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Thursday, 17 January 2002

Official visit of the President of the Russian Federation - Poland-Russia Economic Forum

On January 17th 2002, the President of the Republic of Poland, Mr. Aleksander Kwaśniewski, and the President of the Russian Federation, Mr. Vladimir Putin, attended the 2nd Poland-Russia Economic Forum organized by the National Chamber of Commerce and the Eastern Club in cooperation with the Russian Association of Industrialists and Entrepreneurs. The two-day Forum that opened on January 16th in Warsaw was attended by over 400 entrepreneurs from both the countries. The plenary session discussion, attended by government officials of both the countries, focused on mutual trade relations and the prospects for their development as well as on Poland`s integration with the European Union. The need to enhance cultural and scientific exchange was also highlighted. During the second day of the Forum, in the presence of the Presidents of the Republic of Poland and the Russian Federation, members of the governments exchanged signed documents: Agreement between the Government of the Republic of Poland and the Russian Federation on Cooperation in Tourism and Agreement of Cooperation between Lubuskie Voivodship and Pskov District. Addressing the Forum`s participants gathered on the grounds of the Poznań International Fair, the President of the Republic of Poland informed that during the President Putin`s visit an agreement on air transport would be initialed by the Deputy Prime Minister and Minister of Infrastructure Mr. Marek Pol and Minister of Transport of the Russian Federation Mr. Sergei Frank. This agreement was kept waiting several years. The drafting of the agreement was not easy but it opens up entirely new opportunities in transport generally and in air transport cooperation specifically. This is an apparent proof that meetings between presidents, other than gestures and words, can also bring about tangible results. And having talked to President Putin for several hours now, I firmly believe that we have here a partner who in this very resolute and determined way desires to develop Polish-Russian relations, that this agreement will not be the last, that it will be followed by others and that new frames for our cooperation will be devised. This business meeting, I do hope, will go well beyond the scope of meetings thus far held. I had the pleasure of meeting Russian businessmen during my official visit to Russia in April 1996. Present in this room are also participants of that meeting and we all remember our hopes attaching to it. In July 2000, I took part in Moscow in a Polish-Russian business forum. Minster Rushailo honored us with his presence at the meeting and I wish to thank him once again for his appearance and the words then spoken. And it is through these consecutive meetings, through rounds of talks, that we arrive at this meeting of today that is taking place at a very momentous point in time, namely during the official visit to Poland of the President of the Russian Federation. The climate surrounding the meeting is extraordinarily congenial and there is much goodwill on both sides to give economic relations a new dimension, to surmount all the obstacles encountered along the way, to open a truly new chapter. We are confident Mr. President that your presence, your understanding of economic issues will endow the relations with this very new quality. Russia and Poland are important countries and the biggest economies of Central and Eastern Europe. The scope and the direction of this cooperation will in large measure determine the future economic condition of the whole region. Whatever perspective we adopt, we always come to the same conclusion: our countries do not sufficiently explore cooperation opportunities that our close neighborly proximity as well as the size of the markets and developmental potential proffer. And for that reason we need to proceed in a determined and consistent manner to alter this state of affairs. We need to make up for the time lost. With the perspective of the last twelve years we can see that our economic cooperation had gone through different phases, that there were high as well as low points. In 1997, Russia was the second in the world market for Polish goods and ranked third as regards our imports. A year later this positive trend was reversed. The financial crisis that affected great many countries and crippled the Russian economy also very adversely impacted our trade exchange. By the end of 1998, our exports to the Russian market fell by over 20 percent compared with the previous year and the imports dropped by almost 6 percent. Our deficit in trade with Russia was also growing ever more pronounced. In 1997, it amounted to 530 million USD. By now it has grown to 3.5 billion USD. There was a dramatic decline in Polish exports of food products, cosmetics, furniture and plastics to the Russian market. Looking upon Russia as an important supplier of strategic goods, we do nevertheless see the need to undertake joint measures in order to redress the excessive imbalance in our bilateral trade exchange. In order to redress such great trade imbalance, economic policy instruments have to be applied that are in the hands of our respective governments. This is because the issue concerns considerable sums, major governmental orders to the value of hundreds million dollars. I strongly believe that this is