ARCHIVE OF THE OFFICIAL SITE OF THE 2008-2012 PRIME MINISTER OF THE RUSSIAN FEDERATION VLADIMIR PUTIN

Vladimir Putin's opening remarks:

Good afternoon, friends,

First of all, I would like to thank you for the invitation to take part in your work. I believe today's meeting is very important. Almost one quarter of Russia's population live in villages. People in attendance here are those whose work defines the level of social welfare and, to a great extent, the living standards of millions of rural people. That is because people trust the local rural authorities with solving the issues that ultimately determine the quality of their lives. My colleagues and I realise that you are facing many challenges. Certainly, we need to join our efforts and try to improve the effectiveness of the local rural authorities' performance and expand their powers.

I will begin with the key issue that concerns each one of you, but which has not been properly addressed so far. I am talking about the financial base. Rural communities and municipal districts are almost fully dependent on higher authorities' budgets. For over half of such municipal entities, local revenues account for less than 30% of their budgets. We have all the numbers: local revenues of 8,009 out of 18,954 rural communities account for 10%-30% of their revenue, and for 3,150 rural communities this number is as low as 10%. Rural communities are in a particularly difficult situation. Local revenues of half of them are below 1 million roubles, but these rural authorities have many responsibilities. What does "many" mean? Basically, they have the same responsibilities as other levels of authority. Russian municipalities are very different in nature, too. Under the law, rural authorities have over 30 functions. It is very difficult to exercise the powers with so scant resources, even impossible at times. For this reason most rural administrations are forced to delegate the functions that they cannot properly execute to the regional authorities. This goes for land use regulations, issuing construction permits and even organising leisure activities. These are just some of the many issues that should be settled at the local level but are not. So, we have local government on paper without the necessary funds or incentives for proper development. Then there are staffing shortages, too. Often, we have about one municipal worker per 1,000 rural residents. I say "about" because it's an average number. One person has to do so many things at once, and in some cases these officials do not have the requisite managerial skills or professional knowledge. I believe that the regions should participate more broadly in training and improving the skills of municipal workers – first and foremost, in the rural areas.

Currently we have one person working as a lawyer, an economist and an accountant in our rural administrations, with salaries as low as 5,000 – 7,000 roubles per month in certain Russian regions. All of that taken together diminishes the status of local government officials in the eyes of the local population, along with the prestige of the whole system of power as such.

I know that you have quite a few well-grounded complaints about Federal Law No. 131, On the General Principles of Local Government. We should cover this in more detail today. Let us discuss your proposals, if you have any.

What I want to say is that, first, we need to align our financial relations, including the procedure governing the provision of interbudgetary transfers at the district, regional and village levels. We must develop clear criteria for providing financial aid to the rural governments that are not dependent of the whims of the higher-level authorities.

Most of you know this, but I will say it anyway: according to surveys, the effective combination of all interbudgetary regulation mechanisms, including financial aid and the transfer of tax deductions, is present only in a few Russian regions, such as the Voronezh, Kaluga, Volgograd, Rostov and Penza Regions, and the Altai Territory.

The mechanisms for promoting financial independence are not used in full in the Oryol, Tambov, Tver, and Omsk regions, nor in the republics of Mari El and Tyva. This is clear from the financial documents.

Second. The federal and municipal authorities should make full use of the mechanism for transferring deductions from federal, regional, and local taxes and dues to the lower-level budgets. The law provides for such transfers. I believe that a significant part of the personal income tax should stay in the local districts and rural communities. This is a difficult issue, but we should nevertheless address it. This will provide a strong incentive for the municipal authorities to create new jobs, lead businesses out of the shadow, increase salaries and form new businesses. We plan to make the bulk of proceeds from issuing patents to individual entrepreneurs available to the municipal district authorities. In their turn, the municipal authorities should make provisions for allocating a portion of these revenues for the benefit of rural communities.

Third. I agree that rural communities should have additional sources of income. Case in point: today the local authorities must reveal administrative offenses, including environmental violations, but the ensuing fines don't find their way to their budgets. Therefore, there is no motivation for them to ensure compliance with the law. I believe that the administrative fines should go to the budget of the authorities whose local environment was damaged. The growth of local revenues depends on you taking a proactive stance, my friends. You need to encourage the creation of new businesses and jobs and support small and medium-size businesses in rural areas.

You know better that anyone, including me, that many people in rural areas are able and willing to work. Farms and subsistence farms account for almost half of the agricultural output in Russia. We should join our efforts and help people in rural areas expand their operations and stand firm on their feet, so that they don’t have to sell their products under the table but instead have direct access to farmers’ markets and can work in a civil manner. This goes beyond agriculture and also applies to non-farming businesses, such as services, motor transportation, manufacturing of building materials, and the recreation and tourism industry.

Just don’t put up any barriers here. Instead, you should support the initiatives. This will pay off in terms of increased personal incomes and improved local budgets. About 105,000 rural residents received government assistance under the regional employment programmes, which in turn created another 36,000 new jobs.

We will also help rural entrepreneurs. Next year, we plan to launch a special federal programme for new farmers. Anyone willing to start a business in rural areas will be issued a government grant, a soft investment loan and a one-time settling-in allowance. In addition to that, we will expand the programme for family-run dairy farms.

We will certainly develop agricultural and consumer cooperatives and expand the network of businesses engaged in the procurement, processing, and marketing of farm products. Please come up with proposals on how we can use the capabilities of the Russian Agricultural Bank and the State Agro-industrial Leasing Company. I think the regional authorities should co-finance such projects from their budgets.

There is another key rural development issue. This is an intrinsically Russian question about land. The next phase of large-scale land reform begins on July 1. It is designed to transfer land ownership to the people who live on it and to give villages the right to dispose of their land resources and derive additional income.

Friends, colleagues, I would like to say a few words about this. I believe that this is a very important part of today’s meeting. As you know, we have amended the law on the turnover of farming land. The procedures for marking the borders of land shares have been significantly simplified. The rural authorities should help people formally register rights to their land plots. We will relieve you of all extra expenses. The cadastral authorities will provide free information from the State Land Cadastre to the municipal authorities, including the cadastral certificate, cadastral excerpt and cadastral area plan. I would like to ask you to provide all information involved in the preparation of the projects for land marking to the owners free of charge, too.

I would like to draw the attention of the rural community heads and heads of cadastral authorities to the following: all procedures for land marking, cadastral and paper work should be conducted smoothly and without procrastination. People shouldn’t spend hours waiting in line or commuting; they shouldn’t be forced to pay intermediaries in order to get their title papers. Perhaps you heard me saying this at yesterday’s Government Presidium meeting: we are preparing to impose sanctions on federal officials who engage in any form of bureaucratic procrastination. I believe that we should apply these sanctions at all levels of authority. Regarding unclaimed land plots, rural communities will be able to use them at their own discretion, so long as they do so in a responsible and careful manner.

Federal Law No. 435, which introduced amendments to the law On Farm Land Turnover, authorises local government bodies to petition courts to recognise the municipal authorities’ title to unclaimed plots. Priority should be given to the farmers who actually tilled these plots or intended to use them for starting their businesses. The repurchasing price for such plots has been reduced from 20% to 15% of their cadastral value.

As you are probably aware, we have decided to use federal funds to compensate farmers for half the cost of formally registering their land plots. These funds have already been allocated in the 2011 federal budget. As we agreed, the regional budgets should co-finance the remaining part of the expenses.

A law is being drafted to allow farmers to build residential houses on farm land. Some time ago, I met with the farmers and they raised this issue. Work on this law is almost complete. I would like to ask all relevant federal agencies to secure all necessary approval as soon as possible, and I will also ask the United Russia party in the Duma to enact this law before the end of 2011. We should also be careful about the risks. Farm land should not find its way into the hands of speculators or land aggregators. All plots of land that have not been used for farming over three or more years will be subject to repossession. Please speed up the drafting of the government resolution defining failure to use land for farming. This request is addressed first and foremost to the Agricultural Ministry.

Federal executive bodies, primarily the Agricultural Ministry and regional authorities, should provide advice to the municipal authorities on implementing the land reform. We need to improve the villages’ ability to dispose of land plots and fill all remaining gaps in land laws. Therefore, I would like to tell you about a number of legislative initiatives.

Our plans in this area are as follows. First, according to experts, land titles are not available for over half of the state-owned lands. That is why we decided to authorise regional authorities to transfer their power to dispose of such land to local authorities. I would very much like to see regional authorities use this mechanism.

Second. Currently, land laws do not regulate the procedure for providing land to individuals on easy terms. We propose enshrining in law the transfer of plots of land for free fixed-term use by individuals who are already using them or plan to move to rural areas. First and foremost, this should apply to rural professionals, such as doctors and teachers, librarians and social workers. Quite possibly, such regulations can be also applied to people who wish to become agricultural producers.

Next. Families with three or more minor children should be entitled to a plot of land for free without having to go through auctions. This also applies to federal lands that the government will transfer to the municipal authorities for these purposes. A law on this has been adopted.

