VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Transcript of the beginning of the meeting:
Vladimir Putin: Let us share up-to-date information first and foremost.
Mr Kudrin, please take the floor. Tell us about the progress in recovering the economy and financial markets.
Alexei Kudrin: Mr Prime Minister, over the last two weeks we approved and have begun implementing the measures envisioned by the Government's anti-recessionary programme. On November 20, 75 billion roubles was allotted to VEB and on November 24, 200 billion roubles was transferred to the Deposit Insurance Agency (DIA). Meanwhile, in accordance with the Central Bank's bailout plan, ten banks were handed over to the DIA. The DIA has suggested that before their licenses are revoked, these banks undergo rehabilitation, after which they will supposedly be able to resume their operations. During rehabilitation, all liabilities to investors, creditors, and clients are to be fully observed. Besides 200 billion roubles, the DIA was allocated another 65.9 billion roubles coming as a Central Bank loan for rehabilitation of those ten banks.
Vladimir Putin: These steps mean that special attention will be paid to problem banks, and they will in fact be bailed out. Regardless, their clients - individuals, corporates, and companies - will not be affected by this turbulence; as a matter of fact, it is the state that will address all their problems, through the Deposit Insurance Agency's help.
Alexei Kudrin: Exactly, Mr Putin. These banks were selected by the Central Bank and will need two Board approvals - that of the Central Bank and the DIA, so there are two filters. As a rule, these banks are pivotal; they constitute the backbone of local economies. They usually accumulate quite large funds, in the form of deposits from individuals and other clients, as well as from industries.
At the same time, the Central Bank revoked licenses in some cases, but, as a rule, those were the licenses of minor banks that were of no particular importance in the national or global credit markets. In such cases, the Deposit Insurance Fund is immediately involved, and all depositors receive their money. However, such cases were not numerous, and those were insignificant banks.
For major banks, rehabilitation measures are undertaken, with the state providing support. Therefore, we can say today that we are effectively maintaining stability in the banking system. Several forecasts suggesting that there will be many such problem banks have been proven wrong. As a matter of fact, those are isolated instances, and in such cases the state immediately applies its resources.
In addition, in the near future we will allocate 60 billion roubles to the Housing Mortgage Credit Agency, AIZhK. These funds will be used to buy out mortgage securities from banks, and such banks will muster new resources to continue their work, including mortgage lending.
As far as the anti-recessionary plan and your proposal are concerned, last week tax initiatives were adopted in both the State Duma and the Federation Council. First of all, I am referring to the fact that advance payments that companies were to pay in the fourth quarter, proceeding upon the results of the third quarter, were restructured. Companies have been allowed to switch to a different scheme of paying the corporate tax in the fourth quarter, based on actual profits. Thereby, we avoid "paper" profit. Such a scheme was applied earlier, but since Russia's economy is stable, as a rule, gross profits are verified on a quarterly basis. In this case, however, we considered it possible to provide this sort of relief, which will back industries and leave companies with fairly large funds.
In addition, the Duma and the Federation Council decided to reduce the corporate tax by 4% starting from next year. The corporate tax will thus amount to 20%. Furthermore, other articles of the Tax Code, concerning increasing bonus depreciation, were amended and some other measures were taken.
Vladimir Putin: It will be increased from 10% to 30%.
Alexei Kudrin: We will now be able to apply 30%, rather than 10%. We should release a government resolution that will define the types of property and equipment that can be processed under this regulation. Streamlining facilities, introducing new technologies and investing in high-tech equipment will be the top priorities.
A number of laws are currently being drafted, mainly concerning a change in the terms of issuing commercial papers, including the permission to issue commercial papers with the maturity of up to three years. The bill to amend the Law on the Securities Market was handed over to ministries and agencies for coordination, and will be completed and introduced in the State Duma by the end of this week. Other measures are also being taken.
Vladimir Putin: We planned to boost support to SMEs via VEB from this year's 9 billion roubles to 30 billion roubles next year. What decisions have already been made?
Elvira Nabiullina: Today a meeting of the Supervisory Council takes place, where this question will be touched upon.
Vladimir Putin: Is everything ready?
