Vladimir Putin’s speech at the conference:

Ladies and gentlemen, good afternoon,

We are meeting here shortly before Victory Day on May 9. A great pride runs through each Russian family: pride in our nation’s victory, in the feats of our fathers and grandfathers – and now great-grandfathers, for that matter – and in all the heroes who fought in that great war.

From the bottom of my heart, I would like to extend my warmest greetings to all the surviving veterans of the Great Patriotic War and acknowledge our deep gratitude for what they achieved, in addition to our respect for and admiration of their great courage and loyalty.

The 1945 victory over Nazi Germany has gone down in history as a victory won by Soviet soldiers – soldiers defending their motherland. It was here in Stalingrad, on the Volga, where they reversed the tide of the war and eventually saved all humanity from extinction and slavery.

These soldiers fought the famous Battle of Stalingrad for their homeland – for their families and homes, for the future of their culture and simply for the right to speak their native tongue, and for dozens of new generations that were yet to come.

Supporting war veterans and working with young people – teaching them patriotism – are permanent priorities of United Russia and all of its branches.

A deep awareness of their historical, cultural, and spiritual identity and heritage, and a respect for their shared background and national history is what makes people a nation in the first place. It gives us strength and wisdom and invaluable experience, as well as confidence in the future of our country and in our ability to successfully meet the grandest and most difficult challenges.

I have just visited Mamayev Kurgan, where I had an opportunity to meet war veterans and talk with them – and to talk with children as well. I saw the children watching the veterans with awe and admiration, examining their orders and medals. Once again, I would like to congratulate all veterans on the approaching Victory Day, and I wish them luck.

Ladies and gentlemen, one of the most important goals of all our interregional conferences is to focus on problems of concern to the people and to support the most needed and most popular business and social initiatives. When we meet in the regions, we primarily discuss local initiatives and projects. These conferences give us an opportunity to analyse our situation and review our development strategy.

In the past decade – since the early 2000s – we have made extensive efforts to restore the national economy and social programmes from, let’s be honest, the wretched state of affairs in which they had operated since the early 1990s. This work has helped us emerge from the economic downturn with only a few scratches – far better than many other countries, and this has been achieved partially by relying on Russia’s political stability.

Although some repercussions of the crisis still linger and we have only managed to restore two-thirds of Russia’s economy, it is clear now that even a full return to its pre-crisis level would not be enough to ensure our accelerated, quality growth and to change the structure of our society.

While supporting conventional industries, we must also work to accelerate our transition to a modern, innovation-based economy. We have discussed this on more than one occasion and agreed that Russia’s economy is transitioning to a new phase of development right now. The economic crisis has in fact forced some companies to restructure, introduce energy-saving policies, invest in innovation and new technology, and lay a greater emphasis on research and education. We suspected even in 2009 that the crisis would prod us forward. And so it has.

As you know, I travel a lot to Russia’s regions and visit our industrial enterprises. I could cite the chemical industry as an example. There were situations when executives said exactly this: that they had no other option but to invest so much money – in fact, some tens of billions of roubles – in cutting water, heat, and power consumption, and eventually giving their product a competitive edge. This process is still underway. There are efforts to facilitate it at the federal level, and we in the federal government are supporting it by getting laws through the State Duma.

At the same time, we are far from being satisfied with the pace of transition towards a new economy. That is why we are in need of new strategic breakthrough initiatives and new tools for attaining this goal. The results of our regional conferences can also be of help.

How? When we meet in different federal areas – which we will do today, and our colleagues have already prepared for it – we always examine investment projects and new ideas for organising and developing production in various industries. These projects are most often proposed by successful young individuals, ambitious in the best sense of the word, and truly successful. They often put forth ideas on how to improve business conditions or change things on a larger scale. Of course, when planning such improvements, they sometimes rely on our new instruments, such as subsidies that are part of our anti-crisis policy. But they also come frequently as petitioners, asking ministries and departments to consider their projects, support them, and pass the necessary measures.

This situation is largely due to the poor functioning of so-called “social ladders”. Young people often face the words “no openings available”, just as they do in many other countries. This means that the best they can hope for is a very slow ascent along the career path.

As I was reviewing what we have done and preparing for this meeting, I had an idea. Let me try to formulate it now. The idea is to set up an agency for strategic initiatives to promote new projects. The agency will report to the prime minister. It will operate as a public service body in its initial stage, but later, we will consider integrating it into the government structure.

