By Igor Naumov
Alexei Gordeyev managed to lobby the Government to set up a grain company
Yesterday, the Government's Presidium held its first meeting in 2009. The Presidium approved the cabinet's agenda for the first six months of 2009, discussed a range of current issues, including the gas dispute with Ukraine, and adopted an important decision to set up a state agricultural corporation - a national grain company. It will incorporate not only the state grain producers, but also the largest private grain producers and traders.
Prior to the meeting, Prime Minister Vladimir Putin had a telephone conversation with José Manuel President of the European Commission on the issue of gas transit to Europe. Putin did not appear very enthusiastic. He said that the gas row with Kiev was close to resolution. Ukraine accepted Moscow's conditions and agreed to re-sign the protocol on setting up a control mechanism for the transit of Russian gas to Europe through Ukrainian territory. The document is on its way to Brussels, where it will be signed by the European Commission, said the Prime Minister (it was signed by the European Commission yesterday). However, Russia will only resume the supply of gas when it is convinced that the control mechanism is working, Putin said.
Putin then switched to domestic economy. The part of the discussion open to the media was traditionally devoted to Government achievements. A government official told Nezavisimaya Gazeta that due to the crisis, it is becoming more and more difficult for his ministry to find any achievements to report at the Government meetings.
"Achievements" from the ministries have to be approved by the Government administration first, before they can be reported to the public. As a result, the public receives a polished version of the situation in the country. Real issues are discussed behind closed doors. This allows the Government to present an overall successful picture of the economic and social conditions in Russia.
At yesterday's meeting, Andrei Fursenko, Minister of Science and Education, and Tatyana Golikova, Minister of Health and Social Development, were assigned the task of reporting the good news. The former reported on the measures taken to retrain the employees who lost their jobs during the crisis. He said that a programme would be launched within six weeks to train manual or qualified workers. They will be in-demand by the labor market not only for the time of the crisis, but also after the end of the recession. Golikova, in turn, reported that a website "Employment in Russia" would be launched on January 16. The site is designed to help employers and employees to search for workers and jobs respectively. It will have up to 740,000 vacancies listed.
Investment projects could also create new jobs. However, the federal and regional Governments had to adjust their investment projects due to the crisis. Deputy Prime Minister Dmitry Kozak said that both the number of investment projects to be continued in 2009 and their funding amount would be reduced.
Out of the 21 projects originally planned, only 15 will be implemented, and the total amount of funds allocated from the Investment Fund will be reduced from 113 billion roubles to 64 billion roubles. Similar cuts will be made by regional Governments. Due to the reduced investments into the economy, the new job creation forecast was also lowered to 38,000, Kozak said. Nevertheless, this was presented as an achievement, and Putin had to instruct the Government to adjust the Investment Fund activities based on the present economic and social conditions.
Despite the cuts in investment projects, the Government decided to support domestic agriculture. First Deputy Prime Minister Victor Zubkov said that the Government would need to purchase 18 to 20 million tons of grain to support the agricultural production industry (APK). So far, only 5.3 million tons have been purchased for a total amount 25 billion roubles. There is only half the number the grain storage facilities required and the elevator infrastructure is mostly worn-out and obsolete.
To overcome the existing difficulties, the Government has decided to create a national company that will help develop the grain market in Russia. The Agriculture Minister Aleksei Gordeyev told reporters after the Presidium meeting that the Government would draw on international experience when establishing the grain company. In particular, the Canadian and Australian approaches will be taken into consideration.
The newly created company will incorporate 40 state firms and 8 to 10 large private grain companies. Private companies will not be forced to join the corporation, Gordeyev said. Based on state corporation-building cases in other industries, however, private companies often have no other choice but to accept the Government's invitation to join. It would be too costly for them to refuse the Government's offer.
Yesterday, the Vice President of the Russian Grain Union Alexander Korbut spoke positively of the plans to create a united grain company. Its prospects will depend on the market conditions as the corporation will not be a state monopoly, but a business agent, although with a dominant state share, said Korbut. "It will incorporate huge assets, and hopefully it will play an important role in the development of the grain market," Korbut said.