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: Good afternoon. Let's start by exchanging recent information. As you know, I have just been to the Far East. I don't want to discuss my whole programme, but I would like to remind you of one of our commitments - to subsidize air travel for people living in the Far East and some East Siberian cities.
The resolution has been drafted. Mr Ivanov, could you please tell us about it in more detail.

Sergei Ivanov: You have received the government's draft resolution on the rules of subsidizing airlines for flights to the Far East and back in 2010. This applies not only to the residents of the Far East, but also to people living in Russia's European part and travelling to the Far East.

We first adopted this programme this year, and it has proved very effective in making travel accessible to citizens younger than 23 and older than 60. Since then 163,000 passengers have used this programme, mostly residents of the Far East. This year the number of passengers travelling from Western Russia to the Far East increased by 12%, despite the fact that overall air traffic decreased.

The programme for 2010 allocates more funds for the same purpose than in 2009, notably 2.5 billion roubles as compared to 1.780 billion roubles. This has allowed us to expand some of the parameters of the programme.

First, in 2010 we will increase the number of days when it is in effect. This year it was in effect from May 15 to the middle of September. Next year it will be valid from March 31 to October 31. The peak season for airlines is seven months in the warm period of the year, and so this is a serious bonus.

Secondly, we slightly increased the number of routes for subsidized travel. Passengers are reimbursed for 50% of the ticket costs.

We added cities that are not formally part of the Far Eastern Federal District, such as Norilsk and Kyzyl, the capital of the Tyva Republic.

These cities are located in the Siberian Federal District, and their residents can only travel to and from them by air.

Vladimir Putin: There is no other way.

Sergei Ivanov: Indeed, there is simply no other way of transportation.

And the third measure we have introduced into this draft resolution is about encouraging Russian companies to fly domestic aircraft to the Far East.

If an airline taking part in the programme flies a foreign aircraft, it can reserve anywhere from 20% to 40% of seats for subsidized travellers, depending on the type of aircraft. But if it flies a Russian aircraft, for instance a Tu-204, a Tu-214 or an IL-96, it can sell subsidized tickets to all passengers.

Vladimir Putin: Subsidized...

Sergei Ivanov: And therefore we are encouraging airlines not only to fly to the Far East, which they are willingly doing because it is profitable, but also to use Russian planes.

To sum up, the three new measures include extending the programme's term, the number of cities it affects and providing an incentive to use domestic aircraft.

Vladimir Putin: Excellent. So today I will sign a government resolution allocating 2.5 billion roubles to subsidize civilian passenger travel from the Far East to the country's European part and back.

We will also introduce changes to the time-table for the issue and distribution of housing certificates for 2009, primarily in order to carry out our programmes for providing service members with flats.

I would like Mr Serdyukov (the Defence Minister of the Russian Federation) to comment on this.

Anatoly Serdyukov: Mr Putin, another 2,700 housing certificates for service members in the Ministry of Defence are to be issued by government executive order.

This is a very good New Year's present for service members. We will add the 2,700 certificates to the 45,000 certificates we issued this year, thus starting to fulfil the plan for 2010.

We worked this issue out in cooperation with the Ministry of Regional Development, and have already issued personalised certificates and distributed them to service members. In the near future they will be used for their intended purposes.

I would like to express my gratitude for this executive order again. Thank you.

Vladimir Putin: Good. Despite known budget limitations, we are carrying on with the Health programme. I would like Ms Golikova to say a few words about it.

Tatyana Golikova: Mr Putin, ladies and gentlemen, we plan to use a total of 44.4 billion roubles from the 2010 budget for the national healthcare project.

We will entirely fulfil the goals set forth in the national project for 2009. We will continue working on these goals in 2010 and beyond, since the financial parameters of this national project are also based on the budgets for 2011 and 2012.

Supporting draft laws have been submitted to the government. Draft laws that relate to welfare payments are our top priority.

I would like to emphasise that another important priority is payments to local hospital personnel, specifically doctors and nurses working for outpatient clinics, who will receive 10,000 roubles and 5,000 roubles, respectively. These payments were introduced long ago, when the national project was first launched. Employees of medical establishments such as obstetric stations and emergency rooms will also receive additional payments.

We plan to allot almost 30 billion roubles from the 2010 budget for these two types of payments. It is expected that 160,342 doctors and nurses working for local outpatient clinics will receive these payments, which is 6.7% more than last year. We worked with regional governments to ascertain this number.

