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August 9, 2007

Will Russia host Apec Forum?
Having recently won its bid for the 2014 Winter Olympics, Russia is already aspiring to host another symbolic event. At the first Pacific Economic Congress, held in Vladivostok July 28-29, plans were unveiled to make the Pacific port the venue of the 2012 APEC forum.

To win the bid, Russia is employing the tools that helped it with the Olympic one-promises of huge government investment to prepare for the forum. Such a lavish outlay may well be worthwhile, with the lucrative contacts it promises.

Russia joined the Asia-Pacific Economic Cooperation in 1998, and its forum opens new vistas of opportunity for Russian business- trade between APEC members accounts for about half of the world total. True, Russian commerce remains European oriented, as it has always been. The European Union accounts for half of Russia's total foreign trade, while ties with APEC members are as yet rather loose and underdeveloped.

However, the Kremlin is shifting activity to the Asia Pacific region, with energy exports a top priority. That is reasonable: the Sakhalin oil and gas projects will achieve full capacity quite soon, and pipelines from the Siberian gas and oilfields will reach the Pacific coast in several years' time.

Yet however lucrative such projects may be, they did not lead the congress agenda. Presentation of Vladivostok as a potential forum venue dominated the congress. And though the bid has yet to be put to the vote, problems will hardly arise from the generous offers in the proposals. Russia has followed the same strategy that brought it success with the International Olympic Committee, promising billions of dollars to upgrade the city and its environs.

"I've brought money-big money," Finance Minister Alexei Kudrin told the congress. He promised 427 billion rubles ($16.8 billion) of federal target allocations-compared to 12 billion dollars Moscow has earmarked for Olympic construction in Sochi. No wonder Colin Heseltine, the Executive Director of the APEC Secretariat, is enthusiastic about the Russian bid even now, though it will not be officially made until autumn.

There is some resemblance between Sochi and Vladivostok-neither city is ready to accommodate a big international event. The Black Sea spa and the Pacific port have similar problems: bad roads, sewage systems in a disastrous state, substandard hotels, and outdated airports. In both cases, generous cash injections from central government may (it is hoped) change all this.

Primorye governor Sergei Darkin has his own ideas about how to make Vladivostok magnetically attractive-he is planning a posh gambling center and golf-links 80 kilometers from the city, and looks forward to extravagant tourists filling the local purse till it bursts. Unsurprisingly these plans were relegated to secondary importance at the congress.

If we haven't heard about any big deals being made or contracts signed during the congress, this should be no surprise. Everyone knows that the event's organizers were not after business proper, but were sounding out Vladivostok's long-term prospects to become one of the APEC major centers.

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

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