There is one more mechanism that I would like to mention. Currently, the title to housing deemed escheated property is transferred to the municipal authorities, and the land it is on becomes the property of the federal authorities. As a result, we occasionally run into situations where the municipal authorities are prepared to give a vacant house to the family of a teacher but without the adjacent land, which needs to be re-registered in the new owner’s name, and this takes an inordinate amount of time. This is absurd. The agencies responsible for these issues should look into this, come up with proposals and amend the law accordingly. We will do this in the near future.

We anticipate that if we manage this job successfully millions of Russian people will receive a permanent title to land, and municipal authorities will be able to improve their budgets.

Friends, our efforts to increase municipal revenue, improve land relations and create new jobs are aimed at achieving a major goal, which is to make rural areas attractive and comfortable to live in.

Over the past eight years, we have allocated over 40 billion roubles from the federal budget for the targeted federal programme, the Social Development of Rural Areas. Another 190 billion roubles have gone to rural areas from regional budgets and extrabudgetary sources. These funds have been used to improve housing conditions, including for young families and young professionals, to build gas and water supply lines, and to build general education facilities. We used these funds to build over 14 million square metres of housing and provide gas and water to over half of rural households. We have also improved electricity supply and expanded telephone services. To be sure, this is not sufficient, and there’s still much to be done. This year we will allocate another 26 billion roubles for these purposes, of which 8 billion will come from the federal budget. We have plans to build or acquire 915,000 square metres of housing in rural areas, including 510,000 square metres for young families and young professionals.

The decision was taken to extend the federal targeted programme, the Social Development of Rural Areas, until 2013. Work has also begun on a concept for a new federal targeted programme that will define the main areas of further improvements in the social, engineering and utilities infrastructure in rural areas until 2020. This far from everything we plan to invest in rural development.

As you know, we will pursue a series of health care modernisation efforts in the Russian regions this and next year. We will allocate 460 billion roubles from the federal budget to this end. These funds will be used to expand the network of primary care facilities, to repair hospitals, medical and obstetric centres, and general practitioners’ offices, as well as to buy modern diagnostic and treatment equipment.

Let me note also that next year we will begin transferring the authority for organising primary care from the municipal to the regional authorities. The healthcare buildings, facilities and other property will also be transferred. This is not a straightforward process, but let me tell you frankly that we have taken this decision with the sole purpose of improving the quality of service. Please note that we are offering very flexible arrangements whereby the federal authorities can return the powers back to the municipalities. We should take a very balanced approach to these issues and take note of the specifics of each region. Most importantly, we should remember that we are doing all this for the benefit of the people and act accordingly.

Next. Any village or town will evolve and survive if it has a school. It’s a given, as we all know. We should build basic education facilities and found branches of them in small rural developments. However, we should see to it that young people living in rural areas receive an education that is in no way inferior to the one that they receive in the cities. To this end, we have decided to allocate additional 120 billion roubles from the federal budget. We will begin the financing process right away. This year we will allocate 60 billion roubles and bring this number up to 120 billion in the coming years. These funds will be used to purchase equipment for school labs, gyms, medical facilities, and cafeterias. We will purchase enough workstations and establish broadband internet connection to let students participate in distance learning. Some schools have this already, some don’t, but we will get there. The point is not to shut down schools with low attendance, but instead to establish branches of major educational institutions so that rural children have access to quality education using distance learning opportunities. That way, the municipal and the regional authorities will cut expenses involved in maintaining such low-attendance schools.

We will stock school libraries with new books and buy the necessary vehicles. Then we will be able to ensure high living standards, including quality education and health care. We will connect rural town and villages with federal highways. Over 46,000 towns and villages don’t have hard-surface access roads. We have decided to allocate 5 billion roubles to build access roads from rural towns and villages to major highways. We will have allocated up to 7 billion roubles for these purposes by 2013. Certainly, we should take into account the specifics of such rural communities located in Siberia and the Far East, their growth dynamics and other factors. All of that should be considered during the allocation of funds. In other words, we should use a differentiated approach to each particular region. In addition, I think that local co-financing is another very important pre-requisite for the allocation of federal funds. We are discussing this issue with heads of regional administrations in an effort to make the regional contribution at least half of the entire amount.

I would like make a point to the regional authorities: you are about to receive a serious source of funding for building roads. I am talking about the regional road funds. I believe it would be fair if a major part of these funds goes to building rural roads. This would be a responsible and correct approach to regional development, all the more so as rural taxpayers make substantial contributions to road funds and are entitled to good roads just like the rest of Russia.

This calls for a revision of technical specifications regarding the construction of roads leading to businesses, farms and other rural facilities in order to cut the time and financial expenses, on the one hand, and to make rural roads more functional and suitable for agricultural equipment, on the other hand. All of that should be done in compliance with safety regulations.

A few words in conclusion. We live in a vast country with vast natural resources and outstanding human potential. The tempo of the nation’s development depends primarily on its citizens, their initiatives and desire to improve life in their village, town, district, city and country, as well as on the quality and effectiveness of local governments, which are directly involved in the people’s lives. Russia begins here, at this level.

Together, we will do all it takes to achieve our goals so that Russian people feel that they are being taken care of. Thank you for your time.

* * *

Vladimir Putin’s comments on forum participants’ speeches

If I may, I’d like to make a few comments on your speeches.

These issues are very important. It is very good that we have the opportunity to meet you like this and to discuss such crucial issues. We must work together to find the best ways of resolving the difficult tasks that face the country, municipalities, regions and the federation as a whole.

Let’s start with the urgent issues. I’m grateful to those who raised them in their speeches. First of all, these are issues of tariffs, the development of the infrastructure, gas and electricity supplies, taxable income, one’s own sources and the revenues of municipal budgets. These issues were mentioned in every speech. They influence the development of the transport infrastructure, roads, and gas and electricity supplies, and so on and so forth. We must make difficult decisions. If I may, I’d like to sort through these issues one by one, as they were introduced.

First of all, there is the issue of the revenues of the municipal budgets. The speakers have made a number of serious proposals that may considerably change the current state of affairs. One of the proposals (made by the first speaker) is to levy taxes from infrastructure facilities – railways, gas pipelines, high-voltage transmission lines, etc. We have discussed this issue. Moreover, I was amazed that the Finance Ministry, which everyone so openly criticises, considers this solution worthwhile.

There is one more problem. It concerns the Defence Ministry’s facilities and lands that are exempt from taxes. They have to pay 0.3% from the cadastral value (we are now thinking about this). Exemptions may be lifted. We must analyse what facilities, including real estate, and lands are being used for their intended purposes. We must scrutinise everything. We must consider everything in a calm manner and start moving in this direction without any haste. I can tell you this straight away.

A few words about linear facilities, for instance gas pipelines. By the way, speaking about gas supply, in 2010 we commissioned 5,200 km of gas-distribution networks and supplied 57,800 houses with gas under the federal targeted programme “The Social Development of Rural Areas up to 2012”. In the past year up to 52.6% of houses in rural areas were connected to gas supplies as compared to 47% in 2009. This is a big step forward in one year on the national scale. Some regions maintained effective cooperation with Gazprom whereas others didn’t (I’m not going to list them here but we know them). In this context I’d like to say that Gazprom Mezhregiongaz (a division of Gazprom) only pays for the construction of gas pipelines linking residential areas. In other words, it brings gas to area, but the regional and local authorities are responsible for laying the street networks and for bringing gas to the end users. It often happens that Gazprom fulfils its part of the deal, while regional and local authorities stop at that for lack of resources. We won’t discuss the reasons here, but the simplest excuse is lack of money. This work requires coordination. It turns out that Gazprom has invested funds but they serve no purpose because they do not reach the final users. This work must be clearly coordinated with the regions and municipalities. This is the first point.

Now the second point that is very important. It is possible to zero out the increase of tariffs, but in this case Gazprom will stop building these networks. You will understand that it simply won’t have the funds for this. Now we are resolving a very important and sensitive issue. I haven’t yet dared sign this resolution. I’m referring to the resolution on limiting the increase of tariffs of the so-called natural monopolies (Russian Railways, gas and electricity companies) to the growth of inflation next year. We think inflation will be around 5.5%-6.5%, but even this is a big deal for these large enterprises, the so-called infrastructure monopolies, because this will drastically restrict their development potential. Russian Railways, for one, will find it very difficult even to carry out simple repairs. We must calculate everything thoroughly here. I can tell you that adjusting the growth of their tariffs for inflation and increasing their tax burden is simply very dangerous for the country. We must adopt a very balanced approach to this issue and weigh everything… We must measure the cloth not thrice but thirty times before cutting. But this issue has been raised with good reason and I must say that we won’t only be thinking about it but also moving in this direction. We will resolve the issue of the growth of tariffs and of limiting it next year. We’ll make this decision anyway. It’s hard for me to cite the parameters now. I’m afraid to do this in advance, to announce this in public now. But we will certainly move towards restricting tariffs and will think of how to regulate the replenishing of municipal budgets step by step, without any rush, and we’ll do this, among other things, at the expense of the infrastructure facilities. I’m telling tell you this in quite definite terms.

