External Economic Activity / Border Cooperation

Cross border cooperation of Krasnodar Region

Taking into account the geographical position of the territory, the administration of Krasnodar Region pays special attention to the development of foreign economic relations of region. One of the main international activities of Krasnodar Region is the strengthening of friendship and partnership with neighboring territories of neighboring states, participation in the programs and projects aimed at enhancing cross-border cooperation.

Krasnodar Region has the state border on the Azov and Black seas with Ukraine and the land border with Georgia. It also has established strong partnerships with the States of the Black Sea basin.

The main partner states of the Black Sea region are Bulgaria, Turkey, Ukraine, Romania. The total trade turnover with these countries in 2006 exceeded one billion U.S. dollars. And for the 9 months of 2007, the amount of import and export of these counterparties amounted to 1,4 billion U.S. dollars, equivalent to approximately 30% of total turnover of Krasnodar Region.

Existing forms of business cooperation with Ukraine are a mutual exchange of working visits of delegations, holding of exhibitions, participation in economic forums, conferences, signing new and updating existing agreements and their realization. Krasnodar Region is a member of the Regular Meeting "Commonwealth regions", which involves the administrative and territorial units of Ukraine.

More than 20 joint Russian-Ukrainian enterprises, specializing in trade, construction and repair work, production of finishing materials work in Krasnodar Region.

The important element of cooperation is the coordination of commercial fisheries in the Azov Sea, Kerch Strait, and joint fishing zone in the Black Sea, the improvement of its rules, fix fishery regime and also mutual work in the field of industrial ecology.

The basis of cooperation of the Kuban and Ukraine is close friendly relations with the Autonomous Republic of Crimea, based on long-term trusting relationships between the bodies of executive and legislative power, business communities of our regions.

Cooperation with the Republic of Bulgaria. The dominant joint activities are trade, design and survey works, construction. Trade turnover with the Republic of Bulgaria for 9 months of 2007 exceeded $ 8 million. Representatives of major Bulgarian business concluded a major investment agreement with Krasnodar Region in the construction industry during a presentation of the region in Austria in April 2007.

Trade turnover with Romania has substantially increased. In 2006 the volume of export-import relations amounted to over seven million (7.3 million U.S. dollars). In 2007 it increased over five times only for the first half year and exceeded 37 million U.S. dollars. The first official visit of the Consul General of Romania Ionescu in Krasnodar in October 2007 was the real indicator of the growing of interest of Romanian official and business circles to the region.

Strong and mutually beneficial partnerships are established between Krasnodar Region and the Republic of Turkey. Turkey is first in total export-import operations of the Krasnodar Region. Cooperation in energy, transport, trade and tourism services has been dynamically developed. Such close partnerships have become the impetus for making the Action Plan between Krasnodar Region and the State Secretariat of Turkey's foreign trade. Turkish Standards Institute (TSE Ankara) invites annually professionals of hotel business to explore the experience of hotel management services in Turkey (3-5 persons per year). Tourism Organizations of our region (LLC "Dzhavad", JSC "Kubanturist", LLC Resort Center "Kom-Intour") provide charter flights to Istanbul, Trabzon and Anatolia.

The basis of relations of Krasnodar Region with Georgia is cooperation with the Republic of Abkhazia. The results of the development of relations between Krasnodar Region and the Republic of Abkhazia are the realization of the basic regulations of the Memorandums of Understanding between the administration of Krasnodar Region and the Government of the Republic of Abkhazia from 14.02 2003, 08.09.2003 and a declaration on friendship and cooperation between Krasnodar Region and the Republic Abkhazia from 13.11.2006. It should be noted the increased activity between the two subjects in the transport sector, in the sphere of customs regulation, resorts and services, banking, education and culture.

Today Krasnodar Region has a number of agreements with the administrative-territorial entities of the Black Sea region. Among them is the agreement of principles of trade, economic, scientific, technical and cultural cooperation with the Autonomous Republic of Crimea, a cooperation agreement with Zaporozhskaya regional state administration, a protocol on cooperation with vilayet Istanbul, etc.

One of the effective methods of relations development of Krasnodar Region with the neighboring subjects is the International Investment Forum "Sochi". Yearly the representatives of official and business circles of foreign countries, including the States of the Black Sea, participate in the forum. Forum "Sochi" is one of the best investment areas in Russia where the multi-million contracts and significant for the cooperation development agreements are signed. In October 2006 the Black Sea Trade and Development Bank in the framework of the International Investment Forum held a conference "Black Sea Business Day". The result of the conference was the signing of the agreement on intent of cooperation with the administration of Krasnodar Region in the framework of forum "Sochi - 2007". The interest of foreign partners to the Forum in 2007 shows the increasing interest in the Krasnodar Region, as in the region, which has significant economic and investment potential.

