A Third Point of Support

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Ufa, the capital of the Republic of Bashkortostan, will play host to the SCO and BRICS Summits this summer. Head of Bashkortostan Rustem Khamitov is determined to leverage this opportunity to garner greater interest in his city from foreign investors and to implement his idea of a region-to-region international cooperation format.

What makes Bashkortostan the venue of choice for the BRICS and SCO international summits? What benefits does the Republic stand to gain as a result of these events?

It is a great honor for us to host these summits and we will do everything within our power to organize these high-profile international events at the highest possible level. Why was Ufa selected as the host city? The answer is simple: I went to the President with a proposal, and Vladimir Putin supported our initiative. He said that he had no doubt that Bashkortostan’s capital would rise to the occasion and emerge as a hospitable host during these events.

Naturally, we will do our utmost to capitalize on this opportunity and showcase the best that our Republic has to offer, and to stake our claim as a region that boasts dynamic development and high economic potential, and remains open to broad cooperation with investors and entrepreneurs from the BRICS and SCO countries.

Nearly 5,000 visitors are expected to take part in the upcoming events. Is the city capable of accommodating all of them? Have any new facilities been added in Ufa as a part of the preparation process?

One of our most important objectives was to modernize the airport, which we have tackled successfully – the second runway has been repaired and is now capable of receiving aircraft with a takeoff weight of over 200 tons. We built a new international terminal that meets the highest international standards and offers a high level of comfort for passengers. As a result, the airport’s international traffic capacity has gone up to accommodate 800 passengers per hour. Both summits will take place at the Congress Hall, which was built in 2007 to mark the 450th anniversary of Bashkortostan’s union with Russia. We had to reformat the working area inside this facility. As for the renovation of the concert halls in the Bashkir State Theatre of Opera and Ballet, as well as road construction projects that have been completed, the entire scope of work was planned long ago, regardless of the summits. It is just that our plans coincided with these large-scale events. Last but not least, during the two years of preparations for the summits, private investors have built seven new hotels in Ufa, including world-famous brands such as Hilton, Holiday Inn, and Sheraton. There will be a 24-hour business center in one of these hotels that will have ample facilities for business negotiations, conferences, and official receptions. We expect to reach full operational capacity in July. What is of utmost importance, in my opinion, is that we are fostering a well kept and comfortable environment in the city – facades of various buildings have been touched up, garden squares and boulevards have been laid down, and courtyards and roads have been repaired. The city looks fresher and more attractive. Both local residents and visitors can live and work in a very pleasant environment. Naturally, we will continue this policy of improvement in our cities and villages after the summits. That goes without saying. We have grand plans.

Who will be using this infrastructure after the summits?

These facilities will not remain empty. This year alone, we are planning to host several large-scale meetings as a part of Russia’s presidency in SCO and BRICS. This fall, Bashkortostan will host the Russia-Kazakhstan Interregional Cooperation Forum, with presidents of both countries in attendance. Plans are being put in place to create a permanent platform in Ufa to facilitate greater interaction at the regional level in the framework of international cooperation. We will exercise this ‘bottom to top’ approach to cement the political construct underlying both SCO and BRICS. The President supported this idea. So there is no doubt these facilities will be sought after.

Are you planning on using volunteers during the summits?

The volunteers will be there to welcome the arriving delegations and accompany them. Our public shows a great deal of interest in the summits and many people want to be a part of this event and help to organize it. When we launched our volunteer recruitment process, we received nearly 10,000 applications – and not just from young people, but also from retirees and people from other regions and even other countries. University students from China, Iran, India, Turkey, African countries, and the CIS who currently study in Ufa have responded to our call. As a result, more than 3,500 volunteers have completed their distance training and interviews. We have selected 500 of them to form the main pool and 300 more as a reserve. Most of them speak English, and some speak Chinese, so they will have no problem communicating with the visitors.

During the BRICS Business Forum in Fortaleza, you placed particular emphasis on international cooperation as the main pivot and proposed developing a region-to-region cooperation format. How much promise does that hold? What is the current state of cooperation between your republic and members of the Eurasian Economic Community and the CIS, as well as other regions in the BRICS, APEC, and SCO countries?

Today life itself compels us to focus more on international cooperation. Take a look for yourself – there is ongoing interaction at the level of SCO and BRICS heads of states, as well as between large businesses, but virtually no such work at the regional level. Incidentally, the R2R format is particularly well suited to attract investors and foster the development of territories. This format will enable large, medium, and small companies alike to join efforts, as well as to create clusters involving entrepreneurs from the SCO and the BRICS countries. In essence, the R2R format should become part and parcel of, and a third point of support for, the development of both the SCO and the BRICS as a whole, and each country in particular, and strengthen the relations between these countries and cooperation between large businesses.