As for rural roads, I have already said in my speech and want to emphasise once again that we have made a decision to establish regional road funds. But every region must determine their own priorities in using these funds. According to preliminary estimates, they receive very handsome sums that are a real source for developing roads. I cannot but agree with the last speaker: when we speak about rural areas, we must primarily think about transport safety for children. If we talk about restructuring the school networks and transporting children, we must resolve the issues of transport and roads before we shut down small schools and begin transporting children to larger ones. Any other decision would be absolutely irresponsible and wrong.

It was said (ostensibly I said this in my speech) that we must do everything to keep all small schools by all means. I’d like you to understand me correctly – I haven’t said that we must keep all small schools by all means. You should decide on where it makes sense to save them. We have a vast territory and shutting down everything in one go would be a grave mistake because it is impossible to deliver children to well-equipped regional educational centres or secondary schools on our enormous territory. We said it is necessary to develop roads, but this task requires time and money and we cannot do this overnight. And we do need to upgrade education now. So, what should we do? What measures are proposed as part of the reforms in school education and the school network? The government has allocated 120 billion roubles for the next two and a half years. What is the most reasonable way of spending this money? I’d like to repeat that we will allocate funds for transport, school support, the purchase of equipment, and in part for repairs. The money saved by the regions must be channelled into increasing the salaries of teachers. Their average salaries must be brought up to match the regional average. Many governors have already told me that this will be done by September 1 of this year. I understand that not every region can do this, but some have already done so. Maybe this will not be accomplished so quickly everywhere, but this must be done as soon as possible.

What does this mean? This means that our goal is to consolidate the common educational space of Russia and guarantee uniform educational standards in schools. What should we do with small schools in those places where it makes sense to save them? The proposal is to transform them. We should create large educational centres – good basic schools – and surround them with a network of so-called small schools. The latter’s managerial personnel can be cut down because the management must be transferred to basic schools. It is also possible to reduce some other expenses but it is necessary to raise the quality of education (as I have already said here) by making use of distance learning, for one. We will provide the funds for the purchase of the required equipment and the retraining of teachers. You must save small schools whenever necessary. For the time being we cannot achieve our goals in a different way and we probably shouldn’t.

Incidentally, in distributing the funds, we have agreed with the governors of the regions to send twice as much for every rural student than for any other under the programme of upgrading school education.

Now a few words about healthcare. No doubt, it is essential to earmark funds for obstetric centres. I’d like to draw your attention to the following. Working at the level of the Ministry of Healthcare we have conducted a large amount of work with the regions. We have concluded agreements with all the regions – every region without exception! They specify how much money is earmarked for each region. It is up to every region to decide how much money to allocate to the rural areas, the district hospitals and so on – because this is the level of regional responsibility. These programmes have already been signed but they can be adjusted. You must be more active in working with the regional governors. We are ready to support you. I think – and I remind the regional governors and the Ministry of Healthcare to pay attention to it –that rural areas need to upgrade medical services for the people. Of course, money is required for this, but the money is available and must be distributed properly.

Now I’d like to speak about the level of deductions in tax sharing. As far as I know, in the past municipalities did not establish this level themselves but these deductions were simply larger. You know, I think we should look at this once again – you are quite right. We should look at how these taxes are split and think about how to replenish municipal budgets. We’ll certainly think about this.

Now I’d like to speak about support for rural areas. We started supporting them 10 years ago. Before rural areas had not received any help, and we know what kind of condition they were in. For all the difficulties – and we know that our rural problems go through the roof – the conditions in agricultural production have undergone a fundamental change. I have already said this and can repeat that I have just received confirmation of my words at the exhibition. Eight years ago we imported 1.6 million tonnes of poultry and this year only a little more than 200,000 tonnes. Our producers say that we can do without exports now and even ask us to do without them. This is a major achievement.

We have increased pork production several times. We still have problems with cattle. Obviously, beef cattle breeding is not yet up to the mark. It is only making the first steps, but many farms already have their own breeding herd.

We are developing dairy production. I’ve just talked to one of the producers; he told me that the dairy market is too small and they are talking to Kazakhstan and starting to sell their products there. This is a major achievement, too, and credit for it goes to you. Thank you very much.

We remember how difficult the past year was. We had a drought for two years running and it was a big ordeal for agricultural producers. We recently recalled the drought and famine in the late 1920s and the early 1930s. Do you remember the consequences? Millions of people starved to death, although the drought was not as severe as in the past two years. You realise how different the consequences were. We still manage to go through such trials reasonably well because of the development of agriculture and the government’s recent support for it.

This year we have allocated 150 billion roubles from the federal budget directly for this purpose. Another 150 billion roubles will come from Rosselkhozbank (Russian Agricultural Bank) and other financial institutions. We continue to subsidise loan rates for agricultural producers. We’ll continue doing this, and, as you know, in some areas we subsidise up to 80%-95%. We have extended all loans that were taken last year because of the drought. We have also earmarked additional funds for the shipment of grain from the regions with a decent harvest to those regions that were short of grain. We have started subsidising these shipments. We have also allocated an additional five billion roubles to the farms that will continue to raise cattle regardless of any difficulties. By the way, one farm director told me that he kept his cattle and received the money.

We made additional decisions on banning grain exports, which you know about. Now things have come back to normal. Starting on July 1, we’ll lift the ban again in the hope the forecasts of the Ministry of Agriculture will come true and we’ll receive the expected 85 million tonnes of grain this year. It goes without saying that we will continue supporting rural areas in every part of the country and will consider what else we can do for this purpose. In any event, the government will not neglect to support a part of the country inhabited by almost 40 million people.

* * *

Vladimir Putin’s responses to forum participants:

Question: I am the mayor of Kagalnitskaya, a rural community in the Rostov Region. As I listened to my colleague Svetlana Kutenko (the mayor of the Bystrogorsky rural community in the Tatsinsky District, Rostov Region), I was thinking: “Poor railway!” They had problems with cross-ties, which they had to get from another community, while we got paving stone from them. We painted those cobblestones, made a pond, put some swans in it – a little piece of beauty in the heart of the village. We might host a master class in landscape design now!

Vladimir Putin: Only please don’t dismantle the rail track!

Question: Mr Putin, I have another question. It’s very nice to hear about upcoming rural road construction grants, of course. It’s one of our critical problems, one we deal with every day. But it frightens me to consider whether we will actually be able to utilise these funds, because we have another huge problem that confronts us daily. The funding of rural road construction, maintenance and upgrading requires a complete set of design documents, including reports on prospecting, a topographic survey, and expert approval. These papers cost from 0.5 to 2.5 million roubles per kilometre of road, at times equalling the cost of the construction itself. The situation is even worse with footpath repairs, with design costs often exceeding expenditures on the job itself. Take an example from my village. When we decided to repair a small, 330 metre stretch of paved footpath in Kagalnitskaya, we made an estimate of the cost: drawing up design documents would cost 624,000 roubles, while the repairs would cost 508,000 roubles. This doesn't seem to be very rational to us, and so we kindly ask you to do something to direct some funds towards road repairs in villages. We could decide whether to replace design documents with designing estimates, which would cost only 20,000 roubles for that 330 metre path. This way, we can save something out of our modest budget to pay for the repairs. Thank you.

Vladimir Putin: You are perfectly right, I cannot add a word to what you said. We must untangle the red tape. The Ministry of Regional Development will make relevant amendments to the government decree. Mr Basargin, the minister, is here, and has heard everything. I fully agree with your idea, and we should implement it as soon as possible. I understand your problem perfectly, which is that you cannot obtain the funds without a stack of corresponding documents. But who will fund your projects? And where will you find the money to pay for these documents? So you are in a vicious circle, and I fully agree with you that it must be broken.

Question: Mr Putin, I am from the village of Rodniki in the Solikamsk municipal entity of the Perm Territory. The [federal] government recently allocated tens of billions of roubles for the development of neighbourhoods and courtyards. According to the media, however, the funds are intended only for Moscow, St Petersburg and regional centres. Why is this?

Vladimir Putin: Because of budget financing limitations. The total grant amount will be slightly over 40 billion roubles, of which federal allocations make up 26 billion, the rest coming from regional budgets. The situation there is very complicated. I often visit the regions, I see with my own eyes what’s going on there, and I admit that it's even worse in your village.

But I'd like to explain what's going on. It is not a federal duty to supervise courtyards and adjacent roads, and to fund their maintenance. However, we have met the regional governors halfway, and have allocated additional funds in order to start comprehensively addressing the problem. These grants, however, will certainly not suffice. Whenever I travel to other small towns, they always ask me why money only goes to regional centres. It's not just Moscow and St Petersburg, but the regional centres as well. Most likely, they too find the grants inadequate. This is solely due to budget constraints, and also because this is not our function.

