Point of View

"I can tell you that the moratorium on the increase of unprocessed lumber prices will be extended into next year, 2010. I believe a similar decision can be taken for 2011. But we will make a decision based on our analysis of the situation on world markets. We hope that our foreign partners will use the additional breathing space judiciously - incidentally, this applies not only to foreign partners, but to our own logging industry as well - in order to expedite the implementation of their development projects and not appeal to the Russian Government to extend the moratorium year in and year out."

"The new Russian Forestry Code, which came into force in 2007, has set transparent, market-oriented rules for the industry. They are based on environmental responsibility, equal access to resources, and incentives for those who invest in advanced timber processing. Such investors will receive tracts of forested land without auction. We have simultaneously decided to phase in higher export duties for unprocessed lumber. I would like to stress that this is by no means an attempt to weaken the position of our competitors. It is a very natural and long overdue step towards a more modern and diversified economy. I am confident that such steps open up new opportunities both for us and for our traditional partners. To be fair, one cannot but notice that we have given our foreign colleagues an excellent opportunity to expand their business. In effect, we have given them direct access to the Russian market and sent them a signal: come and build your facilities, create jobs, and work."

"We do not believe that the current problems are reason enough for giving up our plans for modernisation altogether, or for abandoning our commitment to scaling down the export of raw timber. I am speaking about our development strategy."

"The Russian car market has a bright future, especially when the crisis ends. I am confident that post-crisis growth will be considerable, and there are objective data showing that the Russian car market is the largest in Europe. Several years ago we decided to launch large-scale cooperation with our foreign partners in the auto industry. And today the bulk of the world's leading automakers have plants here, which we regard as an inalienable part of the Russian automotive industry. Specifically, the anti-crisis measures currently being implemented in Russia include these plants. We will provide all-round assistance to the traditional automakers. They have a large part to play in the Russian economy, as they ensure employment in dozens of cities and entire regions, and I am confident that they can deal with the current problems, modernise production, and roll out competitive products and cars that will be in demand."

"The timber industry requires greater support in these hard times. We have done something for it already. In particular, we are subsidising interest rates on loans to businesses and lumber exporters. Allocations for purchasing new equipment are being made through Rosagroleasing. Many plants are on the Government list of essential companies, which entitles them to government guarantees."

"I deem it necessary for the Russian Government to explicitly define its position on the use of forest resources, the development of the timber processing industry, and the basic principles of cooperation with our foreign partners. Obviously, we cannot be content with just supplying raw timber and with the current state of the industry… We have chosen to modernise the industry, establish new high-tech plants, create new jobs and come to the international market with competitive finished products. We should also work more to conserve our natural resources."

"I would like to tell you that the Government has drafted a decision on issuing the next tranche of state guarantees amounting to 36 billion roubles to the Agency for Housing Mortgage Lending. These additional funds should help the AHML to continue to develop mortgage lending, and therefore support people and the construction industry."

"A decision has been made to speed up the construction of the onshore spillway. I spoke about it during the meeting at the Sayano-Shushenskaya Hydroelectric Power Plant. As much as 4.3 billion roubles will be allocated from the Government's reserve for this purpose this year."

"The Russian Government is drafting a state energy efficiency programme. We have drafted a new Energy Strategy for a period until 2030. In fact, we would like to develop a fundamentally new energy system that will be more reliable, effective and environmentally friendly."

"The energy industry's investment programme in general. The programme prioritises reliable energy supplies and construction of new modern power plants. Notably, state-controlled companies must commission about two gWt of power-generating facilities in 2010. Private investors who have bought into the energy industry during the reform of utility giant Unified Energy Systems (UES) are planning to build another 3.8 gWt of power-generating facilities. The new owners of power-generating companies have pledged to implement investment development programmes and must, naturally, put them into practice."

"Without a strong, cutting-edge machinery manufacturing industry Russian economy will never be full-fledged, competitive and based on innovations, will never overcome its excessive dependence on raw materials. That was why we made decisions to develop and upgrade the industry even before the crisis. We have established major integrated shipbuilding, aircraft-building and military industrial companies."

"The automotive industry ended up being one of the sectors hit the hardest by the economic crisis. Sales of new cars dropped significantly not only in Russia, but all over the world. Only now have markets in individual countries started to recover.<.....> The transition to modern standards must be gradual. Russian auto plants must have enough time to upgrade their manufacturing capabilities and technology. And of course consumers have to be ready for this."

"Regarding imports, as I've already said many times, we will strive to have all import vehicles fully meet Russian standards. The new set of technical regulations is based on these specific principles, and I hope that its coming into effect will allow, among other things, improved traffic safety on our roads."

