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Dominique Kuhling. Netherlands Embassy in Moscow

'Russia and the Netherlands Have Increased Their Cooperation to Fight Climate Change'

Dutch Chargé d’Affaires in Moscow Dominique Kuhling.

In a tweet-sized answer, could you describe the current state of relations between the Netherlands and Russia?

It is a story with two sides. We have close cooperation in fields such as trade, innovation, sciences and culture. But our political relations have been strained since 2014 due to, among other things, the downing of flight MH17 in Eastern Ukraine, the illegal Russian annexation of Crimea and growing concerns about the human rights situation in Russia.

You have worked now for over two years in Moscow. What are your impressions of the country and the city?

I can safely say that I very much enjoy working and living in this city! I have always had a keen interest in this country’s history, literature and music, and so much of it is — quite literally — around the corner. Personally, I enjoy walking and in order to explore this city I began by taking walks around the neighborhood of our embassy — near Arbatskaya — expanding my route in ever widening circles. I am impressed to see this great multitude of theaters, museums, historical landmarks and cultural hotspots together in one city.

That said, I have truly enjoyed traveling to other parts of Russia as well and appreciate the magnificent culture and nature of Russia's vast regions. One of the absolute highlights was a trip with my family to Siberia and to Lake Baikal, which was frozen at the time. It was an experience we will never forget.

How are the business and economic ties between the Netherlands and Russia? How has this changed since 2014, and how would you like to see things progress in the future?

The Netherlands is Russia’s third-biggest trading partner and the second-largest investor in Russia. Our economic ties have traditionally been robust and diverse. Trade between Russia and European countries decreased significantly over 2014-2015 and is slowly moving back toward original volumes. The 2019 figures from the Dutch statistical office show a growth in Dutch exports of almost 20%. 

In some aspects, trade has changed: Whereas we used to export a lot of agricultural products, Dutch companies now export high-quality technology (such as milking robots and greenhouse technology) that Russian farmers use to make their own products. In addition, and despite the effects of the Covid-19 pandemic on international trade, we continue to export a wide range of goods to the Russian market, from medical equipment and medicines to trucks. In the future, we would like to see our bilateral trade grow as a result of the opportunities in the Russian economy and competition on the Russian market.

Given the size of the two countries, the Netherlands and Russia appear to have strong trade and investment ties. Why do you think that is? And, to what extent do the figures we see on paper reflect genuine ties between the real economies in the two countries? For instance, on paper, the Netherlands is the second biggest investor in Russia, after Cyprus.

Russian and Dutch economic strengths and products are, to a large extent, complementary. The Netherlands is a net importer and important destination for Russian oil products and coal, as well as for metals such as copper, nickel and aluminum. The port of Rotterdam plays an important role here: It is used not only for direct transit to other destinations, but also for export at a later stage, after products have been processed further in the Netherlands. We are all part of the global value chain. Dutch exports contain a lot of capital goods, which are being used to strengthen production in Russia. A very promising development is the export of pharmaceuticals and medical equipment, as healthcare is a national priority in Russia.

As you might know, the Netherlands has a very open economy and is home to many international companies and European headquarters. Their investments in Russia have an upward effect on the bilateral investment figures. With their investments, many of those international companies create employment and added value both in the Netherlands and in Russia. The numbers are impressive: Over 3,000 Dutch companies trade with the Russian Federation and almost 400 Dutch businesses are present in Moscow, St. Petersburg and the regions.

What is your role as Chargé d’Affaires and the role of the embassy in promoting business and economic connections between the two countries? Do you see advancing business ties as part of your mandate? Would you like to see stronger business ties between Russia and the Netherlands? Practically, how do you achieve that?

As Chargé d’Affaires, I represent Dutch interests in the widest possible meaning of the word. My colleagues and I speak with Dutch entrepreneurs on a daily basis to hear about their experiences of doing business in Russia and to see how we can contribute. We do our best to advance business ties where possible, for example by bringing together active Dutch and Russian entrepreneurs at the Dutch Residence for informal meetings and discussions. Over the course of the next year, our two governments will co-organise a number of economic working groups on issues such as energy, innovation and health care. And we will hopefully be able visit a number of Russian regions to further develop regional economic ties.

What opportunities do you see for Dutch firms and investors at the moment?

In the coming years we will see a lot of developments in Russia in the area of ecology, healthcare and infrastructural developments in ports and airports. Dutch companies have added value in these sectors.

I regularly talk to Dutch businesses and investors to hear their views and the opportunities they see are very diverse. One example is the Fast Moving Consumer Goods (FMCG) sector. Recently, the embassy was present at the opening of the dealcoholization machine at Heineken’s Volga brewery in Nizhny Novgorod, with which the company wants to answer the growing demand for alcohol-free beer.

Moreover, the agriculture sector in Russia is developing quite well and the government is promoting the production and export of food products. For that reason, the Russian demand for genetic material, machinery and equipment is growing, as well as for modern and innovative agro technology. We see that trend reflected in the recent opening of a new factory by the Dutch company Grodan in Tatarstan. Another important area in the field of agriculture is the exchange of knowledge and provision of practical training by Dutch agricultural specialists for Russian farmers and growers. The Netherlands is well known for its efficient and well developed agro food sector. We are proud that our country, which is the size of the Moscow oblast, is in fact the world’s second largest exporter of agricultural goods, with an agro export of over 90 billion euros!

How important is the environment and combating climate change in your bilateral relationship with the Russian government? 

Climate change is a global challenge which affects the fundamental elements of our societies; our nature, our economic activity and our health. In the Netherlands rising sea levels are a threat to our critical infrastructure, agriculture and economic activity. In Russia melting permafrost, fires in Siberia and floods in Irkutsk threaten villages and vital infrastructure. Therefore, in both the Netherlands and Russia, the fight against climate change is on the political agenda. It is a regional problem that requires common effort.

Russia and the Netherlands have increased their cooperation to fight climate change. One example is energy transition in sectors like transport (smart mobility), energy (renewable energy), agriculture (smart farming) and the living environment (waste management). We organize visits, facilitate academic exchanges and discuss climate change during governmental dialogues in our bilateral working groups.

Are there any successful initiatives or programs either in terms of addressing climate change (e.g. emissions reduction, green energy) or ecological issues (e.g. waste management, air pollution) in the Netherlands that Russia could look to for inspiration?

Russia could look for inspiration to the approach my country took to come to a Dutch Climate Agreement. Our traditional "polder model" has developed in the past decades into a cooperation mechanism which includes not only the government and business, but also knowledge institutions and non-governmental organizations. Because the approach is based on finding compromise or — where possible — consensus between all these stakeholders, Dutch citizens generally perceive the outcomes of this approach to be fair. Last year, this approach delivered the Dutch Climate Agreement, which aims to elaborate how the Netherlands will implement the Paris Climate Agreement toward 2030.

What can the Netherlands offer Russia in terms of environmental know-how, technology or expertise?

The Netherlands is in the top three EU countries with the highest rate of waste recycling per capita. In March 2020, we organized a visit to the Netherlands to show our Russian colleagues the Dutch model of extended producer responsibility and how solid household waste is collected, separated and processed in the Netherlands. A successful Dutch company in this field is Multriwell. In fact, they were hired in Russia to address issues with smell around the landfill in Volokolamsk. The company extracted the gases that were released at the landfill and was able to transform the gas into energy (waste-to-energy solutions).