Prime Minister Vladimir Putin answered questions from Russian journalists at the end of his visit to Mongolia
Transcript of the meeting:
Vladimir Putin: Good evening. You must be tired, I am sure.
Voice: No, not at all, we are fine. And how are you?
Vladimir Putin: I am doing fine as well.
Question: So it turns out that you have spent practically a whole day in flight during the last three days, away from the Government, the Government House and your colleagues. Could you tell us what you did on the plane, what decisions you made, and whom did you speak with on the phone?
Vladimir Putin: First of all, I am never without my colleagues for long. What's more, I was accompanied on the plane. And as you can see there are a great number of members from the Cabinet of Ministers, representatives from various agencies, directors of state companies when we touch down. So everything keeps moving at a lively pace.
On board the plane I work on documents, prepare for the negotiations and meetings, and keep busy with ongoing paperwork. But if necessary I always have the essential means of communication at hand, including closed channels.
Voice: Did you manage to speak with anyone, give any instructions?
Vladimir Putin: Yes of course I spoke to company managers and the heads of ministries and agencies. For example, after my visit to the Amur Shipbuilding Plant, you might recall that one of the workers came to me with a request to re-establish the rail link between Komsomolsk-on-Amur and the Moscow-Vladivostok train. The train used to be a direct one from Komsomolsk-on-Amur. You could take a seat in the carriage, it would go to Khabarovsk, and from there it would join one or the other railway line, heading either towards Moscow or towards Vladivostok. Some time ago this route was closed.
After we had our conversations and finished our meetings, I got back on the plane and called the President of the Russian Railways company, and asked him to report back on the possibility of re-opening that link.
Now he has reported back to me that it will be reinstated in a week, I understand.
Question: Anything else?
Vladimir Putin: In order to take decisions which had not previously been agreed in Moscow, for example, and which arise during the meetings which we have been holding in the regions, sometimes a position needs to be agreed upon with the ministries and agencies whom these decisions will affect - for example, with the Finance Ministry, other ministries such as transport and so on. In that event, I simply pick up the receiver and speak with them. One can freely exchange opinions using various ways of communication.
Question: Mr Putin, returning to your visit to Japan. As everyone knows there is a current territorial issue [regarding the Kuril Islands]. How much did it influence the discussions of the nuclear agreement, and the development of cooperation in the economy? Perhaps, there were and still are obstacles to the development of cooperation in trade and the economy? It is well known that the Japanese raise this issue whenever the opportunity presents itself.
Vladimir Putin: You refer to the problems of concluding a peace treaty? Of course this question has been raised a great deal, and on practically all levels in any of our contacts with our Japanese colleagues. Let me reiterate that in order to resolve such issues - and this is something I also said to our Japanese friends -questions of this rigour cannot be resolved through normal civilised channels between hostile parties or between countries who have at least negative relations with each other. These difficult questions, of great public sensitivity, can only be resolved in a civilised manner amongst friends.
That is why we think that the development of trade, economic, cultural and humanitarian relations will form the foundations on which we will be able to move towards the resolution of questions relating to the conclusion of a peace treaty. And what that treaty will be, and what form it will take, will be subject to compromise and agreement.
Question: Mr Putin, what is your personal view on dividing the islands in half horizontally? Not in the context of the future negotiations of President Medvedev, but in your own personal opinion?
Vladimir Putin: I think jumping ahead in the matter serves no purpose. We agreed to hold a meeting between President Medvedev and the Japanese Prime Minister during the G8 summit in Italy. We need to allow our specialists, our experts at the Ministry of Foreign Affairs, President Medvedev, and our Japanese partners at this meeting to prepare and formulate their positions.
Question: And will you find a basis in law for this?
Vladimir Putin: A good lawyer will always be able to find a basis in law. This is a political question.
Regarding the legal aspect of this matter, there exists the San Francisco treaty recognised by law. Our legal position is absolutely cast iron. It is not about that, but about how best to build good-neighbourly relations with our important partner to the East - Japan.
We naturally complement each other; our economies do at any event. Japan's advanced technology, our resources in Eastern Siberia and the Far East - we share common interests. We need to sweep aside that which interferes with the development of our relationships off the agenda. Clearly this must happen, and can only be accomplished in ways that correspond to the Russian Federation's national interests.
Question: You concluded your tour of the Far East with a visit to Mongolia. Following the talks there, how do you feel this visit went? Is Russia losing Mongolia? Here I am referring to, first and foremost, trade and economic cooperation, while taking into account the increased activity of the Chinese and Koreans. This is my first question. And the second one: many experts see the sole purpose of your trip to Mongolia as to support the current President of the country Nambaryn Enkhbayar, who is well known for his pro-Russian leanings, given that Mongolia will soon hold presidential elections. Tell us openly, is this view in any way justified?
Vladimir Putin: In the near future, I think, in fact it is more than that, it is stipulated by law that there will be elections to the Japanese Parliament. Did it not occur to you that I visited Japan in order to support someone? Probably not so. Why then would you think that such a working visit, a business trip to another country, to Mongolia, is connected with supporting the representatives of one or other political group?
