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Prime Minister Vladimir Putin chairs a meeting of the Government Presidium

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During the meeting of the Government Presidium, Prime Minister Vladimir Putin proposed raising the minimum compensation paid to the victims of disasters, adding that amendments to that effect have already been drafted. Other amendments have been drawn up to enable the government to take decisions on compensation and aid to the victims of disasters quickly and with the greatest possible flexibility.

Commenting on the recent decision to suspend grain exports from Russia, Mr Putin said it had been forced by the harsh realities of life. Citing the latest forecasts from the Agriculture Ministry, he said that this year's harvest would be "considerably more modest than we expected at the beginning of this year." But thanks to the Intervention Fund and the surplus from last year, Russia will nonetheless be able to cover its grain needs.

Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, ladies and gentlemen.

Let's share the latest news we have. Tatyana Golikova will report first on the progress made on paying compensation to families that have lost loved ones and property in the recent wildfires.

Tatyana Golikova: Mr Putin, colleagues. Work is now underway in all the regions of the Russian Federation that fall under the government decrees. There are 14 such regions. As things stand today, we're to pay 10,000 roubles to each of the 3,745 people affected to cover their basic necessities. The money has already been paid out to 3,299 people affected by the fires, or 88.1%.

There has been much less progress in the Voronezh Region, but this can be explained by the fact that the number of victims changed in just the past few days. And as this number is growing, so too is the number of people eligible for compensation. Also, there are some organisational problems in the Kirov Region and the Vladimir Region.

Now, our delegates on the ground, who are working as part of an Emergencies Ministry team, are taking care of these problems on a case-by-case basis.

As for the restoration of lost property and the payment of 100,000 roubles from the federal as well as regional budgets, here's how things stand currently. As of this morning, 82.3% of the victims have received federal compensation and 84.3% have received compensation from regional governments. This small margin is due solely to the need to verify the lists. I must say that for the most part the regions are working well. There are unavoidable problems in the three regions that I mentioned, which we are trying to resolve on the ground.

Vladimir Putin: Good. Are we on schedule for the construction of new housing, Mr Basargin? By the way, I've got a monitor with a webcam connection in my office now. The image isn't great at this point; specialists will have to work on it further. But the cameras are already up and running in all major regions. How's work progressing?

Viktor Basargin: Some adjustments are still being made, Mr Putin. In 11 regions, 73 webcams have been installed in 42 communities where major construction projects are being carried out.

Vladimir Putin: Follow through on this with the Communications Ministry, so that everything is functioning properly in all locations, in all of the 14 regions and on all the construction sites. Okay?

Viktor Basargin: We are monitoring construction on a daily basis, Mr Putin. According to our data, 1,824 families have been left homeless. The number is constantly being updated: 1,990 houses in 147 communities have been destroyed. We've checked the number of affected communities, and the latest figure is 147.

All design work is now finished in accordance with the construction schedule. Construction models and contractors have been selected in all of Russia's regions, pursuant to Article 55 of Law 94 on the sole contractor. There are some 400 pieces of equipment and over 1,000 construction workers on the construction sites now. By and large, work is being completed according to schedule in all locations. The sites are being cleared in all of the regions. Also, foundations are already being laid in the Voronezh Region, in two of its towns, Maslovka and Olkhovatka. In the Moscow Region's village of Beloomut, foundations are being laid for eight houses; six foundations are being laid in the Ulyanovsk Region; in the Belgorod Region, most of the projects are in the foundation-laying stage, while four have already moved on to the construction phase.

We have no delays anywhere except in the Ryazan Region, where the risk of wildfires is still too high to begin construction.

Vladimir Putin: And how far behind schedule is Ryazan?

Viktor Basargin: A couple of days. Here're figures for all the households, Mr Putin: 1,247 households have expressed a desire to have new housing built for them, which is more than 60% in the 42 largest communities. Ninety-three families, or about 6%, have said they would prefer to buy a house themselves, whether new or used; 331 families, or a little over 20%, have opted for monetary compensation; and 153 families, or 10%, have not yet decided on the type of aid they would like to receive. So, by and large, everything's going according to plan, we believe, and we will continue our monitoring of day-to-day operations on the ground.

Vladimir Putin: Good. Please continue monitoring the situation carefully and report back.

Mr Shuvalov, you are working on relations with foreign investors. I asked you to closely monitor how investment climate is developing. Please talk a bit on this topic.

