During his trip along the new Khabarovsk-Chita highway Prime Minister Vladimir Putin replied to questions from correspondents from the Russia-24 and My Planet television channels
Question: You must have traveled to this region many times before, right?
Vladimir Putin: I've been to this region but I never stopped here before. You know how it usually happens - the airport, a hotel, regional government offices, the airport again and departure. When you stop and take time to look at everything with your own eyes, you understand it differently.
Question: How?
Vladimir Putin: You understand what is missing and what should be done for the people to feel that a real change has been made. We have just spoken with truck drivers. We call them long-distance drivers. They said that this part of the road is good but that there are no maintenance facilities. Imagine you have a flat tire and it is minus 50 degrees C and there is no communication. This is a very serious problem. This means we didn't think everything out properly and must correct it soon. This is the first point.
The second is the beginning of the highway. It was built in 1994-1996 and is clearly outdated. It passes through populated areas and the surface is not great. However, the people there are happy to have the road because it didn't exist several years ago. Yet, this is not enough. This is the past. It looks good, not as a federal highway but as a byroad, and no more than that. This is the second point.
Third, we intended to connect Russian territory with motorways and we have done this. However, the main burden now is not between Khabarovsk and Chita but between Khabarovsk and Vladivostok. And it appears that the latter road is worse than this one.
Remark: It's an old road.
Vladimir Putin: It is, and the burden is heavier. It is immediately clear that this should be done in the first place without reducing the pace of work at this section. There is still a lot to be done in the beginning of the road. This is the third point.
And the fourth one: there is a lot of traffic to the north from here - through Yakutia to Magadan on the Lena road. I knew about this anyway but drivers openly complain that it is difficult to work there. What does difficult mean? The volume of freight traffic could have been much greater if the working conditions were different.
Question: So, the next step is to develop roadside infrastructure?
Vladimir Putin: Yes, at least this is the goal here. Roadside infrastructure, servicing centers, rest facilities, maintenance points where drivers could stop and have a normal meal. There must be communication and medical assistance. All this should be done. It is necessary to develop small and medium-sized business and the regions should play a large role in this.
Needless to say, the federal authorities should do everything to remove any administrative restrictions. It should be easy to start working here. But the local government should also create the conditions necessary for comfortable work that also brings in a profit. The owner of the place where we have just been said he is already running a maintenance centre. He is thinking about opening a new one because the traffic here will increase. This means that the market for such services will grow.
Question: Population density is very low here, given the vast territory. So we must develop the region and do something to attract people here. I think this should be one of our objectives. Do you have any ideas how people could be attracted here?
Vladimir Putin: We have already discussed this question during my trip. We have started building the Nizhne-Bureiskaya hydroelectric power plant. Taken together with the Upper Bureya plant, it will be a large power generating facility. This has encouraged plans to build new plants, including steel plants, here. A representative of one of these companies has signed an agreement with RusHydro to receive electricity from the new power plant. This will allow us to build a new space centre here, which the country needs now and will also need in the future.
What is a space centre? It is a small city with 35,000 residents, a plant producing the requisite components, such as hydrogen, for space flights. It will be a high-tech plant implying the creation of an environment that will encourage innovation.
As we drive on, you'll see a site where an oil pipeline is being built jointly with China. These major facilities being built along this route will grow and boost development in the region.
I'd like to say a few words about a steel mill. I am confident than new facilities will spring up here as soon as the Nizhne-Bureiskaya hydroelectric power plant comes on-line or even before that. The government must create the infrastructure, and business will flock here.
Question: But can you employ local people who have no special training for such projects?
Vladimir Putin: The situation could be simpler for the space centre project. A resident of Uglegorsk asked me: "Will you build a town using the professionals coming from European Russia and Siberia? Or will you also hire locals?"
The space centre project will be easier to implement because the requisite professionals are there, who were once employed by the Defence Ministry. They and many of their relatives served in the Strategic Missile Force, because we are going to build a spaceport at one of the former Defence Ministry sites where a missile unit was deployed.