For instance, today the Republic of Bashkortostan is making great inroads working with Chinese regions; we have signed agreements with two provinces, namely Jiangxi and Liaoning. Last year alone, we held nearly 15 meetings with representatives of China’s government and business community, and organized the Republic of Bashkortostan Business Days in the People’s Republic of China Forum. We have cooperation agreements in place with various regions in India, Iran, Belarus, Turkey, and Sri Lanka. We decided not to wait until these relations had been put on a formal track at the SCO and BRICS level, and began this work ahead of time. New enterprises and new jobs will be created with joint activities across the board, which without a doubt will improve the competitive edge of our countries in the global marketplace.

Which large-scale investment projects are already being implemented by companies from the BRICS countries in Bashkortostan? How efficient is the evolving cooperation between UMPO and Hindustan Aeronautics Limited (HAL) of India to produce a turbo jet engine for SU-30 aircraft?

Today, more than 10 investment projects are being jointly implemented with Chinese companies. These range from the construction of a rolling mill and the launch of heavy-duty drilling rigs in Ischimbai to building new greenhouses and a deep grain processing complex. In other words, in two to three years, several new joint ventures will be inaugurated in our republic at the same time.

Engine makers from Ufa have launched the manufacturing of SU-30 jet engines in India, in a HAL corporation branch in Koraput, under their license. Indian specialists supported by UMPO have already completed four assembly unit stages and the fifth stage is well underway, again with the assistance of our engine makers. They have already shipped 280 technological engine kits, and this work is still ongoing. Another production facility was launched in Laknau where they are developing a fuel metering production capability. In addition, India has proposed that we jointly develop an engine for the fifth generation aircraft, and they stand ready not only to finance the project but also to take part in the design, assembly, and trial stages. This is a very promising start.

What is the status of your joint bus production project with Marcopolo, a passenger transport manufacturer from Brazil?

Marcopolo and KamAZ have set up a joint venture in Neftekamsk to manufacture Bravis buses. As a part of their import substitution efforts, 90 percent of all components are being produced locally. One hundred eighty small buses have already been shipped and now they service various routes across the entire territory of Russia, from Kaliningrad to Sakhalin. I myself had a chance to travel on this bus and I found it comfortable, modern, and stylish. It could function as a school bus or service both suburban and city routes. They are planning to ship 200 more buses this year and to expand their sales geography to the CIS countries and the ‘near abroad.’

Moreover, the Neftekamsk Automotive plant facilities will be used by Bell, a South African company, to manufacture articulate dump trucks. These specialized vehicles are used in the mining and construction industries. Russian consumers show a great deal of demand for such dump trucks, and the market capacity is estimated at 200 to 300 vehicles per year. Therefore, we will see the launch of their very first production line quite soon.

One way or another, the agenda of both summits will also touch upon today’s challenging economic situation. How did the crisis affect life in the Republic of Bashkortostan?

Just like many other ordinary people, I do not like the word ‘crisis.’ I think that any crisis first forms in people’s minds, and then spreads to different areas of human activities. The Russian Federation has indeed experienced certain financial difficulties this year. Their causes are obvious: the sanctions, the falling ruble exchange rate, and the global recession. However, in Bashkortostan of all places, industrial enterprises continue to operate in a sustainable manner. This year started with stronger indicators compared to last year – we saw three percent growth in Q1. When it comes to consumer goods manufacturing and our leather and footwear industry, we see that their output has somewhat dropped, but they have their own specific problems and their own chronic diseases that are mostly a function of their significant dependence on imported raw materials. Naturally, the very word ‘crisis’ makes certain people exercise greater caution – they economize, cut costs, and build reserves. As a result, financial flows slow down. While funds borrowed from abroad used to serve as major ‘donor’ assistance in the past, today this channel is off limits, and I am not even talking about the small-time loans trickling in from the West. Financial cooperation with the East is still only in the making. So we need to accelerate our financial flows domestically using our own resources.

One of our most important objectives was to modernize the airport, which we have tackled successfully – the second runway has been repaired and is now capable of receiving aircraft with a takeoff weight of over 200 tons. We built a new international terminal that meets the highest international standards and offers a high level of comfort for passengers. As a result, the airport’s international traffic capacity has gone up to accommodate 800 passengers per hour

In today’s economy, the anti-crisis decisions that are being made at the federal level should be quickly communicated to the regions, and constituent entities of the Russian Federation – like our republic – should respond in a dynamic vein and act quickly. It should be noted that we are capable of resolving some issues on our own, and relatively fast. All that it requires are certain specific powers. Primarily, it means getting the right information. For example, if a company stops paying taxes, we should be able to resolve this matter quickly and ascertain whether the company in question is truly in a difficult financial situation or if we are dealing with another induced bankruptcy where the owner pockets the money and disappears abroad while we are left to deal with his problems, predominantly those of a social nature. So far, the ‘tax secret’ policy has prevented us from finding out what sums the companies are funneling and where. Guided by the ‘commercial secret’ clauses, entrepreneurs do not feel obligated to report their total outputs to us, or where their products are being shipped. It is difficult to manage economic processes without this baseline data.

