2 june, 2008 18:00  

Prime Minister Vladimir Putin chaired the meeting of the Russian Government’s Presidium


"I would like to stress that we welcome foreign investments. They are growing year in and year out. We are very glad about it and we will do all we can to support the process in the future."

Vladimir Putin At a meeting of the Government’s Presidium

Transcript of the opening of the meeting:

Vladimir Putin: Good afternoon, colleagues.

Preparations for the International St Petersburg Economic Forum are drawing to a close. How is work going at the final stage? Ms Nabiullina, please.

Elvira Nabiullina: Yes, indeed, the preparation for the forum is in its finishing stretch. The forum is due to open on June 6. This is the 12th international forum to be held in St Petersburg. The main aim of the forum is to provide an opportunity for the members of the world political, business and academic elite to discuss the main challenges, problems and prospects of peaceful development and the role and place of Russia in that process.

Traditionally the forum lasts two days. The first day is devoted to the international agenda. We expect a speech by the President of the Russian Federation. The main topic of the plenary session is the search for a balance between protecting national economic interests and the need to address global problems jointly. Other topics to be discussed on the first day are the key challenges to world development, the situation in the world financial markets, the situation in the food markets and in the energy sphere.

The second day is devoted to Russia. It will see the discussion above all of the challenges, problems and outlook for the development of the Russian economy. The keynote report will be delivered by the First Deputy Chairman of the Russian Government, Igor Shuvalov. There will also be a series of conferences and roundtables to discuss the key topics of the development of our economy but, importantly, they will be discussed in the global context. Innovation, infrastructure, investments and institutions will be discussed. In effect, the four "I"s the President spoke about in his campaign speeches.

Conditions will be created for bilateral and international meetings. There will be a strong cultural programme. In other words, we expect that the forum will be a significant event that will make it possible to discuss the most pressing problems and look for ways to solve them.

Vladimir Putin: Is everything ready in technical terms? Are there any problems?

Elvira Nabiullina: Yes, everything is ready. So far everything is going according to plan.

Vladimir Putin: All right. Mr Zhukov, on May 31 you took part in the voting to name the city that will host the Universiad in 2013. Let us all congratulate Kazan, the Republic of Tatarstan and the whole of Russia. It is a major event, probably second to the Olympic Games in terms of the number of sporting disciplines and the number of participants. But we should be ready to help Kazan if there is such a need. I am sure some problems will have to be tackled at our level.

Alexander Zhukov: Yes, Mr Putin. In general, Kazan is well advanced in its preparations. Most of the sporting facilities - and they are modern and of very good quality - have been built. Kazan has extensive experience of hosting major international competitions. Still much remains to be done. And of course Kazan counts on the support of the Federal Government.

I think we must render all-round support because it is indeed a major sporting event. It will be held a year ahead of the Sochi Winter Olympics. That is also very important in terms of acquiring experience in the preparation and holding of the Olympic Games. So I believe that we will shortly prepare a programme jointly with the leaders of Kazan and Tatarstan, and identify all the needs and form an Organising Committee. We will prepare all the proposals for the federal level.

Vladimir Putin: Very well. Mr Zubkov, you have chaired the government commission on the development of the fisheries industry. What was the discussion about?

Viktor Zubkov: Yes, I conducted a meeting of the government commission on fisheries. A number of fundamental documents and issues connected with the development of the industry were discussed. They include the preparation of the regulatory-legal acts in support of the federal law On the Development of Fishing and the Preservation of the Water Biological Resources.

As a follow-up to this law it is necessary to submit to the Government 28 regulatory documents. The adoption of these documents will make it possible to set clear and understandable rules for the sector, to enhance the economic and financial results for the state and business, to fill the legal vacuum which is a spawning ground for the shadow economy and all kinds of corruption in this industry.

The process of approvals is not proceeding easily. Some agencies are a bit too slow. To step up the process we have created a working group, the necessary instructions have been issued and now we see positive dynamics. I am sure the work will be completed by the deadline set under the law, by July 1. All the 28 regulatory-legal documents will be submitted to the Government.

Another important issue discussed by the Government Commission was the introduction of the notification procedure of registering fishing vessels in ports. The heads of regions who attended the meeting noted that the new system is already working. The vessels unloading time has been cut dramatically: previously it took two or three days, and under the new regulations it takes three hours; 98% of the ships fit into that schedule. We have monitored the third decade of May and out of the 612 vessels 604 managed to make it within the allotted three hours.