This agency would not just draft proposals on what needs to be done and what needs to be changed but would include people who implement innovative projects themselves. Can you follow my thinking? I think that many of our colleagues could be involved: those who have been presenting their ideas and projects at our regional conferences in the past, those who are speaking today or in the future. Our most successful companies might be involved as well.

I am not referring to large companies like our energy giants, although they are quite successful. The companies I’m speaking about do not only occupy niches on the domestic market but make forays into international markets as well.

We need a platform for ongoing dialogue. I would appoint one of my aides to take care of this hypothetical agency in its early stages and provide it with administrative resources. We would then elect a director and senior officials responsible for the different areas of the agency’s activity.

I suggest three such areas for now. One may be tentatively called “New Business”. People would work in this area from their own backgrounds and could draft proposals on how to effectively support businesses and reduce current barriers to start-up companies just entering the market. They could help the government decide how to support such businesses and build a more flexible and effective regulatory system for corresponding industries.

Much needs to be done at the level of the regional and municipal authorities; primarily, we need to build accessible infrastructure and provide loans to start-up businesses. In addition, we need to oversee the way in which the new entrepreneurs fit into the market, which, as you are aware, is overburdened with various monitoring and regulatory bodies, as well as other administrative procedures.

I suggest that we name the second area of focus “Young Professionals.” The first thing we need to do here is develop a system of professional standards by which to provide a clear cue – both for the market and the public at large – of the skill sets necessary for a specialist in any given area. This will give us the criteria to define the term “professional” or “specialist” in today’s economy and society.

We are very late in developing such criteria. Back in 2006, I reached an agreement with the Russian Union of Industrialists and Entrepreneurs, which brings together major Russian businesses, that they would develop a system of professional standards. Unfortunately, there’s not much progress to report. Let’s not only support this work on a government level, as government experts suggest, but also enlist the input of the young doctors, teachers, lawyers, engineers, and service workers whom it will ultimately affect.

The third area includes projects in the areas of education, healthcare, culture, recreation, and social services for the sick, disabled, and elderly. Among other things, we should encourage young managers to take on social sector enterprises and put together youth, professional, and managerial teams at schools, healthcare facilities, colleges, and cultural facilities.

I believe that civil society organisations should also be included in this area. Russian non-profit organisations have hundreds of thousands of active members who deal with important issues without the involvement of the state. We need to enlist the support of such non-profit organisations in the provision of budget-financed welfare services – especially for the sick and elderly and in promoting a healthy lifestyle. In a word, we need to use them in areas that are beyond the government agencies’ reach.

Everything I've just mentioned is very important. Now let’s try to build such an institution and team up with people who advance fresh ideas and get results. In modern parlance, these people need “an extra lift.”

Once young people get involved in the development and adoption of nationally-important decisions, we’ll have more opportunities to do away with the chronic problems of Russian society. I mean building “immunity” in the new generation to “diseases” like corruption, habitual ways of deriving unfair and unearned income, and giving priority to fleeting private and corporate interests at the expense of broader national concerns. I believe that these new recruits will help us go beyond the mere adjustment of our industrial and social policies and help us give a fresh start to the development of our human capital. Let me reiterate: the promotion of new people in business, public services, and politics should not follow the model of bureaucratic laws and procedures. This is also true of the United Russia party, which should see younger people joining its ranks. I’m talking about educated, ambitious, professional, and constructively thinking people.

All of that can come under the single title “Projects for the Future.” Let’s try to accomplish this using our new platform.

Dear colleagues, let’s move on to the main issue, which is the socio-economic development of the Southern Federal District and programmes that will help realise the potential of Russia’s southern regions while significantly raising the standard of living for local people. These programmes are also meant to create new jobs, high-tech production facilities, and modern infrastructure. Russia’s southern regions have undisputed competitive advantages and resources, such as a favourable geographical location and climate, fertile land, and great human resources, which can help secure its fast development.

The top-level higher education institutions located in the Southern Federal District are active in R&D work in such promising areas as nanotechnologies, biotechnologies, telecommunications, innovative materials, and alternative energy sources. They work in conjunction with businesses and development agencies.

Rosnano alone has taken up projects worth 15 billion roubles in the southern regions and plans to invest over 7 billion roubles of its own funds. We have established the Southern Federal University in this region, which is an innovative development centre. It trains specialists in much needed areas and conducts a great deal of research. A Technology Transfer Centre was established at this university.

