Transcript of the beginning of the meeting:
Vladimir Putin: How is the situation in the region, what is the state of the economy? In the first quarter, the economy was in decline throughout the country, including the Novgorod region. Recently, there has been some recovery. How lasting do you think it will be? Are businesses operating efficiently?
Sergei Mitin: The economy in the region has been growing slightly since January. It has not been a substantial growth, approximately 1 to 2 percent, but still a growth. The worst situation is in those industries where the markets are depressed - the timber, chemical and metals industries. The situation is more favorable in agriculture, which featured a 20 percent growth in the first half of the year. A new poultry farm has been launched with a capacity of 42,000 tonnes of poultry. This year, it will produce approximately 12,000 tonnes of poultry. We pay close attention to this sector.
In manufacturing, we are focusing on and monitoring those sectors which, according to analysts, have good prospects both domestically and for exports. I believe this will allow us to redress the economic downturn experienced at the end of last year and the beginning of this year.
Our priority concern is provision of budget revenue and employment. We have been able to avoid big fluctuations in the unemployment level. Currently, it stands at 2.4 percent, and I don't think it will increase through the end of the year. There is one enterprise, however, which is giving us trouble.
Vladimir Putin: They must pay wage arrears to employees.
Sergei Mitin: Precisely. That is the most important task. We have started bankruptcy proceedings, and hopefully will be able to find new investors, who will re-launch the business. Evidently, the problems faced by the company are rooted in improper management rather than the economic downturn. Hence, we assume that new investors would restructure the business.
Vladimir Putin: Sticking to social issues, how are the preparations proceeding for the new academic year; are all repairs and renovations on schedule; what about preparations for the winter season?
Sergei Mitin: We took very serious preparations both last year and this year. We emphasise locally available resources. We have a lot of timber here. Therefore, we decided to convert the coal-operated boiler equipment to locally available fuel - chip and firewood. It should allow us to make some savings while increasing employment. The process is already under way - several boilers have already been changed to firewood and the effect has been positive.
Vladimir Putin: I visited one of your enterprises, Akron, in the beginning of the year. It was in a very difficult situation then. Has it improved since?
Sergei Mitin: The measures that you took then did improve the situation. The enterprise, however, is still facing problems related mainly to raw materials supply. This, of course, is a separate issue, which I will report on later. There are constant problems with deliveries of various raw materials and price increases by producers. Naturally, this has a negative effect on the company. It could have worked much more effectively. Still, it had very good results last year.
Vladimir Putin: What about relations with financial institutions?
Sergei Mitin: We have a very good relationship with the Russian Agricultural Bank. The bank effectively financed the poultry farm construction worth 3 billion roubles. As a result, we were able to finish the project within a year. As I mentioned, the poultry farm is one of the 10 largest in the country, and the credit for this goes entirely to the Russian Agricultural Bank. We also cooperate with Sberbank. Overall, we have no major problems with banks, although they are somewhat conservative and complacent. Today, however, this is probably understandable. Occasionally, there are problems, of course. Specifically with the troublesome company we referred to earlier - we would have caught the problem earlier had the bank been more pro-active.
Vladimir Putin: Good, thank you.