ZASHCHITA-NAKHODKA HAD ANNUAL GENERAL MEETING

Shareholders of insurance company Zashchita-Nakhodka met on 26 May.

The approved alterations to the by-laws, elected a new board of directors and approved procedures for dividend payment.

1.03 million rubles of profit were distributed as follows: 515,000 rubles for dividend and another 515,000 rubles for the reserve fund and social development fund.

The floating of a recent 3-million-ruble issue of stock is coming to an end and will bring the insurer's charter capital up to 12.5 million rubles. The meeting decided to increase the charter capital once again by revaluating the face value of shares and issuing an additional offering of 50 million shares of stock.

The newly elected board included five members: Primorsk Shipping Company chairman of board Alexander Kirilichev (chairman), OAO Nakhodka-Torgmortrans-Service director general Yury Kolesnichenko, OAO Nakhodka Ship Repair Yard chairman of board Yevgeny Chizh, Prisco director general Sergei Popravko and Zashchita-Nakhodka financial director Dmitry Vakhonin. - Tatiana KOZINA.

WATER SUPPLY RESTRICTIONS LIFTED IN VLADIVOSTOK

As Primorsky Krai governor Sergei Darkin declared, available water reserves in southern Primorye's reservoirs will suffice to normally supply water to Vladivostok till spring 2005. Water restrictions were in effect 9 months and had been caused by shortage of water in storage reservoirs.

Two water intake facilities were built during the water crisis - Shtykovsky and Shkotovsky (the latter to be commissioned in June). There is a likelihood that the underground water reservoir Pushkinskaya Depression will not be developed. A final decision will be made after completion of engineering documentation, which is currently in the works in Moscow. Instead, the regional administration plans to construct a water accumulation station in Khasansky Raion. - Yevgeny ITAROV.

RUSSIAN-CHINESE INVESTMENT FORUM HELD IN KHABAROVSK

Agreements on investment intentions, signed during the Russian-Chinese investment forum closed today in Khabarovsk, totaled some $700 million.

The following documents were signed:

Agreement on construction of a facility for production of thermomechanical pulp in Khor settlement, Khabarovsky Krai with an annual capacity of 300,000 tons.

Agreement on a joint venture to produce MDF boards.

Agreement on cooperation in timber resources development and establishment of a joint venture for timber production and processing in Khabarovsky Krai.

Protocol of intent between Jewish Autonomous Oblast and Heilongjiang province on soya cultivation.

Agreement on cooperation in timber cutting and woodworking in Jewish Autonomous Oblast.

Agreement on cooperation in timber resources development and use in Tomsk Oblast.

Agreement on intention to set up Suifenhe Industrial Zone in Pogranichny, Primorsky Kra for assembly of household electric appliances, output of light industry products, etc.

Speaking to the forum, presidential envoy in Far East federal district Konstantin Pulikovsky said: "Contacts on top level, bilateral intergovernmental and inter-agency commissions on cooperation, their sub-commissions and working groups are an effective means for day-to-day exchanges with opinions and coordination of positions in bilateral issues and topical international problems between Russian Federation and China. Attitude to foreign investors, to Chinese investors in Russia should be based on trust and respect. However, today even regional and federal authorities in Russia treat Chinese entrepreneurs with due respect." - Yury ROGOV.

DALNEVOSTOCHNY BANK SUBMITTED REPORT

Shareholders of OAO Dalnevostochny Bank had their annual general meeting in May. In the rating of Russia's 200 largest banks for 2003, published by the Expert magazine, Dalnevostochny ranked 184th in terms of assets.

The bank is a leader among the region's bank in terms of profit and among Primorsky Krai's banks in terms of capital and clients' resources.

Its balance sheet total grew by 31.5% in 2003 and working assets grew by 24.3%. Clients' resources totaled 2,352 million rubles, a 26.5-% increase on 2002. Internal capital grew by 19.2% and amounted to 360 million rubles. Profit was 76 million rubles. Dalnevostochny's credit portfolio grew by 35% and reached 1,711 million rubles.

As bank president Yadviga Dobryanskaya said at the shareholders meeting, Dalnevostochny's strategy is aimed at further strengthening its standing in the Far East's financial market through expanding clientele, improving quality of services, introduction of new bank products and further development of existing ones.

Today, the bank has good prospects in such business lines as money lending to the real sector, expansion of international cooperation, issue of and support to VISA credit cards, development of consumer loans, active introduction of Internet technologies. - Tatiana KOZINA.

FUNDAMENTAL RESEARCH WILL HELP CATCH UP WITH AND OVERTAKE JAPAN

Representatives of Russia's elite declare more often that the Russian economy, growing in recent times due to raw material exports, needs an innovative breakthrough. How can this be accomplished and how should modernization of the Russian economy start?

A "ZR" correspondent talked about this with Yury Gromyko, one of the most asked-for experts in Russia, who visited Vladivostok to attend the 9th conference of Pacific university presidents.

"ZR" FILE: Yury Gromyko is D.Sc. (Psychol.), Professor of the Higher School of Economy and member of the Russian Academy of Natural Sciences. He is an expert of strategic research centres in Volga and Northwest federal districts, widely known for scholarly writings in the filed of socio-cultural development, modernization of Russian economy, cross-border cooperation.

- Russian science and culture are crisis-stricken today. Unlike economy, which steadily develops thanks to the raw materials sector, nothing noteworthy occurred in this sector in last time, with the exception of an increase in salaries to researchers and Nobel prize awards for achievements of 1960-70s. How can Russian science be a locomotive of economy?

