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Prime Minister Vladimir Putin meets with Voronezh Region Governor Alexei Gordeyev

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Transcript of the beginning of the meeting:

Vladimir Putin: I have looked over the numbers for the Voronezh Region and I see it's doing well, on the whole.

Alexei Gordeyev: Thank you.

Vladimir Putin: Industrial output is up 9.4%, which is almost twice the first-quarter national average of 5.8%. Not bad.

Registered unemployment is down 15%. This is also quite an achievement.

The Voronezh Region consistently ranks among Russia's top ten agricultural producers. Agricultural output in the region is up 12.6% against a national average of 3.6%. Again, not bad.

The regional budget also looks good.
However, I was surprised to see that wage arrears went from 16.2 million roubles on January 1 to 58.6 million roubles in April. What's this all about?

Alexei Gordeyev: Mr Prime Minister, you certainly have a command of the numbers. There are all summarised on the slide, so I won't repeat our achievements. Let's start with the third slide on wage arrears. Last year we worked together with the regional public prosecutor's office to address wage arrears resulting from the financial and economic crisis - in other words, on the companies that fell on hard times as a result of the downturn.

We significantly reduced wage arrears over the year - not just by a few percent points, but by an order of magnitude. However, new accounting standards were introduced in January. The records now include wage arrears from companies that had gone bankrupt even before the downturn. That's where the increase comes from.

Now, together with the regional public prosecutor's office ...

Vladimir Putin: So the downturn is not to blame?

Alexei Gordeyev: No, these companies have been bankrupt for five years or so. One of them, the Voronezh Excavator Factory, accounts for 80% of all arrears. However, if we consider the latest figures, for May 1 - we have the latest statistics here. See (pointing to the graph), this red bar is getting shorter. By the middle of the year, we expect to put an end to wage arrears in companies that were hard hit by the crisis.

As for bankrupt companies, we are making significant reductions in their wage arrears. We have met with the managers and owners of those companies. So we are working on this issue.

The most important thing you have mentioned is that we have no wage arrears in the public sector. We are paying wages on schedule here. We have saved enough money to pay wages on schedule in June and July, which is peak vacation time.

Vladimir Putin: You are implementing a number of ambitious projects. How is the work going?

Alexei Gordeyev: Work on major investment projects has continued, which is very important. Construction of a large nuclear plant has continued, and I want to thank you for this. We have another two units to build. They demand huge investments - more than 30 billion roubles for this year alone. Sergei Kirienko [head of the Federal Atomic Energy Agency] is supervising the project, and construction is keeping pace. Several thousand workers are employed on the site, mainly from companies based in Voronezh.

We will open a major cement plant this year in the Podgorensky District of the Voronezh Region. It will be a modern plant, and the largest of its kind in the country. The commissioning and start-up are scheduled for the end of the year.

Vladimir Putin: What about mineral fertilisers?

Alexei Gordeyev: A very large fertiliser manufacturer is working steadily. In two years, we almost doubled the amount of fertilisers purchased for agriculture in the Voronezh Region. Siemens has made its decision, so in August we will start to build our first major factory manufacturing electric transformers for industry with the help of German investors.

Vladimir Putin: What about synthetic rubber?

Alexei Gordeyev: The company SIBUR is providing active support to manufacturers. The Voronezhsintezkauchuk plant is working steadily. It is our testing ground for innovative technologies. Several companies have begun to purchase additives that reinforce asphalt, which I hope will improve roads all over Russia.

Mr Prime Minister, I want to add something about the promising figures connected with the decision on Sberbank. I have the latest figures here for housing loans - the change in interest rates in the Voronezh Region over the last three weeks. Mortgage loans totalling 250 million roubles have been made, which is almost three times more than in the same period last year. In other words, people are borrowing three times more now thanks to the affordable interest rates.

You touched on another matter - supporting small and medium businesses. Our strategic goal is to foster a social and economic environment that is favourable for business and the public. We are working on the current federal government programme to create an e-society - transitioning to a convenient one-stop shop for government and municipal services. We have opened a multi-use centre in Voronezh. Please come and visit it. Take a look around. It's interesting. It drastically reduces the burden on the business community. And I should add that small businesses are doing better than the national average. They employ 25% of the workers in the region and contribute roughly 20% of the gross regional product.

Vladimir Putin: What about stockbreeding?

Alexei Gordeyev: It is the backbone of our agricultural sector. It's been experiencing significant growth. In fact, the 12% increase in regional agricultural output comes from an increase in stockbreeding. We expect to increase meat production by 30-40% this year. Dairy farmers are doing well, too. We attach great significance to dairy farming, because we see how important it is to the agricultural sector.