Dmitry Medvedev’s speech at the forum:

I’m not sure it’s appropriate to deliver a speech at a forestry forum using an iPad. Perhaps, I should have opted for paper instead. At any rate…

Prime Minister Katainen, ladies and gentlemen. I was happy to accept the invitation to attend this forum, which is being held for a fourth time already. Being the last to take the floor has its pros and cons. On the one hand, you have the privilege of knowing what those who spoke before you had to say. On the other, finding new issues, those not brought up by your predecessors, can prove quite tricky. Summing up the results of work in three areas, Prime Minister Katainen and his fellow participants said all the important things that there are to say, it seems, so there’s nothing left for me to report. But I’ll go ahead with my speech anyway, highlighting issues that may have been raised already, but that need further explanation.

Such gatherings have already become a tradition, which is a good thing. I won't say any banalities about the significance of the forestry industry in Russia and Finland alike. Obviously, it will remain an instrumental development sector and a major area of bilateral cooperation for years to come. But there are matters of principle importance here. First of all, forestry is historically a mainstay of both our economies, and we are big players on regional markets as well as globally. This is why we are responsible also for some serious stuff, including for the global environmental balance and for what the timber market will look like in the future.

We’re well aware that the market is now being pressured by partners who boast more favorable conditions for development than Russia and Finland. I am referring to climatic conditions. These are mainly southern, tropical countries. As for us, we live up in the north, and our forests are boreal, to put it in scientific terms. And we should not only bear this aspect in mind, but also try to put it to good use wherever possible. We want to make sure Finnish and Russian timber processing companies retain their positions on global markets. Also, being next-door neighbours, we need to closely monitor developments on our own markets. There are areas where Russia and Finland are competitors, of course. Having said that, the markets of both our countries are open these days, and we should try to interact more, with Russian companies coming over to operate in Finland and Finnish companies, in Russia.

Secondly, Russia is now trying to modernise its economy. And forestry is one of the sectors involved. But despite some positive dynamics, we have to admit that the actual contribution of this industry to the national economy is still disproportionately small. Its share in Russia’s GDP and export proceedings is negligible so far, despite the fact that the country is at the top of global rankings on wood reserves.

That kind of situation is not suitable for us, and we should do something to change it. We should take systemic measures to introduce modern technology for deep timber processing. We should provide state-level support for high-tech operations, while also creating conditions for public-private partnership and for the inflow of foreign investment. There are quite a few such opportunities out there already. There are priority projects – more than a hundred, in all, with total investments at about 400 billion roubles. I’d like once again to invite the Finnish business community to join us in implementing these projects. As far as I know, these plans existed, initially, and some initial investments were even made.

We had to readjust our plans due to the global economic downturn, as well as some other reasons. Now, I think, is the right time to revive investment. Mr Katainen and I had rather a long discussion on mutual investment today. It is no exaggeration to say that mutual Russian-Finnish investments have never reached such a scope as they are now – at least not in recent history, because the Soviet years are hardly comparable with the current situation. We have never before seen billions of dollars flowing into the Russian economy from Finland and hundreds of millions, flowing into the billions, coming the opposite way. The timber industry is open to investors. I reiterate that there are no limits to timber processing in Russia, and there will be none. In fact, such projects are entitled to Government support.

As for border crossing regulations, our colleagues have just mentioned them. We will certainly amend them, too. We had rather a long talk about it today. I assure you that we will improve checkpoints, which are the cause of so many complaints, and we have earmarked considerable sums for these improvements to be made next year.

My counterpart has just mentioned the World Trade Organisation, which Russia has recently joined. Our accession increases investment opportunities, while posing problems for domestic manufacturers, as is usually the case with new WTO member states. As for the Russian Government’s position on this matter, I can say only one thing: we will take a balanced stance with due consideration for the interests of Russia and of Russian manufacturers, but with a friendly attitude toward our partners, Finland being no exception. Mr Katainen and I were outspoken about this at the negotiating table today.