In addition, the State Fisheries Committee has been told to submit to the Government this week a draft Strategy of the Development of the Fisheries Sector until 2020. Considering the large amount of work, the Commission will meet every month.

I am planning to visit Chuvashia tomorrow. We will review progress in the programme to raise livestock. We will pay special attention to agricultural cooperation and cooperative food trade. We will take Chuvashia as a case study of what measures the governments at all levels and the local chief executives should take to develop and increase the effectiveness of government support of domestic agricultural producers and the development of all forms of entities in rural areas: collective and private farms, and personal subsidiary plots. I expect to pay special attention to the creation of cooperative agricultural markets as an important mechanism for creating a competitive environment in the agro-industrial complex. I am planning to conduct a video conference with the regions on all the issues discussed at the conference in Chuvashia.

Vladimir Putin: Mr Zubkov spoke about agriculture. Mr Gordeyev, the spring sowing season is coming to an end. How do you see the result? Is harvesting already beginning in the south?

Alexei Gordeev: Thank you, Mr Putin. I can report that the sowing of spring crops on the whole has been completed. As forecast, the total area under crops is 49 million hectares, of which 31 million are under grain crops. If you consider the preservation of winter crops, the area under grain crops will be 1.5 million hectares larger than last year. So it can be said with a fair degree of confidence that the grain harvest will be at least 85 million tons, as we have already reported to you.

It is important to single out the wheat crop. We believe the wheat harvest will exceed 50 million tons, which is 10% more than last year. It will secure the achievement of all our goals, above all the need for bread.

Today we see the trend of substantial falling of prices for grain crops in the domestic market on expectations of a good harvest. The structure has significantly changed because livestock breeding, in particular pig breeding, and poultry breeding are developing intensively. Things are less good with milk cattle breeding. Mr Zubkov has instructed us to prepare a departmental targeted programme. We should step up this work.

Agricultural producers have increased areas under high-energy crops - soya, rapeseed and legumes. Crops have increased by 25%.

Today we can start reporting on the course of preparation for harvesting. In just 10 days threshing of spring crops and barley will begin in the Kuban area. By mid-June threshing of winter wheat will begin. Our interagency seasonal farm work headquarters created by the Government's decision early in the year is switching from monitoring and organising spring work to organising harvesting in the country. It will take three months of intensive work at all the levels of government. And I would like to report on another issue, Mr Putin. More than a year ago you instructed us to support the initiative of the students of agricultural higher education institutions to revive student volunteer units to take part in the implementation of the priority national project.

Last week the Ministry hosted a meeting of all the commanders of such units from the agrarian higher education institutions. More than 50,000 students have joined the movement. I must say that all the initiatives come from the grassroots. There are more than 900 units. They are leaving for their third field work semester. The amount of work planned is 15 billion roubles and the wage fund will be about 400 million roubles. We believe that it is a welcome addition to every student's budget.
So the initiative, which the country's leadership has backed, is making good progress, above all as far as the students are concerned. Thank you.

Vladimir Putin: OK. How many people did you say will work?

Alexei Gordeev: 50,000 students, I mean only agricultural and fisheries higher education institutions. We are working together with them. That's more than 60 higher education institutions.

Vladimir Putin: Mr Ivanov, you have chaired a meeting of the Board of Directors of the United Aircraft Building Corporation and the Supervisory Board of Rosnanotekhnologii. Tell us about the results, please.

Sergei Ivanov: Thank you, Mr Putin. I would like to report that on May 28 a regular meeting of the Board of Directors of the United Aircraft Building Corporation was held. The main aim was to prepare the company's general meeting of shareholders on the results of 2007.

The results of the aviation industry in 2007 are generally not bad, output has increased by 16.6% on the previous year. The growth has been greater in military aircraft building (19.7%), compared with 10.2% in the civilian sector.

The total sales amounted to 230 billion roubles, a third of which are proceeds from the sale of our planes. In terms of production volume and financial indicators it was the best year for the aviation industry since 1991. But quality is the main thing. We at the Board of Directors have determined the range of plane models in all areas - from combat and military transport to civil aviation. In civil aviation, we are working closely with air carriers. Above all we proceed from the needs of the carriers for modern civil aircraft with energy-efficient engines.