Elvira Nabiullina: Yes. There will be an increase from 9 billion to 30 billion roubles, and we will also discuss a scheme that we have prepared. According to it, these funds will be more available to small businesses. Thus, by increasing the sum, we change the mechanism a little, channeling these funds to those sectors and regions where the need for them is most acute.
Vladimir Putin: How do local guarantee funds for SMEs work?
Elvira Nabiullina: Local guarantee funds are supported by federal programmes. Apart from VEB, we have programmes that are financed directly from the federal budget.
Vladimir Putin: We also wanted to boost their financing.
Elvira Nabiullina: We also increased these sums from the current 4 billion roubles to 10.5 billion roubles in 2009.
Vladimir Putin: As far as I can recall, we planned 4.7 billion roubles.
Elvira Nabiullina: Some 4 billion roubles for 2009; we boosted this sum to 10.5 billion roubles. Apart from support for guarantee funds, there are other steps that have been coordinated with local governments. I am referring to establishing "business incubators", creating infrastructure for small businesses. These funds go directly to the regions. We also subsidise the regions that carry out their programmes...
Vladimir Putin: And what about the microfinancing fund? From 200,000 to one million roubles?
Elvira Nabiullina: Microfinancing has not been fully developed yet. I mean, the system of minor grants, or minor financing, has not been developed. We are now making our core banks engage in it. For example, Sberbank is going to launch a programme that will increase the amount of minor grants and minor loans in the framework of microfinancing. We will also boost the share of federal budget funds allotted to support local microfinancing programmes.
Vladimir Putin: It is necessary to develop this system. As you know, it has proven very effective in some countries. The Nobel Prize was even awarded for it. We should take advantage of this groundwork. We agreed to try our best to make municipal orders and local tenders, even those held at the federal level, accessible to SMEs.
Elvira Nabiullina: We have prepared amendments to the documents that will give SMEs more access by way of defining lots. Lots should be cut to let SMEs participate in orders for Russia's regions and municipal authorities. Such amendments have been drafted and will be adopted in the near future.
Vladimir Putin: Mr Sechin, how is the clean-up of the natural disaster's aftermath going in the European part? There were blackouts and other problems in the region.
Igor Sechin: Mr Putin, as we reported, 25 Russian regions were affected by severe storms between November 22 and 24. Destructive storms with 24m/sec winds, rain, and snow caused many technical problems and blackouts that affected up to 350,000 people. We established regional centers for electricity supply security in the Moscow Region, Yaroslavl, the Tver Region and the Novgorod Region. The centers were notified about other constituent entities in due time.
The main damage that caused mass blackouts occurred on the 6 and 10 kW distribution networks. There was no serous damage on the main 110 kW network, nor were there power supply interruptions on railroads or in the oil and gas complex. As of November 24, 120,000 people did not have electricity. On November 25, there were only 17,000. By 9 a.m. on November 27, the aftermath of the storms in the Central, Northwestern, and Southern regions was cleaned.
On November 30, in Kursk, after a break in the heating pipeline, the Northwestern District temporarily had its heating shut off, but the supply was resumed by 9 p.m.
In the Sakhalin Region, in Sakhalinenergo's area of responsibility, no customers or objects are experiencing troubles with electricity. Unfortunately, a fire started yesterday at the diesel power plant in Severo-Kurilsk and left 2,400 people without electricity. The administration has been taking all necessary measures. Six diesel generators will arrive in the port of Korsakov today, and then will be transferred to Severo-Kurilsk. By 6 p.m. local time, 50% of the population will have electricity generated by reserve sources on a rotating basis. The approximate date of the completion of accident recovery works is December 10. In other Russian territories, power supplies will be provided as usual.
Vladimir Putin: The winter season started today. I hope that all the systems are in good order. You, Mr Sechin, and the relevant services reported that preparations for the winter season went as usual, and we have all the reserves. Therefore, I hope that everything will work properly. If it does not, you should take all necessary measures to solve problems.
Igor Sechin: We will do that, Mr Putin.
Vladimir Putin to Igor Levitin: Mr Levitin, was the next section of the side road near Sochi launched?
