This morning the joint committee will have a discussion with a delegation from the Russian Parliament. I welcome our visitors who are led by Mr. Vladimir Asiev whom I will ask to address the committee. Members can then ask questions.
Visit of Russian Delegation.
Mr. Vladimir Asiev
We are very glad to meet the committee. We arrived yesterday and are very pleased to be in Ireland on what is for most of us our first visit. With me are Ms AlexandraBurataeva, Mr. Evgeniy Ivanov, Mr. Victor Kazakov and Mr. Victor Kolesnikov, all of whom are members of the Duma. Ms Maria Jakovleva is our interpreter.
It is good to have five Members of Parliament present.
Mr. Asiev
Last year the Speaker of one of the Houses of the Oireachtas visited Moscow where we had very useful discussions at which it was decided that our friendship group would visit Ireland. We have come to improve relations and exchange opinions. As such, the three day visit will involve a great deal of work but we are ready for the discussions.
The delegation is most welcome to the Joint Committee on Enterprise and Small Business. We look forward to further dialogue on the possibilities for expanded trade between our two countries. The most senior member of the committee and a former Minister, Deputy Howlin, will now put appropriate questions to the delegates.
I welcome the delegates. Given that Russia is such a large country and Ireland is so small, we are honoured that the Duma has sent a delegation. Trade and employment are the issues on which the committee is focused. In that context, we look to other small countries such as the Netherlands which has a significant trading arrangement with the Russian Federation. What attributes and skills does the Netherlands have that we lack? What must we do to improve our trading relationship with the Russian Federation?
Mr. Asiev
The policy of our country, President and parliament is that, for Russia, there are no small countries. Ireland is an equal partner for us and we would like to build our relations on that basis. That is why we are here and ready to talk about issues. We believe that in each country there is a specific feature which could help to build strong relations. Ireland is a dynamically developed European country. That is why its experience is very interesting to us and we would like to talk about it.
Mr. Evgeniy Ivanov
Russia developed the Netherlands 200 years ago and in so doing developed Europe. These are, therefore, historic relations and memory. Meetings such as this will contribute to the improvement of our relations, as has been the case with the Netherlands.
From our perspective, the greatest explanation for economic revival in Ireland is provided by our investment in the past 15 years in education and focus on niche sectors of the economy, particularly ICT, pharmaceuticals and health products. While they have been the driver of the economy, we are now looking to the next generation of nanotechnology to create a niche market. Are these sectors where relationships can be developed between the manufacturing base in the Russian Federation and Ireland? For example, we have key partnerships with the United States, Canada and EU member states. Are there prospects for linkages with Russian equivalents?
Mr. Asiev
In September the President of the Russian Federation declared four national projects in the areas of health care, education, accessible housing and agriculture. Ireland and Russia can co-operate in areas such as health care and education, in respect of which Ireland has interesting experience and Russia is trying to make progress. We think we could benefit from Ireland's experience.
Ms Alexandra Burataeva
When we were preparing for this trip, we met the Irish ambassador to Russia who invited some Irish businessmen who work in Russia to meet us. They said they had travelled to Russia in the early 1990s, at a very difficult time for it. Many in Ireland should envy the present circumstances of the businessmen in question because their businesses are developing very well. Russia has very big markets, of a size which cannot be found anywhere else. I am not just talking about Irish pubs selling Guinness or Irish whiskey, but about Irish companies involved in forms of technology such as wi-fi. When the businessmen in question took risks some time ago, many said it was too dangerous but they arrived and won. One of the most important factors in success is risk-taking. Russia is very different now. We have a different society and our laws are working. Ireland should develop its ties with Russia now that it has changed.
The issues of fuel and energy sufficiency and security concern most countries, including Ireland. It is obvious that these matters are not of such great concern in Russia which has enormous reserves of natural gas. We need to consider how those reserves can benefit an economy such as ours which does not import gas from Russia. Ireland imports gas from neighbouring EU member states which import gas from Russia. Ireland is analysing how it can secure its energy supply. Is it possible for the Russian Federation to play a role in that regard, for example, by liquefying gas and transporting it to an island country such as Ireland? Can the concerns about the development of a continuous pipeline from Russia across the European continent to Ireland be overcome?