In 2008 we are to launch commercial production of two types of civilian aircraft, in addition to Sukhoi's well-known SuperJet, also An-148. Contracts for the planes have already been signed.

In general for the first time since the collapse of the Soviet Union the corporation has its order books full. The industry needs new modern production capacity.

So the Board of Directors has identified three areas of further development. First, the personnel: designers, engineers and workers qualified for hi-tech production of modern aircraft. The second area is the switch to high technologies, and the corporation has already allocated money for this in 2008-2009.

The third aspect is competent modern management. The formation of the corporation is to be completed this year. By the end of the year the United Aircraft Building Corporation will be joined by the Kazan Aircraft Building Association, the MIG Corporation and, I hope, the Chkalov Aviation Plant in Tashkent. That will complete the formation of the corporation.

As for the second item on the agenda, the Supervisory Board of the State Corporation Rosnanotekhnologii approved the first investment project. The first investment project since the creation of the corporation is ready for approvals and evaluation.

Vladimir Putin: What is the project?

Sergei Ivanov: It is a project to produce aspherical optical elements with the use of unique nanopositioners. It sounds very high-tech, but to put it in simple Russian, it is about the use of the elements I have mentioned that will dramatically reduce the number of lenses and mirrors in optical technology beginning from photo and video cameras, projectors, Xerox machines and of course space equipment used for observation and military products. The project is divided into two stages.

Vladimir Putin: How much will it cost?

Sergei Ivanov: 300 million roubles of government money at most. And about 350 million roubles will be invested by private shareholders interested in the production.

Vladimir Putin: So, here is one example of public-private partnership.

Sergei Ivanov: There is also an investment project. But it is the responsibility of the Rosnanotekhnologii corporation.

Vladimir Putin: Fine.

Sergei Ivanov: And it is divided into two stages. The first precision machine tools with an accuracy of up to 10 nanometers will be created in 2008-2010. Then pilot production will begin. In 2010-2012 commercial production of these nanopositioners will be launched. They will be used in practically all spheres related to optics.

Vladimir Putin: Thank you. Ms Golikova, the summer is here. How are children's summer holidays organised?

Tatyana Golikova: The children's health season starts today, in fact. We expect more than 52,000 summer health and recreation institutions for children from the Russian regions to open this season. There will be about 50 million children involved. The main financial load will be assumed by the Social Insurance Fund. Its budget will earmark 16.2 billion roubles for the purpose. The federal budget is also making a modest contribution to the tune of 1.3 billion roubles, it will transfer money to the budgets of the Russian regions mainly for health facilities for disadvantaged children. So, considering the money that will be invested by the Russian regions themselves, we hope that the summer health campaign will be successful.

Vladimir Putin: I hope so. Mr Lavrov, have we agreed with our Arctic neighbours on dividing the resources?

Sergei Lavrov: The first meeting of the foreign ministers of five Arctic states took place in Greenland last week. It is an informal group comprising Russia, Canada, the United States, Norway and Denmark. They all cooperate within other, more formal structures such as the Arctic Council. These are the five countries on the coast of the Arctic Ocean. Naturally, considering the growing interest in Arctic programmes, special responsibility devolves on the littoral states. Such a meeting has been held. It examined practically all aspects of Arctic development in the new conditions, in the conditions of global warming. Scientists have yet to determine whether it is temporary or permanent. But in the current situation it was highly important for them to meet and look at the problems that arise here.

The declaration they passed reflects all the aspects of Arctic cooperation. Particular attention was paid to the continental shelf problem, more specifically the claims to the continental shelf beyond the 200-mile zone.

We believe that a key conclusion is the agreement sealed in the declaration to the effect that the five littoral states of the Arctic Ocean will deal with all the issues connected with the ownership of the continental shelf beyond the 200-mile zone on the basis of international law. We believe that the Law of the Sea Convention passed in 1982 is quite enough. In other words, the declaration confirmed the line Russia pursues in accordance with the decisions of its leadership, on the basis of the decisions of the last meeting of the Marine Board to the effect that we will uphold our rights to the continental shelf beyond the 200-mile zone on the basis of international law and the results of scientific research we are conducting and which we are submitting to the relevant commissions of the United Nations.