Igor Shuvalov: Mr Putin, as per your instructions, the government is constantly working to improve legislation that directly affects freedom of entrepreneurship, with the aim of reducing administrative barriers. We often talk about doing this so that the typical problems that not only foreign but Russian businesspeople constantly face would become a thing of the past.

We will report to you about the legislation that is under development, and then we will submit it to the State Duma. In particular, much has been done lately to aid the development of small and medium businesses.

According to your instructions, we also established a single channel for complaints filed by foreign and Russian citizens against officials in the regions and federal executive bodies regarding the difficulties they encounter as entrepreneurs.

The Ministry of Economic Development of the Russian Federation has created a special department to deal with these issues. They analyse all incoming information and also review specific complaints and suggestions.

At present, the statistics tells us that most of the complaints have to do with administrative barriers and customs procedures - these account for almost half of all complaints. Then there are complaints about the migration legislation, labour laws and so on.

A new law on migration was recently enacted. As for removing administrative barriers, this involves a combination of legislative and practical issues.

As you requested, I have also been meeting with large companies operating in Russia. After they follow up with the Ministry of Economic Development, we then try to hammer out a decision.

Quite recently, as I reported to you, we held such a meeting with the company Nestle, which has been in a difficult position. Then it turned out that they reached an understanding with the relevant regulatory authorities on how to rectify certain violations, and now the situation is completely different.

This work is now becoming systematic in nature. We have set up all the infrastructure necessary to make headway on this issue. The press service of the Russian government created a special site, http://www.modernrussia.com/, where people can send all complaints and suggestions, and these will be processed. And people will be able to contact us through the internet portal, among other ways.

The institution of ombudsman has been established in virtually every region of the Russian Federation. We also support these relationships, and we are monitoring what kind of complaints people are taking to the regional government and the ombudsman. Typically, they have to do with the same administrative barriers - failure to process land claims in the necessary timeframe, difficulty obtaining the required permits for business activity and so on. Sometimes they go to the government with complaints of unlawful or unfair court decisions. We do not deal with such issues, Mr Putin. And anyway, as you instructed, we are not overstepping our bounds and dealing with issues that are the responsibility of other bodies. We believe that this work should be coordinated in order to resolve the difficulties that entrepreneurs face in a timely manner. Again, we believe that the judiciary should be independent from the executive branch, but we do draw the attention of the judiciary to various existing problems. Our relationship with our colleagues working on this issue is pretty effective and, on the whole, we work to fulfil your instructions to change the investment climate in the country.

Vladimir Putin: Alright. Thank you.

I have signed a government resolution on the disclosure of information by wholesale and retail electric power providers. Mr Sechin, your comments, please.

Igor Sechin: Mr Putin, based on your instruction, the Federal Tariff Service has submitted to the government the draft resolution you signed after the government, the Federal Anti-Monopoly Service and other relevant agencies made all the necessary improvements in the text. The resolution changes disclosure standards for wholesale and retail electric power providers, a business with natural monopolies, primarily the Federal Grid Company and the Interregional Grid Holding. An official website will be set up to grant all interested parties access to the following information controlled by natural monopolies: the composition and volume of spending on the production and sale of electricity; a number of economic indices and figures on return on investment while the government has been regulating energy market tariffs; daily electric current frequencies in the unified grid; energy companies maintaining system reliability; troubleshooting in the unified federal grid and the formation of a power reserve.

The Federal Tariff Service and the Energy Ministry will approve these standards on disclosing information in accordance with the powers delegated by the new resolution.

The Federal Tariff Service and the Federal Anti-Monopoly Service will monitor the disclosure of information.

The disclosure of this information will create greater transparency in the work of natural energy monopolies and allow for greater oversight of their spending. It will also allow for oversight in the sphere of tariff regulation and lead to more transparent decisions on connecting companies and individual consumers to the grid. This resolution has been met with approval on the market. It is seen as a positive thing.

Vladimir Putin: Okay. Now, I'd like to say a few words on our agenda.

You know the situation we are facing: the record-high temperatures in Central Russia are causing forest fires and drought, which are impacting agriculture.

Relief work has begun, as reported here. I want to remind you that all those who have been left homeless must have new accommodations before the start of the cold season.

