Dmitry Medvedev, Prime Minister of Russia, on Russian-Thai trade relations: Viewpoint

As is known, our countries have a special relationship. In two years’ time, we will mark the 120th anniversary of the establishment of diplomatic ties. Our economic cooperation has, in effect, never been interrupted. In recent years, trade turnover, despite the crisis and global economic problems, has grown, reaching $4bn in 2014 by our estimate, and $5bn by our Thai partners’ estimate – these are positive dynamics.

We believe that we have every chance to increase this indicator to $10bn through various sectors, such as fuel and energy, agriculture, cooperation in the defence and technology sectors, new technologies or medicine. The potential of the aircraft, helicopter-building and motor industries has not yet been tapped to the full. Naturally, we are counting on further growth in tourism, which is such an important area of our cooperation. Thailand is among the most attractive countries for tourists worldwide – definitely for our citizens. In 2014, 1.6m Russians visited Thailand. However, it is important to understand that competition for tourists is becoming more intense, both for internal and external reasons.

Russia also seeks to create favourable conditions for our investors. We work continuously to improve the investment climate, remove administrative barriers and provide preferential work conditions in the Russian Far East. In March 2015 a new law came into force establishing special legal arrangements for entrepreneurs in “priority development areas”. These areas will include a simplified land acquisition procedures, tax breaks and other preferences, as well as the possibility of applying “free economic zone” Customs regulations. It will also be easier to hire qualified foreign personnel in these areas.

Today is an opportune time for entering the Russian market, especially for companies producing food and consumer goods. There are several reasons for this, including the launch of the Eurasian Economic Union, a big market that now includes five countries, with a combined population of about 180m. For investment projects in the other four member countries, we have ensured that sales are without additional Customs duties. It is also possible to substitute those imports from countries that have backed anti-Russian sanctions. For well known reasons, niches have emerged in our markets, primarily within the food and agriculture segments, and those who fill them will naturally be given additional opportunities.

Trade relations, for example, or more precisely, the volume of agricultural produce imported to the Russian market from Thailand has grown by 8.5% in a few months. This shows that our restrictions, namely the embargo that we have imposed on a number of European goods, is working, and is working in favour of goods from other parts of the world, specifically from South-east Asia, and from Thailand. In agribusiness we are ready for the creation of co-production ventures and, of course, for Thai supplies to our market. However, at the same time we would like to see reciprocity, so that our grain producers and processors can also supply the Thai market, enabling us to rectify the imbalance in bilateral food trade.

Generally speaking, I would like to emphasise that we are interested in diversifying our trade with Thailand and expanding exports of high-tech products. In fact, international cooperation in this segment is a key condition for its development. We are open to expanding ties with Thailand, other ASEAN states and the Asia Pacific region as a whole. The transition to financial settlements in our local currencies – the rouble and the baht – could provide an additional impetus to bilateral ties, making it possible to cut costs and currency risks amid unstable exchange rates and speculative attacks on national currencies, and eventually we will be able to make our goods more competitive on the domestic markets.

Adapted from a speech in April 2015 in Bangkok, Thailand.