We are pioneers in this work; we are more advanced compared with other countries that can claim their sections of the continental shelf. We hope that such a strong signal on the need to proceed in this way and uphold the claims of corresponding states is important for the continuation of the work.

Vladimir Putin: In other words, nobody has abolished the former agreements, including those of 1982?

Sergei Lavrov: No. On the contrary, it has been confirmed that they are a solid basis for further work.

Vladimir Putin: Very good. Thank you.

Let us discuss the current agenda.

At the meeting of the Government Presidium on May 26 we discussed the tax policy. Based on its results documents were signed to introduce priority draft laws at the State Duma.

Let me remind you that we are talking about reducing taxes for families with children, exemption from taxes on the expenditure on education, healthcare, construction and acquisition of housing. We are also talking about creating tax incentives for the oil sector and small businesses. Today we will also discuss amendments to the federal budget, the budgets of the Pension Fund, the Social Insurance Fund and the Federal Mandatory Medical Insurance Fund for the current year.

We discussed these topics in detail at the Budgetary Commission on Wednesday. The budgetary amendments have a "strong social emphasis". Additional resources must be provided for the development of agriculture.

A number of other pressing tasks are being addressed. Let me remind you what they are: housing for war veterans, providing war veterans with special transport or monetary compensation, increasing allowances for care of the elderly, the disabled, including disabled children, indexation of social benefits, including child allowances, free medication for people enjoying federal subsidies, agriculture, and the Sochi Olympics.

Besides, during the discussion at the Budgetary Commission - I am glad that Mr Kudrin is nodding his head, he remembers that we agreed then to take another look at the financing of some important major projects. They include speeding up the building of the bridge across the Volga in Ulyanovsk, the Makhachkala-Botlikh road in Dagestan, as well as modernisation of infrastructure in Vladivostok as part of the preparation for the forthcoming APEC summit.

The Ulyanovsk Bridge - as we said last time - is one lamentable instance of construction that never ends. The construction began back in Soviet times. The problem must be finally solved.

The building of the Botlikh road will ensure communications with the mountainous parts of Dagestan. I have been there and I have seen it all. First, I have promised it to the local people. Second, the road has by and large been built, but it must be brought up to scratch. A tunnel needs to be made, which is the most expensive part of the work. But if all this is put into practice, it will greatly improve the life of thousands of people. The region will have more opportunities for sustained economic development. Along with the laying of the pipeline and branches from the main pipeline leading to villages, the situation will improve greatly in economic and social terms.

The same applies to the preparation for the APEC summit in Vladivostok. It is a good occasion to give an extra impetus to the development of the whole Far Eastern region.

Let me remind you of what we said last time: an additional 2.9 billion roubles must be allocated for the construction of the bridge across the Volga in Ulyanovsk in 2008; another 1 billion roubles are needed to build the Makhachkala-Botlikh road, and 420 million roubles to prepare the APEC summit in Vladivostok.

Additional funds are allocated for the postal service - 1.6 billion roubles; 400 million roubles for Atomflot, 427 million roubles for the construction of the Institute of National Philology and Culture of the Finno-Ugrian Peoples at the Mordovian State University, and another 1 billion roubles for the reconstruction of the embankment in Yaroslavl.

Mr Kudrin will tell us about it in more detail later.

From the results of the discussion of budgetary amendments we must take a decision to introduce these bills at the State Duma.

I ask Mr Kudrin and Ms Golikova to work out all the aspects of the government initiatives as regards the funds, in close contact with the State Duma deputies.

Today we will also discuss the formation of the Commission to Monitor Foreign Investments.Its main task is to consider the applications of our foreign partners to acquire enterprises in the strategic sectors of the Russian economy.

I would like to stress that we welcome foreign investments. They are growing year in and year out. We are very glad about it and we will do all we can to support the process in the future. The new law on foreign investments does not ban them. On the contrary, it creates procedures that are transparent and easy for investors to understand.

This is in fact the main aim of the law. It contains a closed list of types of activities for which foreigners seeking to control enterprises will have to go through a special approvals procedure.

Many developed countries have similar legislation.

I ask the Ministry of Industry and Trade to promptly prepare proposals on the composition of the Commission and the authorised agency which will deal with all these issues on a day-to-day basis.

Let us get down to business.