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Prime Minister Vladimir Putin chairs a Government Presidium meeting

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Transcript of the beginning of the meeting: 

Vladimir Putin: Good afternoon, colleagues. First, let’s share the current information we have.

The summer harvesting season is now in full swing. What is the situation like on the grain market and inside the agro-industrial sector?

Viktor Zubkov: Good afternoon, Mr Putin, colleagues. Southern Russia is now busy harvesting crops. The situation is business-like, and there have been no setbacks. As of July 13, 7.5 million tonnes of grain have been harvested on an area of 1.8 million hectares. Harvest volumes exceed 2010 levels everywhere. As I see it, government measures, including efforts to expand the area of cultivated land, to provide agricultural producers with seeds, mineral fertilisers, petroleum, oil, lubricants and loans, have yielded results. Analysts now predict that Russia will harvest 90 million tonnes of grain this year, and that all crop harvests will expand. Mr Putin, I am happy to note that this is particularly true of barley and buckwheat crops. These were the crops with the greatest deficit in 2010. Analysts predict that 17 million tonnes of barley will be harvested this year, as compared to 6.5 million tonnes in 2010. The buckwheat forecast is 850,000 tonnes, as compared to 330,000 tonnes last year, a 150% increase.

The price situation remains stable on the grain market. The prices are within levels seen as comfortable both by grain producers and consumers. In effect, zero food inflation is being recorded. Russia actively exports grain. In all, 770,000 tonnes have been shipped in the period July 1-13. About 1.5 million tonnes of grain are to be shipped this July. We have accepted customs agency requests totaling 6.5 million tonnes. Consequently, exports are proceeding smoothly. Russian grain is being supplied to 27 countries, including such traditional customers as Egypt, Turkey and Israel. I am happy to note that new countries, European countries, have started importing grain. Their number is much larger today, and this is very good. Top-quality Russian grain is in high demand on the market. And I suppose that there is no reason or need to introduce any customs-regulation measures today. We monitor the situation, and I think that this will be a relatively good grain year for Russia.

Vladimir Putin: God willing. We should monitor the situation more closely and respond in a timely manner to everything that happens in this sphere. Let’s hope that we will be able to maintain the current pace.

Mr Shmatko, we had a meeting at the Kirishi refinery on July 8, at which we discussed upgrading our refineries. Government officials, corporate managers and majority shareholders came up with many proposals and recommendations. What’s the progress of getting the final documents ready?

Sergei Shmatko: Mr Putin, everyone involved in the industry is very enthusiastic about the decision that was made at that meeting. Let me inform you that the four-party agreements – the ones that you supported – with motor fuel manufacturers have been signed. These agreements set forth the oil companies’ commitments regarding the implementation of their investment plans for upgrading the refinery industry. These agreements will go through the appropriate corporate procedures and will be perfectly legitimate.

Vladimir Putin: In other words, the draft agreements that the ministry prepared for our oil companies to sign will need to go through some additional corporate procedures?

Sergei Shmatko: We plan to conduct board meetings with all the companies, and they will look into approving their respective documents, Mr Putin. 

Notably, experts believe that the decisions we adopted are extremely important and will have a long-term social impact. We believe that these decisions truly seek to establish competition between Russian manufacturers and suppliers of high-grade motor fuels. In addition, they will preclude shortages and secure a transition to environmentally-safe fuels.

You issued several instructions after the meeting. Let me inform you that we have largely reached an agreement on draft regulations and that they will soon be submitted for government consideration. 

Next. We have effectively started setting aside fuel reserves. We will begin forming such reserves in July-August so as to avoid any shortages during this period. Mr Putin, let me thank you for these decisions on behalf of the industry. The companies assumed responsibility for fulfilling your instructions and meeting the refinery output targets – and I wish to emphasise that they did so of their own accord.

Vladimir Putin: That’s good. Thank you. Mr Sechin, we have spoken many times about the need to accelerate the commissioning of the Nevinnomyssk power station in the Stavropol Territory. Is any progress being made?

Igor Sechin: Yes, Mr Putin, the commissioning of this power station was behind schedule. We have talked with the owner – the Italian company, Enel, which owns OGK-5. According to your instructions, I’m going there tomorrow to make sure that the plant is commissioned for testing. After we are done with the tests, it will be commercially operational within two months. I will debrief you when I get back.

Vladimir Putin: Good, thank you. Any other questions related to power engineering? Anything that requires immediate attention?

Igor Sechin: In all of Russia?

Vladimir Putin: Yes.

Igor Sechin: We continue to work on the instructions that you issued at our meeting with the governors. In some regions, such as Buryatia and Khakassia,  we are gradually switching to special modes of operation, of which we have already informed you. About a week from now, we will give you an update on the commissioning of the Sredneuralsk power station.  We have requested a meeting to discuss this issue. We are also preparing the power generation equipment for winter.

Vladimir Putin: I asked you to review the tariffs in Buryatia. 

Igor Sechin: Yes, right.

Vladimir Putin: The Irkutsk region, which enjoys good power generation capacities, is right next to Buryatia. The latter is obviously outside fair competition arrangements. They used a certain tariff, which was then eliminated. It should be reinstated.

Igor Sechin: I understand. We are working on it. There are more regional problems there that we need to address because, so far, we have yet to adopt regional decisions as to a guaranteed supplier. We agreed that it should be an established company that would cater directly to the consumers, which would preclude…

Vladimir Putin: I am sure that the regional authorities will meet you halfway with regard to this issue in any manner that you propose. Most importantly, the tariffs should encourage competitiveness with neighbouring regions.

Igor Sechin: That’s exactly how we see it.

Vladimir Putin: Do you agree?

Igor Sechin: Yes, I do.

Vladimir Putin: Please finish it and report back to me.

Igor Sechin: I will.

Vladimir Putin: Thank you.

We are seeing improvements on the labour market. Unemployment is down from 5.8 million to 4.6 million – that’s a drop of over one million. Please go ahead, Mr Zhukov.

Alexander Zhukov: Mr Putin, we do see positive changes across all major labour market indicators this year. New jobs are being created, and the number of gainfully employed workers is growing. As of June, the total number of unemployed dropped by 1.2 million. We had 5.8 million in January. Now we have 4.6 million unemployed, down from 7.8% to 6.1% of the employable workforce. This is the first time that we have seen those numbers dip below the pre-crisis level of 5 million unemployed, or 6.6% of the workforce, in October 2008. Registered unemployment…

Vladimir Putin: Even less, we are at 6.1% now.

Alexander Zhukov: Yes, a little less.

Registered unemployment is currently at 1,405,000, down 164,000 as compared with early 2011. This number is also lower than it was before the crisis. Part-time employment has also decreased by 220,000 jobs since early this year. The number of job openings (also a very important indicator) is now almost equal to registered unemployment. In other words, the labour market tension coefficient equals one today. Overall, that is a rather positive indicator. However, the situation is extremely unfavourable in the North Caucasus both in terms of unemployment and labour market tension.

Vladimir Putin: We need to develop the domestic economy, manufacturing, and services. We will get back to it later.

We have signed an executive order to adopt a programme to develop the Kant Baltic Federal University in Kaliningrad. We have allocated 5 billion roubles from the federal budget for this purpose. The total amount of investment, I believe, is 6.8 billion. How do you plan to go about this work?

Alexander Zhukov: You are right, Mr Putin. The approval of the development programme for the Kant Baltic Federal University was the last of our programme approvals for all federal universities. We started establishing these universities in 2007. Today, we have eight federal universities. In all, we have released 48 billion roubles for the implementation of these programmes in 2011-2013.  Taking Kaliningrad University as an example, I can expand on the sort of results we are seeing from these programmes.

More than half of the pedagogical researchers from Kaliningrad will take training programmes with leading foreign and Russian higher education institutions. We will enlist the services of at least 100 leading foreign experts for such training. We will launch over 50 international research programmes. A physics and mathematics lyceum will be established at the university. Together with employers, we will see to it that almost all graduates find a job in Kaliningrad – 97% is our target number. It is also important to note that university equipment will be substantially upgraded, and we will set up at least 70 new research and educational labs and retrofit the existing ones. In terms of equipment, the university should be among the top 25 globally. The overriding goal of building these universities is to train qualified employees who will go on to promote modernisation in these regions.

Vladimir Putin: Good, thank you.

Let’s move on to the agenda. We have several important items to discuss, including production sharing agreements, procedures for tracking prescriptions for drugs that contain narcotic or psychotropic substances, and several other issues.

Let’s get to work.