I would like to return to the theme I was speaking on in my address, and in my comments about the opinions of our colleagues here. We have determined to establish road funds, and I very much hope that you will spend them wisely. We have increased fuel excises while retaining old tax rates, despite the objections from the business community. I have just met with road building and maintenance businesses. “Abolish the tax if you are bloating excises,” they said. We will think it over but at any rate the money involved is huge which must be channelled into top priorities, including the matters you have just mentioned. We will certainly join efforts with regional governors to take stock of the matter.

Mikhail Degtyarev: May I? Mr Putin, ladies and gentlemen, my name is Mikhail Degtyarev, I am the Brodokalmak village mayor in the Chelyabinsk Region. I am also the head of the Chelyabinsk regional association of rural and urban developments.

We made certain analyses and drew up a report about the funding of local government in our region. This is what we found out: small town and rural authorities have 50 duties now, compared to 30 they had in the past – all that with miserly funding. I would like to submit that report for you to find out the true figures. You should bear them in mind when additional funding for rural and small town communities is planned.

Vladimir Putin: Good, thank you.

Vladislav Timchenko: Good afternoon, Mr Putin.

Vladimir Putin: Go ahead, please.

Vladislav Timchenko: Vladislav Timchenko, head of the All-Russia Council for Local Self-Government. Mr Putin, you announced the establishment of the Russian Popular Front in Volgograd on May 6. Hundreds of NGOs support the idea. All regional branches of the Council for Local Self-Government discussed a memorandum and proposals for its action programme. More than 500 pragmatic and constructive proposals have come to the council. It is gathering for a congress in Moscow on July 11, with more than a thousand delegates and guests. The congress will discuss all those proposals, including the ones made at this forum today, and make decisions.

Mr Putin, my colleagues and I know how busy you are, but please come to our congress if you can spare some time. Believe me, we will propose practical items for the Popular Front programme as the front will undoubtedly provide an opportunity to consolidate all population groups in Russia. It will represent all municipal units – urban districts, villages, small towns, and metropolitan areas. I expect a constructive discussion from which the state will benefit. We will support your initiatives and are willing to be partners to the front.

Vladimir Putin: Thank you very much for your support. I hope it will be another effective tool of direct contact with the colleagues represented in this hall. The dialogue will help us to take better stock of problems and make successful decisions in due time. Thank you very much.

Question: I am the Otradnoye village mayor in the Uglich District, Yaroslavl Region. Mr Putin, I have two questions to ask you. First, our village possesses taxable property. Could it be exempted from taxes to help the community.

Second, we grew up in the 20^th century, and when we were young, we took part in all kinds of farm work. Now, the law bans the employment of schoolchildren. What could we do to have the legislation amended? Then, the law should stipulate the construction of training farms attached to schools for young people to learn rural trades and stay in the countryside. We have opened a management school to train our own municipal officials but if we want to educate farmers, we need school farms and money to maintain them. Thank you.

Vladimir Putin: Do you mean vocational training?

Response: No, just small farms attached to schools for all students to train…

Vladimir Putin: You mean something like shop classes?

Response: That’s right.

Vladimir Putin: All right, we’ll think it over. Let’s agree on this: the programme for modernising education, which I mentioned today and which is generously funded, will envisage this, among other measures. Education Minister Andrei Fursenko is here. Mr Fursenko, please take note of this proposal. Thank you.

As for tax exemption, you know the fiscal system has its general principles, and any exemptions destroy it. I think a colleague said here earlier: “When you introduce benefits for one, please compensate our shrinking tax revenues through subsidies.” That is the general principle underlying the entire fiscal system. However, I will bear it in mind and discuss it with my colleagues.

Vladislav Vinogradov: Vladislav Vinogradov, head of the Kharabali district in the Astrakhan Region. It is good to gather here today, in Mordovia. We are greatly flattered by your presence because local self-government boils down to civil society and the authorities at the same time. This should be understood, and it is good that you realise it, Mr Putin. We see that you do, and we are grateful to you for it.

Our organisation is collecting proposals to the Popular Front. One idea is often advanced and I know it has support from a federal television channel and municipalities. Mr Kirichuk (Stepan Kirichuk, representative of an executive body at the Federation Council, the upper house of the Federal Assembly of Russia) and Mr Basargin support it, too. Local authorities are harassed nonstop by inspectors and the prosecutor’s office. Today, we have a kind of holiday – not exactly a celebration but a day of local self-government, when all local communities have gathered to think about the roads local self-government should take. In fact, local self-government is the basis of all government while municipalities and regional authorities are public services. We have come to a consensus already. Please support us through your parliamentary party.

Vladimir Putin: All right.

Vladislav Vinogradov: So you will extend your support? Thank you very much.

Vladimir Putin: I promise I will help, and I will certainly work on the problem with my colleagues in the State Duma. You hit the nail on the head: the law defines it not as the state level of government but as self-government. All the same, it is part of the state. But at the same time, it is self-government, civil society. That’s what makes it a tremendously important level of government. After all, I said in my opening remarks that ordinary citizens don't care about names – municipal, regional or federal. That’s government, and it’s the only thing that matters to them. The attitudes of Russian citizens to the state in general depend on our performance. Local self-government is a critically important thing, and we should look for ways to support it. This is one of them. It will enhance its prestige and enable people not only to take a look at it as part of the daily routine, of which we all have too much, but to stop for a considered evaluation of the job to see who is coping the best and discuss the future. Let us support this idea.

Question: Mr Putin, I am the mayor of the village of Vata in the Nizhnevartovsk District, Khanty-Mansi Area. I would like to ask you a question. Though we all know that Gazprom is connecting villages to the gas grid, we are fully aware that many villages are remote from oil mainlines and, possibly, it does not pay to build pipeline spurs to reach them.

Is it possible to develop autonomous gas supplies of such communities, and can such development be included in federal and regional programmes?

Vladimir Putin: It is possible and even necessary to do so. You are right. But you probably meant gas pipelines when you said oil pipelines. As for remote communities, especially in Siberia and the Far East, we should certainly develop the liquefied gas industry and promote the use of liquefied natural gas.

Gazprom has such plans, but I don’t think it should be the only company engaged in this activity. So-called independent producers can make the basis of its development. Please pay attention to it and support them in every way possible. The government will also do it.

Question: Mr Putin, I am the mayor of the village of Azov in the Azov District, Omsk Region. Thank you very much for the support of the rural areas. I have been a mayor for six years. We have been actively working on federal programmes throughout this period. We have just received support for gas supplies, housing construction, new accommodation for the residents of temporary housing, and many other areas.

I have a question concerning street lighting. We spend 750,000 to 800,000 roubles a year on it out of the village budget. Advance payments and present tariffs are among our greatest problems. At present, we are charged 4 roubles a kilowatt, just as industrial companies, while rural residents pay 1.76 roubles. Can these tariffs be changed and advance payments abolished? Thank you.

Vladimir Putin: Mr Basargin, just what advance payments are meant here?

Viktor Basargin: For the use of electricity.

Vladimir Putin: So they have to pay in advance?

Viktor Basargin: That’s an arrangement for supply companies.

Vladimir Putin: This matter must be thoroughly reappraised. I don’t quite see why advance payments are required from you at all. We should make a thorough analysis of the supply companies’ performance. I promise that we will look into it at a government meeting, and appraise the current practice in this sector. As for tariffs, I have said already that we will try to keep them at the inflation level next year, while this year’s national average is not to exceed 15%. However, some regions exceed that ceiling. We will probably have to put up with it when it is substantiated by an underdeveloped electric supply infrastructure. In some instances, regional governors submit documents confirming that 15% is not enough for network maintenance and development, which occasionally requires 20-24%. But tariffs should be always reasonable, at any rate.

I have dealt with this issue many times but we will return to it again. Judging by information from the regions, we managed on the whole to bridle the tariff upsurge in the first quarter, and even reduced them in some areas. They soared by 32% and even by 40% in certain regions, but the rises were eventually reduced to 15% or at least to 24% at the maximum, as far as I know. But we will consider it again.

Tamara Savinykh: Mr Putin, ladies and gentlemen, my name is Tamara Savinykh and I am from the village of Birtyayevskoye in the Kirov Region. It is a hard-working village – farmers, doctors and teachers. But we also like singing and dancing. That’s where we have a problem. I mean our cultural centre, which used to be excellent but now it needs to be renovated and we haven’t been able to afford it for several years. We need about ten million roubles to finish its reconstruction. But something is being done for it now that regional Governor Nikita Belykh has looked into the matter.

I would also like to say a few words about the Spark, our folk song and dance company. It has thirty performers on the staff. The company was established 35 years ago. It goes on foreign tours every year. Even at such hard times as now, it resumed regular tours four years ago. The village budget is 5 million roubles, 3 million out of which goes to the Spark and the cultural centre.

It’s impossible to disband the company, whose performers, all of whom are Merited Workers of Culture, have given their all to the arts. I think it is our honourable duty to support such known folk companies as Spark. Thank you.