As for our republic, the crises of 1998 and 2008 showed that our diversified economy is capable of weathering the storm and maintaining a decent level. During those years of crisis, the Republic of Bashkortostan invariably remained one of the few federal constituent entities that never allowed any serious economic recession to take roots. Naturally, the unique niche of our republic’s economy helped in many ways; the products manufactured by our local enterprises – such as fuel, chemical agents, and mineral fertilizers – are always in demand. A large part of Bashkortostan’s mechanical engineering enterprises service defense procurement needs, and today this particular area receives decent funding. We also have a powerful agricultural sector: Bashkortostan is the largest agro-industrial region and Russia’s leader in milk production. We are not about to give up our leading position. I can tell you in earnest that we will weather this storm.

Social well-being of citizens is an important life quality indicator. How does the current state of the Russian economy affect people’s mood?

From my very first day as Head of Bashkortostan, I have come up with several formulae, chief of which is to work for the people. This is not just a catchy phrase – this principle underlies every day and every hour of my work. Indeed we have always paid a great deal of attention to the economy, and will continue to do so at all times. However, I believe that my primary objective is to build a just and socially cognizant government. The mood of the people depends to a great extent on how different levels of the government treat ordinary citizens, and whether they take into account these citizens’ interests, demands, and needs. There has to be full contact and mutual understanding. If the entire society works hard, the desired results will be achieved, including our economic targets.

What is the current state of Bashkortostan’s tourism infrastructure, and to what extent is it in demand?

Back in the Soviet Union, Bashkiria was often referred to as Russian Switzerland, as a ‘country of a thousand rivers and lakes.’ At that time, many countrywide pedestrian, equestrian, and river tourism routes traversed the territory of the Republic. Few regions in the European part of Russia can compare to Bashkortostan – we have taiga and steppes, alpine rivers and waterfalls, rocky ridges and caves, large lakes and water reservoirs. Here you can drift down the river in a kayak, enjoy a sauna in a field, go fishing, and visit the Kapova Cave (Shulgan-Tash) where prehistoric cave paintings are still preserved. You can scale Iremel, a mountain ridge with a special natural energy. Very few places in the world could rival our republic. There was a time when I used to go on hiking tours, and essentially walked across the entire territory of Bashkortostan, and I can tell you that our region has a great deal of potential. It sometimes seems as though we are lacking simple tourism infrastructure facilities, but we are already well on track to tackle this issue. There are currently 44 tourism investment projects underway, for a total of 14 billion rubles, in various cities and communities across Bashkortostan.

In the winter, visitors will be attracted by the Republic’s ski resorts, of which we have many – including well-known locations such as Abzakovo and Mratkino, to name just a few. Even in Ufa, one can find decent slopes. And I am saying this as someone who has been a fan of alpine skiing for a very long time. Of course I have visited all of our slopes. For many athletes, Bashkortostan is a place of choice when it comes to training, and that is great! Our wellness resorts are also evolving. Many people in Russia and around the world have heard about the medicinal qualities of our mineral springs in Krasnousolsk at the wellness complex in Assy. Other well-known locations include the balneotherapy health resort located in Yakhty-Kul on Lake Bannoye, the hot springs at the Yangan-Tau resort, and the kumis therapy clinic in Yumatov. Speaking of which, kumis therapy [a treatment which consists of drinking large quantities of kumis, a fermented mare’s milk drink] used to be favored by Anton Chekhov, who was advised to visit Bashkortostan by Leo Tolstoy, another connoisseur of this drink.

Lately, our local travel agencies have stepped up their activities and now they are offering a number of attractive tours, like the ‘Golden Belt of Ural-batyr’ or ‘In the Footsteps of Salavat Yulaev.’ Soon Ufa will be included on the so-called ‘Red Route,’ or the Lenin tour that includes historic Soviet sites and remains particularly popular among visitors from China. However, this work needs to be intensified.

Bashkortostan is home to many different ethnic groups, but it has always remained peaceful – an enviable situation for other regions in our country and around the world. Here you find a unique culture based on mutual understanding and engagement. How is that possible and what lies at the heart of this culture?

What lies at the heart of it is the wisdom of people. Society itself manages these processes. Our ethnic diversity is a blessing. On the other hand, it does require that we exercise greater restraint. People understand that any careless remark or wrong move could result in difficult and undesired consequences.

It took not just decades but centuries for this culture of communication to grow. In many ways, it helps to preserve peace and quiet, and little credit can be attributed to the government. The task of the government and law enforcement is to counter any manifestations of extremism and protect people from those who try to provoke ethnic strife. Society is perfectly capable of handling the rest on its own.

Historically, given all of its ethnic diversity, Bashkortostan has stood apart from other regions in that its people have always been tolerant and peaceful. We have a large percentage of mixed marriages – look at any family and you will find mixed ethnic backgrounds. More than 100 different ethnic groups live in the Republic. So one of our primary objectives is to nurture our atmosphere of friendship and mutual understanding, which is a recipe for stability and continued development.

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