Personnel at obstetric stations and emergency rooms account for 140,269 people. They will receive 6,000 and 3,000 roubles, respectively.

Another priority is the resolution allocating subventions to regions for providing pharmaceutical support to people who receive social benefits.

We have finished all preparatory work with the Ministry of Finance. As of October 1, 2009, 4.2 million people opted to receive benefits in kind for pharmaceutical support. They will receive pharmaceuticals as benefits in kind in 2010.

In addition, an extra 12.9 billion roubles will be allocated in the form of inter-budget transfers, which will allow us to meet the pharmaceutical needs for this group of beneficiaries.

Vladimir Putin: Good. I would like Mr Andrei Fursenko to comment on two issues, specifically the payments for class supervisors in state and municipal educational institutions and the subsidies to be allocated in 2010 for distance learning for children with disabilities. Go ahead, please.

Andrei Fursenko: Mr Putin, ladies and gentlemen, I would like to focus on two top priorities in the National Education Project.

The first one refers to class supervisors. We are moving ahead in this area despite economic difficulties, and there is even some progress in this area. At the very beginning of next year we will put into effect the decision to pay additional benefits for working in the Far North and other regional benefits on top of a teacher's base salary. The funds from the federal budget will be transferred to regions in full. The appropriate documents have been prepared, with the distribution plan drawn up. There will be no delays.

Vladimir Putin: So it already includes regional benefits, doesn't it?

Andrei Fursenko: Yes, it does. And it also includes benefits for working in the north. These will be complete payments in full amount.

The second priority, the development of distance learning for children with disabilities, is relatively new. It was started within the framework of the National Education Project this year.

This project comprises three sub-projects, specifically setting up distance learning centres in every region for children with disabilities, providing necessary equipment to allow these children to study at home, and training teachers to work with these children.

One billion roubles have been allocated this year, and these subsidies have already been transferred. We plan to allocate 2.5 billion roubles annually between 2010 and 2012.

Taking into account the pilot projects we launched within the framework of federal targeted programmes and regional programmes, this approach has been used with over 3,000 children. We have developed appropriate methods and technical solutions.

There are some 30,000 more children that are unable to go to school and have to study at home. We believe that this issue will have been mostly resolved by the project deadline. All documents and methods have been prepared. We expect to meet all our goals completely.

Vladimir Putin: Where will the teachers who will work with these children be trained?

Andrei Fursenko: They will be trained in teachers' training universities. There are also special programmes. Yesterday Mr Sergei Naryshkin (Head of the Presidential Executive Office) held a meeting of the commission on issues of support for people with disabilities, which I attended along with Ms Tatyana Golikova. The meeting touched on the necessity of developing special programmes and requirements.

This work has been started already. Unfortunately, there not enough tutors and teachers trained in this area, not enough teachers for correction schools, classes and for work with children on an individual basis. This is why the education centres to be created on the basis of higher schools will be aimed at training teachers for distance learning.

Vladimir Putin: Good. Let us move to today's agenda.

First of all I'd like to say that this is the final meeting of our presidium for this year. We will analyze the results of the outgoing year and map out our plans for the next one.

I would like to say right away that it is common knowledge that the outgoing year was very difficult. In 1998 we also went through a major global crisis, but it was more or less local because it started in Asia and the world economy could rely on many islands of stability.

But this time the downturn is global, and there are no safe havens of economic stability. Our GDP has decreased by about 8.5%. This is a serious decline, but it is smaller than expected.

In these circumstances, the government had to prevent the destructive effects of the crisis, guarantee the required level of economic stability and, as far as social issues, help above all those who have found themselves in the worst economic conditions.

It is still too early to give a comprehensive evaluation of our anti-crisis measures. But it is already possible to say that despite all the difficulties, the entire programme of anti-crisis measures has been implemented. I hope that we have gotten through the most intense period of the crisis, and that economic recovery began in the second half of the year.

We have managed to keep inflation under control. According to preliminary estimates, it will be about 9%. This is a historic minimum to some extent. The exchange rate of the rouble remains stable and predictable, which helps to assure businesspeople and people in general. In a tentative estimate, the GDP will grow by 3% next year.

However, there are still risks. First, the growth has not yet become sustainable. Second, it is largely based on replicating the old, raw-materials-based model of development. This means that we should change our priorities and concentrate on the goals mapped out in our plan for long-term development, namely building new industrial capabilities and establishing an innovation-based economy.

It goes without saying that we will not curtail the necessary anti-crisis measures, but we should link them closer with technological modernisation and structural reforms.