Vladimir Putin: That’s right. Such work should be reflected in the rural development programme, as I said. I call on the Agriculture Ministry and the Ministry of Culture to pay attention to this. As for the Spark company, please give me the necessary papers, and we will see what can be done to promote it.

Sergei Makhalov: My name is Sergei Makhalov. I am the mayor of the village of Smolny in Mordovia’s Ichalki District.

Mr Putin, Smolny national park in our municipality is federal land. Part of the social facilities that are essential to us…

Vladimir Putin: What did you say its name was?

Sergei Makhalov: Smolny national park.

Vladimir Putin: Another Smolny? With the cruiser Aurora anchored behind the bushes?

Sergei Makhalov: Not yet.

Vladimir Putin: Thank God! Keep her in a quiet harbour.

Sergei Makhalov: A part of our infrastructure – residential houses, the cultural centre and the first-aid point – are either in the park or in federal holding. The proprietors don’t maintain them or make any repairs. The structures are dilapidated. Is it possible to make the holders maintain the property properly, or should it be transferred to municipalities with funds for capital repairs?

Vladimir Putin: That is what must, not should be done. That is absolutely correct. If the owner cannot maintain the property, he must cede it. Here, however, we have another problem. You certainly encounter it – for instance, in your contacts with the Defence Ministry: some federal agencies are willing to cede property but not in its proper state, while they should make repairs before. We must see to it. Now, however, the matter concerns the reserve’s property. Does the reserve have a federal status?

Sergei Makhalov: It is federal property in the operative management of the national park.

Vladimir Putin: Let’s make a note of it. What region is it?

Sergei Makhalov: Mordovia.

Vladimir Putin: So it’s Mordovia. I will talk it over with the governor. We’ll look into the situation, really. After all, this is not his but federal property, so this is the correct way to pose the question. Either the project is normally maintained or it should be ceded to regions or municipalities.

Go ahead please.

Antonina Tyurikova: I am Antonina Tyurikova from the Gryazovets District in the Vologda Region. Mr Putin, two problems must be addressed to build a house. One concerns the land plot and the other money. There is a good programme for the social development of rural localities but, regrettably, in compliance with the Housing Code, the recipient of a land plot is automatically removed from the waiting list for improved housing and the list of programme beneficiaries, and is therefore no longer entitled to grants…

Vladimir Putin: You mean construction grants?

Antonina Tyurikova: Yes. Mr Putin, please address this problem at the legislative level. Thank you very much.

Vladimir Putin: Yes, it is just. I will certainly make a note of it, and I will not forget to do it. If I’ve got it right, a person on the housing waiting list is entitled to a particular grant but automatically loses this right as soon as he receives land.

Antonina Tyurikova: He is removed from the waiting list for improved housing …

Vladimir Putin: So that is how the Housing Code has it?

Antonina Tyurikova: Yes, the Housing Code.

Vladimir Putin: Let’s consider it settled. I will certainly order the relevant government agencies to look into the matter, and I will talk to deputies.

Antonina Tyurikova: We will be very grateful.

Vladimir Putin: Yes, that’s absolutely correct. The possession of a land plot does not guarantee that a home will be built there. That’s quite right.

Alexander Nekrasov: Mr Putin, my name is Alexander Nekrasov. I am the mayor of the village of Tornovskoye. I accepted the office 19 years ago after I worked for 18 years as chief agricultural specialist.

What my colleagues said and did was quite correct. I agree with everything. However, there is a question I feel obliged to pose. It has to do with what my colleagues from the Kostroma Region said. Our village is also involved in programmes. We took part in capital housing repairs, and spent 18.5 million roubles on it. We participate in the construction of gas supply networks and the provision of other public amenities. We took part in a regional competition and won an award. But we have a big problem. I feel obliged to speak up. I will be 60 next year. I might retire soon, but the problem will remain for other people.

Mr Putin, I’m referring to the problem of water supply. We talked here about this and that, and said that energy fees should be reduced, and so on and so forth. But we were beating around the bush. I never heard the water problem mentioned. How should we address it? When a man comes home from work tired and dirty and cannot take a shower, even the prettiest and most brightly painted washstand and basin won’t make him happy. Public discontent is building. Now, regarding electricity fees. I pay 1.9 roubles for a kilowatt as a private citizen, while the housing maintenance office which I established in the village pays 5 roubles a kilowatt. It cannot go on like that. We are at the end of our tether.

I have a practical proposal to make. We said to the people that the village will receive grants in a year or two, and life will be better. So my idea concerns the transition period. Electricity fees in my village should be reduced from 5 roubles to 1.9 roubles at least for the next three years. Our water supply is only for household needs. We have no production businesses – we do not even bottle drinking water. If my problem is solved by Mr Putin, we will have stability in community amenities. The arrangement should concern only rural developments, not urban. So public utilities will work, we will have smooth water supply, and people will be content, and our leaders, our village and all of Russia will deserve every compliment. Thank you.

Vladimir Putin: As you know, we liberalised the electricity market at the beginning of this year. The matter has its pros and cons but it was done to develop the electric industry and grids. Meanwhile, this country does not produce enough electricity and does not have enough grids. You surely remember last winter: unprecedented bad weather left entire towns and villages without electricity.

We have preserved tariff regulation for private users. Others, with token exceptions, do not have it any longer. However, you are right that fees should not be bloated. That goes without saying. True, electric market regulation remains only for private customers. However, the state needs relevant instruments. One of them is the Antimonopoly Service, whose duty is to make sure fees don’t grow uncontrollably. I am not quite certain whether we can abolish now the decisions made in the beginning of the year. But we can and must work to keep fees in check.

Why can’t we reduce the tariffs to the previous 1.9 roubles? What’s the problem?

We’ve attracted foreign and Russian investors to electricity generation and, slightly less so, to the development of electric grids. We and our partners agreed that they would make a sizeable investment in the development of the power industry. I have to acknowledge that at the first stage, at the beginning of the downturn, Russian companies did not fulfil their obligations. Now they are behaving and have invested tens of billions of roubles.

We must pay foreign investors their dues. Even despite the downturn, practically all of them implemented development programmes. If they invest in such programmes, they deserve profits. We promised them, in principle, to liberalise the market, so that the tens of billions of roubles they had invested by that time were not wasted. Despite all that, we certainly should correlate electricity fees with our users’ incomes. You are right on this point, you needn’t say any more. I agree with you on the whole. I only want you to see what guides us when we solve such problems. Putting it bluntly, if we swindle an investor once, other investors will not come to our other industries. So we need the utmost accuracy. However, it is our duty to pay attention to the correlation between growing tariffs and what consumers can afford.

Remark: Mr Putin, let me add a word. I have lived in my village for 36 years and I remember how the local electric company office looked 15-20 years ago. Now, it’s a luxury office with posh cars in front. I went there after I was notified that they were cutting off the electricity to my home. The guards did not admit me to the premises, and told me to wait. The entire time I was there trying to file a complaint my wife sat at home without water…

Vladimir Putin: That is why I said that fees must not exceed what consumers can afford. We will look into it again.

Response: Thank you very much.

Remark: You should discuss it with the Energy Ministry…

Vladimir Putin: We will assess the situation with the Energy Ministry and the Federal Antimonopoly Service.

Remark: Mr Putin, I am the mayor of the village of Obyachevo in the Komi Republic. Thank you for your visits to our republic and for resolving our problems.

We repeatedly petitioned against utilities fees in our republic. The greater the distance from Syktyvkar, the higher tariffs are. In Syktyvkar, it is 3,000 roubles per flat, and in our village, 200 kilometres from the city, six to eight thousand for heating alone. Can’t the transportation issue be solved at the republican level? The greater the distance, the more expensive coal and fuel oil are. Incomes in remote places are far smaller than in the republic’s centre while utility fees are much higher.

I want to thank you for paying attention to Federal Law No. 94. It ties us hand and foot. Grants are made in spring. Summer is very short in our parts, and autumn comes even before we are finished with pricing. Then it is snow again, and we have no time to do anything.

Our rural roads are in utter disrepair, though a federal highway is being built. I would like to thank the federal officials who are present here for their attention to our needs. We would like to support the measures you spoke about today. A road fund will be established, and we also have an environment protection fund, to which we want to appeal. We have one waste dump for 16 villages. Our district stretches 130 km in three directions from the centre. One dump is certainly not enough for this large area, and there are no plans for another within the next five years. The available programmes, a republican and a district one, don’t work. Thank you.

Vladimir Putin: It is up to republican authorities to decide on what experts know as sanitary landfills and ordinary people as dumps. Federal authorities cannot supervise all dumps though I promise to talk with the head of the republic about them.

As for transportation, perhaps you know how we settled fares with Russian Railways. Higher tariffs are applied to shipments over a particular distance, and they are reduced for routes exceeding so many thousand kilometres. The same can and should be done at the republican level, especially in such a vast country as Russia. We will look into it, and I will talk with the head of the republic.