Igor Levitin: Mr Putin, this is the section you visited last year. Its construction began 20 years ago, but was halted. Now we have revised the project documents, and the road was launched in accordance with the new economic, technical, and environmental requirements. New treatment facilities were built that will transfer all water from the road into the sewer system.
In 2009, the whole road will be finished.
Vladimir Putin: How long is this section?
Igor Levitin: That one is about 5 kilometers. The last section, which is not finished yet, has a 2.5 km tunnel. We plan to finish and launch it in 2009. After this, the city will have a by-road, and people will be able to get to the airport by bypassing Kurortny Prospekt.
Vladimir Putin: That one that goes through the center?
Igor Levitin: Yes, that one. We have revised the funds with regards to the construction materials market.
We had a meeting with all contractors that are planning to work in Sochi, including on road interchanges, and discussed pricing for 2009.
Vladimir Putin: Good. Mr Kozak, how is the work on the development of transportation infrastructure for the Olympics going?
Dmitry Kozak: This road is the solution to many social and technical problems. It has been under construction for 20 years. Even the International Olympic Committee attaches great importance to this by-road, especially in relation to loads transfer during the construction process.
In general, the development of transportation infrastructure includes not only this road, but also the many other roads, freight yards, and two ports that we are building. The work will be done in a timely manner. In December, due to the efficient work of the Russian Railways company, we will launch the first freight yard, which will transport 5 million tons of inert materials.
Construction of the Adler - Krasnaya Polyana road is going as planned. We have also been renovating the airport. On January 1, the new terminal will open its doors to passengers.
In general, along with the IOC, which is attentively supervising the work, we do not have any complaints against the constructors.
Vladimir Putin: OK.
Tatyana Alexeyevna (addressing Tatyana Golikova), today is World AIDS Day. How are the programmes in this sphere going?
Tatyana Golikova: Mr. Putin, colleagues, this is the 20th time that the world is marking World AIDS Day. In the last three years, the Russian Federation has exerted substantial efforts to help the victims of this disease and step up activities to prevent AIDS. In 2006, this effort became part of the national project and from 2006 through 2008, the federal budget allocated a sizeable sum of 18.7 billion roubles for this purpose. It doubled the amount of money the Russian regions had previously earmarked for these purposes. The plant and equipment of AIDS prevention and treatment centres has seen marked improvement. New standards of medical assistance have been adopted, and yet so far, we have not been able to turn the situation around. The number of HIV patients has increased by 33,000 in the last ten months. However, we have been pressing ahead with measures in this field. More than 30 billion roubles will be allocated for these purposes between 2009 and 2011 under the Budget Law. This is in addition to the billion roubles allocated in 2007 to finance research on developing an AIDS vaccine and coordinate this work with the Eastern European and Central Asian states.
Last year, we decided to compensate the Global Fund to Fight AIDS, TB, and Malaria for the $217 million that the programme had previously allocated for its work in the Russian Federation. This is not to say that we are diminishing these programmes; on the contrary, we have the money in the 2009-2011 budget, and all the programmes launched as part of the non-profit organization's efforts will be continued. This does not contradict our laws. We will continue to give grants to the organizations working in this field.
We hope that Russia's commitment to work in these areas will increase and will enable these people to live normally.
Vladimir Putin: I understand that we have no problems with funding.
Tatyana Golikova: No problems in 2009. We are looking at 2010 and 2012 together with Alexei Kudrin in terms of increasing the funding, because we have made great progress in identifying such patients during the last three years. The number of victims will require somewhat more spending than originally thought.
Vladimir Putin: OK. Sergei Borisovich (addressing Seregei Ivanov), how is the preparation for the international forum on nanotechnologies going?
Sergei Ivanov: As I reported earlier, the first ever International Nano-Technology Forum opens on Krasnopresnenskaya Embankment in Moscow on December 3. All preparations have been completed. 3.000 people have confirmed their participation in the forum. They represent the whole world of nano-industry, major scientists, and researchers in the sphere of nano-technologies. They will represent 90 Russian cities and science centres from 32 countries. This covers practically all the countries engaged in nano-technology in the world. They have all confirmed that they will take part. After the official opening ceremony, the forum will consist of two main parts: the business part, attended mainly by businessmen, will consist of 12 panel discussions on the use of nano-technologies in the market, in commerce, and in production of concrete products. During these 12 panel discussions, 115 nano-technology products will be introduced.
