CONFERENCE CALL: Sent to Siberia

By bne IntelliNews August 6, 2010

Guy Norton in Ulan-Ude, Russia -

Truth be told, Ulan-Ude, the capital city of the Republic of Buryatia in the far flung reaches of eastern Siberia doesn't regularly feature on bne's rosta of conference venues. But fired by a spirit of adventure and the opportunity to visit Lake Baikal, the world's biggest freshwater lake and truly one of Russia's Seven Natural Wonders of the World, we embarked on the 6,000-kilometre trek from Moscow to check out what gives in Russia's Far East. And well worth the trip it proved.

What Ulan-Ude may lack in metropolitan glamour and glitz, it more than makes up for in terms of providing an alternative take on the Russian experience. Visiting Transbaikalye reminds the visitor that Russia has an Asian as well as a European face, in ethnic, religious as well as cultural terms.

Not only is the region home to the indigenous Buryat, Evenk and Soyot peoples, it is also the centre of Buddhism in Russia, with numerous picturesque temples and settlements peppered throughout Buryatia's taiga landscape. Buddhism coexists peacefully alongside Christianity, Islam and Shamanism. In cultural terms, the region owes as much to Asia as it does to Europe, and notably boasts some of the finest Mongolian cuisine outside of Ulaan Bataar. In economic terms Buryatia also looks as much to the East as it does the West. Speaking at an economic conference in Ulan-Ude, the Buryatian president, Vyacheslav Nagovitsyn, emphasized the fact that the republic needs to build on its strong historical links with the countries of the Asia-Pacific region if it is to secure economic, if not political independence from Russia. Given the booming economies of China, South Korea and Mongolia, he argues that the markets controlled by Beijing, Seoul and Ulaan Bataar are where Buryatia should seek its fortune. "We need to restore the Tea Trade Road."

As a result, Ulan-Ude already boasts a Mongolian consulate and a Chinese one is planned in the near future. Under Buryatia's long-term economic plan which runs to 2025, the republic is looking to establish a raft of economic zones, which it is hoped will prove a magnet for investors from Asia as well as Russia. Over the next 15 years, Buryatia is looking to establish agricultural, energy, innovation, mining and tourism clusters, which should provide important sources of investment and employment and help to arrest the mass emigration that has plagued the republic since the early 1990s. "We need to improve living standards and the dialogue between the government and private individuals," says Tatyana Dumnova, Buryatia's minister of economy.

Siberian recreation

One man who is seeking to help Buryatia is Mikhail Slipenchuk, chairman of Russian financial-industrial group Metropol, whose PhD thesis appropriately enough majored on the development of the Baikal region. Slipenchuk has a number of irons in the fire when it comes to kickstarting the Buryatian economy. Already making the literal and metaphorical transition from the drawing board to concrete reality is the Baikal Harbour Special Economic Zone, which through an innovative public-private partnership initiative is creating a multi-centre all-season holiday resort on the shores of Lake Baikal that will offer a multitude of recreational and leisure pursuits ranging from yachting and skiing through to spa and Tibetan medicine facilities. It is hoped that ultimately Baikal Harbour will attract a million visitors a year and create up to 34,000 jobs on the back of a total investment of RUB45bn worth of public and private funds.

Slipenchuk is also set to play a key role in the much-needed exploitation of Buryatia's huge, but to date largely untapped, mineral resources, which have an estimated value of $135bn. With the help project financing from major banks in Russia, Europe, Asia and the US, Slipenchuk through his MBC Corporation mining subsidiary is looking to invest over $1.5bn into developing the Ozernoye and Nazarovskoye deposits into world-class projects, producing zinc, lead and gold and generating revenues of over $1bn a year.

As Arnold Tulokhonov, a member of the Russian Academy of Sciences, pointed out to conference delegates, despite providing European Russia with 95% of its natural resources, the inhabitants of Asian Russia have yet to reap much reward. Indeed, he highlighted the fact that while cities in Mongolia and China are prospering, cities in the Russian Far East are largely stagnating thanks to a toxic cocktail of corruption, mismanagement and mass emigration. Certainly, Tulokhonov's contention that a Communist dictatorship in China, which routinely executes corrupt officials, was delivering more socio-economic benefits for its citizens than a supposedly democratic, free market Russia where corruption often goes unpunished, provided those delegates who had been sent to this corner of Siberia with plenty of food for thought.

CONFERENCE CALL: Sent to Siberia

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