Last but not least comes Federal Law No. 94. There are many problems with it. A decision has been taken, you know, to thoroughly update and amend it, or even to pass a new act instead of it. We are working on this now. We must see what has to be done urgently to put an end as soon as possible to the absurd situations you mentioned. We will think about it, too.

Dmitry Shvetsov: Good afternoon, Mr Putin. I would like to pass along greetings from urban and rural mayors of the Republic of Buryatia. They invite you to visit them.

Vladimir Putin: Thank you.

Dmitry Shvetsov: My name is Dmitry Shvetsov. I am the mayor of the village of Kabanskoye in Buryatia. I would like to call your attention to two problems.

There was a heated discussion of housing and utilities problems at a section meeting yesterday. Our representative made a good address today. However, I would like to raise another issue. The programme on the social development of rural areas is remarkable. In particular, it envisages two water pipelines in our village. We are building them with funds from the federal and republican budgets, and they are to be ready within the year.

The rules of the game were different from the present in 2009, when we finished the project design and were choosing a contractor. As that time, the federal and republican budgets assumed a greater part of funding. Only small sums came from the municipal budget. When allocations were made in 2010, another item appeared in the estimates – extrabudgetary resources. Here is an example: I need six million roubles to finish construction, and have to raise three million. Don’t think I am complaining. Money is surely an acute issue but I only want to say that rules should not change mid-game.

The situation is even more difficult in Kalisovskoye, the neighbouring village. They have only started the job. There are 1,500 residents in the village, and its budget is approaching two million roubles. They must raise 11 million this year for a project estimated at 20 million. Where will they find the money? I have no idea. There is another problem which also concerns housing and public utilities.

Vladimir Putin: Did you talk about it to Nagovitsin (Vyacheslav Nagovitsin, president of Buryatia)?

Dmitry Shvetsov: We did, Mr Putin.

Vladimir Putin: What did he say? Where could you get the money?

Dmitry Shvetsov: He told us to find an investor – the company that intends to service the pipelines later. But we have no such opportunity.

There is something else I want to talk about. Our village has a rather developed system of public amenities, with six boiler houses working on coal, a heat supply system 42 km long, and about 60 km of water pipes, not counting the lines to be ready this year. However, we have a bad problem with Boiler House No. 5, built some years ago in the centre of a neighbourhood.

Every spring, we have to remove tonnes of soot from nearby streets. So my question is quite simple: will we ever have gas heating in Buryatia?

Vladimir Putin: You certainly will. Do you know about your republic’s plans for gas supplies?

Dmitry Shvetsov: We know about the plans but the gas mainline to reach Buryatia is being built on order from above…

Vladimir Putin: Yes.

Dmitry Shvetsov: As far as I know, there is a preliminary agreement for bottled gas but we are afraid it will be expensive.

Vladimir Putin: It is certainly more expensive than pipeline gas. I promise to pay special attention to this. I fully realise how important it is. I will talk to Mr Nagovitsin and the people at Gazprom. I will order them to coordinate their activities and think about how to supply gas to Buryatia. We will certainly do it.

Dmitry Shvetsov: Thank you, Mr Putin. But I am a gentleman and I cannot ignore a lady’s request. A note has come from the back row with the request to read her question aloud.

Vladimir Putin: How do you know it’s from the back row?

Dmitry Shvetsov: It was passed from there. So can I read it?

Vladimir Putin: Do please.

Dmitry Shvetsov: Yelena Sokolova of Vindrei village in Mordovia writes: “Mr Putin, do you believe that communities bordering on forests are prepared to deal with the fire hazard season? My village has monthly revenues of 46,000 roubles, out of which I pay wages, contribute to funds, and pay utilities and communication fees.”

Vladimir Putin: Of course not. Not all our towns and villages can properly fight fires, though a relevant federal decision has been passed and we make decent fire fighting allocations. We are funding the regions and paying for the equipment of the Emergencies Ministry to be updated. The programme we have created envisages sizeable grants, 43 billion roubles. I must say that federal authorities cannot know what is going on in every village. This is up to regional authorities. They must be in direct contact with the people. In particular, they should establish volunteer fire squads. The relevant decisions have been taken. It is clear that the problem cannot be addressed without financial support. I call your attention again to the problem which our colleague has raised. What’s her name? Repeat it please.

Dmitry Shvetsov: Yelena Sokolova.

Vladimir Putin: Ms Sokolova is absolutely right. We have had many meetings on this topic in the government and at the interregional level. Again, I urge all regional governors to pay attention to this problematic situation. We must do everything we can to prevent a repeat of last year’s tragedies. I will check it again.

Dmitry Shvetsov: Thank you.

Vladimir Putin: Welcome. Let’s finish up this meeting. We have been talking for two and a half hours now.

Sergei Mikhailov: Mr Putin, my name is Sergei Mikhailov. I am the mayor of the village of Kidyshevsky in the Chelyabinsk Region. Consolidation experiments, as in the power industry, are always alarming. The postal service has launched an experiment in our region. The Russian postal service was established 300 years ago and never had any problems, even in wartime. Now postmen are dismissed as centralised delivery of pensions is introduced. The same is going on with drug supplies in small communities. We have to train paramedics and obstetricians for obtaining chemist’s licenses at the expense of the local budget, while drug sale revenues go to the central pharmaceutical store. They no longer service us to streamline their expenditures.

Vladimir Putin: The postal service is doing the same. As for drug supply, you know that supplies and the pharmacy network are entirely privatised. It is, however, possible to reduce local budget expenses through first-aid stations. Local authorities should not engage in this. I will think it over as the matter is extremely important. We will also pay attention to the postal service. I know its problems. There are tonnes of problems having to do with the need to maintain a wide network with numerous workers, and raising wages. They have to be thrifty, just as any business engaged in this sphere. At the same time, we should not put up with absurd innovations. So I have heard once again about a problem that is well known. However, we will address it once again and do everything possible to make sure that innovations are based on common sense.

Viktor Basargin: Colleagues, we have been talking for two and a half hours. Let the two next questions be the last. We have to finish up. Any objections? None? Thank you.

Question: I am from a village in the Smolensk Region. Its population is 5,034. The village is ten kilometres from Vyazma, a town of military glory, and 160 kilometres from Smolensk.

Mr Putin, in 2008 the Defence Ministry transferred buildings and utilities into municipal holding while retaining land, and stopped maintaining the area immediately after it was ceded. Road cleaning, garbage collection, weeding and everything else is now the villagers’ duty. More than that, we cannot arrange capital housing repairs because of this dual holding, as Federal Law No. 185 has to be complied with. The cantonment was built 15 years ago, and much has been done since: a pharmacy, a church and cooperative garages were built. We are deprived of a large portion of fiscal revenues. More than that, all structures built over these 15 years may now be legally qualified as squatter settlements.

Vladimir Putin: Why?

Question: Because land relations remain vague and so the buildings cannot be maintained, and one cannot register holding rights. We were informed that the ministry has no objections to ceding the land, but only at the villagers’ expense. But then, the revenues of a rural community and the Defence Ministry are incomparable.

We are also alarmed because the Defence Ministry might cede only plots occupied by transferred facilities and remain the holder of the entire area. That is why I would like to ask you how long all this can go on, and whether there is a chance to change the situation as soon as possible.

I have another request. I’m sorry. We Russians like making requests. Perhaps that’s the way we are made. I don’t think I will ever again see a prime minister in the flesh and at such close distance …

Vladimir Putin: Who knows.

Response: I am not so young. A cantonment built by the Magdeburg Company of Austria in 1995 for Russian military officers withdrawn from Germany makes up the greater part of our village. It’s a beautiful, tidy place with sophisticated social infrastructure. However, as something is always overlooked, they did not build a cultural centre and a gym. The village has a cultural centre outside the cantonment, so we can cope with the problem, but to build a gym is not so easy.

We have built a tennis court and a hockey rink. The construction of a major fitness centre will soon begin in Vyazma, our district centre, with the governor’s help. I know how many petitioners you encounter all over the country, but could you please help us to address the problem for our military? There are four Heroes of Russia in our village. Regrettably, three of them were awarded the title posthumously. Our school is named after Alexei Kutsykin, its former pupil who died during the clashes with Georgia. The military retire early, at the age of 45, as healthy men in their prime. That is why sports and fitness matter so much for the community. Incidentally, it is one of the few where birth rates exceed mortality. Please help us if you can!

Vladimir Putin: Okay, I promise. We will help through the ministry or United Russia, which has a special programme. We will solve your problem, I promise. Now…

Remark: Mr Putin…

Vladimir Putin: I am sorry, I would like to address the problem of property and land. It might be relevant in many villages, not just this one. So I want to mention what should be taken into account.

First, these procedures are terribly bureaucratic, so I want to say from the start that we will soon draw up a simplified procedure for property transfers from the Defence Ministry to communities.