Mr Enkhbayar and I are indeed on good terms. We see that the President and the serving Prime Minister are willing to develop the relationship between Russia and Mongolia. Those agreements made today testify to this: on the metals and mining industries, on transport, on uranium, and we agreed to opening additional Aeroflot routes. In sum, there were agreements in practically all areas. Here every second person, possibly everyone, speaks Russian. The country's leadership supports the recognition of Russian in the public sphere in both general and specific terms. All this indicates that the conditions for the development of bilateral relations are being created. And as for who will win the elections, that is a matter for the Mongolian public to decide.
Question: And as for whether we are losing Mongolia as a trade partner?
Vladimir Putin: Of course the competition is growing, this is clear. But this should only push us to work more efficiently, in this case, regarding Mongolia.
Question: Today you and your colleague spoke about how vital it is to expedite the process of preparing the documents on the joint uranium venture. When do you expect to be able to sign these documents and thus set up this venture? Will it be this year or the following?
Vladimir Putin: This year. I understand it will take a few weeks.
Question: And which Russian companies will be able to participate in it?
Vladimir Putin: The uranium project will involve Rosatom. We have set up a major specialised state corporation. We need to give it the opportunity to work. You know that it faces big plans for the development of Russian nuclear energy. I have already spoken about this; we are ready to build 28 major sites in the coming year. During the entire Soviet history only 32 were built. Not long ago we decided to give the company additional capital. This year we have allocated them more than 73 billion roubles from the state budget, and not long ago we decided to additionally capitalise the company by another 50 billion roubles. This is money that goes direct to the company. It allows them to work, and to have a sense of security, in conditions that have seen many shares fallen in value.
Question: And the Mongolian resources? What are our prospects for them?
Vladimir Putin: There are always prospects in hand. We shall see. Overall we are pleased or content with what has been agreed today. Work will go ahead.
Question: Mr Putin, you also went to Komsomolsk-on-Amur. There were several events where you were not in attendance - for instance at the metallurgical factory where decisions were made.
In addition, regarding the shipbuilding plant, Andrei Krainy, the head of the Federal Agency for Fishery, said that in the current climate it is difficult to reinvigorate it. What is your opinion - is it possible or not?
Who is that group of private shareholders who own 79%. People have been talking about it but no one knows who they are. Can you give us any indication?
Vladimir Putin: I certainly should not mention any names here. This is not secret information. Frankly speaking, I don't actually remember them by name. However, this is not undisclosed information. You can receive the information from our agencies, just contact the shareholders, or look on the Internet, that's all you would have to do, so go ahead. They are not in hiding anywhere, and thank God, have not absconded anywhere. They understand that this is a difficult situation; here I am referring to the company's heavy debt burden, and that is why they accepted the decisions which were made.
As I have already said, 36 billion roubles is the sum of total debt, but the majority of it is linked with the final completion of the order. So as soon as it is completed, then the debt shall disappear. But the problem lies elsewhere, in that there is a critical mass of this debt, about 14 billion roubles, which is owed to Sberbank. And that critical mass of debt impeded the normal functioning of the enterprise itself. As soon as any customer, including the Russian Ministry of Defence, sent money to the business, for wages, or to pay for particular components, then the bank immediately took this money for its own use. This problem had to be resolved.
Personally speaking, the main reasons for my trip to Komsomolsk-on-Amur were the problems in the Far East shipbuilding sector.
The United Shipbuilding Corporation has been set up. You know about that. Shipbuilding in Russia, as has been previously established, developed along regional lines: the North, the North West, the Volga area, and the Far East. Those are the main groups. And of all those points it was the Far Eastern shipbuilding sector whose condition demanded particular attention, with the Amur Shipbuilding Plant on the verge of bankruptcy. Above all, that is why I went there in particular, to see what is happening on the ground and to make decisions which would give the factory a future. I think we made those decisions.
As you are aware of, we reached an agreement with the enterprise regarding ownership. The group of private shareholders gave Sberbank, or rather, sold Sberbank their share package of 59% for a symbolic sum, which Sberbank will sell on to the 100% state-owned United Shipbuilding Corporation for the same symbolic sum, which is a technical detail.
This allows Sberbank to give the corporation a loan of over $240 million over 10 years at the minimum interest rate, which will allow them to pay off their debts. This benefits the bank because if we stabilise how our businesses work then the bank will end up dealing with viable borrowers rather than with defaulters, from whom it is not clear what they can obtain.
Question: Are other companies afraid of similar nationalisation?
Vladimir Putin: No, they have no reason to be concerned. And those who are efficient owners certainly should not be frightened. But in this case we were dealing with a unique situation, as it is not just a shipbuilding factory that makes yachts - it is a shipbuilding facility that makes nuclear submarines.
I altogether do not understand who came up with the idea to privatise a business like that. They have always been kept going, and in the main still are, working on state orders. When the decision was taken, when these people became private owners, they should have brought this under consideration. They should have calculated, and if they didn't have a computer, they could have at least worked it out on an old iron Felix pinwheel calculator - you know that's a basic machine - how much money would come in, and what they can count on. So we agreed on ownership restructuring, as well as on the loan from Sberbank. That will allow the Ministry of Defence and other state customers to continue working with the enterprise.