- Indeed, it definitely cannot in its present state. Problems faced by our science are very well known: "brain" siphoning out, critical ageing of research staff, ineffective structure of research and educational institutions. We are seriously lagging behind other nations and ourselves of 15-20 years ago. At the same time, Russia still has a number of advantages and possibilities for transformation of economy in line with advanced research results.

One of them is a powerful fundamental research sector, while even some industrialized nations have no fundamental science. We still have quite many scientific schools, capable of formulating advanced new knowledge and reproduce breakthrough technologies on its base.

- But, recent experiences show that, on the one hand, fundamental research results are largely international. On the other hand, Russia is actually lacking a mechanism for their conversion into concrete innovative solutions. Will it not happen so that, by developing fundamental research, we will be working to the West's benefit?

- I think that the division of science into fundamental and applied branches, which is justified in many respects and has sense in it, is not quite correct from today's viewpoint. Specialists believe that we stand at the threshold of global breakthroughs that will yield a whole number of new technologies. This is lasers, nanotechnologies, quantum and photon research.

This trend is understood everywhere in the world, and many actively try to develop fundamental research. It is just in this respect that Japan is weak - for a long time, it was giving priority to buying patents and introducing new organizational solutions. The Japanese are unable to reproduce really fundamental research, which could not only learn first-class technologies but concentrate on scientific breakthroughs as well.

In this case, this is just a matter of competitive edges. On the whole, Japan is most likely not interested in developing fundamental research. On the current technological level, it is one of leaders, capable of offering non-ordinary solutions and doing many things better than all others. Obviously, Russia cannot compete with Japan in this respect.

Therefore, the only way forward is to create the above mentioned mechanism for converting fundamental research into innovations. Certain steps toward this goal have already been taken. In particular, there is one very interesting technical park in St. Petersburg on the base of Svetlana company, where attempts were made, supported by business, to pass at a faster pace from fundamental solutions to specific technologies. This example shows that it is possible to elaborate a mechanism in Russia for launching venture projects supported by business.

- What is the main obstacle: lack of necessary infrastructure or persisting uncertainty about ownership rights for technologies, developed on governmental money and belonging to the government?

- In my opinion, there are several very important problems. We may solve the issue of ownership rights but, if we try to leave it to large business alone, without creating a patenting infrastructure, which, in my opinion, can be done only with the government's participation, this would give rise to numerous new problems.

The thing, which you have mentioned, will happen. Western firms will get access to many unpatented technologies. A lot of groups already actively collaborate with Russian research institutes and, by the way, openly say that they continue to be a source of unrealized solutions. We can make siphoning out of intellectual capital even more rapid.

Perhaps, I will say nothing new but one of contemporary Russia's main problems is wrong understanding of and attitude to property as such. We still don't have clear understanding where its top level is being formed. Our understanding is that of the 19th century: property should be some material asset - land plots, beds, wardrobes, oil areas, etc. However, the most valuable asset today is intellectual capital. Neither oligarchs nor officials nor ordinary people understand that. Hence, unwillingness to invest resources in scientific research.

But, there is another aspect - problems of the so-called technodynamic. Any technology is not quite something single and whole with a great many of buttons and levers, it is rather a complicated system of rate fixing, standard developing, production operationalizing. Therefore, to have new technologies working in Russian conditions, the existing industrial structure should be altered.

Furthermore, if we succeed in establishing a wide net of venture fairs and giving business possibility to choose real investment projects, we will immediately face another problem. It turns out that the most promising technologies in terms of commercialization are the ones developed in 1960-70s.

By creating an active sales infrastructure, we will use up all technologies designed in the past, but breakthrough technologies are needed for an economic breakthrough in the 21st century, so much spoken about by everyone in recent years. In this sense, the problem of science reproduction in contemporary Russian conditions comes to the fore. It is clear that the existing system should be changed.

- But, speaking about defects and need for crucial changes of the existing system, researchers and educational workers make no hurry in reforming themselves.

- It seems to me that this problem is getting off the ground. The recent appointment of Andrei Fursenko, well-known for promotion of innovations and organization of venture fairs, as federal minister of education has come in proper time.

The word "concentration" should become a key word in reforming science and education. It is obvious that we have to set tight priorities in any case, but many forget that is only part of the job. To create practically-oriented science, we have to work out a scheme for training new specialists, kind of innovation agents. To that purpose, an adequate scientific and practice-oriented environment is needed. It exists now, but in isolated patches, which should be integrated into a whole.

It is important in this respect to present at least on paper a scheme of what we would like eventually get. Otherwise, all reforms and concentrations will be reduced to merger of existing institutes and universities and emergence of huge monsters on their base. Many of Russian higher learning institutions have already stepped on this way.

It is a specific of our Russian mind - any construction should result in something big and made of reinforced concrete. However, such approach is contrary to basic trends in business spheres, where transition to outsourcing models is actively taking place, i.e. business prefers to create purpose-specific and functionalized breakthrough structures rather than reinforced-concrete monsters.

By the way, there are several rather dangerous thoughts. It's a paradox but Stalin and Beria have managed to create breakthrough research structures inside the Gulag on a similar principle. When asked, where he had received such multi-disciplined education, our well-known scientist Pabis Kuznetsov replied: in Gulag's research bureaus, because all research staff there were academicians. And then he told a real story.

When Beria came to inspect his research bureau, one of researchers asked: Lavrenty Pavlovich, who are we now?

The answer was: "How come? You are the flower of Russian science. But it is no good to gather you in Moscow for solution of specific problems. You will complain and quarrel there with one another, and here you are working." - Andrei BLINOV.