In a word, the district has all it needs to expand the regional economy in a balanced manner and establish points of growth in industry, agriculture, and tourism.

You are probably aware of the importance of the annual Sochi Forum for Russian and International Companies. It started out upon the initiative of the regional Kuban authorities, and we are thankful for that. I can see the governor nodding in approval. Indeed, the credit for this initiative goes to the regional authorities: they spearheaded it, made a push to get it done, and proved the value of the idea. Now, this forum has become an influential international business platform, a veritable showcase for Russia’s southern regions.

The interest we have seen in the projects that are being implemented in the Southern Federal District is truly great. Investments in the regional economy have exceeded 3 trillion roubles since 2006, and all of that occurred amid the turmoil of the crisis. I am confident that the investment flow will continue growing.

We should pool our resources and capitalise on newly available opportunities. We should build a solid foundation for subsequent sustainable development. Just as in the rest of Russia, we intend to make a genuine infrastructural breakthrough in the south and secure the area's effective integration with regional and international trade and investment projects.

Today, Russian seaports on the Black, Azov, and Caspian seas process 180 million tonnes of cargo yearly, or 36% of the nationwide cargo turnover. Five years from now, the capacity of ports located in the Southern Federal District will grow to almost 270 million tonnes, which is a major increase.

We will build coal, grain, oil, container and passenger terminals, retrofit the Novorossiysk and Rostov transport hubs, and construct new ports, such as Taman on the Azov Sea and Olya on the Caspian Sea. The latter will become an important link in the North-South continental transport corridor.

Notably, Russian businesses started making sizable investments in port infrastructure. Private investment accounts for half of some 300 billion roubles allocated for the expansion of ports on the Black, Azov and Caspian seas. Timing is crucial here. Competition for transport services on the Caspian and Black seas is becoming exacerbated, and I mean it. It’s no accident that our neighbours invest heavily in this area and focus their administrative and financial capabilities on transport.

The renowned Volga-Don waterway should get a new lease on life. This will remove the obstacles en route from the Caspian Sea to the Black Sea and fully integrate Russia’s internal waterways with the international transport network. Our partners and neighbours have come up with numerous proposals regarding this project. They vary in nature and some of them are of truly epic proportions, but we will certainly need to make the best possible choice. By all means, we will move in the chosen direction.

We took our first step in 2008, when we completed the renovation of the Kochetov hydroelectric plant on the Don River. We invested 3.2 billion roubles in this project. Another 1.1 billion roubles will be used for expanding the internal water transport infrastructure in the Southern Federal District in 2011. Our plans include a major overhaul of the Volga-Don Canal. Caspian and Mediterranean coastal states have shown serious interest in this project. Certainly, we will need to tie in all rail, motor, air, and waterways available in this region in a smart fashion. Each link should complement the other. This is the only way to attain synergy in the project and maximise its effect.

We will also need to streamline transport flows and establish modern logistical centres in Rostov-on-Don, Astrakhan and Novorossiysk. We need to take advantage of their favourable location and strengthen our trade and economic relations with neighbouring countries in the Black and Caspian sea regions.

There's one other acute issue. Highways in southern Russia are overstretched, especially during the summer holiday season. This results in more frequent car accidents, aggravating traffic congestion, and constraints for cargo traffic.

All these problems naturally need to be resolved. In the next five years, we’re planning to upgrade major federal highways running through this district, including the Caspian, the Caucasus, and the Don and to renovate the roads leading to ports and border crossings into Ukraine and the countries of the Transcaucasia.  Some 85 billion roubles will be disbursed for this purpose in 2011-2013.

As the work progresses, we’ll collaborate with our partners and neighbours on projects such as the construction of a motorway around the Black Sea. We’ve discussed this with our partners repeatedly, most recently in Turkey. It's an idea that I find both sensible and interesting. I’m sure it will give a boost to the region’s development as well as to economic and cultural cooperation between our respective countries.

If a consensus is reached, our neighbours will make the necessary investments. We’ll contribute our share as well. We’ve got what it takes to translate this ambitious project into a reality, and we’ll be working to make it happen.

I believe it’s time we got down to the construction of a bridge across the Kerch Strait. I know that it's a long-awaited project for southern Russia and the Crimea. I’ve discussed it with the president and the prime minister of Ukraine. Our Ukrainian counterparts staunchly support the project. It should be impeccably done both technologically and in terms of engineering. It may be hard to implement, but it is certainly worth the effort, given its apparent importance to both economic development and our cooperation with neighboring states.