Many residents of that village are connected with missile technology. I think it will be easier for us to find requisite professionals for the new project there.
As for the Nizhne-Byreiskaya power plant, I talked with workers before leaving. I asked them if they were working or would work here. They replied: "We want to. We built the Sayano-Shushenskaya hydroelectric power plant, the Upper Bureya plant, and now we will work here."
In principle, we have a streamlined system of using skilled professionals, including workers and technologists. However, conditions should be created for especially difficult projects to attract professionals, for example from European Russia.
I have just been to Khabarovsk. We visited the High Medical Technology Centre there. At least 30% of its staff has come from cities in Siberia and the European part of the country because the centre offers interesting jobs and has cutting-edge equipment that even large European centres don't have yet. This is the first thing. And second, we have created good living conditions for them; each professional has a flat, a good flat in a district of their choice. The governor told them: "Choose any part of the city you want."
When we apply such methods to all production and living questions, we will have no problem attracting personnel.
Question: You did not stop at Blagoveshchensk, but I have been there. You can see there that the conditions of our neighbour (China) are becoming constrained because of a fast growing population. Twenty years ago, there was a small village on the other side of the Amur, and now it is a small city with a population of four million - this is small in China. There are more Chinese in the streets of Blagoveshchensk. Can we do something to stop their economic expansion?
Vladimir Putin: First, I don't think this is China's economic expansion. And second, China's northern regions are growing now not because of constrained conditions in the country but because the Chinese government is implementing consistent policies for the economy and for the ethnic composition of its northern territories. I think that we will eventually benefit from this, provided we choose an appropriate policy. It makes more sense to have a prosperous and flourishing neighbour than a poor and ailing neighbour who needs permanent attention.
At the same time, we should work accordingly to develop these territories. We have not paid enough attention to them until recently. I would like the economic and social development to increase in Kamchatka, Sakhalin, the Primorye Territory and here in the Amur Region. We will attain these objectives if the plans we are discussing during this trip are implemented. In that case we will have comfortable cooperation and will benefit from having a prosperous partner.
Remark: Are you referring to the situation in the oil and electricity sectors, our recent projects such as the oil pipeline (to China)?
Vladimir Putin: Yes, oil and electricity. But don't forget that we also sell millions and possibly billions of dollars worth of special equipment and armaments to China, which are high-tech products.
Question: Are we buying more?
Vladimir Putin: We are buying more consumer goods, and I am not sure we should compete with China in the production of cheaper consumer goods. We are unlikely to win such a competition. About 200 million people annually join China's labour market; however, eventually there will be a problem with their subsequent employment. But now they have a large and cheap workforce which is an apparent competitive advantage, especially in the production of consumer goods that do not require high skills or complicated equipment. Such workers produce very cheap consumer goods of acceptable quality.
Our competitive advantage is different: high-tech products.
I have no doubt that we have a good chance of succeeding if we continue our development and progress along this path.
Question: I'd also like to ask about one of the key industries of the Far East, the fishing industry. When we spoke with fishermen, they said that it's less costly to lease ships from China and service them there. They also said that Russian vessels are in a poor condition; they are worn out and obsolete. Will the government attend to this issue?
Vladimir Putin: Yes, it will. But why have we found ourselves in this situation? These are similar problems facing not only the shipbuilding industry but also the aircraft industry, and they are rooted in the history of this country. The Soviet government concentrated on the production of military aircraft and vessels, and our military aircraft sell well on international markets today. Russia even lacks the production capacities to satisfy the global demand for its aircraft.
The same goes for air defence systems. We could sell more S-300 and S-400 systems, but we just can't produce so many of them. Again, we lack the capacities. The same applies to military shipbuilding. Russia produces submarines and several types of subsurface ships - they are highly competitive and are marketed globally.
