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Bashkir reality (Rustem Khamitov's interview to the magazine «VIP-Premier»)

This summer Ufa-city will host international SCO and BRICS summits. The decision of the President of Russian Federation and Russian government to entrust holding of such important events to Bashkortostan is very significant for the Republic which is among leaders in All-Russian ratings and keeps economic growth and investment prospects despite the crisis. Rustem Khamitov, the Head of the Republic of Bashkortostan, gave an exclusive interview to the magazine «VIP-Premier» about coming events and current aims.

- Mr. Khamitov, why Bashkorostan was chosen as a host-city for coming summits? What profits the Republic expects to make on these events?

- It is a great honour for us to host such summits and we are doing our best to organize these important events at highest level. Why Ufa was chosen as a host-city? It’s simple: I applied with such proposal to the President of the Russian Federation. Vladimir Putin endorsed our initiative and said he had no doubt that our Republic could rise to the role of a hospitable host-city for these events.

For our part, of course, we will try to use this opportunity to show all advantages which our Republic is famous for. We are the rapidly developing region with high economic potential and we are open to cooperate with investors and businessmen from SCO and BRICS countries.

- There will be about 5 000 guests taking part in these events. Does Ufa ready to meet all of them? What new infrastructure facilities have been built in Ufa during the preparation for summits?

- One of the most important aimes was airport modernization and we coped with it: the second take-off and landing strip which allows accommodate extra-weigh planes with the take-off mass more than 200 tones was renovated. We also built a new international terminal conditioned to all standards and providing passengers with comfort at high level.

Summits will take place in Congress-hall which was built in 2007 marking the 450th anniversary of the joining of Bashkortostan to Russia. We were to reform a working space in this venue. As for the reconstruction of concert halls, Bashkir State Opera and Ballet Theatre, roads and streets - all work was planned long ago without dependence on summits. It happened that plan realization was in step with such great events. Finally, 7 luxury hotels have been built in Ufa by private investors. Two of these hotels are already opened and rest ones will be able to host guests in May. In such a way, we will be completely ready be July.

As for me, the main point is that we create well-groomed and favorable urban surroundings: housefronts are cleaned, parks and avenues are made, yard and roads are renovated.

The city has become more comfortable and picturesque. Citizens and guests will be happy to live and to work here. Of course, we will continue renovating our cities and villages after summits, too. We have great plans.

-In 2012 you ordered to halt the «Ufa-airport» road renovation and even to do it over again. How often do you control building process yourself?

- Of course, I control building processes myself. As for the low quality of roads renovation, unfortunately, we face such problem rather often. The roads are built poorly. Sometimes it is made intentionally to come back next year to renovate the roads again and to «get» new income. When I noticed that contract organization made low quality road-bed again, I stopped renovating process and made it to do it again. After the asphalt was rolled again it served longer but only in 1,5 time, not in 3-4 as we planned. Now this road has to be reconstructed again. It is like an instant tilt at windmill.

Now we invite specialists from other regions and even abroad to take part in road building contract work auction and we have to pull the plug with some local bunglers.

- The preparations for coming summits coincide with difficult time for the country. How do the crises influenced the Bashkortostan? What do you undertake to resist this challenge?

- As all sane people I don’t like the word «crisis». I think that all crises start in our minds and then spread on fields of human activities. Yes, this year the Russian Federation faced financial difficulties and their nature is obvious: sanctions, appreciation of foreign exchange, world economic decline. But, in Bashkortostan, for example, factories work stably; the year has started with 3% growth in first quarter in comparison with last year’s indexes. Light industry, tanning and footwear industry faced the decline in productivity but they have their own specificity and chronic problems especially which dealt with the dependence on imported raw materials.

Of course, the word «crisis» makes some people to be over-cautious: to economize, to keep costs down, to prestock supplies. As a result, financial flow in economics slows down. Earlier, borrowing abroad was a good option. Now we are out of this source: western low flow of credit no object and the work in financial sphere with East hasn’t started yet. So, we are to quicken inner financial flow using our own resources.

