29 december 2010

President Dmitry Medvedev and Prime Minister Vladimir Putin attend a Government meeting



Dmitry Medvedev: Dear colleagues, I have come of course to wish you a Happy New Year, which is always a pleasant thing to do. We should always wish each other well, especially since life is full of all sorts of surprises.

The government must work non-stop for the country. Perhaps we will live to see the day when the government deals only with strategic issues, but unfortunately, for a variety of reasons, the government deals with current issues, and sometimes even the issues that should be managed by the regional authorities. We are facing difficult situations at centres of transport because of the bad weather conditions. The government has to deal with this situation, although it should be the business of regional leaders.

I think it has been a fairly good year for our economy. In spite of the many nuances of the economic situation, this has been a year of recovery from the crisis. The fact that we had such a year in these conditions is, I think, a credit to the government, which has managed the economy on a daily basis. Given this trend of recovery, it is critical to keep the situation under control, which has been done in fact. I think the very fact that the unemployment rate has gone down by practically 2 million is a very good outcome. The fate of a huge number of people is involved. Frankly, when we discussed the crisis exit strategy with other state leaders we all assumed that it would be a protracted recovery process and that it would be accompanied by growing unemployment. Nevertheless, our country has managed to buck the trend and achieve good results. I think this is very important.

We have managed to produce decent results in increasing the gross domestic product. I was discussing this with our colleagues yesterday. Yes, we are slightly short of the target, but, unfortunately, the unusual summer and the crop failures have affected our economic growth. Likewise, it has influenced the inflation rate, which is higher than we expected. However, it is still under 10% and is generally comparable to what it was before the crisis.

Speaking about key indicators (for example, the work of the banking system), they are absolutely stable, and today the refinancing rate is the highest in the history of modern Russia. These figures may seem dry to some, but they are nonetheless important. There are things that matter more for the majority of people, but they depend on finances and the health of the economy. I mean society's well-being. And in that regard we have accomplished what we planned, that is, we have preserved all social programmes. These were difficult decisions to make, but we made them at the very start of the crisis. We have repeatedly discussed them together and I think there is no trouble here. We are not ashamed to look people in the eye because the social obligations I assumed as president, and the social obligations assumed by the government, have been met.

This is not to say that no problems remain; there are still many problems. We have been discussing what we will do next year. Undoubtedly, it is going to be a difficult year. We have to attend to various matters, beginning from the stabilisation of the food market and the development of projects in agriculture and ending, of course, with macroeconomic issues.

The investment climate continues to be a very important problem. We have few positive changes to report on that front, even though we have been hard at work on it. So, this is probably one of our priorities.

I have just taken part, along with some cabinet members, in a meeting of the Financial Development Council, which is devoted to creating a financial centre in Moscow, in Russia. I think this is also very important. It concerns not only bankers and those who make money through the financial system but the entire economic life of our country, and thus, the fulfilment of our social obligations.

We need to finally get past the economic crisis and develop the real sector. The modernisation of the economy is still an exceedingly important area of work. We cannot develop further if we stay within the paradigm where growth is driven by raw material production. We are all aware of this, even though oil and gas account for a significant part of our budget revenues. So, the five areas of modernisation that we are pursuing with the government constitute a major priority for the government.

We need to take care of defence and national security. Some fundamental decisions have been made that aim at developing the military-industrial complex and shaping a new image for the Armed Forces, as well as reforming law enforcement in the country. All this work will require proper financial support and daily monitoring. This responsibility falls on the whole government, not only the leaders of law enforcement agencies.

And needless to say, we will have to improve every aspect of our foreign policy.

Colleagues and friends, I would like to sincerely thank you for the great amount of work you have done this year. I would like to thank the prime minister, and all the ministers and deputy prime ministers for all they have accomplished. Once again, I believe that in spite of the large number of challenges and issues, it has not been a bad year for us socially and economically. I hope that next year will be even more successful. Happy New Year! And all the best to you.

Vladimir Putin: Esteemed Mr President and my esteemed colleagues. On behalf of the members of the government, I would like to thank you, Mr President, for this positive appraisal of our work.

Indeed, we do have something to show for all the work we have done. The key indicators, of course, are the falling rate of unemployment and the reduction in the number of people who live below the poverty line. We have managed to make progress on this even during the global financial and economic crisis. Of course, it had something to do with the changing trends in economic development. Last year we saw a major slump, 7.9%. This year we expect a growth of about 9%, and the industry indicators are even better, a growth of more than 8% and rising real wages.

But of course the government could have been more active and efficient in certain areas. We are aware of all this, but we would like to thank you and the Presidential Administration for working very closely with us. We have indeed managed to form a single team. Yes, differences of opinion did arise, but not between the administration and the government, but inside the common team. Approaches to some problems may have differed, but they were solved jointly through debate, and on the whole we have managed to find the right solutions. I would like to stress – and I think many would agree with me, and I know this better than many of those present – that this work would have been impossible without the president's direct support. That is one thing.

And the second thing is that we have made progress in certain areas that we worked on together as a large team for a long time. For example, on the issue of membership in the World Trade Organisation. It involves many questions, yet there is a solid link between the government and the administration in this area. Notable progress has been made. Yes, there is still no final result, but we have agreed on the main parameters with our primary partners, and that is a big plus. There are some things that are entirely within the president's responsibilities, but they are important for the social sphere and for the economy.

A decision has just been taken to create the Investigative Committee. The president and I discussed this issue. It is a major decision that has not attracted very much public attention. But it marks a major departure from the former system, the Soviet system of law enforcement bodies with the Prosecutor's Office responsible for the functions of supervision and the functions of investigation. The president has brought this to its logical conclusion. This will undoubtedly facilitate the fight against corruption, improve the investment climate and so on. I think this is one of the most important decisions of late.

Finally, I would like to congratulate President Medvedev on concluding work on START. It will have a serious impact on matters of international security and beyond. It is important for all of us because it creates favourable external conditions for tackling socio-economic issues inside the country.

And lastly, of course, we will focus on implementing the targets set in this year's Presidential Address. I hardly need to remind this audience that Dmitry Medvedev worked on national projects and organised this work when he was deputy prime minister. It was therefore perfectly logical that the address this year gave special significance in state policy to issues of mothers, children and education.

Mr President, I have prepared instructions for the realisation of the ideas set forth in the Presidential Address this year.

I will allow myself, on behalf of the government of the Russian Federation, to wish you a Happy New Year and all the best in the coming year.

Dmitry Medvedev: Thank you very much.