On the other hand, little was done to develop civil aircraft and shipbuilding, which is why these industries are lagging behind today. We don't have the facilities necessary to manufacture such aircraft and vessels. There's not even anything to rebuild or repurpose - such facilities need to be built from scratch.
However, this gives us a competitive edge and offers new opportunities. If we create everything from scratch, we can do it using modern technology. This is what we're trying to do now, and there's nothing we should be ashamed of here. We should use modern technology and attract leading international shipbuilders. I'm referring to South Korea and Japan primarily, the leading manufacturers of several types of vessels. We're doing our best to attract them here. Incidentally, we're going to build two shipyards in the Far East in cooperation with our Japanese and South Korean partners.
But this doesn't mean that Russia has nothing of its own. Here, in the Amur Region, the shipbuilding industry is quite strong, and the repair docks operate well and usually have a substantial workload. Fishing vessels are primarily built and repaired here. Competition is very tough in this segment, and the government will try its best to bolster the fishing industry without impeding the development of the civil shipbuilding industry.
This fully applies to civil aircraft construction as well. Airlines need new, comfortable, modern and cost-effective aircraft. Those who work in the open sea need vessels of the same quality. But Russian companies do not manufacture such aircraft or vessels. This is why we must create the conditions necessary to produce them in Russia. And we do have a good basis for this, personnel and a strong scientific community.
We need to create conditions that make it possible to manufacture them here, benefitting from the best international practices and technology, and attracting international specialists. We need to build docks and work out a programme, a plan for the development of the industry. At the same time, we should make it clear to Western companies that unless they enter into cooperation with us, at a certain point we would tighten the screws, raising import duties or distributing fishing quotas only between Russian-produced vessels under the Russian flag.
But we shouldn't be hasty. The key thing is that we must avoid any harm to the fishing industry. We must draw up a programme and make it known to everyone involved in this process. This programme should be open and clear, and take into account the positions of fishermen, economists, shipbuilding companies and financiers. If we develop such a programme and coordinate it with each party I've mentioned, we'll have every opportunity to keep up with international companies and market competitive products at home and globally.
Question: The auto industry faced similar problems. You're now driving a Lada Kalina. I'm sure you've tried different cars in your life. What are the Kalina's strong and weak points? I'm sure you can compare it with other cars.
Vladimir Putin: To tell you the truth, I'm amazed. I think I need to ask the manufacturer how this car was assembled - which of its parts are serial-produced and which are exclusive, made specifically for this trip. I was assured that the car is just one in a batch. I like this car very much. It's compact, not too loud and consumes a bit over six litres of gasoline per 100 kilometres. I didn't try driving at a high speed, but at 140-150 kph it was okay. I almost didn't have to kick down at sharp curves - this car stuck perfectly to the road. Very good for a car of this class. I enjoyed it.
Question: Still, you must have also noticed its shortcomings...
Vladimir Putin: I guess not. Only, it's either a glitch or the gear gauge actually should work this way. You see, we're in fifth gear but it shows neutral. But the rest works fine. GLONASS and all the other systems function well. If we press here... This is the main display... The Sat Nav... You turn it on, switch, and here we go.
Question: It's detecting a satellite?
Vladimir Putin: Yep. It shows outside temperature, mileage, a lot of information. It's very convenient.
Remark: If it shows neutral gear, then this is a serial-produced car, Mr Putin.
Vladimir Putin: Oh, here goes GLONASS...
Question: You mean this male voice?
Vladimir Putin: Yep, it just let us know we're driving. An onboard computer, you know, a scanner... Settings...
Remark: Quite unexpected.
Vladimir Putin: You think I expected that? That's interesting...
Question: What conditions should be created for the auto industry so that Russian-produced cars can keep up with international cars?
Vladimir Putin: I think they have been created already. Thanks for mentioning the auto industry. The same should be done in the aircraft and shipbuilding industries.
There are certainly differences and specific issues here. Clearly, it's easier to assemble a car than a ship or an aircraft. The production time and investment are different. And this should be taken into account while developing such programmes. But the idea is the same in principle.