We’ll continue to advance this project in cooperation with our Ukrainian partners. It will help foster human contacts while promoting economic development and tourism. Everyone stands to gain from it.

Fourteen million people used the services of the Southern Federal District’s tourist industry last year. Quite a few, actually. But its full potential is not yet being tapped. The region, which incorporates the Volga delta, the Caucasus Mountains, and three seas, affords plenty of opportunities for recreational, educational, and health-based tourism.

We’ve decided to create six special economic zones for tourism and recreation in the North Caucasus Federal District and the Southern Federal District. Some 60 billion roubles in federal allocations will be channeled into their development. Around 400 billion roubles will come from private investors.

We have a long way to go. Of course, there will be difficulties and risks throughout, but I’m sure we’ll be able to see these projects materialise, including the one to create a mountain tourism area, Laganaki, in the Krasnodar Region and the Republic of Adygeya.

In order to build a powerful tourism industry, we should raise the quality of hospitality services, train competent personnel, develop effective marketing techniques, create a comfortable environment [for operators and tourists], and improve the accessibility of the region. Over the course of three years, we plan to spend more than 10 billion roubles on upgrading the region’s key airports, including in Sochi, Volgograd, Gelendzhik, Anapa, and Krasnodar.

A large new airport, Yuzhny, will be subsequently built in Rostov. It will become a major hub around which international tourism can develop.

We’re also facing the need to dramatically expand the capacity of major railways, including by laying additional track along the Krasnodar-Adler and Volgograd-Tikhoretsk routes – more than 1,000 kilometres of rails in all.

Furthermore, we’re going to launch high-velocity passenger train services between Moscow and Adler by the 2014 Olympics and between Rostov and Krasnodar by 2015. We’ll then launch such services for Krasnodar-Kavkazskiye Mineralnyie Vody, Rostov-Kavkazskiye Mineralnyie Vody, and, later on, for Volgograd-Saratov.

Such are the plans of Russian Railways, roughly. Naturally, we’ll be supporting them in their efforts.

A one-way trip on the high-velocity Moscow-Sochi train will last 14 hours. A trip on a regular train currently takes more than 24 hours.

We’ll try to implement most of these key rail projects for high-velocity trains in time for the 2014 Winter Olympics and the 2018 FIFA World Cup. Incidentally, southern Russia is to host several matches of the tournament. The bidders include Sochi, Volgograd, Rostov-on-Don, and Krasnodar.

There’s been some talk over which cities are on their way out. Let me make it clear right from the start: we are not going to reject anyone. It’s world football’s governing body, FIFA, that will have the final say. I met with Mr Blatter as recently as last night and we discussed the issue with him. But we will defend all 13 bids. Our premise is that regional as well as federal institutions will be competing for the right to host World Cup events. Volgograd will certainly play host to some World Cup matches. How can we win without Stalingrad? 

I’m sure the 2018 FIFA World Cup will give a powerful boost to the region’s economic and social development. It will bring with it additional jobs, new contracts and investments, a new athletic infrastructure, roads, and hotels, thereby raising the local standards of living.

In the early 2000s, we put forward the idea of developing Sochi as a world-class sea and mountain resort. We then won the fierce competition for the right to host the 2014 Olympics. This isn’t a question of prestige, although prestige does matter to us. It’s not about our ambitions, either. It’s just that we came to realise that the development of Greater Sochi was a challenge we could no longer defer, and the Olympics provided us with an opportunity to focus our financial, administrative, and other resources on tasks that needed to be carried out for the benefit of the local community and the nation at large.

The Sochi Olympics, the Kazan Universiade, and the FIFA World Cup are all oriented primarily toward the younger generation. Hundreds of thousands of young men and women will enter sports schools and clubs thanks to these events. You know as well as I do that the influx of newcomers into such schools may grow dramatically following some spectacular sporting event or an uplifting film about sports being played on TV. That’s a statistically proven fact.

I remember when the movie Judo Genius hit the big screen. The number of people going in for judo and sambo rose noticeably following its release.

Our ice hockey players and figure skaters regularly win at international tournaments. I wish them every success in the current world championships.

