29 december 2010

Vladimir Putin wishes government pool journalists a happy new year and answers their questions at the government press centre


Transcript of the conversation:  

Question: What, in your opinion, was good about the past year? 

Vladimir Putin: The good thing is that we did all we promised to do, including for the victims of fires. This is potent proof of the country’s potential. When under pressure, we can do it. As I’ve said before, we have the financial strength and we can deploy our administrative resources as well. I liked the way everybody worked to complete that task. They did a great job – honestly – the regional leaders and the builders. Frankly, it was great to see how these people were giving their all. Plus there was a positive public reaction and that is also important.

Question: I am sorry, was this effort on manual control, which of course is necessary at a time of crisis, or were all the governing levels performing as they should on their own? Were you aware of their commitment at the time?

Vladimir Putin: Once they got their act together, I felt it immediately.

Question: Were cameras necessary to make them work expediently?

Vladimir Putin: That may be so. It was a tool to influence everyone involved, it contributed to the results. Actually, I didn’t invent anything. This is what the IAEA does; it sets up web cameras that operate around the clock. If a camera is switched off it is treated as an emergency and an IAEA commission is sent to the site.

Question: In other words, you will make it a practice here?

Vladimir Putin: You know that this was also an emergency situation. It called for hourly monitoring. I actually did the monitoring and watched. I came every morning, pressed the button and then clicked the mouse to see what was happening in the regions. In several cases I looked at new sites and I saw that there was action, people were walking, builders were moving around on scaffolds, but on other sites there were no moving vehicles, and there was silence, everything was at a standstill.

Question: On the eve of your arrival I also watched the cameras. The place you were heading for was a scene of horror during the night: rescue workers were suspended from the roof…

Vladimir Putin: You know, it is not only fear that drives people, sometimes it is conscience. And the builders in particular and experts were really eager to help people and they did it. So I give a toast to all those who did their job this year against all the odds: To you. You also had a hard time this year: you travelled a lot and moved about, so it was a year that counted for two as far as you are concerned.

Question: The next year promises to be very much the same.

Vladimir Putin: Like working on the frontlines. First of all, I would like to thank you for your cooperation. I hope you too found it interesting and useful, because we have been to many parts of our country together. It’s a large country, and you saw firsthand what we are doing and how, and you witnessed what was accomplished and what was not. Most importantly, of course, I would like to thank you for the information support, for your unbiased assessment of everything that took place in the country, everything that the government does. A happy new year to you.

Remark: Thank you.

Question. Everybody is worried because we have the uncanny habit of greeting every new year…

Vladimir Putin: One should get rid of bad habits and traditions.

Question: We were just wondering about the chances for avoiding energy problems this year? There are no signs of anything like that, are there?

Vladimir Putin: There is a chance, but I don’t know whether it will become a reality. In any case, today we have agreements with all our main partners to work in keeping with the understandings achieved. We have contracts with all our main partners, with our neighbours (Ukraine and Belarus) we have effective contracts which have been signed and have been honoured so far. We hope it will be the same from here on out. We have done much to meet our partners halfway, we have done a great deal for them and it cost us quite a bit. As you know, we paid Ukraine a huge sum of money for the Sevastopol base and we will go on paying. We are discussing various options for our work in the future. You are aware that I have proposed a merger between Gazprom and Naftogaz of Ukraine. I think it is a worthwhile idea. If you put emotions aside and do some calculating… yes, it is true that in the event of a merger, Naftogaz of Ukraine will be a minority shareholder, but it will be the largest company in the world, in which Naftogaz will be represented and will have a serious voice which will always be heard, as it will be a united company. After all, Naftogaz is the largest transporter of our gas to our European consumers. Therefore, if we grow in general, they will be a part of the joint work, including production. They have a lot to gain, that’s one thing. Second, of course we will develop our transportation potential via Nord Stream, South Stream, to the Far East and to the North. We have positive and ambitious multibillion rouble plans. There is a lot of work to be done toward the south, toward China.

Question: Economic results were reviewed today, and looking ahead… What would you say to a possible transition in the future to a free-floating rouble? When do you think that may happen?

Vladimir Putin: The economy must be ready for it. Of course, that is a good thing: it makes the economy more mature and able to react to developments in a more flexible way. If we look at the peak of the crisis, late 2008 and the first quarter of 2009, if we had had a free-floating currency it would have “flown away” at once and people would have woken up, like in 1998, in a new economy and a new life, with no money in their bank accounts. We have prevented this. Yes, we have suffered some losses: our sovereign wealth reserves have become more modest, but they are being restored, they already stand at 500 billion. So, this is the price we have paid for stability in the country and for social justice. It was a justified measure under the circumstances. But over time, of course, as the economy matures and becomes more stable and more market-oriented, there will be more balances inside the economy, people’s incomes and savings will be different and then we would be able to gradually move on to this.

