Economic Cooperation Between Cities of the Baltic Sea Region

 

Address of the Vice Governor of St. Petersburg, G.I. Tkachev,
to the 3rd Baltic Development Forum

St. Petersburg, September 24, 2001

 

Dear Mr. Minister, Ladies and Gentlemen,

 

The first development program for Northern Europe goes farther back than 10 or even 100 years ago. It was born when courageous, enterprising Varangians, Slavs and Finns made the coasts of the Baltic and North Seas their home.

Two thousand years ago, the cause of the Northern Dimension was furthered by the Vikings. In the 14th century, it drove the Hanseatic Union and its eastern partners, Pskov, Novgorod and Narva. In the 17th century, the cause of the Northern Dimension brought forth the enormous Swedish Empire and, for more than 200 years thereafter, was also inseparably linked to another empire, Russia. Today, Northern Europe’s progress as one of the world’s leading industrialized regions is bolstered by the European Union’s Northern Dimension program.

 

Geography of the Northern Dimension

If we view the Northern Dimension as a program for all of Europe, not only the European Union, it will span Ireland and the United Kingdom in the west, the 11 member nations of the Baltic Sea Council, and Belarus in the east.

In Russia, the Northern Dimension primarily applies to the north-western regions: Murmansk, Arkhangelsk, Pskov, Novgorod, Kaliningrad, the Leningrad Oblast, St. Petersburg, and the Komi and Karelia autonomies.

Thanks to its cohesion with the North European Initiative of the US Department of State, the geography of the Northern Dimension also transgresses the Atlantic Ocean.

 

The Role of the Baltic Sea Nations as Part of the Northern Dimension

Let me tell you about some of the outcomes of the Northern Dimension program that have been particularly obvious in this city during the past few years.

The industries of Baltic Sea nations have displayed close cohesion in such vital fields as ship-building (with an emphasis on ice-breaker building), paper, food, telecommunications and environmental protection. One of our collaborative success stories is coordinated completion of the South-West Wastewater Treatment Plant currently underway in St. Petersburg.

Denmark’s Telenor and Sweden’s Telea have recently emerged as major telecommunications service operators in St. Petersburg, while Carlsberg has invested heavily in the city’s brewing industry. Denmark’s Moeller Group, an industry leader in the Baltic Sea region, has joined forces with Finland’s Fortum and Finnlines to build a new cargo port near St. Petersburg. The Swedish-Finnish company Skanska has contributed immensely to property development in St. Petersburg. Some of Skanska’s milestone projects are restoration of St. Petersburg’s Swedish church and a new building to house the Consulate General of Finland.

In the meantime, we are also looking at the opportunities to restore the Estonian church, while the restoration of the Finnish church is scheduled for completion this year. Overall, hundred of projects have been successfully completed in St. Petersburg in collaboration with Germany.

 

Dear Conference Participants,

It is an acknowledged fact that Northern Europe is a predominantly urban region. North European cities are crucibles of social, political, environmental, economic and cultural growth. The old Hansa has taught us that a sure way to prosperity in this region is collaboration between its cities or, as the Finnish Professor Urpo Kivikari puts it, the ‘Growth Triangles.’

Ties forming in the region do not necessarily fit into a triangular pattern. When we talk about the St. Petersburg-Helsinki-Tallinn growth triangle, we cannot help including Stockholm as well, because Stockholm exerts a formidable influence on Helsinki, St. Petersburg and Tallinn both via its banking system and through its large-scale involvement in environmental projects in the east of the Baltic Sea. The governments of these cities have recently endorsed a specific joint project aimed at eradicating the existing barriers to cooperation.

St. Petersburg is able and willing to make a valuable input into the Northern Dimension. Our input will be all the more productive if we join forces with our partner cities.

What makes St. Petersburg eligible for the program? First of all, it is the city's stable treasury system, its budget which has been deficit-free for years, and the city's savvy domestic and international borrowing policy.

In addition to high-paced growth, favorable trends in St. Petersburg's industry are evidenced by the upscale activity of international investors in the city.

Furthermore, St. Petersburg authorities have been doing a great deal for environmental protection.

Last but not least, St. Petersburg has an enormous pool of scientific, cultural and educational resources to contribute to the program.

There is no modern trade or profession which is impossible to obtain in St. Petersburg. We are prepared to make our educational resources available to the program for the benefit of the entire region.

Speaking of cultural ties, St. Petersburg attends most of the region's cultural highlights. We have held Days of St. Petersburg in Turku, Finland. Last year, the city took part in celebrating the 450th anniversary of Helsinki. This year, St. Petersburg's artists, sculptors and musicians made their creative contribution to Riga's 800th birthday. In 2002, St. Petersburg will be participating in the celebration of the 750th anniversary of Stockholm. For our part, we count on a broad involvement of our partners and neighbors in the upcoming celebration of St. Petersburg's tercentenary in 2003.

