By John Bonar

For Peter the Great St Petersburg was his window to Europe in 1712. For Vladimir Putin, President of the Russian Federation, Vladivostok is his window on Asia and the Pacific. Ceded by China in the 1858 Treaty of Aigun, Vladivostok was declared a city in 1880 by Russia although it had been declared a Freeport in 1865. It lies ten time zones to the east of Moscow.

Built on the hills around the sprawling Golden Horn Bay Vladivostok is a huge natural harbour and became home port of the Pacific Fleet in 1871, when the fleet’s precursor, the Okhotsk Flotilla moved here. The city enjoys a temperate climate with the mercury falling to at times -20 Celcius in January and rarely rising above the mid 20’s in the summer months. The monsoon means rainy summers with the wettest month being August. For five months of the year (November – March) Vladivostok’s average temperature is below zero.

The great event securing Vladivostok’s future was the arrival of the Trans Siberian railroad in 1903. This world-famous railroad links Moscow with Vladivostok, with a branch into Mongolia and China,  is an awesome 9,289 kms long providing a fascinating seven-day journey.

Vladivostok’s lead role in developing relations with the Asia Pacific region was emphasised by the city hosting the 2012 APEC summit. Before the summit I visited for the first time the park dedicated to Vladivostok’s sister cities, with their names carved on archways that visitors stroll under.  Niigata, Akita and Hakodate of Japan, Incheon of South Korea, Dalian, Liaoning, Yanbian and Jilin of China, Cebu City, Makati and Davao City of the Philippines, Wonsan in North Korea, San Diego, Tacoma and Juneau of United States, Manta in Ecuador and Kota Kinabalu in Malaysia drive home the Pacific ambitions of Vladivostok.

Vladivostok is closer in flight time to Tokyo, Beijing and Seoul than Moscow.

There are tremendous opportunities to develop the vast potential in international trade and tourism, and showcase the vibrancy of Vladivostok and Russia’s Far East to the rest of the world. Vladivostok International Airport has the capacity to handle 3.5 million passengers which is more than double its current volume of 1.7 million as of 2015.

The city of 600,000 residents is home to the vibrant 1899-founded Far East Federal University located on a spacious 5-year old campus on Russky Island, a legacy achievement of the 2012 APEC Summit. Another six universities and many institutes and academies of higher education ensure that the city has a youthful population drawn from over the entire Far East region. This means a vibrant café society, youth-oriented media and a ready supply of multi-lingual eager young recruits for new people-oriented business.

President Putin has noted that “Vladivostok has really made great headway in its development over the past seven or 10 years, simply amazing. It is a different city.”

He pointed out that in “amazing progress” he meant the new airport, the new road, Far Eastern University on Russky Island and the two great bridges that now link the two sides of the bay and Russky Island to the city.

This youthful population are eager adopters of technology and recognising this the Russian Duma (Parliament) in the autumn of 2017 set up two pilot cryptocurrency agencies.

One is a crypto-advisory agency; the other is a crypto-detective agency. Victor Fersht, the director of the Inter-University Centre for the World Trade Organization (WTO) in Russia explained, as quoted in November 2017 by Prima Media:

At the last meeting of the State Duma, a decision was taken to establish a state structure – a crypto-detective agency, the first pilot branch of which will be opened in Vladivostok and an advisory centre for all those who want to start working with cryptocurrency.

Tourism has huge potential. There is a market of over 22 million people within a two-hour flight time to Vladivostok and a further 33 million people reside within another hour’s journey. So a market of 55 million people lie within a three hour flight time in cities with existing flights to Vladivostok.

But the people of Vladivostok feel European and with even limited experience of European business investors long for more because “they leave a legacy” as one local executive told me, on one of my many visits to the city over the last 18 years.

For a European going to Vladivostok is a long journey comparable to going to Tokyo with additionally considerable time between connecting flights in Moscow.

Russia is very capital-centric so such stopovers can be put to good use. The Russian Ministry of Far East Development is in Moscow, headed by Alexander Galushka. The Russian Agency for Strategic Initiatives is there also as are several funding agencies. Also, for Russians wanting to secure a visa to the UK, it can only be processed in Moscow. Along the trans-Siberian railway, the station clocks display Moscow time.

But while there is huge scope for international investors and entrepreneurs there are risks as well. In his 2017 marathon live televised press conference President Putin told a journalist from Vladivostok, “Vladivostok is far away from the capital but, as they have always said in Russia, ‘it is too high to the Lord and too far to the Tsar.’ There is a problem there that has not been solved yet. I hate to have to say this, but I have to: The region is deeply criminalised. This applies to fishing, forests and other areas of economic activity. However, step by step, we will fix these problems and enforce order, which is necessary for people to live a normal life.”

Notwithstanding the risks highlighted by the President, the rewards in Vladivostok can be rich. Yes to Business plans to establish an office in Vladivostok within the 1st quarter of 2018 and I propose to spend up to 50% of my time there. We will monitor the developments in the region, promote the products and services we represent and consult, advise and help clients bring their projects to productive fruition.

If you want a presence in the Russian Far East then please get in touch with me – jbonar@yes-to-business.com.