Vladimir Putin: Good afternoon, ladies and gentlemen, friends,
Today was the first meeting of the Council of Ministers of the Union State for this year. Mr Sidorsky and I discussed a wide range of bilateral and integration issues in detail, and also shared our opinions on the current economic problems.
As you know, last year we approved a joint action plan to mitigate the negative effects of the downturn on the Union State.
I am pleased to note that our closely coordinated anti-recessionary policies have proved very effective, increasing trade and Belarusian exports to Russia, which rose by some 40%.
Last year bilateral trade fell by 31% due to the global downturn, to $23.4 billion, but there has been a significant increase in the first months of this year, as I mentioned. We hope that these trends will continue. To this end, we must take advantage of all the opportunities and benefits of deep integration.
At the meeting of the Council of Ministers, we analysed the progress implementing the economic agreements between Russia and Belarus and concluded that they are being carried out consistently and to the benefit of our nations.
We also reached several decisions on joint programmes for the development and application of new technology. The purpose of these efforts is to promote technological modernisation and a robust post-crisis economic recovery.
Furthermore, we also approved the plans for fuel and energy distribution in the Union State in 2010. They fully comply with our energy agreements. I would also like to highlight our accomplishments in harmonising our countries' legislations. We have done much to protect equal rights for Russian and Belarusian citizens in the labour market and social services.
Without a doubt, this moment will be remembered as the beginning of a new integration mechanism, the Customs Union of Russia, Belarus and Kazakhstan. Working through the Union State and the Customs Union, we set before ourselves many large-scale objectives and move towards our main objective: the establishment of the Common Economic Space on January 1, 2012, which will completely eliminate all barriers to trade and investment.
In this regard, I would like to say that I am satisfied with the constructive and engaged discussion on the blueprint for facilitating the flow of goods and vehicles in the Union State, as well as the routine discussions between the Russian and Belarusian customs services and transport agencies.
Ladies and gentlemen, friends,
We will be celebrating the 65th anniversary of the victory in the Great Patriotic War soon. Here, in the heroic city of Brest, there is no need to say how much this anniversary matters to us.
We are preparing large-scale celebrations with our Belarusian partners. I am confident that we will commemorate Victory Day honourably. We will pay due respects to those who perished in battle, and grant moral and material support to the veterans of the Great Patriotic War. It is our sacred duty.
In closing, I would like to say that the meeting of the Council of Ministers of the Union State was characterised by a high degree of trust, as has always been the case, although it was not without disagreement. But these disagreements were business-like and, as a rule, lead us to finding a solution for the problems we face.
Thank you very much for your attention.
Sergei Sidorsky: I fully agree with the points made by the Russian prime minister.
I can only add that it was our common arrangement to have a presence here on the Western border of our state.
We expressed our willingness to establish ourselves from July 1 of this year on the external border of the Union State, which will at the same time become a customs border, marking a common customs space. It is important to note the considerable effort over the past few years in preparing for such serious steps.
The border authorities have reported the steps they have taken and how they will ensure border control in the Union State. The customs authorities have also done a lot of work. Now information on vehicles crossing the external perimeter of Belarus is recorded at the main customs control posts and sent in real time to Moscow. This is very important in terms of trust.
We discussed the trust issue a great deal. Today we were reassured that mutual confidence on the external border works. It is therefore important to understand today that the lifting of controls on the Smolensk section (we mentioned this earlier - controls on vehicle movement in the Smolensk Region were abolished a few weeks ago) is a big step towards real integration. These steps make people feel that the Union State and its government's resolutions and measures are real and yield practical results for the people of Russia and Belarus.
The discussion of specific issues of economic development was businesslike and constructive. We discussed the full spectrum of issues, covering our integration programme and the existing agreement, and concluded that we should step up our efforts in this area.
And it is very important that we agreed to further integrate all aspects concerned with energy resources and such economic sectors as machine building, power, electronics and microelectronics, or branches we consider to be the economic development drivers.
We decided to set up a task group under Russian and Belarusian deputy prime ministers to monitor the integration progress and update us regularly.
To sum up, the issues raised by both Russia and Belarus were all examined today. The appropriate instructions that were issued had also taken into account what Mr Putin said. It is very important that, given our decisions today, we set a good pace for 2010, and now we want to make good economic progress and emerge quickly from the crisis in which we, unfortunately, landed against our will.
Thank you.
Question: Interfax. I have a question for both prime ministers.
As reported, until recently, Russia and Belarus have differed on one important issue - whether or not oil customs duties should be included in the general tariff regulations applicable throughout the territory of the Customs Union. As far as we understand, Belarus insists an effective customs union is impossible unless the general regulations include oil, while Russia suggests signing additional agreements on the matter. Have you specifically discussed this today? If so, have you made any progress in the rapprochement of the positions?
Mr Putin, there is also a question to you alone. When dealing with your foreign counterparts, do you still raise the issue of recognizing Abkhazia and South Ossetia as independent states? Thank you.
Sergei Sidorsky: We have discussed a range of issues related to the protocol to the 2007 oil supply agreement signed by deputy prime ministers Igor Sechin and Vladimir Semashko.
We have agreed that Russia will supply 6.3 million metric tons of duty-free oil for domestic consumption in Belarus, while the remaining balance (a total of 21.5 million tons of oil) will be taxed.
The agreement, the protocol we have signed today contains a number of development issues including the duty schedules for Russian companies in the Belarusian market. We have made very specific and constructive proposals to settle this issue. We have good reason to believe that all of these issues will be handled successfully soon.
As for the July 1 deadline, we believe we should be able to take sufficient steps by then to implement the signed protocol; taxes and duties should be rescinded as the single economic space is formed.