Mr. Asiev
A pipeline to Germany is being built under the Baltic Sea. This is the first step to bring gas to Europe. Co-operation with Ireland can be discussed. We should be partners. Russia is ready to make certain proposals and is prepared to co-operate.
There are now discussions regarding building gas stockpiles in Europe and we are in negotiation on this matter.
There was a reduction in Ireland's meat exports to Russia between 2003 and 2004. It may be possible to reach an agreement by which Russia buys our beef and we buy Russian gas. This perhaps could be discussed at an intergovernmental joint commission on business co-operation — organised by Enterprise Ireland and the Department of Enterprise, Trade and Employment — on 29 March in Moscow. This committee is responsible for working closely with that Department with the aim of improving trade.
Mr. Asiev
We can certainly discuss these issues but we can talk about meat and gas separately. Ireland delivered approximately 50,000 tonnes of beef to Russia and this market could be bigger.
It was 75,000 tonnes in 2003 but it has decreased by 25%.
Mr. Ivanov
It is not for the Members of Parliament to discuss the concrete or specific conditions of trade in beef, gas or oil. That is for businessmen. What we can do is define certain conditions. Energy resources should not be a tool of manipulation. Whoever is ready to pay will get the gas or beef.
Mr. Asiev
The Russian people are eating more beef now because incomes are high and also as a result of the bird flu issue.
Senator Leyden previously served as Minister of State with responsibility for trade and has visited Russia.
I welcome the Russian delegation. Its contribution is being recorded and broadcast throughout the Houses of the Oireachtas and on the worldwide web.
I had the honour of leading a trade delegation in 1990, the first from any European country to the Russian Federation. There is a close and personal relationship between the Russian and Irish peoples. We are building new links both culturally and in the context of tourism. I recall the contribution of Aeroflot to Shannon Airport when flights went from Russia to Cuba. We had duty free shops in St. Petersburg. As this is not a negotiating committee but a forum for exchanging views, I very much welcome the delegation's presence. It is a great honour for us. I wish to express my thanks to the ambassador for his kind invitation on Friday.
Russia's influence in the world is vast. I note its work in the Middle East and Mr. Putin's involvement with and support for the Palestinian state. I look forward to the recognition of Hamas as the legitimate elected Government of Palestine. Russia's influence, along with that of Ireland, is crucial in the Middle East.
Mr. Asiev
We can improve our relations through the creation of a direct flight from Moscow to Dublin, though it may not be very beneficial from an economic point of view.
There should also be flights to Shannon Airport.
Senator John Hanafin is a Member of Parliament with a keen interest in technology and IT business, and is the brother of our Minister for Education and Science, Deputy Mary Hanafin.
I welcome the delegation. I have long believed that Russia should take its place in, and become a full member of, the European Union. While there are possibilities for other states that are not part of the Continent of Europe, it would be my wish that Russia be one of the first to join the EU. I would like to see a change of attitude in Europe in that regard because the new Russia is a marvellous country.
As a Member of the Upper House in what is, I hope, the first of many terms serving in the Oireachtas, I have been and will continue to be a good friend to Russia because of my immediate family's connection with it. There are many lessons that the Russian delegation may learn while in Ireland, particularly in respect of the way this country dealt with its semi-state sector in the 1960s. Ireland was at that time strongly centralised. The Barrington report drawn up in the early 1960s showed similarities between Russia and Ireland in terms of demographics, young and old populations and emigration problems. Ireland has since turned things around completely and I will speak with regard to how we achieved this. I hope Russia can avoid some of the pitfalls encountered by Ireland, though we have come through them successfully.
In the period to which I refer, the State was heavily involved in transport, energy, employment and all other aspects of Irish life. We then opened up our economy. We designated Shannon as a tax free area in the 1950s, which led to it becoming the destination of choice for American foreign direct investment. The decision we took in the 1960s to invest heavily in education at a time when money was not plentiful paid high dividends.
I commend President Putin for the way in which he dealt with corruption in the 1990s, when vast state assets were sold off at cheap rates to insiders, which was not good for the Russian people. This corruption prevented Russia from attracting foreign direct investment. I am very glad to see President Putin continuing to deal comprehensively with corruption.