Firstly, this is the case of information uptake. For instance, one company stopped paying taxes. We have to clear up this situation quickly in our region, is it true that this company aced very difficult financial situation or it is an artificial bankruptcy- when the owner with all income run abroad and we are to stew in his juice. But, nowadays the «tax secret» doesn’t allow us to learn what sums and where these companies payed. Following the meaning «trade secret» companies are not obliged to give us an account how many products they produced and whom and where they discharge cargo. It is very difficult to administer the process without such information.

As for our Republic, crises in 1998 and 2008 showed that our diversified economy can keep on a good level in such situations. In those days, Bashkortostan stayed among subject of the Federation which controlled economic level. Of course, we owe our Republic agriculture specialization: products such as fuel, chemical, mineral fertilizer which our companies produce are always in demand. Republic machine builder are largely oriented on Defense Procurement and Acquisition and now this direction is financed well. We have strong agricultural complex: Bashkortostan is the biggest agricultural region in the country. We are in the first place in our country in milk production and we won’t climb down. I bindingly confirm that we will pass difficult times.

- The quality of life is measured by citizens’ life. How does recent economic situation influence the citizens of the Bashkortostan?

- From my first work day as the Head of the Republic I formulate for myself several postulates; the main of them is to work for people. It’s not a phrase-mongering statement but a sense of everyday activity. Economy will always be cared of, but I think that the most important aim nowadays is the process of forming fair and social-oriented power. Citizens’ life depends on the attitude of officials towards their interests, requests and demands. There has to be full contact and mutual understanding. If the whole society works actively, we will have the result.

- Bashkortostan shows stable high rate of growth in economic and social sphere, but at the same time the level of migration from the Republic exceed the level of migrants. Why does it happen and are you concerned about that fact?

- Of course, I know the migration statistics. But it is the question about several thousand people. It is in error limits. The population of the Republic is about 4,0-4,1 people for almost 20 years.

Nowadays, the main migration flow is in direction to Moscow, Saint-Petersburg. The other direction is to southern territories, Krasnodar Krai and Stavropol. Life conditions are more comfortable there, climate is softer and the ground is better quality.

And old industrial regions such as Ural, trans-Volga region, unfortunately, became labour force supplier. This is a signal to federal government, too: Our regions can’t be considered only as a natural resourses and labour force supplier. Good life conditions have to be created for people there.

On the migration statistics final-year students effect who leave the Republic to study. Earlier 5 - 6 thousand students left the Republic per year, now their quantity is 16-18 thousand. Although we also have good quality universities in Ufa. It’s obvious that on graduating from the Prestige University in Moscow student from the region tries to stay and find the job there, because there are more opportunities for self-realization.

The wage is important, too. On average it’s not high in the republic, because share of rural population is 40% and the wages there are 12-15 thousand rubles. In industrial sphere wages are 35-40 thousand. At the same time, the competition in such well paid spheres like oil refining and petrochemistry is very strong. It is hard to get fixed up in a job even for locals, not that for newcomers.

- Nevertheless, despite small wages the Republic is among leaders in agricultural products production. Why do people work in these spheres?

- Urbanization processes are world trend now. But, they are slower in the republic. No one restrains them artificially. The thing is that we have stable traditions, especially in agricultural sphere. Moreover, why people can’t live in the countryside if there are asphaltic road, gas, water and school?

Furthermore, now we focus on creation of comfortable public spaces, which will be no worse than in the city: relax zones, parks, swimming pools and so on. All of these, of course, will hold people to stay in the countryside. I believe that the main reason of migration from the countryside is low quality life conditions.

Today, it is an often situation when people hold 20-30 cows or 15-20 horses, cultivate 3-5 hectares of ground. Peasants have income from farmstead and it helps them to develop their life, built houses, teach children. Of course, peasants’ work is hard: they have to work 24 hours a day, but those, who are not lazy, have prosperous lives.