I would like to mention several priorities.

First of all, our efforts to boost internal demand, especially in such industries as automobile manufacturing and construction, will be critical. Thus, the pilot project aimed at disposing of used cars should be launched early in the year. The total cost of the programme is close to 10 billion roubles. Those who turn in their old car for scrap will get a 50,000-rouble subsidy.

I would like you to bear in mind that the procedure is new to us. It has to be said for the sake of fairness that a fully-fledged mechanism could not be put in place at such short notice. We have no facilities for used car disposal. No region in the Russian Federation has the necessary number of such facilities. I urge you to work out the procedure in the first half of January, in spite of the holidays.

If we lack disposal facilities in all the regions of the Russian Federation and cannot quickly build them, then we should focus on the regions where disposal can be organized. We should then designate the depots where used cars will be delivered and perhaps allocate extra outlays for transport. In any case the procedure should be convenient for owners of used cars.

It is also necessary to pay off debts and launch modern production at AvtoVAZ, the United Aircraft Building Corporation, Uralvagonzavod (which makes railway cars) and some other major companies.

I would like to stress that in preparing solutions for various objectives, you should seek to create synergy, to use the trendy word, with other objectives. Something similar happened during the construction of a new oil pipeline from Eastern Siberia to the Pacific Coast, when the company Transneft placed orders with automobile and metallurgical companies.

Uralvagonzavod has orders from that company for several years ahead. As part of anti-crisis measures, almost 11 billion roubles will be allocated in 2010 to redeem accounts payable to the United Aircraft-Building Corporation.

The authorized capital of Uralvagonzavod will get another 10 billion. We will determine the amount of additional financial contributions to AvtoVAZ after talks with the shareholders.

We must meet all the housing construction targets and continue to move people out of old housing that is no longer safe. I would like to repeat that it is our challenge and our obligation to the people who still live in slums to clear these slums and enable people to live in normal, modern conditions. All World War II veterans and Defence Ministry servicemen should be provided with housing.

While making use of market mechanisms, we should lower the interest on mortgage loans. You will remember that we are committed to providing 250 billion roubles for these purposes through Vnershekonombank. The mortgage rate should be cut to 10-11% at the first stage.

In the longer term - and I have just been discussing this with my colleagues - we should seek to bring it down to 7% and less. This will address people's housing problems and stimulate construction and related industries.

In 2010, 44.4 billion roubles have been allocated for the construction and purchase of more than 45,000 flats for service members.

I would like you to know that until very recently this was thought to be an impossible task. People are weary, but they are resigned to waiting for years for their housing problem to be solved. I am referring to service members. Some thought that it was an impossible task. We should complete it in 2010.

This year and last year we allocated money to address these problems in amounts we could not have dreamt of before. Let me repeat: we did it and we are capable of solving these problems in 2010.

The Housing and Utilities Reform Fund will get 15 billion roubles ahead of schedule to demolish dilapidated housing.

Major infrastructure projects remain priorities. However, we should sort out the design standards and the pricing mechanism. We discussed this mater just recently when we looked at Olympic facilities construction sites during my recent trip to Sochi. I am reminding you that this problem should be solved without delay.

A system of electronic auctions should be used to award orders. In other words, conditions should be created for making investments work much more effectively.

Second. In 2009 we managed to avert the threat of a full-scale banking crisis. Yet even though interest rates are going down, we still have a long way to go to make loans accessible to all. We will therefore continue to offer state guarantees to backbone strategic enterprises. That practice should be used to the full.

Simultaneously, systemic measures should be introduced to strengthen the banks' resources to enable them to accumulate "long money" and greatly expand loans to the real economy. In particular, the investment potential of accumulated pensions should be used, as well as new financial instruments such as infrastructure and "project" bonds.

Incidentally, it is already obvious that our measures to rescue the banking system have been effective and timely. We warded off the collapse of the banking system, preserved the payments system and settlements in the economy. We have avoided a repeat of what happened in 1998, when people lost their money in banks.

Next point. It is important to expand the base for economic growth, above all by supporting free enterprise and creating conditions for new companies to enter the market. The notification-based procedure of starting up businesses will be spread to all types of activities, with few exceptions. And these exceptions must be specified and listed.

It is necessary to reduce the number of types of activities that require a license, and the licensing procedure should be streamlined and standardised.

Small businesses will receive about 100 billion roubles in loans through VEB partner banks in 2010. I repeat, we discussed this topic recently: the mechanism has yet to be finalized, but we have the money and the opportunities to implement these large-scale plans of supporting small business. The opportunities for this are there. We still have to work out effective mechanisms that bring quick results.

