Pacific Economic Congress

The decision by Russia that it will formally offer to host APEC in 2012, with the Leaders Summit to take place here in Vladivostok, has generated much excitement among APEC members. This will of course be the first time that Russia has hosted APEC. I am therefore delighted to speak to you today about APEC - what it is, what it does, what it has to offer Russia and what Russia has to offer APEC.

All of the issues on APEC's current agenda, which will be discussed at the APEC Leaders Meeting in Sydney in September, are of interest to Russia. Historically Russia has considered itself a Eurasian country even though, culturally and economically, its focus has been more on Europe than Asia. But, as the centre of gravity of world economic growth shifts increasingly to Asia, so too will Russia's focus inevitably change. As a major power in the Asia Pacific region Russia has the potential to play an important role in APEC. As its economy continues to grow, and with it the need to achieve greater economic efficiency, productivity and competitiveness, the value of APEC for Russia will also become more evident.

While it is true that most of Russia's trade takes place outside the APEC region, namely with the EU and CIS, the importance of the Asia Pacific as an increasingly important trading partner cannot be denied. In the years after Russia's joining APEC in 1998' through to 2005, its exports to APEC member economies increased by 97 percent while imports from APEC member economies grew by 208 per cent.

That strengthening relationship between Russia and other APEC members can best be illustrated by a few facts.

As Russia's economy continues to grow, expanding by more than 50 per cent over the last seven years according to the 2006 APEC Economic Policy Report, structural reform continues to be an important catalyst of this development and APEC is playing an important role in this process. Consistent and sound economic strategy, primarily focused on modernizing the country's financial system and mitigating economic risks and improving the investment climate is essential for this ongoing and positive expansion.

In recent years a number of important reforms have already been implemented in the areas of tax, banking, labor, and land codes.

To assist with the smooth transition that is required to develop and then implement these reforms, Russia can benefit significantly by more actively participating in APEC policy-related and technical working groups, and in APEC's capacity building initiatives.

In the years ahead, and as Russia prepares to host APEC in 2012, Russia's participation and leadership in these working groups and in other capability building initiatives will no doubt increase - indeed there will be an expectation among other member economies that this will occur.

APEC's principles of free and open trade and the work being done in areas such as structural reform, anti-corruption and improving transparency are helpful to Russia as it seeks accession to the WTO. This is an important component in Russia's foreign economic policy.

For Russia - like all other APEC member economies - the reality is that if members are not committed to implementing the sorts of best-practice policies advocated by APEC in areas such as public sector and corporate governance, transparency, regulatory reform and economic and legal infrastructure, they will be less competitive than others that do, and their economies and people will be less well off.

Russia, with its immense natural resources, especially in energy, has much to offer the APEC region, not just as a major energy supplier but as a contributor to APEC's efforts to achieve sustainable and clean development and to efforts to mitigate the effects of climate change.

Without doubt, APEC, with increasing participation by Russia and ongoing participation by economies on both sides of the Pacific, is an integral part of the regional architecture in Asia Pacific, which is the engine of global prosperity in the 21st century. Indeed, the Asia Pacific region is coming of age, and its voice will be increasingly influential in global councils.

Russia, in hosting APEC 2012, with the summit to be held here in the Russian Far East, is sending an important signal to other APEC member economies, and indeed to the rest of the world, that the international centre of gravity is shifting to the Asia Pacific.

Moreover when Russia hosts APEC in 2012 you will have an unrivalled opportunity not only to showcase Russia's economic achievements and the advances in Russia's Far East, but your economy will be in a position to facilitate and shape debate and discussion on global issues that will determine the success of the Asia Pacific for generations to come.