Rossiiskaya gazeta: "Giving green light to local self-government"
Vladimir Putin promises not to forget about the unemployed
On December 18, Prime Minister Vladimir Putin went to the Lipetsk Region where he chaired a meeting of the Presidium of the Presidential Council for the Development of Local Self-Government.
With winter coming, Vladimir Putin's inspection visits to Russia's regions has become more frequent. Yesterday, it was the Lipetsk Region's turn. Lipetsk Region has Russia's third largest budget revenues. It is one of a minority of Russian regions not subsidised by the government's regional support fund. Note that in 2009 tax revenues from Novolipetsk Steel may fall by 60%, warns regional governor, Oleg Korolev. Novolipetsk Steel, (NLMK) accounts for 40% of the region's budget revenues.
As usual, Putin began his tour of the region with visits to its key industries. The prime minister's first visit was to the Lider-Resurs (Leader Resource) cardboard factory founded with Rosagroleasing's assistance. Putin watched for a while the noisy process of cardboard packaging production and talked with plant managers and workers.
As it turns out, plant managers were not too worried about the financial crisis. Not only was the company not reducing personnel but it actually plans to increase it by nearly 50%. "We have 190 people working here, but we hope to increase this figure to 280 soon," Igor Konyakhin, one of the factory's founders, told the Rossiiskaya gazeta daily.
Managers complained in unison about Russian banks afraid to take risks during the crisis and only reluctantly issue loans but at exorbitantly high interest rates. "Regrettably, most major banks are now busy making money on exchange rate fluctuations," said Oleg Donskikh, another founder of the cardboard company. The founders could not help but complain to the prime minister about banks. Putin promised to straighten out the complicated situation.
The crisis came up again at the meeting of the Presidium of the Presidential Council for the Development of Local Self-Government. Putin recalled that he had already discussed anti-crisis measures with the regional leaders. Now he wanted to continue this dialogue with municipal authorities who are "more familiar with the local situation."
In these crisis conditions, many sectors require more government attention. However, yesterday Putin proposed focussing on small business. The prime minister described his impressions of the Lipetsk Region's enterprises he had visited and said that "they are operating at a steady rhythm." According to Putin, the government should now focus on efforts to protect the domestic market, stimulate domestic demand and restore the credit system. The government has already allocated 30 billion roubles ($1.08 billion) to Vnesheconombank to support small business. It will also support the surety funds and subsidise interest payments on loans issued to small and medium businesses.
The prime minister focused on tariffs on which "the economic status of our major companies" largely depends. In the current situation, the government decided to revise the earlier planned tariff growth rates. On January 1, 2009, gas tariffs will increase by only 5%, not by 25% as first planned, and the annual average should be any more than 16%.
"We will look at the developments in the economy and the social sphere in the first quarter of next year, and will decide then on the next steps," the prime minister said.
He promised that the government would not forget about the problems of Russian Railways. According to the prime minister, the average annual growth in railway freight tariffs should not exceed 12% in the first quarter of next year, as opposed to the 14% or 18% previously planned. In order to compensate for shortfalls in the revenues of the Russian Railways monopoly, the government decided to earmark an additional 50 billion roubles for its support, Putin said.
Regarding Gazprom's investment programme, it will not undergo any serious change in the near term. The Cabinet believes Gazprom does not yet need state subsidies, Elvira Nabiullina, Russia's economic development minister, said. However, some investment programmes in the energy sector will be revised.
The prime minister also mentioned housing [and utilities] which is fully controlled by regional and municipal authorities. He called on the municipal authorities to "take a responsible and cautious attitude to the tariff policy in the housing and utilities sphere." He also proposed devising a mechanism for additional targeted support for people who have found themselves in a difficult situation.
Finally, he addressed the grave problem of unemployment which is of most concern to Russians during the current crisis. The government is constantly monitoring the labour market. According to the prime minister, the situation as a whole "is under control," but there are issues. First of all, problems are most critical in company towns, that is companies who are the primary source of employment in city. Putin said that since October 2008 about 7,500 companies had been forced to cut wages or sharply reduce their personnel. He did not give the exact unemployed figures but said that another 207,000 "will work a partial work week or will be sent on mandatory leave." To ease the burden, the government wil raise the maximum unemployment benefit to 4,900 roubles and introduce mortgage loan deferments.
The government has also decided to allocate an additional 50 billion roubles to support the labour market. These funds will be used within special guidelines. Putin explained that they would be allocated for special programmes to combat unemployment as proposed by the regions. The funds will be given only if the programmes are "clear and efficient."
Another measure proposed to strengthen the labour market is to support public works projects in various areas, including road construction, farming and city and village development.
The meeting also discussed measures to further develop local self-governments. According to the prime minister, a system of local bodies of authority should undergo a substantial change, and the financial base of the local self-governments should be improved.
Employment should be top priority for the local authorities, the prime minister underlined.
Alexei Ilyin, Lipetsk
Moscow issue