favored by the prevailing conditions. This is because after a difficult period the Russian economy has surmounted the crisis and is now gaining momentum. In Poland we recognize with due regard its dynamic development: the growth in industrial production, the falling inflation, the sustained high positive foreign trade balance. We wish Russia success with the reforms currently implemented with the object of profoundly restructuring the entire economy. We wish you Mr. President, the Government of the Russian Federation, that you should be successful in attaining your objectives. You have in us not only pundits but also those who are willing to assist you in those undertakings that fall within our capacity. Poland has been implementing important reforms for thirteen years now and we have lived through periods of high economic growth. The processes have currently slowed down but this should not obscure form view that which has already been achieved. Over the twelve years we recorded aggregated growth in GDP of close to 30 %. This is the highest growth rate in all of Central and Eastern Europe. Forty percent of all foreign investment in our region was targeted to Poland. We have now reached the last stage in our negotiations with the European Union and I hope that they will be concluded this year in keeping with the adopted timetable. The enlargement of the European Union eastwards should in no way be construed as posing a threat to economic cooperation between the countries of Central and Eastern Europe. In consequence of the enlargement, economic relations in eastern and western parts of Europe will markedly gain in significance. There is no other country with a greater interest in strengthening the ties than Poland since their robustness and significance will determine the position of our country in the Union. I am confident that Russia and Poland can devise satisfactory solution to all problems that may arise in consequence of the Union`s enlargement. I believe that by combined efforts we can do much to prevent the eastern frontier of the enlarged Union from becoming a dividing line, one separating Poland from her eastern neighbors. Mr. President, Ladies and Gentlemen, I do not need to assure you - and many noteworthy pronouncements, important ones, were also made yesterday - that Poland desires to maintain the best possible relations with Russia. We seek a partnership that will translate into mutually beneficial economic, scientific and cultural relations, one that will find expression in joint investments, in day-to-day good neighborly cooperation. The first important step along the way has already been made. During the recent visit to Moscow of Leszek Miller, the Prime Minister, a bilateral "Declaration of Cooperation in the Field of Trade, Finances, Science and Technology" was signed. I regard this declaration not only as an important political document and an expression of goodwill of both sides. I hope that it shall serve as a cue to promote revitalization of relations between Polish and Russian entrepreneurs, as a stimulus inducing them to explore congenial form of collaboration, as an encouragement to undertake joint initiatives. I very much welcome the initiative to set up Polish-Russian Business Council. This would constitute an entirely new element in the practical conductance of our economic relations. The activities in that field of Polish business organizations, especially those of the Eastern Club and the National Chamber of Commerce, are deserving of recognition. In solving the problems of economic cooperation no one is more competent than the businessmen themselves. We ought to do our outmost so that entrepreneurs encounter the least number of bureaucratic obstacles in their way, that they can count on being accorded favorable treatment and assistance by state authorities of both the countries, that they are provided all legally permitted privileges and aid. Mr. President, Ladies and Gentlemen, Economy is that field of activity where tangible outcomes are obtained within the shortest time. We very much desire - and I know that this view is also shared by President Putin - that the results of Polish-Russian cooperation should become apparent now, that we should not have to wait for these a long time, that we would not submit either to inertia or bureaucracy. There are signs that there are already some positive developments. Last year, after a long pause, exports of Polish goods to the Russian market rose again. This might portend the beginning a new and positive trend. But this still falls well below the level we attained back in 1997. Reverting to the level of four years ago would require much greater engagement from the side of Polish businessmen as well as more explicit encouragement from the Russian side. Declarations by themselves will not suffice, what we need are concrete actions. And an important question we have to ask of ourselves - what we, Poles, can offer Russia? And if in fact we were to respond in plain language, we would say without hesitation: we can offer almost everything! Polish enterprises are today bound by technology, capital, personnel, organization and experience with that which the most advanced in the world. At the construction-investment "BUDMA" - Offers for Russia" exhibition here in Poznań we present a Polish bus that is made with the application of cutting-edge technology, in collaboration with a world renown company, but still priced a quarter less than