Business perspectives from ABAC 2012 Chair
It is the first time Russia is hosting APEC and we see it as a great opportunity.
The APEC Business Advisory Council (ABAC) gives the private sector a voice to provide advice and information about business needs and concerns to all levels of APEC, from senior government officials and directly to the Leaders at an annual dialogue.
With Russia as host of APEC in 2012, Mr. Ziyavudin Magomedov, the Chairman of the Board of Summa Group, was appointed to chair ABAC for the year ahead. Recently, he shared his plans for 2012 with the APEC Bulletin.
APEC Bulletin (AB): What will ABAC be focusing on this year?
Mr. Ziyavudin Magomedov (ZM): It is important for us to ensure concrete results in the work of ABAC. As APEC’s host economy in 2012, Russia has outlined four priority topics that follow APEC’s previous years’ priorities: trade and investment liberalization; regional economic integration; strengthening food security; establishing reliable supply chains; and intensifying cooperation to foster innovative growth.
Our initiatives in the framework of these priority-areas deal with regional transport infrastructure development; technology transfer cooperation; fostering new eco-standards in urban environments; harmonizing customs procedures; and strengthening regional food security.
AB: In your experience as a businessperson, what specific challenges have you encountered as they relate to these issues?
ZM: These are very specific issues. For example, my company is one of the largest port operators in Europe and we continuously face issues in supply chain performance. One of the key problems in front of us is bottlenecks in railroad connections. Russia has second longest railroads in the world (86,000 kilometers) that can serve as a land bridge between Europe and Asia. It can result in a 2-3 times decrease of cargo transit time between Europe and Asia. However, few thousand kilometers of bottlenecks prevent most international shipping companies from using this route. Although our ports can handle an increased turnover, other supply chain weaknesses prevent us from using this opportunity. We believe that our joint efforts in ABAC will help to resolve this problem.
AB: What results can we expect by the end of 2012?
ZM: A concrete goal we hope to achieve together with Leaders of economies is establishing the Policy Partnership for Technology Transfer in APEC. We envision it as a working body bringing together business representatives and public officials in a similar fashion to the Policy Partnership in Food Security. The new partnership will assist emerging economies in acquiring new technologies, stimulating economic growth and providing a platform for best practices sharing in this field.
One of the outcomes that I personally consider very important is greater attention to sustainable development. Asia is currently experiencing booming urbanization. According to the UNESCAP, in the last two decades the Asia-Pacific urban population has risen by 29%, more than in any other region. I hope that in 2012 APEC would be able to adopt a joint approach towards eco-standards for cities in the region that would allow comfortable and healthy living along with fast-paced economic development.
Finally, in 2012 the Policy Partnership for Food Security will start operation and it will be a new entity bringing together businesses and public officials. We are talking about a crucially important policy area directly affecting the lives of hundreds of millions people. Establishing the new policy partnership and contributing to its efficient work will be one of our major priorities in 2012.
AB: Why is hosting APEC this year important for Russia?
ZM: It is the first time Russia is hosting APEC and we see it as a great opportunity. The Asian part of Russia alone has a total area of 13 million square kilometers making it the largest in Asia. No surprise that Russia is interested in deeper integration in economic cooperation in the Asia-Pacific region to boost its socioeconomic development.
For example, Russia is one of the few economies in the world that can significantly increase its agricultural production and exports. Currently Russia exports approximately 20 million tons of grain and this amount may increase by up to 50% in 2020. Meanwhile, there are almost 600 million people in Asia that need more food and we think that Russia can play an important role in satisfying that need.
AB: As a successful businessperson and the chairman of the Summa Group, what is your proudest achievement in business and what are the necessary skills to possess?
ZM: The most important thing is being result-oriented, both in business and in international cooperation – that is the skill that leads to success.
I started my business career in banking, but then I turned to transportation and logistics. Our first project was a brand new oil terminal that allowed us to develop into the third largest port logistics group in Europe with a total turnover of 157 million tons in 2011.
Together with our partners, we won an international contest to construct and operate a new oil terminal in the Port of Rotterdam. Together with the Port, we have established a Global Strategic Partnership that allows looking at opportunities to cooperate in China, India and other emerging markets.
Currently the Summa Group is one of the leading investment companies with assets in transportation and logistics, construction, engineering, oil and gas, and telecommunications.
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ABAC held its first meeting in Hong Kong, China in February. The next meeting will be held in Kuala Lumpur, Malaysia in May, Ho Chi Minh City, Viet Nam in July, and finally culminating in Vladivostok, Russia in September. ABAC also will provide direct input and recommendations to APEC Leaders at an annual open-dialogue session during the APEC Economic Leaders’ Meeting in September.