Vladimir Putin: I absolutely agree with Mr Sidorsky. Customs duties should be cancelled within the single economic space. The single customs space is to become active by January 1, 2012, according to our plans.
This will require dozens of joint documents to be signed which will create a framework for cooperation. Let me remind you that Russia this year decided to meet its Belarusian friends halfway by agreeing to supply 6.3 million tons of duty-free oil for domestic consumption in Belarus.
What is especially important today is that we have reached an agreement on the energy balance. A relevant document has been signed and our future work in this area will be based on it. However, Mr Sidorsky persistently raised a number of other issues at the meeting - about cooperatives, about refined products and so on. We agreed to instruct the respective energy ministries to finalize these issues and report to us as soon as possible.
About the last part of your question, the recognition of Abkhazia and South Ossetia: I have never demanded that Belarus recognise the two republics. I, personally, have never even brought it up. If the two presidents, Dmitry Medvedev and Alexander Lukashenko, have discussed the issue during their talks, you had better ask them about it. We haven't discussed it today.
Nevertheless, I quite understand what your question is about. Indeed, Russia has always supported Belarus's foreign policies, even when we had economic disputes. We have invariably supported them internationally, because Russia and Belarus were in the process of building a union state. I have always told my counterparts - don't touch our relations with Belarus. This is globally accepted practice after all. Belarus is quite capable of choosing an internal political regime and of dealing with other problems.
Therefore I quite understand the Russian public's concerns. Russians did indeed expect Belarus to support Russia's policy regarding Abkhazia and South Ossetia immediately, energetically and effectively. As we know, that never happened.
But, let me tell you one thing. We have always supported the improvement of Belarus's relations with its Western neighbours and the United States. If their relations do improve, even at the expense of the recognition issue, we'll see this as a positive effect anyway. Belarus and Russia are very close, and we are building a union state, and a single economic space. Improvement of Belarus's relations with the West is worth it.
Second, we are living through a major recession. The International Monetary Fund has provided anti-crisis loans of over $3 billion. Russia is part of it, as it has contributed to the IMF. On the other hand, I would rather agree with one famous fiction character who said that there are certain issues where bargaining is "out of place." In any case, recognition of Abkhazia and South Ossetia is entirely within Belarus's sovereign power. That sovereign power is formed by Alexander Lukashenko, the country's legitimate president.
Question: Good afternoon. I'm Ivan Mikhailov from Belarusian TV Channel One.
Much has been said today about the need to promote bilateral trade at least to its pre-crisis level. What practical measures could be taken to achieve this goal? I am addressing this question to both prime ministers.
Vladimir Putin: Let me begin. Sergei Sidorsky mentioned this when he spoke about deepening cooperation, and I fully agree with him on this issue.
We have made practical proposals to Belarus in the chemical sector, oil refining and mechanical engineering. They are currently being analysed. I hope very much that these proposals will be implemented. This is one of the most promising venues of our trade.
The level of cooperation between us is very high, more than 70%-80% in some sectors and individual companies. Some of our enterprises cannot live without each other, at least today, which is certainly a good way to promote development. This is first.
The second aspect concerns the creation of the Customs Union and the Common Economic Space, which will open the market to many investors. Let me emphasise that even the first steps in creating a common customs space have boosted the sales of Belarusian goods to Russia by 40%. This is definitely due to the efforts of the Belarusian Government. The supply of Russian goods has grown by 12%-15%, but the growth for Belarusian goods was nearly 40%.
I believe that these are the main two measures, although there is one more objective we have discussed at length, and which we will eventually achieve - the creation of a common currency. If we had a common currency now, it would encourage market growth, simplify mutual transactions, and also reduce investor expenses thereby increasing competitiveness.
Thank you.
Sergei Sidorsky: On the whole, we have analysed last year's results. There was a decrease in trade compared to pre-crisis levels. Our mutual trade went down by over 31% last year, and Belarusian exports to Russia plunged 36%.
It is important that a joint anti-crisis action plan encouraged the development of our relations last year. We scrutinized the plan before adopting it and also presented it to our presidents. We considered it at all levels, and we believe that it includes the necessary elements for preserving the integration which we have developed over the last few years.
Close cooperation between our businesses and the adoption of practical programmes allowed Russian exporters to maintain their share in the Belarusian market and vice versa.
You have asked how we plan to increase mutual trade; the Russian government and the Russian president have answered your question. We will proceed by transforming our commodities based economy into an innovation based economy. Belarus has begun implementing this plan in the past few years. The Belarusian economy does not fully depend on commodities, and we have made great strides in moving away from oil refining. We have preserved our microelectronic and optics plants, and the precision industry, which is becoming closely integrated with the Russian economy. The coordinated development of Russian and Belarusian development programmes will ultimately increase bilateral trade.
We set up a dozen new enterprises every year. We have submitted a number of proposals on integrating them with Russian businesses. Our Russian partners, Russia's largest companies and state corporations, have submitted their proposals on integration. We have discussed these today and believe, as I have mentioned, that we will soon boost our cooperation, thus greatly increasing bilateral trade.
Vladimir Putin: I'd like to add that we continue to support the Belarusian economy by supplying low cost energy. Everyone knows this; it is not a secret. In the first quarter of this year, Belarus buys Russian natural gas for $269 per 1,000 cubic metres, while neighbouring Ukraine pays $304. Compared to the average European price, Belarus will save $2.6 billion this year.
Moreover, Belarus buys 6.3 million metric tons of oil for internal consumption duty free, which saves it another $1.6 billion.
Also, Gazprom is paying $600 million for its part of Beltransgaz.
However, we proceed from the assumption that this investment is justified in regard to the integration prospects we have discussed today.
Thank you very much.