Regarding not being able to collect taxes, this is not for lack of a regulatory framework, or any problems there. I will have another look at what's really going on in the regulatory framework and what is preventing the issues from being resolved. But as far as I see it, the obligation to pay taxes, in this case by the Ministry of Defence, comes immediately after... Not when they are registered, but when they are put on the books, and they must pay taxes from the start of their operations. And if they do not, it's a deficiency of the local tax authorities. We'll certainly work on it through the Federal Taxation Service.

Igor Petrov: The Republic of Sakha (Yakutia). Good evening, Mr Putin, my name is Igor Petrov and I am head of Maisky Nasleg municipality in the Amga Ulus, the Republic of Sakha (Yakutia). Ms Sokolova got a little ahead of me about the fires. We have been talking with different people here at the forum, and many of them, when they learn that we have come from Yakutia, ask us: What’s the situation with forest fires? And it is true, the Republic of Sakha is still smouldering. As I was leaving, there were some small fires in our area. And I would like to ask, when will the forests be put in order?

Here is an example: the heads of all the municipalities in my district used local manpower to fight the fire. What is a forest fire in the taiga? Half of Russia was burning last year so you probably know what that entails, right? The fire came as close as five to six kilometres from populated areas. And it's a well-known fact that women and older schoolchildren took part in extinguishing fires.

Our forest farm is not ready to fight wildfires – it has no equipment to locate and extinguish them, and so on. People beat the fire with tree branches. Can you imagine that? And I would like to reiterate that this problem is very serious. No tracked vehicles, no specialised aircraft, and so on – without special equipment, we will never be able to extinguish forest fires. We cannot deal with this elemental force. And none of the volunteer groups will be able to extinguish the fire. It's all good and well if there is a fire in a town, a volunteer squad works very effectively – they will engage the fire and apply some initial measures prior to the arrival of fire-fighters. But using the community to fight a large forest fire is quite problematic, to say the least.

How is it problematic? We bring the people out, we're responsible for their lives, and we're not sure that they'll come back out alive and unharmed. Therefore, the fire-fighting system must somehow be revamped. Viktor Maslyakov, head of the Federal Forestry Agency, came to visit us in our district. We discussed all this, but what I would like to see is not only support for our republic but for a system to be put in place. Thank you very much.

Vladimir Putin: I already talked about it earlier and I want to reiterate: we have approved a major programme for the federal authorities. Only forests and forest farms here, in the Moscow Region, have remained in federal ownership; the rest have been transferred to the regions of the Russian Federation. And so here we must act in at least two and sometimes three different capacities.

Regarding the federal level, I repeat – we have an extensive, very costly programme. We allocated 43 billion roubles alone for re-equipping fire-fighting brigades – and that's not all – and we also subsidise and provide relevant support to the regions of the Russian Federation.

It is vital to use a wide range of approaches to fighting wildfires, and municipalities must pay attention to it and allocate the necessary funds wherever possible and as much as possible. We are ready to support the regions, but you also need to work with people. Indeed, except for fires that occur due to natural causes, the majority of fires are caused by human negligence, and we must also carefully monitor this.

We have a vast territory and vast forests that are perhaps unique in the world. Yakutia is one of the largest republics in terms of territory, and what percentage of forest does it have? There is a huge number of forests in Siberia. We often do not have roads that go there, and the only way of fighting the fires is from aircraft. Here, too, there are certain limitations. But in order to restore these services, the necessary resources must be allocated.

Incidentally, we have allocated funds for both clearing and replanting forests affected by fires in 2010. All of these funds have been allocated. They are allocated from the federal budget and I hope they will arrive in time and will be used effectively. But we must understand that elemental force is elemental force. What happened last year? Many of you know a lot about this – the so-called crown fires that arise given high temperatures and strong winds. Even aircraft are powerless against these. Trenches had to be built around towns and various facilities. They were simply useless, because the fire jumped over hundreds of metres – over entire lakes. Do you understand? It is a real disaster, but it certainly does not mean that it is not necessary to prepare for tackling these challenges. Let's do it together. I repeat, the necessary funds from the federal budget are not only on paper, they have actually been transferred. We'll work together on this problem.

Question: Mr Putin, I have come from far away, from the Republic of Tyva. May I ask a question, please?

Vladimir Putin: Go ahead.

Question: You have visited the Republic of Tyva more than once. The Tyvan people appreciate and love you for your attention to our small homeland, the Republic of Tyva. I am from the Kyzyl Kozhuun, the rural community Sumon Sukpak, and I am chairman of the Great Hural of Representatives of the rural community, I am a delegated deputy of the Kyzyl Kozhuun municipal district of the Republic of Tyva. I have been working in the local government for 12 years.

I have a question about land. In April, representatives of the Kyzyl Kozhuun municipal district addressed the issue of transferring jurisdiction over the land for the Kyzyl-Kuragino railway line, located in Kyzyl Kozhuun, to Kyzyl, the capital of our republic.

The Kyzyl Kozhuun municipal district, would like to see this land remain under the jurisdiction of Kyzyl Kozhuun, since it adds to the tax base. Why am I asking this question? Because I am the chairman of the budget commission of the Kyzyl Kozhuun municipal district. This would give us the opportunity to replenish our tax base and supplement the budget of our rural communities. Thank you.

Vladimir Putin: Yes. Have you talked to Mr Kara-ool (Sholban Kara-ool, governor of the Republic of Tyva) about this?

Remark: Mr Kara-ool has led us to believe that…

Vladimir Putin: He wants to take this very land away from you.

Remark: …the issue of this parcel of land is already resolved at the regional and federal levels. Therefore we would like to ask ... Of course, this is a strategic plan and it affects not only the interests of our district and all of the republic, but at least a fraction...

Vladimir Putin: We have discussed the development of the infrastructure, roads, railways and so on. This is one of the most important transport routes for the republic, which really should provide more jobs, increase the cash flow to the republic's budget and we are talking about serious money. It is an entirely different quality of filling the republic's budget. It is about developing huge deposits of natural resources – primarily coking coal, both for domestic consumption, for our steel plants and for export. Indeed, this is a strategic route, but this is just the first time I hear about the issue of the municipality's interest. I do not know what Mr Kara-ool told you, but he and I did not discuss this issue. This is certainly a decision to be made by the republic's authorities, and not the federal ones. I will definitely speak with him about this, and addressing all other colleagues, I can only tell you that you need to reserve land in a timely manner. In a timely manner! You knew that roads would be built there.

Remark: Thank you very much.

Vladimir Putin: There's nothing to thank me for yet. But I promise you that I will talk with the head of the republic on this issue today or tomorrow.

Remark: Mr Putin, we will compile all the questions…

Vladimir Putin: No, your colleagues are here, let them quickly ask the questions and I will try to briefly answer them.

Anton Trudinov: Mr Putin, thank you very much. I am Anton Trudinov, deputy head of the administration of the Medvedevo municipal district in the Republic of Mari El.

Mr Putin, under the federal targeted programme “Social Development of Rural Areas,” one of the areas of development is the implementation of pilot projects in integrated development of rural communities. But, unfortunately, this endeavour is not being realised. In 2009, we developed a master plan. Our plan received an expert endorsement. The estimated project cost is about 120 million roubles. We have an investor who is willing to invest own funds. This is the Yola agriculture holding, which is known around the country – Yoshkar-Ola tinned beef is known almost all over Russia. But at the moment, unfortunately, no funds from the federal budget are being allocated for this project. I would like to ask you to help in this endeavour, because at the moment we are really ready to build a large community, which will have a new school, a kindergarten, a stadium and another 40 houses that the investor is willing to build at its own expense.

Vladimir Putin: Is it a matter of comprehensive construction of a particular community?

Anton Trudinov: Yes.

Vladimir Putin: And what is the size of the investment?

Anton Trudinov: The investment is 120 million roubles. But this money…

Vladimir Putin: This is 120 million roubles over how many years?

Anton Trudinov: We are ready to implement this project within three years. But what is the problem? After all, co-funding through the federal, republican and local budgets is envisioned, plus the investor's funds. If there are federal funds, the funds of the local and the republican budget, and, of course, the investor...

Vladimir Putin: In other words, we’re talking about the federal contribution? Thirty million? How much?

Anton Trudinov: Around this amount. Yes.

Vladimir Putin: Write it down, please.

Anton Trudinov: Thank you.

Vladimir Putin: We'll look into it, work through it and make a decision.

Anton Trudinov: Thank you.

Remark: Good afternoon, Mr Putin.

Vladimir Putin: Hello.

Remark: I am the head of the Khatukai rural community in the Republic of Adygea. You visited us during the flood in the summer of 2002 in the Southern Federal District. I'm not going to ask you for anything or to complain. We have problems, but we are trying and resolving these problems. And I think that in active cooperation with the regional centre and district level authorities, we will address all the outstanding problems. I want to thank you for your warmth and personal involvement in 2002, on behalf of all the local residents who remember you with kindness. Thank you for this.

Vladimir Putin: Thank you very much. Go ahead, please.