The second part of the forum is devoted to science and technology. It will include 29 sessions of scientific and technical panels on various areas of the use of nano-technologies: energy, industry, medicine, nuclear research, etc.
In parallel with the forum, an exhibition of nano-technologies will be held, with 115 international and Russian companies presenting their wares. At the end of the forum, on December 5, the state corporation Rosnanotech will present prizes to young scientists who do research and spread nano-technologies in the commercial sector. This sums up the nano-forum.
One more thing: I would like to report that another scheduled test launch of the sea-based Bulava ballistic missile took place. It was the 9th launch conducted as part of the tests of that missile, and it was a success. All the flight parameters were observed: the launch of the missile from the Dmitri Donskoi submarine, the operation of all three rocket stages, and the separation of the platform from the warheads. All the warheads were delivered to the planned targets. Another, and final, test of Bulava is to take place before this year is out. The tests are to be completed in 2009, but our industry and the defence enterprises concerned have already started serial production of Bulava missiles. Funding is proceeding according to schedule and the project is running smoothly. The final launch went off normally from beginning to end.
Vladimir Putin: Nikolai Yegorovich (addressing Nikolai Makarov), is the military pleased with the results of the tests?
Nikolai Makarov: Yes, it is. All the parameters are normal.
Vladimir Putin: The flight tests will be completed in 2009. When are you going to procure them and put them into operational duty?
Nikolai Makarov: We would like to finish the tests in 2009.
Vladimir Putin: Thank you.
Let us move on to today's agenda.
We will look at the draft Strategy of the Development of the Financial Market of the Russian Federation through 2020.
In recent years, more and more enterprises in the real sector have regarded the stock market as a convenient and reliable instrument for raising funds for investment projects. Just one example: in 2007, the issue of securities raised over 850 million roubles, or 13 percent of the total amount of investments.
The results this year will be more modest. This is understandable in the light of the global financial crisis. However, the main conclusion remains that the financial sector has become part and parcel of the Russian economy. On the whole, it is coping with its main job of converting national savings into investments and production development.
However, our trading floors are still way behind the leading world centres in many key areas. Furthermore, they are too sensitive to the mood in foreign markets.
The recent events - the substantial drop in the shares of domestic enterprises -- have shown how uncomfortable it is when most of the decisions as to which securities to buy or sell in Russian money markets are made outside the Russian Federation, based on criteria that have little to do with the real state of our economy and Russian enterprises.
As a result, the current prices of the shares of our enterprises are far lower than the real value of their business. Indeed, we know of instances when they have dropped below the value of the real assets in their accounts. This is a bizarre phenomenon that is grossly unfair.
To be sure, nobody is going to restrict the activities of foreign capital in the Russian stock market. We welcome foreign investors. But at the same time, the challenge is to create a massive stratum of domestic investors and form our own powerful financial institutions.
Moreover, now that the crisis warrants a revision of priorities that may change the balance of forces in the world economy, Russia is getting one more chance to become a world financial centre.
This calls for substantial changes in the laws. The infrastructure of the financial market should be strengthened and superfluous administrative barriers have to be removed, thus cutting the cost of attracting capital to Russian money markets.
The first priority, however, is to protect the rights of investors, to form a system to compensate citizens for the damage caused by bad-faith actions of market agents.
Attempts to use insider information and manipulate the market should be stopped.
The draft law that introduces these fairly new concepts is to be discussed today. It will entail amendments to the Criminal Code and the Code on Administrative Offenses.
I have named just some of the measures. The Strategy prepared by the Federal Financial Markets Service lays down only the long-term guidelines for the development of the financial market.
For Russia to position itself as an international financial centre, further steps will be needed. For example, the adjustment of tax legislation, streamlining of the visa requirements for businessmen, and the creation of a comfortable infrastructure for the work of financial companies. A comprehensive plan for the creation of the financial centre will be discussed by the Government shortly.
I open the floor for discussion.