"Despite certain economic difficulties, we have kept our space projects on the budget priority list. This year alone almost 82 billion roubles have been appropriated for these projects under three federal programmes. Let me specify that these allocations amount to 58.2 billion roubles under the Federal Space Programme, another 15.3 billion roubles under the federal targeted programme GLONASS Global Navigation System, and yet another 8.2 billion roubles under the federal targeted programme on developing Russia's defence and industrial complex in 2007-2010 and beyond. Thus, the total is 81.7 billion roubles."

"The Government has adopted a number of anti-crisis measures to stabilise the financial position of the industry's individual companies. I am referring to additional capitalisation, and the granting of state guarantees and subsidies. A total of eight billion roubles have been allotted to the Khrunichev State Research and Production Space Centre, and state guarantees worth three billion roubles have been granted to the Energomash Joint Stock Company. The Government has also made decisions on granting subsidies to a number of other organisations of this industry."

"Let me recall that our strategic goals in this respect are to make the domestic space industry more competitive, and to more effectively use its potential both for resolving domestic socio-economic tasks, and for entering high-tech international markets. Obviously, we should not forget the industry's role in our defence capability. Defence-related projects amount to 63% of what is being done in the missile and space industry."

"At the same time, apart from budgetary funds, we must create the conditions for attracting private investment into our water management complex. The expenditures required for implementing the strategy, which we are going to review today, will add up to about 662 billion roubles in the period up to 2020. About 500 billion roubles will come from the federal budget; the regions will not contribute much, while extra-budget funds will amount to a mere 66.9 billion roubles. In general, this sphere may be quite attractive for private investment as well."

"The recent tragic events at the Sayano-Shushenskaya Hydroelectric Power Plant have made it perfectly obvious how much we still have to do to increase the reliability of technical structures in general, and hydro-technical facilities in particular. We must conduct a thorough inspection of all strategic and vital installations of the infrastructure and work out a procedure for their regular modernisation and monitoring over their technical condition. By and large, we must fundamentally improve technological discipline in industry and other branches of the economy."

"In recent years, we have made a number of achievements. Water losses during transportation have decreased by 6.3%, while sewage dumping has been reduced by 9%. The introduction of the closed cycle technology has increased the reuse of water by 6.5%. The quality of water, including that from drinking water sources, has improved. The water-holding capacity of our GDP has been reduced, although we are still behind many countries in this respect."

"We are witnessing the establishment of key elements of the national nanotech network, which includes publicly accessible research centres. Therefore, I think it expedient to extend the term of the federal targeted programme Infrastructure Development for the Nanotechnology Industry for another year, that is, through the end of 2011."

"At this stage, I think it is extremely important to create and stimulate domestic demand, an approach that involves, among other things, the Government procuring nanotechnology products for Government needs and for the needs of companies in which the Government holds stakes, such as healthcare, educational, research and housing and utilities companies. And if we are discussing the allocation of federal resources, investing in innovative technologies is certainly the best decision we could make."

"Judging by the available data, which is quite abundant, we have established a good foundation for the development of technologies connected with medicine, diagnostics equipment, environmental protection, saving energy and the production of innovative composite materials. Almost a thousand enterprises of the real sector of the economy are working in the area of nanotechnology industry."

"Let me repeat that we intend to invest in aircraft construction, and will do so, but we need real results. I would like to emphasize that the industry must function in market conditions. We realize full well that the situation is difficult, and that your rivals in the world markets are enjoying direct support from their governments. However, to start with, we should not repeat the stupid mistakes of others, and we should work effectively. And, second, we cannot resort to this practice all the time. We can work effectively in this country, and we should achieve this by all means."

"At the same time, the aviation industry is going through uneasy times, to put it mildly.<...> I mean inadequate quality of corporate management, high costs, and low economic efficiency of labour productivity. There are many examples.<...> It may seem strange, but a whole series of United Aircraft-Building Corporation (UABC) contracts for the delivery of aircraft both at home and abroad have brought only losses instead of profits.I would like to ask UABC and relevant departments to analyse this situation in detail, and to submit proposals that would prevent such setbacks in the future."

"Furthermore, aircraft construction has found itself in an extremely difficult financial predicament. Before coming here, we held two other meetings, trying to carefully analyse the financial situation. The total debt of UABC and its subsidiaries is more than 119-120 billion roubles. Moreover, there is a deficit of 64 billion, which is not guaranteed by their revenues or profits."