Question: I'm the head of the administration of the Yakshaisky rural community in the Zvenigov District of the Republic of Mari El.

Mr Putin, my question is as follows. Our towns are adjacent to the boundaries of federal forests, and we cannot expand the settlement, because the Forestry Ministry does not approve the plans. How do we solve this issue?

And my second question. I would like for the salaries of the heads of the administrations and officials of the rural settlements to be raised. Thank you.

Vladimir Putin: When we finish here, please come over and we will discuss the first part of your question in more detail. All right? Regarding salaries, I am sure it will meet with general approval. Go ahead.

Remark: Good afternoon, Mr Putin. The Republic of Mordovia, Lyambirsky municipal district, the Bolsheyelkhovskoye rural settlement. Alexander Yeryomkin.

I have several questions, but I will ask them briefly. I have written them down and will pass them on to you later. The first question. These are not my wishes, but the wishes of yesterday's forum participants. The issue of monitoring and supervisory bodies was raised. And just now someone also handed me a note. In particular, a proposal was voiced to include additional funding with the delegation of authority by the federal government to local governments, or to exempt local governments from penalties levied to the heads of municipalities or entities when there is insufficient funding for these items. The associated fines are still sizable. This is the first question. The second question ...

Vladimir Putin: Wait a second, let's assume that we thoroughly study your first question and definitely come to a decision. I fully agree with you: as soon as we limited the opportunities of monitoring and supervisory bodies to inspect businesses, they have picked other venues and are tearing everyone apart.

Remark: Yes, just on Monday, I already had two inspections.

Vladimir Putin: Yes, I understand.

Remark: And fines.

Vladimir Putin: I understand this perfectly well, because we have severely restricted inspections of businesses and unscheduled inspections are now allowed only with a warrant. The situation in that area has stabilised, so now they rushed to you.

Remark: Second question. Regarding the “Clean Water” programme. It was developed and adopted in large cities with a population of over 100,000. We asked for this programme to be adapted for small municipalities. Our rural settlement has a population of 4,368. Through the “Social Development of Rural Areas” programme, we could provide the town with all kinds of utilities – water, gas and electricity. There is currently an issue of water quality, which is very serious, because the piping is badly worn out. Accordingly, we must anticipate and address this issue.

Vladimir Putin: Here, let's be honest, all of you will understand me. This issue is related only to financial constraints. But the way the issue is raised is absolutely correct, because regardless of where people live – in large cities or small villages – they must enjoy the same services from the state. That is only right.

Remark: The third item is not a question but a proposal. We have significant infrastructure and we would like to ask for support not only for our settlement, but generally, for the cultural sphere, the preservation of Russian rural traditions largely depends on it. This is the third issue.

Next, the fourth question. On June 4, 2011, Federal Law No. 123 was adopted to give to local government control over management companies. And we would like to ask that this federal law be amended regarding the termination of contracts with management companies – there are no options at present. If some violation is detected, the local government raises the issue at general homeowners meetings of terminating services to housing stock. But we have no alternative – we live in a rural area – no management company or any other service organisation will work with us. Establishing other forms of housing stock management is problematic and takes time. Therefore, in this case, we propose to hold management companies administratively and criminally liable, and then we'll see how it goes.

Vladimir Putin: Wait a second. Criminal liability is a very serious thing. You know, we hand out prison sentences at the drop of a hat. Therefore, we must approach this very carefully. If someone has something stolen, the Criminal Code works effectively enough. There, I assure you, as they say in some places – there's a legal article for every person. And if something is stolen, then certainly you need to file the appropriate charges.

As for financial, economic and administrative responsibility, let us think together on what can be done to adjust this mechanism, to adapt it to small settlements. True, perhaps, it's hard to imagine that management companies will flock to small settlements. We need to think about this together. Yes, sanctions are necessary, but what kind of sanctions and how can they be made into an effective instrument of pressure on these companies?

I suggest that perhaps we, together with the union of municipalities, just sit down, brainstorm and make some proposals. We are ready to respond to those tools that you offer to improve performance in this area – an extremely important area for us all. Let's think about it.

With regard to the principle of such municipalities, which are very large, there are – as I recall – home-owners there who should get together, and the municipality should help them, and they have the right to terminate the contract. Here, I honestly do not see a problem – dissolve the contract and attract other companies.

Remark: But there are no other companies. That's the whole point.

Vladimir Putin: In your case there aren't, but I can tell you that, in fact, if the scope of operations is developed on a regional and municipal level, then, in general, by and large, it is not so important whether the town is small or large. A company that can work in hundreds of settlements – that's the whole point. You just have to develop the infrastructure of this business, and you need to help it grow, but be demanding of it. It's true.

Remark: Another question from my colleagues regarding land relations. There is a procedure for the submission of land for auction. The problem is that there is a mass of speculators and real estate agencies that are ready to pay a lot of money for parcels of land. And it turns out that the local residents and workers in the town are not able to get this land and continue to live there. That's another problem. Thank you.

Vladimir Putin: No, wait a second. So what? Resellers and dealers appear there. What are you suggesting?

Remark: Specifically for individual housing construction and development of private farming, I would like to suggest possible preferential terms for representation of rural residents – those who live there, who need better housing.

Vladimir Putin: Listen to me. I already said this in my opening remarks. Firstly, I believe that municipalities should be given land. Municipalities should be given the land. Especially land that is not used, including land not used by the federal government. That is the first point. Second, municipalities have the right to transfer these lands for free to those who live on this land and are going to work there or already work there. And this needs to be done. We will only support this trend.

The next decision that must be made is the following. People who live and work on the land should be allowed to build on agricultural land. We must finalise this decision.

Remark: Thank you very much.

Question: Mr Putin, excuse me, I have a question that is a little off topic. I'm the head of a fruit growers’ association in the Republic of Mordovia. Thank you very much for providing such tremendous help for rural residents last year. In your speech, you reiterated that rural areas will be rendered assistance, but for some reason, you forgot about orchards, as if they are not part of agriculture, as though there had been no heat wave, no drought. If crop growers lose a year, fruit growers lose a decade when orchards die. So I have an urgent request from all fruit growers – if we want our people to eat Russian apples, help the fruit growers. A lot of orchards are dying, and many fruit growers need help.

Vladimir Putin: I'm assuming that all assistance provided to agricultural producers fully applies to fruit growers.

Remark: Applies to fruit growers?

Vladimir Putin: Yes, after all, it is a type of farming. They can take out loans with subsidised interest rates, we roll over their loans, just as we do for all farmers. There are some problems? Are there any discrepancies?

Remark: There are.

Vladimir Putin: Like what?

Remark: There are problems with loans. For example, they are not subsidised for current assets that orchards need. There are no subsidies for fertiliser and none for chemical protection gear.

Vladimir Putin: This cannot be true. Agriculture Minister, if you please.

Yelena Skrynnik: Mr Putin, the fact is that our fruit growers are not agricultural producers.

Vladimir Putin: What do you mean?

Remark: We are.

Vladimir Putin: They are, of course. That's right, and I want to say the same thing. Why not?

Yelena Skrynnik: They are not registered. If they are not legally registered, then they are not agricultural producers.

Vladimir Putin: We need to register them. And so what is it that they produce?

Yelena Skrynnik: Mr Putin, we're working on it. We're working on all our fruit growing businesses within the context of United Russia.

Vladimir Putin: No, listen, if they are not agricultural producers, what kind of producers are they? We need to do this, and do it as quickly as possible.

Yelena Skrynnik: All right. We'll take care of it, Mr Putin.

Vladimir Putin: No, not all right. And when will you do this? When will you complete this process? What do you need? What decision must me made in order to legalise horticulturists as agricultural producers?

Yelena Skrynnik: Mr Putin, I will draft a report soon.

Vladimir Putin: No, you tell me right now. I want everyone to hear. When will this be done?

Yelena Skrynnik: I will submit a full report on the situation by June 15.

Vladimir Putin: No, please tell me, how much time do you need to complete the process of recognising horticulturists as agricultural producers? Entirely? At least approximately how much time?

Yelena Skrynnik: We need to make amendments to the law On the Development of Agriculture.

Vladimir Putin: Let's do this.

Yelena Skrynnik: All right, soon.

Vladimir Putin: I don't know what internal problems there are, but I assure you that we will bring this matter to a close.

Remark: Thank you.

* * *

Vladimir Putin’s closing remarks:

Good afternoon, colleagues,

I must say that working in this capacity and with such specialists as you brings me great satisfaction, because you are the people who, in the truest sense, are on the ground dealing with current problems that Russians face. A great deal depends on the way we work together for the benefit of Russia. For instance, Ms Kutenko (Svetlana Kutenko, head of the Bystrogorksy rural community of the Tatsinsky District in the Rostov Region) mentioned in her speech that she had to contact the governor directly, then the minister of culture, and she resolved all issues. Excellent, well done. If we are consistently able to maintain such direct contact, we will solve every problem. Thank you very much.

Working Day

Russia / International Visits

Press Service Announcements: