23 april, 2012 22:43  

Prime Minister Vladimir Putin meets with Governor of the Kirov Region Nikita Belykh


The prime minister and the governor discussed issues related to the region’s socio-economic development in 2011 and the first quarter of this year, including the situation in the manufacturing and residential construction sectors. Mr Putin inquired about progress in the region’s healthcare modernization programme and asked about the salaries of teachers and doctors. Mr Belykh told the prime minister that in March 2012 the teachers’ salary was 54% higher than in March of the previous year, and its level is expected to reach that of the average salary in the region this year.

Transcript of the beginning of the meeting:

Vladimir Putin: Good evening, Mr Belykh. I will be asking the usual questions about the region’s results in the first quarter of the year and your expectations and plans for the rest of the year. Please, do not overlook social aspects: the progress of reform in healthcare, the state of affairs in education, including teacher salaries. Go ahead, please.

Nikita Belykh: All right. I would probably start not with the first quarter of this year, but rather with the results of the previous year, which exceeded our expectations. The results that we have accomplished are better than the national average. This is very important for us, since, as you know, the region is neither particularly wealthy nor very attractive for investment. Our gross regional product increased by 5% in 2011, whereas the overall growth rate in Russia was 4.3%. 

The main sectors of the region’s economy, including the chemical, wood processing and metal industries, have already reached and even exceeded the 2008 pre-crisis levels. This is a very good result. In general, industrial production in the region grew by 8.5% in 2011, exceeding the average national rate of just over 5%.

We believe this is a good foundation for further growth. Plus, our budget revenues have increased as a result – the budget revenues generated in the region have increased by 13%. I have prepared this information, which clearly indicates that over the past three years the subsidies to the region have decreased substantially. Of course, the region is still heavily subsidised by the federal government and it's clear that there could be no miracles here. But between 2009 and 2011, the share of federal subsidies in the consolidated budget decreased from 35.5% to 29.5%. We expect that we can decrease that figure to 25%. 

Vladimir Putin: What period are you referring to?

Nikita Belykh: Three years. I am referring to the period since I was appointed Governor in 2009. During this period, we have observed a fairly steady, albeit not very drastic, revenue growth trend. 

In the first quarter of this year, we witnessed growth in all major sectors of the economy, including manufacturing, agriculture, and construction.

Still, I don’t think that the first quarter is very representative in terms of the year-end results, since economic indicators are very unsteady in the first and second quarters of the year. We’ll need to look at how things proceed over the course of the year. In some areas our results could end better than the national average and in others a bit worse, but the trend is positive across the board. 

As for the issues that are of key importance for the region, I would like to highlight some figures. These issues have also been raised by you on numerous occasions and discussed at various meetings at the federal district level.

As of the end of 2011, we observed only the slightest increase in the birth rate, 0.1%. In essence, this is the same rate as in the previous year. However, in January-February 2011 the birth rate increased 15% over the same period of last year.

This is particularly important, considering that the mortality rate dropped by almost 8% in the same period, as a result, the natural population decline… The mortality rate in the region is still higher than the birth rate, the natural population decline over that period decreased by 47%, which is a very decent trend. I believe this reflects our achievements not only in healthcare, but also in education, crime reduction, etc.     

With regard to issues of education, the wage level…

Vladimir Putin: Just a second. What gross regional product rate do you expect this year?

Nikita Belykh: I believe we’ll have a growth of 4%. I doubt that we can consistently maintain the GRP rate at a much higher level than the national average. I think it will be equal to the average GRP rate in Russia.   

In some sectors, including wood processing and agriculture, we will have quite decent results. The chemical industry is highly dependent on global economic trends. 

Vladimir Putin: Yes.

Nikita Belykh: Fertilisers. The same applies to the metal industry, non-ferrous metals. Therefore, I think that overall, we should fare no worse than the rest of the country.

Vladimir Putin: How are things in the construction industry?

Nikita Belykh: With regard to construction, I will mention a few indicators. In 2011, the volume of commissioned residential housing increased by 7% and was equal to the average rate in Russia. As you mentioned at the meeting on construction industry development during your visit to Kirov in February of last year, our region was among only a few regions in Russia to demonstrate significant growth of 12% in construction in 2010 over the previous year.  

So, we have seen significant growth over these two years. However, the investment rate in construction is much less impressive, but this is largely due to the fact that we have the lowest housing prices in the Volga Federal District. 

Therefore, we are making conscious efforts in this area, aimed mainly at building economy class housing. Today, I wanted to tell you about a project to build employer-provided housing that we launched recently. I think it is very promising. We have already built the first flats…   

Vladimir Putin: For whom will that be?

Nikita Belykh: For public sector employees, including teachers, doctors, and cultural workers. The housing will be built in Kirov and throughout the region. Construction will be funded by our government-owned mortgage corporation and the flats will remain its property. 

Vladimir Putin: You mentioned that the region has the lowest housing prices. What is the cost per square metre?

Nikita Belykh: The average cost is about 31,000 roubles per square metre, which also takes into account the cost of the premium-class housing prices. Therefore, we are selling government funded housing for 27,000-28,000 roubles per square metre. We are trying to stick to the figures recommended for our region by the Ministry of Regional Development (27,600 roubles).

Vladimir Putin: But did you end up building more housing in 2011 than in 2010?

Nikita Belykh: Yes.

Vladimir Putin: By 7%?

Nikita Belykh: Yes, 7% more than in 2010.

Vladimir Putin: Do you have many cases of construction fraud in the region?

Nikita Belykh: We do have them, but not as many as in other regions. We have agreed with the coordinators of these projects that we will continue and intensify our efforts to resolve these issues. I will make every effort to ensure that the issue is resolved by the end of this year or in early 2013 at the latest. Construction fraud has not been a widespread problem in the region. It involves literally just a few buildings and a few dozen property owners.  

Vladimir Putin: This problem should be resolved in 2012, of course.

Nikita Belykh: We will do our best.

Vladimir Putin: What about the social sphere, healthcare and education in your region?

Nikita Belykh: As far as education is concerned, we have fulfilled all the measures stipulated in the agreement with the Ministry of Education. We were supposed to reach the level of 95.4% of the average salary in the first quarter of 2011, and we have done so while exceeding that level. Overall, based on the figures for March 2012, we have exceeded the level of the first quarter of 2011 by 54%. 

Vladimir Putin: What has been exceeded by 54%?

Nikita Belykh: Teacher salary in March 2012 is 54% higher than teacher salary in March 2011.

Vladimir Putin: Have you been able to increase teacher salary to the level of the average salary in the regional economy this year?

Nikita Belykh: Not yet. According to the agreements signed with the Ministry of Education, we are supposed to do this by the end of this year.

Vladimir Putin: Let’s proceed as follows. This is not the first time that I am hearing this argument, including from some of your colleagues in other regions, that the problem has been solved and the salary has been raised to the average level in the region but not as of today (either as of the first quarter of last year or the end of the last year). The salaries must match the current average level in the region. 

Nikita Belykh: Of course. Speaking in absolute figures, it is clear that we are talking about several percentage points. It is always easier to talk in numbers. The salaries in the region are certainly lower than the average salaries in Russia. As of February, the average salary level in the region was about 15,000 roubles, and the average teacher salary was slightly over 14,000 roubles. In other words, if we compare that with the previous salary of 9,000 roubles…

Vladimir Putin: It's a good step.

Nikita Belykh: Therefore, it would wrong to compare this figure with the first quarter of last year.

Vladimir Putin: And what about repairs of school buildings? Are you building new schools?

Nikita Belykh: We are continuing to do both. We are also paying a lot of attention to the construction of kindergartens, because in addition to inter-regional migration, there is also quite substantial migration within the region. Like many other regions in Russia, Kirov Region is facing the following problem. There are schools and kindergarten in rural areas, but the population has been migrating to the cities, to the regional centre. Therefore, we are experiencing schools and kindergartens shortages in the cities throughout the region. At the same time, these facilities are not used to their capacity in the rural areas.

Vladimir Putin: What’s the situation like in healthcare? How is the modernisation programme working? What funding did you receive from the federal budget?

Nikita Belykh: We received about 3.5 billion roubles for 2011-2012.

Vladimir Putin: How much of its own resources does the region have?

 Nikita Belykh: The programme’s total value is about 6.5 billion roubles, of which 3.5 billion roubles was allocated from the federal budget.

 Vladimir Putin: How many facilities are covered by the programme?

Nikita Belykh: There are 400 facilities or 402, to be more precise, that need to be renovated.

Vladimir Putin: Including in rural areas?

Nikita Belykh: Yes, including in rural areas. This, however, does not mean that there are 402 medical institutions involved, since one institution can comprise several facilities. As of 2011, the rate of using up allocated funds under the programme was 74%, which is more than the national average of 59%. We have no complains as regards the assimilation of funds and the progress of the renovation work. I believe it is very important to ensure effective oversight in this area. Therefore, we try to involve the public in these efforts, in addition to oversight agencies.

Vladimir Putin: Have doctors’ salaries been increasing in the region, considering the new industry standards and other measures that are currently being implemented in healthcare nationwide?

Nikita Belykh: Yes. We expect that in 2013 their salaries will increase by 30% as compared with the level prior to the beginning of the modernisation effort. 

Vladimir Putin: Good.