 

Let us try to answer this question. Do we need a new Hansa on top of our existing regional system of international institutions promoting cooperation in virtually every field imaginable?

Firstly, we have the Council of Baltic Sea States (CBSS), an intergovernmental organization established at the 1992 conference of foreign ministers of Baltic Sea nations in Copenhagen.

The Council's mission is to promote all-round cooperation in the region. Along with all the other regions of north-western Russia, St. Petersburg participates in the Council's work as part of Russian delegations. We are proud to announce that the next scheduled meeting of the Council will be held in St. Petersburg next year.

 

The Council of Ministers of Nordic States operates a sprawling network of agencies and institutions patronizing the different fields of cooperation between Nordic nations. The Council of Ministers has an information office in St. Petersburg.

St. Petersburg and its 4 satellite cities, Kronstadt, Lomonosov, Sestroretsk and Petrodvorets, are members of the Union of Baltic Cities.

 

St. Petersburg was among the founders of the Organization for Subregional Cooperation of the Baltic Sea States, a non-governmental organization of Baltic Sea nations. Having no institution of membership, the organization is open to all the 163 subregions of the Baltic Sea nations.

 

The Governor of St. Petersburg, the Mayor of Stockholm, and the Chief Burgomaster of Helsinki have been holding customary meetings as part of the so-called Baltic Three to address various cooperation agendas of the Baltic region, including water protection, navigation and transportation issues. The three Mayors are actively involved in the EU’s Northern Dimension program, as well as St. Petersburg-initiated projects, including St. Petersburg-2003, Europe’s Gateway to Russia, the Baltic Bridge,  the International Freeway E-18 project, and the International Program for the 300th Anniversary of St. Petersburg.

 

Therefore, I believe that a new Hansa already exists as a philosophy and a set of specific programs. No other organization is needed, unless we want to promote 'bureaucratic tourism.'

 

Dear Ladies and Gentlemen,

 

  1. The existing scientific potential of Russia and the other Baltic Sea nations is available and waiting to serve the cause of expanding and strengthening mutually rewarding ties between these nations and the rest of the EU. This potential can also serve as the groundwork for new economic initiatives and investment schemes in the region within the framework of the EU’s Northern Dimension program.

  2.  Looking at the existing portfolio of investment projects and EU programs we realize that, to our regret, the scientific potential of the region overall and, specifically, of St. Petersburg has been largely neglected in drawing up the region's development plans. In general, the focus is mainly on energy and raw materials development.

  3. St. Petersburg has truly enormous opportunities in store which, on closer inspection, may appear attractive in many ways, including:

  • Availability of a pool of qualified labor requiring no further training;

  • Availability of advanced technological solutions ready for use;

  • Availability of infrastructure facilities for high-tech manufacturing in various industries, as well as environmental protection. This potential should by all means be drawn on to boost regional production.

  1. Leveraging the scientific resources of Russia and the rest of the Baltic region for boosting quality manufacturing as part of the Northern Dimension action plan will require the use of high technology.

    In this light, St. Petersburg has the following proposals to make:

  • The resources of St. Petersburg's high-tech industries, such as those listed below, should be tapped more actively under European Union programs:

  1. In nuclear safety: the Central Design Bureau of Heavy Engineering, ROSECOATOM, the Radium Institute;

  2. In timber processing: Lesproyekt, Lenles, PetroLesProm;

  3. In environmental protection: the Leningrad Oblast Committee for the Environment and other environmental protection centers.

In our opinion, it is imperative that economic cooperation is furthered especially in the field of technological research and development.

 

  1. State-of-the-art technology is certainly an indispensable element of the Baltic region's emerging common market, but information technology and telecommunications should be prioritized, being

  • strategically vital as accelerating factors for all the individual constituents of the market process, cross-border cooperation and overall integration. This is obvious since no modern business can be run or expanded without the use of information technology and advanced telecommunications;

  • particularly attractive for business in the Baltic region due to their fast payback and high growth pace.

  1. St. Petersburg further suggests that an investment program be designed as soon as possible targeting the development of cutting-edge information technology and telecommunications in addition to any other plans envisioning the involvement of the region's scientific potential. The new program may cover the following guidelines:

  • Development of offshore programming;

  • Establishment of centers or companies rendering narrowly specialized types of information services, such as testing servers for data security against both unauthorized access and corruption;

  • Implementation of the latest telecommunications technology;

  • Expansion and upgrade of existing networks.

We believe that the opportunities are here for Baltic nations to engage in mutually rewarding business promising sizable returns within a very short time.

 

By way of conclusion, I would like to invoke the words of President Putin from his recent interview in the Finnish newspaper Helsingin Sanomat. He said that European and Russian bureaucracy is the chief obstacle holding back the region's advancement under the European Union's Northern Dimension program. The very nature of this conference proves that we are no bureaucrats. Therefore, I have no doubt that, if we pull together as a team, we will soon see our hopes and dreams of rapid development in the Baltic Sea region come true.

 

Thank you for your attention!