The factory will soon receive more than 2 billion roubles - 2.4 billion, to be precise. 120 million roubles will arrive by the end of the week, and another 380 million roubles by the end of June. Another 1.6 billion roubles will be used to fund ship testing, customer delivery and settling supplier accounts.
Another important task at this shipbuilding meeting was to decide the fate of the whole Far Eastern shipbuilding sector. There are many shipbuilding industries in the Far East, attached to the Ministry of Defence and other agencies. It is very important that we understand which businesses can carry out which functions in the future. We need to ensure that these businesses are operating efficiently.
Finally, 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.
Question: The 8th of May was the anniversary of your confirmation as Prime Minister. Many experts have assessed your work. What is your own assessment of your work? What mark do you give yourself?
Vladimir Putin: B is about enough.
Question: Why a B, and not an A or a C?
Vladimir Putin: That is how it seems to me. In any case it is for others to judge. We should probably reserve our final judgment, and delay the final grades, until after most of the work to overcome the effects of the crisis has been completed. At the moment we are in the process of putting it into action.
We spoke about shipbuilding, but in Komsomolsk-on-Amur we also dealt with the aviation sector. There were also issues raised with regard to the Metallurgical Plant, although we devoted less time to that. That plant also employs thousands of people.
Incidentally, the Metallurgical Plant has also been privatised. It also has private owners who hold the control stake. But on this occasion we decided to offer them assistance. Personally speaking, their situation is not drastic at the moment, as they have not raked off the majority of the money, but have directed it, loans included, into the modernisation of the company.
Of course they are not to blame that the metals industry is currently experiencing such difficulties. These difficulties are being experienced globally. The only issue is that they lack working capital; however, we have not yet agreed how we will tackle the issue. Nevertheless, it is clear that we will help them. After I return to Moscow we will decide on the size of funds and on timeframe. But we will explore these possibilities.
In terms of aviation, unlike the shipbuilding business I have mentioned, the Sukhoi group is currently in a healthy condition. The main task at the company was to define its future growth trajectory. I can announce that there are two main areas of activity: military aviation and the newly created civil aviation.
Regarding military aviation, 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. I am confident in that.
Looking at civil aviation, that is also developing with success; you have been well informed about this. Here I am referring to the SuperJet 100 airliner. We will develop this aircraft using the best modern technology; everything is being done digitally. Partners from the United States, Italy and France are involved in this project. If you may recall, I visited one of the sections where engines are constructed; there, French specialists were working on their completion.
The Italian company Finmeccanica has become a founding shareholder in the Sukhoi SuperJet civil aviation enterprise, holding a stake of 25%. For our part, in accordance with our agreement, we need to do the same. That is why we sought out additional sources of funding and allocated 3.2 billion roubles in capital to fulfil Sukhoi's obligations to their Italian partners. Since the timeframe has increased and the market situation has worsened, the company will need an extra 3.6 billion roubles in funding from the Federal Targeted Programme for the Development of Civil Aviation. This source has been determined and we are in a position to act, as part of the programme.
In order to ensure the purchase of aircraft by our national carriers - this primarily concerns Aeroflot - we have agreed to assist Aeroflot with an additional 250 million dollars in credit resources for their leasing system. I believe the company will be provided for 20 to 25 years.
Question: Barack Obama is coming to Moscow. Are you planning to meet him and do you hope that good, cordial relations will be established as with his predecessor?
Vladimir Putin: A prospective meeting between President Obama and myself has yet to be decided. For the time being the Ministry of Foreign Affairs has not mentioned anything about this. If there is a request from the American contingent, then the Ministry of Foreign Affairs will recommend that we shall meet, and why not. I do not know if the President of the United States' schedule can accommodate this.
If it will be arranged that I will be in Moscow when he has some free time, then why not? It would be a pleasure to meet him.
But the American President is a partner of the Russian President.
Question: Are you truly planning to join in Fyodor Konyukhov's expedition - Allong the Great Silk Road - as Mr Konyukhov himself seems certain of?
Vladimir Putin: I am glad you told me about that.
Reply: But he did invite you, didn't he?
Vladimir Putin: Yes, he invited me, but it's unlikely I have packed the requisite means of transportation for that particular task, if you can understand. The journey is entirely on horseback, which requires a particular understanding and treatment of horses. However, I would indeed find it interesting to take part in Fyodor Konyukhov's expedition. Where can I find the time to do it?! Overall, it is very interesting. And I am not being ironic when I say that I would have enjoyed taking part in his expedition.
Voice: Especially since the region of the expedition is Altai, where it would have been possible to combine business and pleasure.
Vladimir Putin: One could in the Altai region as in other sections of his journey. It is in total, I think, 6,000 km, or more.
Voice: So that seems to be nothing by comparison with how much you have flown recently?
Vladimir Putin: Ah, what nonsense! But that's exactly true, compared to how far we have flown. But covering 6,000 km on foot is quite a different story.
Voice: Thank you.
