29 july 2010

Prime Minister Vladimir Putin chairs a Government meeting

Vladimir Putin

At a government meeting

Participants:
“We are witnessing a certain degree of improvement in Russia’s economy, which is overcoming the consequences of the global economic and financial crisis; at the very least, it is on the path toward sustainable growth. In the second quarter of 2010, gross domestic product increased by 5.4 %, and annual inflation reached a record low, under 6%.”

Vladimir Putin said in his opening remarks that allocations to federal targeted programmes will grow 19% to 981 billion roubles ($32.5 billion) in 2011. In 2011, policy measures will be taken to start the construction of the Vostochny Space Centre in the Amur Region, to support the pharmaceutical industry and domestic and foreign tourism, and to create the foundation of an information society.

The prime minister also spoke about the need to modernise the customs services. The Foreign Ministry and the Federal Customs Service have drafted proposals on Russia's ratification of the International Convention on the Simplification and Harmonisation of Customs Procedures.

I hope this will allow us to more rapidly introduce modern customs standards on the Russian border, which will be convenient both for people and businesses, Mr Putin said.

Two more decisions are to be taken toward that end. One of them concerns submitting the agreement with Kazakhstan on joint control of the common customs border for ratification, and the other concerns the approval of the draft law on removing numerous control and supervision agencies from the Russian border.

These agencies' responsibilities will be transferred to customs officials, creating a one-stop clearance process, the prime minister said.

Vladimir Putin's opening remarks:

Good afternoon, ladies and gentlemen.

Yesterday we discussed the key provisions of the budget for 2011 and the medium-term budget outlook at a meeting of the Budget Commission.

Today we must determine the list of federal targeted programmes to be included in the 2011 budget.

We are witnessing a certain degree of improvement in Russia's economy, which is overcoming the consequences of the global economic and financial crisis; at the very least, it is on the path toward sustainable growth.

In the second quarter of 2010, gross domestic product increased by 5.4% and annual inflation reached a record low, under 6%, although recent forecasts of post-crisis development and recovery were much more modest.

Back in October 2009, we believed that GDP would grow by 1.6% at most in 2010 and that inflation would be about 10%.

We adjusted that forecast upward in December 2009, but our growth prediction was still a modest 3.5% and inflation was expected to reach 7.5%. Clearly, the current situation is better than we expected.

The federal targeted programmes I've mentioned should be used to consolidate the current positive trends and especially to promote a qualitative change in the structure of our economy, the growth of high-tech industries and the modernisation of our infrastructure.

For this reason the draft 2011 budget provides for a considerable increase in investment spending. According to the Ministry of Finance, state investment in 2011 will total 1.364 billion roubles and possibly even more - an increase of 15.3%. We also plan to increase the funding of federal targeted programmes by 19.2% to 981 billion roubles.

Here are some figures for your reference. We have allocated 32 billion roubles for the Civil Aviation programme (a 45% increase), 10.3 billion roubles for the civilian shipbuilding programme (which is an even larger increase, 50%), 13 billion roubles for the development of the electronic components base and radio electronics (up 140%), 21.6 billion roubles for R&D in priority areas of research (up 190%), and 75.8 billion roubles for the federal space programme (a 13% increase). As you can see, this is a considerable boost in spending.

We have found a way to continue programmes that are already underway, and although we had decided not to launch new ones, we have now decided to start new programmes in some fields.

These are the fields in which we are still lagging behind and have problems, where the government must contribute to breakthrough projects that will largely determine the development prospects of entire sectors and the social sphere.

In 2011, we will begin implementing policy measures to create the Vostochny space centre in the Amur Region, to support the pharmaceutical industry and domestic and foreign tourism, and to create the foundation of an information society. We will approve targeted funding to support the machine-tool industry and to create next-generation diesel engines.

We plan to allocate 3.5 billion roubles for Vostochny, 3.23 billion roubles for the pharmaceutical industry, 3.1 billion roubles for the Information Society programme, 2 billion roubles for the development of domestic and foreign tourism, 2.28 billion roubles for the development of the machine-tool industry and instrument manufacturing, and more than 1 billion roubles for the creation of next-generation diesel engines.

Of course, we must not put off addressing acute environmental and social problems. This is why we have decided to launch special programmes to protect Lake Baikal and to create an affordable and comfortable environment for people with disabilities.

Specifically, we plan to allocate 1 billion roubles for the protection of Lake Baikal and 2.3 billion roubles for the Affordable Environment programme.

To all the ministries and departments concerned, please pay attention to quality and make sure that new programmes are prepared in a timely manner. All draft programmes are to be submitted to the government by September 1, so that the State Duma will be able to thoroughly consider them during the budget hearings in parliament.

Ladies and gentlemen, today we will also consider a number of issues that bear directly on the improvement of the business climate and on the rational integration of our country into the international economic community.

I am referring here to the modernisation of the Russian customs system. It must be admitted, as all of us know very well, that foreign economic players, especially those working in high-tech industries, are seriously dissatisfied with the quality of our customs system.

The Foreign Ministry and the Federal Customs Service have drafted proposals on Russia's ratification of the International Convention on the Simplification and Harmonisation of Customs Procedures. I hope this will allow us to more rapidly introduce modern customs standards on the Russian border, which will be convenient both for people and businesses.

Two more decisions we will consider today are directly related to this objective. One of them concerns submitting the agreement with Kazakhstan on joint control of the common customs border for ratification. The other concerns the approval of the draft law on removing numerous control and supervision agencies from the Russian border.

We have been discussing this possibility for a long time, and the time has come to take a decision. These agencies' responsibilities will be transferred to customs officials, creating a one-stop clearance process. Of course, strictly controlled items will be cleared at specially equipped stations by trained professionals.

Now let's move on to today's agenda.

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