"At the same time, it goes without saying that in light of this force majeure, it is necessary to draft a programme for financial stabilisation, and help aircraft builders to get rid of the so-called "toxic" debts. This programme of financial recovery should be submitted to the Government during the next month, or, at most, in a month and a half."

"Now, before our meeting, record contracts were signed here at MAKS for the purchase of 48 SU-35Ss, 12 SU-27SMs, and four SU-30M2s, for the total sum of over 80 billion roubles. The aircraft will be delivered until 2015. Obviously, this will allow us to equip our Air Force with the latest technology, and to keep our aircraft companies busy, which is always important, especially during the crisis."

"I want to add that literally over the last few days, the Government has made a similar decision: 3.2 billion roubles from the state budget will be allocated for additional capitalization of the Sukhoi holding company. Today, we will also discuss the possibility - and I want to emphasize this - we will discuss the possibility of adding another 15 billion roubles to the capital of RSK Mig. We already gave 15 billion, and today we met with Mikhail Pogosyan and discussed this issue. He is in constant contact with Sberbank. We had already discussed this issue previously, when we gave 15 billion roubles, and we will discuss giving another 15 billion."

"Starting in 2004, state financing for aviation increased 20-fold, I want to emphasize this and draw your attention to this, ladies and gentlemen. Not by a percentage, but 20 times over! Just this year, taking into account anti-crisis measures, we allocated another 80 billion roubles for these purposes. The funds were spent on the purchase of Russian airplanes and subsidizing the expenses of technical upgrades for our companies. Around 35 billion roubles from the budget were allocated for increasing the authorized capital of key companies in the industry. These are the RSK Mig company, which received 15 billion roubles, the Chernyshev MMP company, which received 2.9 billion rubles, the Kazan Gorbunov Aircraft Production Association, which got 4.1 billion roubles; and Motopostroitel in Samara, which received 1.4 billion roubles. The annual allotment in authorized capital for UABC to build civilian aircraft is another 6 billion roubles."

“We have singled out development of aircraft engineering, along with the space industry, shipbuilding and nuclear energy, as key priorities in Russia’s industrial policy. Due to these specific industries, we expect a significant increase in the share of high-tech production in the Russian economy, thereby increasing the economy’s sustainability and diversifying its exports.”

"VEB loans made it possible to prevent selling cheaply strategic Russian industrial assets which had been mortgaged abroad. We earmarked $50 billion for the purpose initially but we made do with $10.5 billion, and even that sum has been partly paid."

"The bank started funding the 21st new project. The projects are related to infrastructure development, high technologies, and new industrial plants - in particular, the modernisation of Siberian and Far Eastern railways; the establishment of technology parks in Tatarstan and the Kaluga Region; the reconstruction of several power plants, and work in the entire energy industry. The bank also joined the investors in Olympic construction in Sochi."

"Oil and gas producing companies have indicated several times that without guaranteed access to pipelines they will not be able to foster the rational use of transit gas. I think that such a guarantee will appear. But that means that in the near future, let us say by 2012, we must realise our plans for the amount of gas burnt in flares not to exceed 5%."

"When considering the future development of the consumer industry, we must give ourselves real, achievable aims, carefully weighing up our options, and not knowingly making promises that we cannot fulfil. I will now identify what I consider to be two key problems. The first is the struggle against illegal imports, a problem I mentioned earlier, and black market production. To this day counterfeit production occupies 40% of the market. Here I am also including smuggled goods. it's vital to implement several major investment projects in the sector, modernise consumer industry enterprises with the latest technology, which will allow a significant increase in production quality and will also gradually enable domestically produced goods to regain their prestige in the eyes of consumers in this country and abroad."

"Today the consumer industry comprises a healthy core of several dozen major enterprises and hundreds of small and medium sized companies, which have found their market niche, developing their production of goods for which there is a demand, including for children and young people."

"Despite the difficult situation with budget revenues, state support programmes will continue to be implemented in 2009. 200 million roubles have been set aside for interest rate subsidy on loans for the purchase of raw materials, and 90 million roubles for loans for technological upgrades."

"The main task for the next four years is to make the space industry useful to the Russian consumers, and speed up the build-up of a national group of satellites to enhance the reliability and technical level of communications, radio and television broadcasting, monitoring of the Earth's surface, and weather forecasting. It demands new-generation vehicles, with more extensive functions and longer service life."

"We decided to increase their workload. By 2015, Sukhoi will supply the Russian Federation's Armed Forces with over 60 cutting edge fighter planes. This will more than ensure there are commissions for the military part of the enterprise. The factory is also working on creating a 5th generation weapons system. Work on that is proceeding according to schedule."