Some time we wanted to urge on agglomerative process artificially, but then we understood that we don’t have to do that. Rural life is stable and it is important. We talk about the crisis, but we can see many newspapers with adds like «Buy a calf», «Buy a cow» and «Buy pigs». People see that there is a demand on milk, meat, and most hard-working people want to earn on this. Despite the fact that Russians are not spoilt by extra-comfort, in every settlement many people have gas, water, comfortable toilet, shower. And at the same time you have you own yard, clean air and freedom…. Why should people leave such place?

From our part we help local authorities financially. Our republic is unique in Russian Federation where rural settlement gets additional funds from republic budget in the amount of 125 thousand quarterly and 500 thousand annually. This sum can appear as not considerable in the city but in the countryside this sum can be spent on road, pipe, well or fence renovation. 500 thousand is a great sum for rural settlement. We have 818 settlements of this type. The finance support program costs almost 500 million rubles per year for republic budget, but this is not the case to save expenses.

On one occasion, Nicolai Fedorov, former agriculture minister of Russia, arrived to our city with a working visit. As our territory is large, the time was limited, so we moved by helicopter. During the flight he told me: «The Republic goes very well with you!». I answered: «What can you see from air?». And he said: «Roofs of the houses! Red, green, blue, metal tile, ondulin... It is really beautiful view from above».

Actually, our villages differ from other ones to the best. Not without reason competitions are held between them: for the most well-planned village, the most teetotal village, the most beautiful girls in a village. You can not hold people in the countryside by only one decision from authorities. You need thousands of threads, which connected them in a whole and we have it.

- Bashkortostan is a multinational republic, thus historically the consent and calm between people who belong to different nationalities, is still kept here. How do you reach that?

- People, and society itself are controlling this type of questions. Multinationality is a benefit. On the other hand, it imposes certain self-restrictions. The person understands, that a blurt, a slink of the eye could lead to difficult, serious consequences. Such culture of interaction was developed not during decades but centuries. Thanks in large part to that fact, the peace and balance retain. The power of authorities is not enough here. The power and law enforcement agencies business is to resist the extremes, to stop manifestations of extremism, to protect people from those who try to provoke the interethnic conflicts. Society copes with all the rest independently.

Despite all the ethnic diversity Bashkortostan was always noted historically for tolerance calmness of the population. We have a huge amount of mixed marriages; almost every family is a merge of ethnoses. Representatives of more than hundred nationalities live in the republic. So, one of our main objectives is to keep the atmosphere of friendship and mutual understanding between people. It is a guarantee of stability and further development.

The Summits: the Goal and the Method

On July 8-10, 2015 Ufa hosts the SCO and BRICS summits. The capital of the Republic of Bashkortostan takes the heads of states and governments of the countries, whose territory covers 30 percent of the Earth's land area; its population is nearly 3 billion people. These countries provide 15 percent of all world trade; and its total GDP exceeds the GDP of the United States of America.

In the centre of attention

This year the Russian Federation holds the presidency of both international associations. So it ensures that the end of its chairmanship will be marked by massive and memorable event, for example, the SCO expansion.

Sergey Lavrov, the Minister of Foreign Affairs, said at a press conference on the results of 2014: We had walked a long way to this point, and finally at the summit in Dushanbe in the autumn of last year we had formed the final package of documents on the main criteria for membership in the Organization. Firstly we will consider the applications of India and Pakistan. For that the Organization develops a fairly wide consensus. Iran also asked for membership in the SCO. I think it is quite possible, especially if we achieve progress in regulation of the Iranian nuclear program".

Several countries have expressed a wish to get observer status in the SCO; Armenia, Azerbaijan, Bangladesh, Nepal and Syria are among them. The decision on this matter may also be taken at the summit.