in western markets. Such examples could be multiplied. I believe there is a wide scope, encompassing many industrial sectors, for our cooperation in Russia. In order to take practical advantage of that we have to take greater care to remove all the obstacles that hinder and effectively obstruct the development of our relations. Improvement in trade results is predicated upon an efficient insurance and credit system, appropriate forms of sureties and guarantees akin to those applied in world trade. Also on resolving custom duty issues. For instance, the custom duty of almost sixty percent on furniture exported to Russia bars Polish producers from reentering the market. Cooperation between Polish and Russian banks should be enhanced. I wish to welcome present in the audience representatives of the banking sector. It would also be necessary for the Russian side to sign the agreement on mutual investment protection. I know that the agreement was drafted back in 1992 but was not approved by Duma. I know and we talked about it with President Putin yesterday that the delay ensues from the necessity to align the agreement with the WTO and the EU requirements, but it should also be pointed that the ratification of the agreement could lower the cost of export transaction insurance by as much as 50 percent. It is thus an issue worth the effort. More attention and effort should be devoted to promotional activities. Russia is a big country and `making an appearance` in Moscow or St. Petersburg is simply not enough. Polish businessmen should venture with their offers to particular regions and cities. I am pleased that this cooperation between regions is indeed developing. Economic relations can be fostered by the development of diverse forms of cultural contacts, by establishing cooperation between regions and towns. It is also very important for Polish companies to participate in major fairs and exhibitions across Russia and to organize national exhibitions in the country`s major centers. It has been scheduled to hold such exhibitions this year in Kaliningrad and Kazan and I trust that these will be well arranged and will bring about salutary results. The project of setting up Polish Houses in Russia also presents an interesting idea. It might prove to be a good way of presenting our offer and the scope of our potential. I count on the support of the Russian side, on greater involvement in the promotion of Poland. I look forward to the development of tourism, especially of young people. I believe this is a good way eradicate stereotypes that continue to function in our societies. Another problem in Poland is the popular belief that doing business with Russian partners is marked by risk. But I want to say this - you can never be too cautious but in this particular case the risk is worth taking. And please, Ladies and Gentlemen, look at the Western companies that bravely penetrated the Russian market and prosper there well. Poland does not expect any special privileges from Russia. We do, however, expect that conditions should be created that would allow Polish companies and Polish goods to establish stronger presence on that market. In this I have foremost in mind participation of our investors in the implementation of Russian federal programs. As the exemplary model of regional partnership cooperation should serve the Kaliningrad Oblast that will in near future border the European Union. As a future member state, Poland supports enhanced partnership between Russia and the Union and regards her cooperation with Kaliningrad Region as an important element of obliterating economic and social barriers on our continent. There are good prospects for this cooperation in many fields: in the energy sector, transport, maritime economy and natural environment protection. We are willing to participate in the implementation of the "Program for Social and Economic Development of the Kaliningrad Oblast till 2010". I believe that because of close proximity, the region can be attractive to many Polish companies, including small and medium-size that seek opportunities for making safe and profitable investments in Russia. Our investors are also interested in participating in the planned construction of the h-p cogeneration plant in Kaliningrad and in the reconstruction of the motorway connecting Kaliningrad and Elbląg. As I said yesterday in my toast, over the centuries Poland`s geographical position brought her more calamities than benefits. Today, it works to Poland`s great advantage. The routes crisscrossing the country from East to West and from North to South provide opportunities for developing active cooperation in many fields: communications, transportation, electric power, crude oil and gas transit. We regard with positive interest the idea of constructing a new transit gas pipeline crossing Poland for deliveries from Russia to southern and western Europe. This great project, however, has to be agreed in particulars not only by Poland and Russia but by our other partners, among them Ukraine, as well. I hope that the serious talks conducted on this issue will reach satisfactory conclusions. I firmly believe that the prospects for Russia and Poland are favorable. We have put behind the difficult but certainly edifying history we shared. I am confident that we can be good neighbors and reliable, responsible partners to each other. I want to encourage you to persevere in your
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