Question: So, it would be desirable?

Vladimir Putin: This is a desirable future perspective.

Question: But not in the short term?

Vladimir Putin: We shall see. Everything depends on how the economy develops. Certainly it won’t happen tomorrow. But we must move in that direction little by little. We have discussed this many times with the Central Bank. We have a common position.

Question: In the light of recent events do you think political destabilisation in the country next year is a possibility?

Vladimir Putin: Who is interested in this?

Remark: There are some influences… You know that these influences…

Remark: What happened on Manezh Square...

Vladimir Putin: I am not aware of these influences? What is it?

Remark: So this is unlikely?

Vladimir Putin: I hope it won’t happen. What is the point? Nobody needs it.

Remark: Opposition, football fans, other groups…

Vladimir Putin: Football fans a) are not opposition; and b) they are not homogeneous. Basically these are people who are into sport. If they don’t play sports themselves, they follow sports. You know that this is a European trend: radical elements try to blend with sports fans, use them as a ram like the Teutonic knights used the “pig” formation to break enemy ranks. Of course, they are young people, but they are not brainless. I hope they understand that somebody is trying to use them. I will say that when fans are united they never permit this. On the whole, they have always stayed out of politics and not allowed themselves to be manipulated. I hope that common sense will prevail this time too.

Question: There are many social programmes and you referred to them today as successful. Is it possible that they will be curtailed once the elections in 2011-2012 are over?

Vladimir Putin: No. Why should they? Look, for ten years we have been consistently moving from one stage to the next, step by step. In fact, in launching new programmes we always proceed from what has been planned and done previously. I have discussed this with Dmitry Medvedev just today. In his address this year the president spoke about motherhood and childhood and devoted much time to schools and education. But we already had in place national projects, including one in the field of healthcare. We had deployed a huge demographic programme. So, basically it is yet another step in the direction which we had named as a priority earlier. I hope we will go on moving in that direction. We have a programme for the development of the country and its economy until 2020. You will find everything written down in that programme. We are proceeding in the framework of that programme.

Question: In 2004 and 2008, on the eve of elections, there were major changes in the cabinet. Do you feel that the same will happen in 2011?

Vladimir Putin: In principle, it is undesirable. It may or may not be done. Better to do it after the presidential election when the new government is formed. To form the entire government, to show to society and to the nation the people who will implement the plans that already exist and that may be formulated in part in 2011.

Personalities matter, especially if we talk about the government; the economic views of the people who are implementing economic policy do matter.

Question: What about elections? You have said many times that what is needed now are concrete deeds. And regarding elections, will you run? It is a question for the future. When will you be able to make your decision or announce it?

Vladimir Putin: As both Dmitry Medvedev and I have said repeatedly, we will do it together. We will consider it together and see. It is too early to discuss it now. You understand that as soon as you start talking about it people will stop working. We don’t want to see that happen.

Question: Why?

Vladimir Putin: Everybody expects changes and reshuffles.

Question: Will you head up the United Russia electoral ticket in 2011?

Vladimir Putin: I have already said that I don’t rule it out.

Question: So, you have not yet made a definite decision?

Vladimir Putin: Not yet.

Question: Regarding elections, not here, but in neighbouring Belarus. These were controversial elections which met with a mixed reaction.

Vladimir Putin: A mixed reaction where?

Remark: A mixed reaction in the media, a mixed public reaction, both in Belarus and in Russia, because protesters were dispersed rather brutally. At the same time, assessments vary as to whether or not the elections were legitimate. I understand that considering your official position you are not free in your assessments…

Vladimir Putin: If you understand this then why ask me?

Question: Perhaps you can tell us as much as you can on this, and assess the elections in terms of whether they met the standards of a democratic society?

Vladimir Putin: I did not follow these elections. But the number of votes speaks for itself. We have to respect the choice of the Belarusian people. As for assessing what accompanied the elections, I am not prepared to comment on that. That calls for a closer look into the details.

Question: There are still some things I don’t know. During your video phone-in…

Vladimir Putin: What are you saying? Sometimes when I read, I feel that you know everything and that you are even holding some things back.