In addition to the increase in the membership of the SCO, the agenda includes issues, relating to foreign policy coordination, enhancing of economic cooperation, support of business relations, as well as introduction of mutual settlements in national currencies and forming a single scientific-educational and cultural space.

Before the summits the meeting of the BRICS Business Council will be held in Ufa. Sergey Katyrin, the President of the Chamber of Commerce and Industry of the Russian Federation and the Head of SCO/BRICS business forums, said: Firstly, we would like to organize suitably all the meetings during the SCO and BRICS summits and, secondly, to give an additional impetus to the development of business by means of these measures".

Russia has made a number of proposals, in particular, proposal of the establishment of the Strategic Initiative Agency to reduce administrative barriers to business in the SCO countries. The work on creation of the SCO Development Bank is in progress as well as preparation of an Agreement on Cooperation and Coordination on frontier problems, which must also be signed in Ufa. The presentation of the SCO channel will also be held in Ufa; this channel is intended for the integration and promotion of business in the international organization area. It is expected that the channel will broadcast by means of satellite and cable operators, and will be funded through the expense of advertisers, not through the state budgets of the participating countries.

Russia is also ready to suggest to the BRICS partners, especially China and India, the project on construction of common manned orbital station.

It is expected that at the summit the Strategy of the SCO Development until 2025 and the Declaration of Ufa will be adopted. In addition, the Heads of State will make a statement on the 70th anniversary of the Victory in World War II.

Everything in place

Over the last three years national budget appropriated a few billions to hold the APEC summit in Vladivostok, the World Student Games in Kazan and Sochi Olympics. In this context the capital of Bashkortostan, which received very modest budget for the organization of these representative events, could be called the hostess of "super-economy" summits; 2.5 billion rubles have been received from the federal budget, 2 billion - from the republican budget, and about 6 billion have accounted for private investment. The Ufa saved money, because it was almost ready to hold summits. It was necessary only to redesign the Congress Hall (the venue for the summit), and to renovate the airport and to prepare hotels.

The necessary result was achieved mainly due to the ability the republic and city authorities to get by with the minimum of resources.

For the summits seven world-class hotels were built in the Bashkir capital, and such hotels like Hilton, Sheraton, HolidayInn, Hampton, ParkCity and many others were built entirely through private investment. But the update of the airport and construction of a new international terminal, including the construction of a second take-off and landing strip, which allows accommodate all types of modern aircraft, were half financed by the federal budget. The new terminal with an updated air-port property has not yet picked up or sent a single passenger, but it took second place in the "Best Airport 2014" category of an annual "Air Gates of Russia" national award thanks to its specifications only, followed the Sochi's airport. The international airport "Ufa" became the first of the regional airports in Russia, which confirmed the compliance of ground handling operation to world security standards. The new terminal capacity is 800 passengers per hour; it is four times more than before. And this terminal is able to assure comfort service of the highest standards of the International Air Transport Association (IATA).

During preparations for the summit Congress Hall was renovated; and the National Concert Hall "Bashkortostan" has become a modern concert venue. The Nesterov Bashkir Art Museum, Bashkir State Opera and Ballet Theatre were renovated

“Advertisement is the mover of the trade”

It is obvious, that week of summits will be "the window on the world" for the Republic; and Bashkortostan should use this unique chance in a right way. The Chinese ambassador, for example, who had visited Ufa three months before the event, said: After the SCO/BRICS summit, Bashkortostan and Ufa-city will be known all over China. I see that there are good conditions for investment in the Republic. Our embassy will recommend the Chinese businessmen to come here and to investigate investment possibilities in the Republic. I think that they will show an interest in it." Ambassador's words fully reflect the prospects, even granting a diplomatic politesse.

The number of presentations of future summits had been held in the embassies of the participating countries, and results became unexpected for the Republic; natural beauty and tourist potential of Bashkortostan sparked too little interest unlike the industrial and research and technology base, logistic capabilities. Now, as the saying goes, everything is in the hands of masters.

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