Here's what we've done in the auto industry. A few years ago, we told our partners in advance: "Guys, let's be friends. You must realize that Russia (and no other country, in fact) will not allow you to dump junk on our market, let alone turn Russia into a scrap yard for all your used equipment. This is an environmental issue as well as an equipment quality issue. We want to develop technology in this country and collect taxes here. However, we also understand that consumers need your equipment at this point and that you cannot just jump in and begin production right away. Certain conditions need to be created. So let's compromise. We won't raise import duties right now, but we will provide you with a timeframe so you will know when to expect a policy change. We will gradually increase tariffs, first on used cars, then on new ones. Russia is not a WTO member yet, so we can afford it. But we do not want to undermine your business in Russia. Please, you are welcome to come and start producing here. For our turn, we'll do all we can to ensure a good start for your business. But much more will depend on you. We would like you to gradually give us your technology and know-how, increase productivity and improve the skills of local personnel."
These requirements are included in contracts that the Ministry of Industry and Trade signs with foreign carmakers. We calculate how large the share of Russian-produced cars should be in a particular year. It's a so-called localisation index - it shows the share of domestically produced car parts. This index usually stands at 25-30% at the outset - depending on the car make - and can reach 70% later.
Imagine what it will be like when 70-80% of cars are manufactured at Russian plants. Modern equipment will be utilised there - because international manufacturers should guarantee the quality of the parts installed in their cars.
No large company that respects itself will use something that doesn't live up to international standards. This is the way we may go in the aircraft and shipbuilding industries.
Question: Now let's move to the Vostochny space centre. Has Russia concluded any agreements leasing it out for use by neighbouring states?
Vladimir Putin: What for? We rent the former Soviet space centre Baikonur in Kazakhstan. The lease will expire in 2050. We pay the rent, maintain and develop this space centre. But as I said at the meeting, we'd like to have our own rocket launch site, in our territory. It's a matter of technological development and national security.
Russia had to transform Plesetsk into a space centre although it had never performed such a function. It used to be a launch site of the Ministry of Defence. When we lost Baikonur, we had to repurpose Plesetsk. But we cannot launch manned spacecraft from there and have to use Baikonur.
The new space centre Vostochny will give Russian spacecraft independent access to space. But we'll continue cooperation with Kazakhstan and also France since we have a joint project with them, underway in Kourou in French Guinea. We expect the first launch in the first half of 2011.
We have intensified cooperation with other countries on space launches. Russia still launches more rockets than any other country. We won't have to lease anything. We'll just need to meet the commitments that we have today and those that we will take up in the future.
We've entered into agreements with other countries committing ourselves to joint space projects, including launches. And we're planning to conclude even more long-term agreements with other governments. Moreover, we've received more cooperation offers than we can accept.
For example, we're working on GLONASS now - and it's my pleasure to speak about this project since a few years ago, five years ago, we suggested to our European partners, the European Union, that we should implement this programme together. As you know, they're planning to develop a similar system, Galileo. I suggested doing it together at one summit. We were just beginning our work then. They nodded but never actually showed any eagerness to cooperate and decided to do it on their own.
To function properly, this system needs 27-28 satellites, or better yet 30 satellites in orbit: 25 satellites to make it operate globally and two or three more just to be on the safe side, to have a replacement in case one satellite breaks so that clients can switch to operating satellites.
Five or six years ago we suggested working together on it, but they rejected us preferring to do it on their own. We started our own project. What makes us proud is that we have 25 satellites in orbit, and they have only two. They're trying to expedite this work, put more satellites into orbit and have asked us to help them make more launches. But we just can't do that because our facilities are loaded to capacity - we're making our launches, and launches for our partners, including European partners, in accordance with the agreements we concluded with them.
Speaking about the future of Vostochny, I have confidence that it will have enough orders, from Russian consumers of these services and from our international partners.