Question: During your live phone-in you said that you yourself had picked the question: “Are you not ashamed?” and replied that you were not ashamed. Obviously, you knew the implications of that question and what it was that you were not ashamed of. But could you explain more clearly what you don’t feel ashamed of?

Vladimir Putin: Yes, of course. If we look at what is within the competence of the government, you may or may not be ashamed of this, of what constitutes the immediate duties. I would like to repeat what we have said before: one of the most important social indicators of the work of any government is the level of unemployment and the measures that are taken against it. According to the latest statistics, 1.2 million new jobs, or even more, have been created. That's a significant number, isn't it? The number of people living below the poverty level has dramatically fallen in Russia – even despite the crisis, when so-called developed market economies in Europe repeatedly cut pensions and wages. We not only managed to avoid this but we are also steadily increasing and indexing all social benefits. We have increased pensions by close to 40% this year! Of course, I am not being modest about this.

However, there are problems that might have been solved quicker and more efficiently, as we have said, for instance, the system of state guarantees of loans to the real economic sector at the beginning of 2009. To be honest, I said then that the system would not function effectively. However, my colleagues insisted that it would work. I do not want to shift the blame onto anyone now – but it has not worked yet. On the whole, the arrangement produced some effects over a year or a year and a half. Still, we would like it to be faster and more effective.

Many were apprehensive about our measures to support the banking sector back then, some people wanted to reject them outright. So much was said about the issue. Practice has shown, however, that it was the right thing to do. We channelled more than two trillion roubles into the banking sector. Was that a lot of money? Yes it was, but no banks were ruined, and we acquired the banks that were in dire straits for token sums and so prevented them from going bankrupt. What are we doing now? We are restructuring those banks. I have already quoted the figures: 98% of the two trillion allocated by the Central Bank has been repaid. Only four banks have not repaid the money – one is Sergei Pugachev's well-known bank, and another three. However, this does not mean that the money is lost: the government and the Central Bank will track down assets worldwide, if need be, and recover them. Second, the bank has earned 150 billion while unpaid debts add up to a mere 48 billion. The bank made a profit of 150 billion on interest and loan repayments.

As for VEB, it began purchasing shares in the falling market and so backed it up and prevented these shares from plummeting. Then, when the market started rising again, it began selling these securities little by little, very discreetly, and made $400 million on them. Is this bad? We spent half the money to support the reduction of mortgage interest rates, which was thoroughly considered at every stage, in a situation that was rather complicated due to restrictions that were, in general, connected with finance. There are restrictions here, too. Still, we dared to reduce interest on three occasions – and we were successful! Do you see?

Question: As far as I understand, you can be not only persuaded but forced into a move you think is wrong. And then it turns out that you were right.

Vladimir Putin: Why forced? We have people who are directly responsible for decisions. True, the prime minister and the president are ultimately held responsible for everything, but there are people who directly supervise one sector or another. They are considered to be top experts, regardless of the president and the prime minister. They are regarded as the leaders of a particular field, and we generally listen to them.

Question: Are there cases when you don't have a final say?

Vladimir Putin: Never. The final say is up to us, but we agree with experts.

Question: Mr Putin, allow me to ask two questions about a specific case and your general opinion of it. The Audit Chamber announced yesterday that a huge sum, 202 billion roubles, had been misspent on road construction in Moscow. Minority shareholder Navalny recently made some sensational accusations against Transneft. Are you aware of the situation? Do you know that about $4 billion was basically stolen during the construction of the Eastern Siberia-Pacific Ocean pipeline? If you have something to say about the pipeline and Transneft, please say it. On the whole, my question is: how can Russian officials who have government money at their disposal be made more...accurate, let's say? How can this situation be changed?

Vladimir Putin: It is a matter not so much of accuracy as of using the latest methods for contracting and providing access to government money. After all, the introduction of an online bidding system has been efficient enough. Speaking of which, Law No. 94, so much discussed now, is far from perfect and has room for amendments. The cabinet is considering it. The Ministry of Economic Development and the Antimonopoly Service are working together to perfect it. But, whatever the case, this law will function as an anti-corruption tool. You must have heard that there were times when it helped us to drop bids by 300%, believe it or not, from the start of the bidding to its end. So we will continue to work on improving such tools. Online bids are surely very effective. As for particular instances, everything must be checked, see? At the moment, I cannot give a specific response to the issue with the Eastern Siberia-Pacific Ocean pipeline and how much has been spent on it. But we should not forget that suspicions do not come out of thin air. Construction costs differ from site to site. But there is nothing in the area where the pipeline is being built – no roads, electricity or water, so construction might be very expensive there. It has to be checked. If the Audit Chamber thinks that costs have been inflated...

