linking them with the Trans-Siberian Railway."

    "In case of the successful implementation of the Russian-Korean industrial complex in the territory of the Nakhodka free economic zone, the expected size of whose investments may stand at up to 800 million dollars, this region will turn into the first free economic zone of Russia with an export orientation.

    Cooperation in the fuel and energy complex, in the opinion of the head of the entrepreneurs' union, could become another important trend in the activity of the union. "According to the preliminary forecasts," Arkady Volsky said, "the consumption of gas in the Republic of Korea may increase by 50% by 2010 (about 33 billion cubic meters a year). Therefore, it is worthwhile to consider the possibility of jointly developing gas deposits on the shelf of the Sakhalin Island and the Kovykta gas deposit.

    In the sphere of the power industry, Arkady Volsky specially pointed out the importance of the negotiations between the RAO Unified Energy Systems of Russia and the Korean Electric Technical Research Institute (KERI) on the creation of an energy association of the northeast Asian countries.

    In his report, Arkady Volsky also adduced examples of cooperation between Russian and Korean power-plant engineering companies in producing the equipment to be delivered to the third countries, including the equipment produced by such big Russian companies as Elektromashkorporatsiya, Elektrosila and the Kaluga Turbine Plant. "Their products are competitive enough and are well known in the Korean companies," the president of the Russian Union of Industrialists and Entrepreneurs underscored.

    The earliest implementation of big investment projects will help increase trade between Russia and South Korea, Russian Minister of Transport Igor Levitin said, addressing the meeting of Russian and South Korean businessmen.

    "In the first place, this concerns the investment projects in the fuel and energy complex, in the sphere of transport, construction, the development of natural resources, as well as communication, science and technologies," Levitin said.

    According to him, Russian-Korean trade has seen stable growth of late. In 2003 it reached 4.2 billion dollars.

    "This year, trade between our countries continues to grow. In the seven months of the current year alone, it went up by 56 percent and reached 3.3 billion dollars," the minister said. At the same time Russia, according to Igor Levitin, unfortunately still remains mostly a market for the Republic of Korea, not a real economic partner."

    The minister pointed out that Russia mainly exports raw materials to South Korea. Rolled metal, oil and oil products account for 98 percent of Russian deliveries to South Korea.

    Russia imports in the main chemical goods, cars and industrial equipment from South Korea.

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