It should move towards trade as much as possible
Absolutely. China attracted a high level of foreign direct investment because of the perception of corruption in Russia and I am glad that this has been turned around.
I thank the ambassador for extending the invitation and I hope to attend. I look forward to ever increasing trade and better relations with the Russian Federation.
Deputy Callanan, a representative from the west, is a convenor to the committee.
I welcome the Russian delegation. My first question relates to housing. Are houses in Russia owned by the state or individuals? With increasing wealth, do more people now buy a house?
Will the delegates explain the reason for the low level of unemployment in Russia? Do people who do not work get paid?
Waste management presents a problem in Ireland. How does Russia deal with its waste?
Mr. Asiev
The privatisation process in Russia is being developed well with the result that 80% of the population own their own house. Free privatisation will end in 2010. The President has announced a programme of accessible housing for which state financing will be available. Mortgages are being developed and we plan to double the rate of house building in Russia on foot of the recently announced programme. Currently, we build 40 million sq. m. per year but plan to increase this figure to 80 million sq. m. per year. However, we face certain problems with construction materials, the labour force and the availability of land.
Ms Burataeva
The provision of housing for young people is a serious issue as many young families cannot afford to buy a house. The presidential programme includes a sub-programme aimed at young families in which the parents are aged up to 30 years. Very often young families cannot afford mortgages, which is why the state pays the first contributions and provides credit for 15 years. There is a certain level of competition. Providing benefits for young families with children improves the demographic picture in Russia.
Mr. Asiev
Unemployment continues to fall in Russia and national projects can contribute to the trend. The provision of accessible housing, for example, results in the creation of new jobs. Falling levels of unemployment are the result of economic growth.
Mr. Ivanov
Small and medium-sized businesses are being actively developed and former Soviet enterprises are being restored. The benefit payments for people who do not work are very low. Russia has a liberal labour code and it is almost impossible for employers to fire employees. Such a system has some advantages but it also creates certain problems that we are trying to tackle.
Mr. Asiev
As regards waste management, quite a number of these models have been adopted in Russia in recent years and new laws on environmental or ecological norms are being drafted. We believe this will be an important sphere of co-operation between our two countries.
Ms Burataeva
This is good business.
I wish to be associated with the warm welcome to the delegation. In common with my colleagues, I salute Russia's democratic moves and all its other achievements.
This is a fraternal familiarisation visit. What is the delegation's primary objective in the next few days? I thank His Excellency, AmbassadorRakhmanin, for the kind invitation. Unfortunately, I am obliged to be in another part of the country on Friday evening. Perhaps the delegation might briefly inform the committee about its programme.
The Senator may obtain a copy without the delegation having to read it out, in detail, to the committee.
Mr. Asiev
We should like to know more about Ireland. That is most important for us because this is our first visit.
In the past 20 years, we transformed our country from the second poorest in the EU to the second wealthiest. If that can happen here, it can happen anywhere. I have been a Member of Parliament for 24 years. Apart from education, the one thing that made it all possible was the national understanding under which employers, trade unions, farmers and the Government agreed wage increases for three-year and five-year terms during the past 20 years. This system resulted in a 95% decrease in strike action. Members of the workforce knew in advance the increases they would receive for the following two, three or sometimes five years. The average period of agreement was three years.
I thank Mr. Vladimir Asiev, His Excellency, the ambassador, and the other members of the delegation for attending and for participating in a very informative discussion. I hope it will be the first of many. On behalf of the committee, I hope that the members of the delegation enjoy their stay in Ireland and that it will be a fruitful experience for them. We look forward to visiting Russia in the near future.
Ms Burataeva
The committee would be very welcome to visit Moscow.
Mr. Asiev
We thank members for their kind words. We are aware that there is currently a great interest in Russia. We consider ourselves to be a full member of the European Union. If some people do not think that is so, that is their problem.
The proceedings of this morning's meeting are available on video. If the embassy wishes to contact the clerk, we can provide it with a copy.
Ms Burataeva
I thank the Chairman.
The joint committee adjourned at 10.35 a.m. until 2.15 p.m. on Tuesday, 28 March 2006.