Remark: Not the Audit Chamber. There is simply a document concerning the pipeline, which a minority shareholder has made public. He probably got hold of some important information...

Vladimir Putin: A minority shareholder always has his interests – larger dividends or something else. Every case should be verified, even if it involves only a dissatisfied minority shareholder. We know, and I will repeat this once more, that minority shareholders are always after larger dividends. However, this needs to be checked out. Let the prosecutor's office and other supervising agencies, of which we have enough, carry it out. We will conduct a comprehensive inspection. This concerns road construction, too. We must look into it.

Remark: These are all serious problems. The situation is really tangled...

Vladimir Putin: Look, road construction and other construction businesses are always open to corruption, but we should never make unfounded accusations. We must look into every detail. Take construction. There are different accounting systems in Europe and Russia. Look how they make estimations in Europe. Do they proceed from the width of the road or from something else? Take a close look! We will make conclusions only after we see it all for ourselves, and only then will we prosecute and punish culprits. If they are proven guilty, then they must be punished. Such people should be given guilty verdicts when there is embezzlement and other crimes. But no one should be victim to unfounded accusations. We should not forget about the presumption of innocence. Or are we to treat all people in this country as thieves?

Remark: Mr Putin, you mentioned the ratification of START in your address today, and said that it...

Vladimir Putin: I think that it is an undeniable success in foreign policy for President Medvedev.

Response: But you said that ratification will bring us closer to achieving our socio-economic goals...

Vladimir Putin: Not ratification in itself, but the treaty as a critical part of our relations with the world. And a friendly global environment is a critical factor in encouraging peaceful and sustainable national development.

Question: Do you trust your American partners more?

Vladimir Putin: More and more. Our trust in them continues to grow stronger. Not that it has reached an absolute point yet, but it is still growing...

Question: Russia expects to join the WTO next year. Are we to see it as another confidence building step? Or are there problems, as you said today?

Vladimir Putin: There are problems, but we expect it should happen all the same. But then, what does it mean that we expect it should? We have had long negotiations with the WTO, and have coordinated almost everything with it. I have no idea on what grounds Russia might be denied admittance now. But then, if someone is very anxious to deny us admittance, some pretext may be found.

Question: When we came along on some of your trips, you said at many industrial plants that customs duties on cars were growing...

Vladimir Putin: There are still problems, as I told you. But then again, there are solutions to these problems. There are problems with cars and especially trucks because our partners in the United States, China and Europe have much higher levels of tariff protection than what Russian laws demand. Still, we can devise ways to protect ourselves if we really want to – and we do want to. So if we see that our automobile industry suffers from unfair competition, we will find a way to protect it.

Question: How?

Vladimir Putin: Through non-tariff measures, though they are so-called technical regulations. All WTO member countries use them.

Question: Are they regulated too?

Vladimir Putin: Not quite, there are loopholes that can be used.

Question: Our colleagues in Kyrgyzstan recently expressed interest in joining the Customs Union. Other former Soviet republics are also getting eager to do so, which means that the Customs Union is becoming more influential. What if the WTO is reluctant to admit us for this reason? It's widely known that the establishment of the Customs Union slows the process.

Vladimir Putin: On the contrary, the establishment of the Customs Union promotes our membership in the WTO, believe me. There are several reasons for this. First, our colleagues see that though we are willing to join, we can also do without the WTO. They are also eager to see Russia among the countries that use the unified economic rules and interpret them similarly. So they have accelerated the process of admitting Russia. That is why the establishment of the Customs Union has accelerated, rather than hindered, our movement toward the WTO. So much for my first point.

Second, the Customs Union and the Common Economic Space are arranged on WTO principles. So, even though Russia is not yet a WTO member, it has gotten closer to the WTO in terms of economic practice. Moreover, Belarus and Kazakhstan have the same stance in their economy, so WTO members will find partnership with them simpler now. That was why I said to many of my friends when I was in Germany (I have developed many friendships there over the years): "You don't have to be apprehensive about the Customs Union and the Common Economic Space that we have established. You should thank us, and run to the store for a bottle of schnapps."

Remark: Did they?

Vladimir Putin: They didn't run out to the store, but they still wanted to pour me a glass.

Thank you very much! Happy New Year!

Response: Happy New Year!

Response: May next year be easier on us!