The Organization of the Black Sea Economic Cooperation plays an important role in strengthening the friendly partnership relations with neighboring countries. Today the development of cooperation within the BSEC framework focuses on solving very specific issues in the areas of practical cooperation, such as transport and communications, energy, tourism. Administration of Krasnodar Region facilitates the realization of Russian initiatives in the BSEC - such as restoration of regular passenger and ferry communication between the ports of the Black Sea, the gradual formation of the Black Sea electricity ring, coordinated development of highways around the Black Sea, the realization of joint tourism and recreational programs and projects in the Black Sea.

It is significant that the BSEC influenced on the victory of Sochi for the title of the Olympic city in 2014. In June last year, a month before the vote in Guatemala, the General Assembly of the Black Sea Economic Cooperation during the meeting in Varna unanimously supported Sochi as a candidate city to host the Winter Games in 2014.

Krasnodar Region is an active participant of the movement of the twinning of cities. Close relations are the basis of cooperation between Krasnodar and Bourgas (Bulgaria), Novorossiysk and Varna (Bulgaria), Novorossiysk and Constanta (Romania), Sochi and Trabzon (Turkish Republic), Novorossiysk and Kerch (Ukraine).

The important issues the development of cross-border cooperation of Krasnodar Region with neighboring countries for today are:

• promotion of coordinated development of transport infrastructure in the region,
• join of transeuropean and Asian transport routes,
• formation of the Black Sea corridor,
• restoration of regular passenger traffic between the Black Sea ports, as well as water transport routes including inland waterways in the region,
• the project realization of international transport corridor "North-South" and other transport routes facilitating to use of the transit potential of the region as well as the formation of appropriate production and social infrastructure in the border regions of participating countries to ensure safe transfers and goods service in the territory of another State,
• creation of regulatory, financial and operational information in the field of external economic operations,
• creation of a single data bank of the participants of foreign trade activities,
• coordination of environmental activity, including joint monitoring of water bodies in the Azov and Black Seas basins.

However, there are a number of factors inhibiting further interaction with partners in the region.

Issues related to the legal and customs regulations of cross-border cooperation have been formulated and submitted to the Federation Council Committee on Budget Federal Assembly of the Russian Federation and also sent to federal agencies and services in order to expedite solutions to these problems, as well as highlighting management at the federal level.

During a meeting of Ministers of Foreign Affairs in Belgorod in October 2007 the Administration of Krasnodar Region touched upon the subject of cross-border communications as one of the main link of cross-border cooperation. In particular, the draft of the construction of transport crossing through the Kerch Strait, which will solve the issues related to the increasing flow of tourists, both in the Crimea from the Russian Federation so at the expense of the future ring around the Black Sea, which is now actively under construction was submitted.

A perspective idea for today is creation of a Euro-region "Azov". The practical realization of this project would not only concentrate on the important issues of the region as ecology, environmental protection and restoration of ecosystem of the Azov Sea, but would intensify cross-border cooperation in the Azov and Kerch Regions with the dominant role of Krasnodar Region.

For the further development of cooperation with states in the region we offer to focus participants on the realization of the following items:

• Organization of permanent maritime passenger traffic between the Black Sea states. The Administration of Krasnodar Region has being already worked in this direction. There is an investment project of organization of ferry "Thessaloniki / Perey - Novorossiysk - Thessaloniki / Perey". Potential customers may become tourists and businessmen traveling in Greece and in the States of the Black Sea basin.
• Making a collective decision on the minimization of port charges collected from the sea vessels passengers.
• Extension of the experience of the Black Sea basin according to the forms of state support for the realization of investment projects and individual programs for tourism development.
• Upgrade qualifications for teachers, improve student exchanges and exchanges of faculty and staff, approximation to the educational standards based on best practices of partners in the Black Sea and the organization of research and publishing projects with the assistance of grants from major international organizations. It is worth noting the work of the Kuban State University. It develops actively contacts with the International Centre of the Black Sea Studies, participates in the activity of the BSEC Working Group on Science and Technologies. Several proposals of Kuban scientists have the support of the Black Sea States. For example, Information-analytical center of modeling ecological and economic systems of the Black Sea region was established with the participation of the University management and the support of the federal bodies of executive power.

The adoption of a federal law on cross-border cooperation will be an important impetus to deepen and expand cross-border regional cooperation. The realization of the law regulations will eventually lead to proper coordination of the federal government, municipalities, public organizations and business circles, as well as empower border territories with necessary status.