"We decided that in order for shipbuilding in the Far East to be modern and competitive, and to ensure that no one who orders from them, even Russians, feel the requirement to place their orders abroad (and overall you can understand that they want the goods they buy to be at an acceptable market price and of good quality), comprehensive modernisation is required, or to be more precise, virtually new construction. We are also planning such construction at the Zvezda shipbuilding company in Vladivostok."

"You know how difficult and dangerous the miners' work is. These people have a right to expect additional pension guarantees, including from their employers. We issued instructions that these issues should be addressed again. Working together with the Federation Council, we accelerated the drafting of the law On Additional Social Security for Some Categories of Workers in Coal Mining. It stipulates additional payments to the pensions of the sector's workers depending on the length and conditions of their work. Such payments can be made to the miners who did the most difficult and dangerous jobs. Their retirement pensions with additional payments will amount to as much as 40% of their wage."

"And finally, I want to state that the nuclear industry has always been one of Russia's greatest assets. I am convinced that if we organize our efforts efficiently and set our priorities correctly, the nuclear industry will remain an important source for the country's development, whether it is in energy production, defence, economy, or science. I would like to wish all of you every success."

"As you know, we have already approved the project list for realisation of the Main Government Policy Areas Until 2012. The list consists of about 60 projects. The nuclear energy and nuclear weapons development areas have been included into one of the four "pilot" projects that will be implemented on a priority basis. The project will result in increased energy output at the existing facilities, ensure and strengthen Russia's leadership in nuclear fuel production, and allow us to introduce the most advanced radioactive waste utilization technology and accomplish a series of other environment protection measures."

"As you know, we have highly ambitious, and yet quite realistic, goals in this sphere. By 2030, nuclear power plants should account for 25% to 30% of electricity produced in the country. The current figure is 16%. The relevant figure exceeds 25% and even 30% in many European countries, so we will have to catch up with industrialised states. <...> There are no minor details in this sphere, a sphere that needs a corresponding financial backing. At the same time, we also need to develop a modern grid infrastructure and ensure the solution of many other problems, which have always been important in this sector whatever their scale, even if it is minuscule."

"This year, irrespective of all the difficulties we have experienced, we are not introducing cutbacks; instead, we are increasing the resources allocated to the development of the transport system. We consider this approach to be one of the most important anti-crisis measures, which will allow us not only to create more jobs, but will also lay down the fundamental infrastructure for the post-crisis development of our country. By comparison with 2008, how does the outlook for 2009 appear? The volume of investment has been significantly increased, by 100 billion roubles, which brings it to 550 billion roubles, including 312 billion roubles for the construction and major repair works on roads (up from 294 billion roubles last year). As a whole, the financing for the sector, combined with the anti-crisis measures, has increased by 30%, and if you take highway repair and construction, then this increase stands at 15%."

"We are going to allocate 2.9 billion roubles to one of the largest engine building companies, the Chernyshev Moscow Machine Building concern, which will allow it to retain its workforce of 7,000 people, and ensure the completion of major export orders."

"The electricity shortfall was one of the obstacles to industrial development and the realisation of a series of major projects. The cost of connection to the grid was prohibitively high, and that, in turn precluded the realisation of many long-term investment projects, as I have already said. This issue is particularly sensitive for small and medium sized businesses. In today's crisis conditions, demand for electricity has fallen slightly, and many regions of the Russian Federation are forming reserves. But this is clearly a temporary phenomenon. The restoration of sustainable economic growth is impossible without the development of the energy systems, without deep-rooted modernisation of the aging equipment, without the construction of new power stations and the development of the grid. In 2008 we added two GW of capacity, which is as much as was introduced during the previous two years, 2007 and 2006, together. It is very important that this pace is retained in the coming three years. This requires something in the order of 1.8 trillion roubles of investment."

"We also needed to support banks- and probably above all - because we needed to preserve the people's savings in our banks and prevent the paralysis of settlements between enterprises. We attained both goals."

"Moreover, the banks that received support managed to increase lending to the real sector by more than 15% over the five crisis months, and issued loans worth more than 1 trillion roubles."

"We had to protect the national currency affected by the flight of capital and declining export revenues, to ward off the attacks against the rouble. We managed to prevent uncontrollable devaluation. As we promised, the decline in the rouble exchange rate, which was inevitable in the situation, was smooth; that allowed the economy and people to adjust to the new realities."

"The current exchange rate of the national currency is clearly boosting the competitiveness of Russian producers in the external and, most importantly, domestic markets."

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