No less important is the localisation in Russia – particularly its special economic zones – of lumbering and timber processing equipment engineering. I hope that available joint projects will be implemented.

Third, investment in any business, just as with any other long-term investment, is especially sensitive to the economic situation, to its transparency and predictability. As I have said on a number of occasions, the Russian investment climate is far from ideal but at least it is changeable. I don’t think it is deteriorating. After all, I was doing business myself some time ago, so I have firsthand information about what is changing and what isn’t. There is certainly ample room for progress, and we will make such progress. A national entrepreneurial initiative has appeared to implement a number of roadmaps in economic policy, corporate law, customs regulations and some other fields.

We have drawn up standards for regional executives, because a majority of your projects are regional, rather than national, in their scope, so Russian and Finnish companies have to deal with local authorities. I hope they will change their ways. In particular, this concerns the inclusion of investment activity in the standards by which gubernatorial work is assessed.

Fourth, an ambitious forestry reform is underway in Russia, just as in Finland and some other countries. This job is particularly difficult in Russia: there is the forest use and protection law to update, and the managerial network to decentralise. Basic rights are shifting from the federal centre to the regions. There are pros and cons in this reform, but on the whole it’s the right thing to do, because to force businesspeople to go to Moscow to settle even the simplest matters is not only cruel, it's also unproductive. Private investors should also take over rights and duties from the state.

The forestry policy project, which has just been drawn up, determines the basic development trends of the Russian timber industry, with due consideration of global experience – particularly our consultations with our Finnish friends. The project is being widely discussed, and I hope that not only experts but also businesspeople will join the discussion, because your opinion might be the most valuable, coming from the grassroots. It’s the most practical of all.

Fifth, I heard today that the forum has focused attention on environment pollution, among other matters. This is an essential theme. Illegal tree felling is rampant in Russia, with outdated equipment and without the slightest consideration for environmental regulations. We cannot put up with it, and we will further address the problem by improving the law and practical forest protection. I have to acknowledge that the problem has become more acute in recent years, and it is difficult for us to stop illegal timber deals. We have another duty – we Russians must become ecologically-minded. Here, we have a lot to learn from our Finnish partners. This is an environmentally friendly country, and there is a lot here that we should emulate.

As for certifying timber, this is necessary in order to gain access to environmentally sensitive markets. We look forward to practical cooperation with our Finnish colleagues in this field as well. We have much to learn here, too. Though certification is voluntary in Finland, over 95% of its forests have been certified today. We are introducing the practice in Russia, and a list of conscientious timber procurers and exporters has been drawn up according to standards following the relevant European Union regulations that will enter into effect in March 2013. The list is available on the Trade Ministry website, and is of great help to Russian companies and European consumers alike. We consider this to be the first step in the introduction of comprehensive supervision of timber turnover. We will begin drawing up a relevant law quite soon.

Our partnership in the timber industry began many years ago. Its history has an impact on the future. Finland is one of the world’s technological leaders in this field. We see how timber procurement is organised – practically without any damage done to the environment and with maximum efficiency. The timber industry remains a locomotive for development in Finland. We must take this as a model, and we will do this because we consider your normative base and many other issues to be exemplary. Of course, we will tailor your experience to the specifics of our own situation, which are substantial.

We have sound prospects for cooperation in terms of new wood-based materials, wood house-building – including multistorey and other kinds of buildings – and, of course, biotechnology, such as biofuel production from low-grade wood and logging residues, as well as medicine and composite material production, as discussed by other speakers. This is and will remain a promising area. We are not yet making the most of these opportunities, but there are objective reasons why this is so, including transportation. We will certainly deal with all of these issues.

Ladies and gentlemen, I think that the timber forum is absolutely self-sufficient judging from the practical goals that you are setting. You are waiting for practical actions to be made by our two countries and I hope that they won’t be long in coming. Thank you for inviting me. I wish you success in your private life and, of course, in business.