Small business must get about 80 billion roubles through the mechanism of guarantee funds. In supporting small business, preference should be given to productive and innovative companies.

Let me add that in 2009 support for small businesses amounted to nearly 50 billion roubles, compared with 3.5 billion in 2008.

Fourth. Steps to diversify the economy and exports. To this end a package of institutional measures was adopted this year to promote competition and remove administrative barriers to business. The law on energy saving has come into effect.

We must now address projects in such areas as energy efficiency, nuclear power, space, medical technology and new drugs, and information technologies.

The government export insurance agency is due to start working in 2010. I think its creation has been well timed. During a crisis, we should think about supporting high-tech industries and helping them break into international markets. The agency is charged with promoting domestic high-tech products abroad.

To encourage our companies to be more efficient, new technical regulations should be adopted in industry, and modern management methods should be introduced in state-owned corporations and state-controlled joint stock companies.

We should also give thought to further mechanisms that would stimulate innovation through tax breaks.

Fifth. Sustained recovery requires macroeconomic stability. Inflation will turn out to be 9% in 2009, as we have repeatedly said.

In 2010 the challenge will be even tougher; we set the inflation target at 7.5% or lower. We must pursue a balanced monetary policy and above all reduce the budget deficit. This is a difficult task, but we must try hard to bring the budget deficit down to 3% by 2012.

We will discuss the law on the budget system reform today. The main thing is to produce real motivation for spending money from the budget more effectively and improving the quality of services delivered to the country's citizens.

Ladies and gentlemen,

As we promised, all our social obligations were fulfilled in 2009. The government did not abandon is decision to increase the wage fund for the federal public sector workers by 30%, even though this decision had been made before the economic downturn.

We have managed to stabilise the labour market and prevent unemployment from spiralling out of control. During the recent televised question and answer session, I said that people's real disposable incomes would be much the same as in 2008, or decrease by only 0.4%. And now that we have the data for the whole year, it turns out there even was some growth. People's real disposable incomes will increase by about 0.7-1%.

But I have to say that this is an average figure, and it does not mean much for some categories of workers, for individual people. We have to admit that despite some growth in wages, in some industries salaries have been reduced.

That is why we must thoroughly address the issue of creating effective and well-paid jobs. For this reason, special employment programmes and support of one-industry towns will be continued. Togliatti will be one of the first cities to receive support.

This year, 43.7 billion roubles were allocated for special employment programmes. In 2010, the amount allocated will be slightly smaller - 36.3 billion roubles, but this sum is large enough to cope with our problems.

Of course, the major project during the outgoing year was reform of the pension system. In 2009, the labour pension increased by 24%. The increase will be over 46% in 2010. There will be no pensions lower than the subsistence level in Russia.

Over 700 billion roubles were spent to improve the pension system; this is a very high price. But this is our conscious choice, because we understand our responsibility and moral obligation to support the older generation. In any situation, during both crisis and prosperity, we must first of all think about people. All the more so because investments in people bring tangible results. Over the past five years, the birth rate has been growing, and over the past four years, the death rate has been falling.

I can say with confidence that for the first time since 1995 we register a population growth, while life expectancy in our country has increased by four years in the last five years, to 69 years. Our demographic policies are having an effect more quickly than was planned. We are moving two year ahead of schedule in this respect.

In 2010, we will develop detailed plans for the improvement of the system of compulsory medical insurance. This is a very important, large-scale and complicated task. Apart from that, we need not only to adopt, but also implement a new law on pharmaceutical products, which is now being discussed at the State Duma.
We will continue implementing the National Health and Education Projects. The most important are the programmes aimed at promoting a healthy lifestyle, constructing high-technology medical centres, establishing research universities and the targeted programme to support the leading institutes of higher learning and scientific centres.

Colleagues,

This year, we had to make decisions that determined much in the country's life: its economic resilience, the future of companies and whole industries, and social wellbeing of Russian citizens.

Despite the current problems, we have managed to stick to our plans. Last year was not lost as far as implementing our long-term development plans.

I would like to thank you for your coordinated efforts. We worked as a cohesive team united by one common goal.

And one more thing. It is very important that we have had the support and understanding of our people. We need to do our best to preserve this support, to inspire people's hopes for the revival of Russia's economy and social wellbeing, for changes for the better, and to achieve real, tangible improvements.

Let's start working.

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