I want to say a few words about the decisions we should take today. Experience has shown that the amount of compensation stipulated in our current regulatory acts is too small to provide people with meaningful assistance. This is why in the event of an emergency, we decide, on a case-by-case basis, to add to those minimum amounts. And in order to move away from that practice in the future and to ensure people's rights are upheld, we are considering the possibility of raising the minimum compensation paid to victims of disasters. Specifically, we will double emergency relief compensation from five to ten thousand roubles and increase compensation for completely destroyed property from fifty thousand roubles per family to a hundred thousand per family member. Families who have lost a family member in the fires will receive a minimum of one million roubles.

We have also drafted amendments to enable the government to take decisions on emergency relief as quickly and with the greatest flexibility possible.

I think the Russian regions should be granted similar powers.

Next, as you know, the president considers it necessary to expand the list of critical facilities in need of enhanced fire and other protection. We dealt with this matter at the end of last week. We will take the relevant decisions today - particularly, to form supplementary fire brigades to protect these facilities.

We will also hear from the Emergencies Ministry that fire services are being provided with additional vehicles and other equipment. The ministry is doing what it can to fight the wildfires. Obviously, we need a specific programme for additional supplies of fire-fighting equipment.

I remind you that urgent decisions have been taken concerning the purchases of BE 200 fire-fighting aircraft and equipping government-owned helicopters to extinguish wildfires.

I also want to say a few words about agriculture. The Ministry of Agriculture has been instructed to draw up proposals on the use of grain from the intervention fund. Large harvests in the past few years allowed us to accumulate 9.5 million tonnes of grain in that fund. Now it will be used to stabilise the market and help corporate and private farmers maintain their current livestock populations.

We have taken the decision to distribute this grain directly, without auctions, on the basis of requests from the regions in need, so that the aid is targeted and prompt.

Please report on the progress made on the corresponding regulatory documents.

As for the temporary ban on grain exports from Russia, we have been forced to do this, as you know.

National grain consumption amounts roughly to 77-78 million tonnes a year. We will need about 78 million tonnes this year, due to the drought. The latest Agriculture Ministry forecasts promise a far smaller yield than we expected at the beginning of the year: 65 or even 60 million tonnes. This amount will cover domestic consumption. Even if we harvest only 60 million tonnes, we have 9.5 million tonnes of emergency reserves in the intervention fund plus 21 million tonnes left from last year, for a total of 90 million tonnes, while the domestic demand is 78 million. But what reserves will we have left for next year, 2011? We cannot forecast this harvest or what amount of surplus we will be able to put into reserve next year. I repeat, last year's surplus is 21 million tonnes, which is a sizeable amount.

So I ask the Agriculture Ministry and you, Mr Zubkov, to keep an eye on the situation. First, you should take a decision on using grain from the intervention fund. You should do this in a timely manner. We know that grain prices are up both in Russia and the rest of the world. We see that the market is on pins and needles. Whoever is waiting for December 21 or 31 is wrong because whether we lift the export ban depends solely on this year's harvest.

The problem is compounded by the fact that Russia's leading farming regions cannot sow winter cereal crops because of the weather, so a major part of the country will begin the new year without winter crops. So it appears that the export ban will not be lifted soon, even though it is, of course, a temporary measure. We are in an emergency and it is our duty to think, first of all, about our own citizens, including farmers. Again, we are dealing with an emergency, and we are acting accordingly.

Mr Zubkov, please consider all the factors and take a timely decision on the problems I have mentioned depending on the harvest. I also ask the Agriculture Ministry to duly formulate this policy.

I have asked you to elaborate a system to support companies affected by the drought. Ms Skrynnik, what has been done lately?

Elena Skrynnik: Mr Putin, eleven Russian regions received off-budget loans last week totalling 10 billion 770 million roubles out of the 25 billion earmarked per your order.

We have also finished our inspections of all farms hit by the drought in 15 regions, and we will finish evaluating the damage in all the other regions this week.

Regions will receive another three billion roubles of budget loans this week for seed and fuel purchases and other farming needs, mainly for feed.

The regions have lent their farms seven billion roubles. Tatarstan has been especially generous with a billion and 700 million.

Mr Putin, there are problems with feed. We have stored away 1.4 tonnes of feed per head of livestock, and we plan to accumulate up to 20 tonnes, and this problem is being solved thanks to the regular meetings held by Mr Zubkov. We are also constantly dealing with the problem of transporting feed. The situation is difficult, but we are managing despite everything, and even making progress.

Vladimir Putin: Good.