5 march 2011

Prime Minister Vladimir Putin meets with Volgograd Region Governor Anatoly Brovko

Prime Minister Putin and Governor Brovko discussed in detail the performance of employment programmes and large-scale investment projects in the region, and they touched on housing construction and healthcare.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Brovko, the Volgograd Region performed well last year. The region has its problems, but on the whole the situation is satisfactory. There are stable positive trends in the main areas. I’d like to hear how employment programmes performed in the region and what effect they had on the labour market. I’d also like you to discuss major investment projects that you believe are important and deserving of the attention of the federal government. Another critical issue I’d like to raise is the modernisation of healthcare. Please tell me how well you have prepared for this programme, how you presented it to the ministry, how much funding will be allocated, and what your priorities and plans are for healthcare in rural areas. And I’d like you to report back on housing programmes separately. To my knowledge, you faced the problem of allocating land in Volgograd. How are you addressing these issues?

Anatoly Brovko: As far as the first issue is concerned, we are doing our best to defuse tensions in the labour market. In particular, we are implementing an employment programme, as all Russian regions do. On January 13 of last year, registered unemployment rate stood somewhere between 36,000 and 37,000, which accounted for 2.7% of the region’s population. Currently, there are 24,500 jobless people in the region, which is 1.9% of the population. This rate is much lower than the national average. These results were achieved thanks to two programmes. I have already mentioned the first one. The second one is the programme for small and medium-sized businesses, to which we pay special attention. There are quite a few such businesses in our region. I believe that our efforts will have a real influence on this sector.

As for investment, we understand that the main factor in a region’s economy is investment and financial health in general.

Early last year we started to increase… We just did everything in our power to raise budget revenues, in particular tax revenues in the region’s budget and the consolidated budget. Thanks to these measures, taxable incomes increased by 22.5%. In 2009 investment in fixed assets amounted to 72 billion roubles. We set a very ambitious target – to increase investment by 40% in 2010. And in 2010 it reached 110 billion roubles. Many experts claimed that it would be impossible to accomplish this within a year, but we did it.

As far as large-scale investment projects, I’d like to say a few words about the project for EuroChem’s new mining and processing plant, which you have visited. Everything is fine with that project. We hold meetings to review the progress made on it almost every month. I personally participate in them because this project is one of the main priorities for the Volgograd Region.

Vladimir Putin: What’s the total investment?

Anatoly Brovko: Eighty-five billion roubles. They have invested about 20 billion so far. They are good investors. As for LUKoil, Mr Alekperov [LUKoil President] made a decision to invest 115 billion roubles in the reconstruction and modernisation of an oil refinery over the next five years. I met with Mr Alekperov to discuss energy when he visited our region. It’s been two years since his business entered this sector, but facilities haven’t reached generation capacity yet. We have developed a strategic programme together, which proposes investing 16 billion roubles over the next four years in order to bring the load to 76%. This will foster the development of infrastructure and make the region more attractive for investors. That’s about investment.

As far as healthcare, I think we made a very good presentation of our healthcare modernisation programme. Even though we requested 9.8 billion roubles from the federal government, I’d like to thank you for making the decision to allocate 5.6 billion roubles for this programme. We thoroughly reviewed the issue of ineffective spending while developing the healthcare modernisation programme. As of January 1, 2010, we ranked 64th on the list of regions with ineffective spending in healthcare. I set a goal to minimise the amount of such spending, specifically by asking the region’s government to address this issue in the most careful manner, because for example, the reduction of the number of beds in hospitals will only fuel more social tension.

In 2008, the amount of support staff in healthcare increased by 11%, while the number of doctors fell by 9%. So the balance was disrupted. Last year we rectified the situation.

Vladimir Putin: Did you forget about healthcare in rural areas?

Anatoly Brovko: No.

Vladimir Putin: Is it mentioned in your programme?

Anatoly Brovko: Of course. It’s one of our top priorities. Healthcare and education are the two issues I raise first at my meetings with district leaders.

Vladimir Putin: How is it going in housing construction?

Anatoly Brovko: The numbers are not very good, especially if we compare them with Krasnodar and Astrakhan, but it’s inappropriate to compare Volgograd with Astrakhan. Last year housing construction rates fell in the region, primarily because of a 7.8% fall in Volgograd. A total of 666,700 square metres of housing were commissioned in the region last year, including 330,000 square metres in Volgograd. That’s not enough for a city with a population of a million. In the Astrakhan Region…

Vladimir Putin: Yes, I know.

Anatoly Brovko: It’s not right. We make every effort to reduce administrative barriers, primarily in Volgograd. This issue requires my personal attention, and I will continue to address it in order to improve the situation.

Vladimir Putin: How effective is the mortgage programme?

Anatoly Brovko: In the fourth quarter of 2010 the number of mortgages increased by 80% compared with the third quarter.

Vladimir Putin: Are there programmes for particular population groups, like young families and specialists, in the region?

Anatoly Brovko: Yes, and we have the necessary funds for them. This year we have budgeted 250 million roubles to stimulate housing purchases and to bolster the construction industry in general. The funds will go toward mortgage lending, primarily in the form of interest subsidies for mortgage borrowers. We took advantage of the mechanisms used in other regions. There is a separate regionally targeted programme for housing construction, for which we also provide the required funds.

Vladimir Putin: It is necessary to check on who is doing what. There should be no room for bureaucratic hassles in the decision-making process. Everything that impedes increasing investment in housing construction should be dealt with. I have raised this issue with you more than once. You know what to do. All you need to do is take action.

Anatoly Brovko: We will.