The number of people involved in sports is growing. Moreover, such major sporting events as world championships, the Olympic Games and the World Student Games will certainly help promote healthy lifestyles. We will continue developing an easily accessible and affordable infrastructure for sports and recreation, opening new stadiums, swimming pools, sports and fitness centres all across Russia. In all, we will be creating a modern national fitness system.

Sochi, Russia’s resort capital, has for decades been a favourite vacation spot for millions of Russians. Unfortunately, the city itself was in a deplorable condition. It didn’t even have a decent sewage system, the waste treatment system was antiquated. The city experienced electricity shortages almost every winter due to transmission line breaks in the mountains. Many districts lacked central gas supply systems. The only road along the sea coast was overloaded. Does that sound like a proper national resort town? As a result, despite its unique potential, the city was far behind foreign resorts; it was losing money and jobs.

The city infrastructure is being overhauled. World class public utilities, transport infrastructure and state-of-the-art sports facilities are being built according to the highest standards of quality. A training base is being built for national teams in many sports. The city itself is developing alongside the coastal area and a mountain cluster. The project includes a gas supply system, a new power station, eight substations, roads, tunnels and about twenty bridges.

As you know, we have already hosted the Alpine Skiing European Cup. The construction is going along according to schedule. I would like to thank everyone working on Olympic venues. You are doing a great job.

I would also like to thank the members of student construction teams. They are working well and are very dedicated. Great job! Thank you very much.

In total, more than 255 facilities are under construction in Sochi and most of them will certainly be used long after the Olympics.

For example, Sochi will see 367 km of roads built and rebuilt in 2014, including interchanges and tunnels. This will help to eliminate traffic jams, one of the most serious problems for the city, and improve environmental conditions.

The new airport facility was commissioned last year. By the time the Olympics start, eight sea terminals will be rebuilt or built and an international passenger and cruise hub will be set up. Seven substations have been commissioned and another six substations are to be inaugurated this year. This will help ensure the highest reliability of the electricity supply.

Throughout this year we will fully deliver on our commitments to people whose homes and land plots were located in the Olympic construction areas.

All of them are either receiving better housing or, if they choose, monetary compensation based on market prices. Along with building sports venues and modern hotels, we are developing the social infrastructure, including healthcare facilities, schools and kindergartens. Moreover, a new university, the Russian International Olympic University, will be established in Sochi.

I would like to cite some more significant figures. The government and investors will spend about 85 billion roubles on the construction of Olympic venues and a total of 60 billion roubles on environmental conservation measures. As you can see, these are comparable amounts.

Moreover, the total area of protected natural areas around Sochi will increase by 20,000 hectares. Significant amounts have been invested in the Caucasus Biosphere Reserve. A new nature reserve, Utrish, was set up in the Krasnodar Territory in September 2010. For reference, various nature reserves currently account for 11% of Russia’s total area. The federal government intends to set up eleven new nature reserves and 20 national parks in the next decade. Ten existing nature reserves and two national parks will be significantly expanded. This is a large-scale endeavour.

All of this is a significant contribution of our country to maintaining a balance of the world’s nature and climate and, most importantly, to ensuring the high living standards, health and environmental well-being of Russians. This well-being is still a long way ahead, but we are moving in the right direction.

I would also like to add that construction sites in Sochi saw the first broad use of green environmental standards. We plan to start using this technology across the country. It is expensive, but it is indeed an investment in the future.

Naturally, such an overhaul is required not only in Sochi or Astrakhan, which received significant help from us during the preparations for the city’s 450^th anniversary. Within these preparations, many city facilities, historical sites, and architectural monuments were renovated. And there is still much work to do in Astrakhan. The city has lots of rundown homes and other problems. But honestly, almost all Russian cities and towns need to have serious renovations done. I was in Penza recently. And a resident came up to me and said: “You know it’s a pity for us to see money invested in large cities while Russia’s medium-sized and smaller towns are neglected.” And I understand his feelings. This is why the federal and regional authorities need to pay attention to this issue and keep working on it.

Overall, we are striving toward a situation in which Russian citizens live in equal conditions regardless of where they live. People should live in towns and cities with good infrastructure, educational opportunities and high quality healthcare services.

Naturally, Russia is a vast country, and our infrastructure is totally underdeveloped. This is clear. Certainly, there’s an immense amount of work to do, but we need to keep working.

As you know, we recently completed the construction of a roadway connecting European Russia with its Far East. Russia has never before had a roadway running all the way across its territory. The Trans-Siberian Railway was built in 1903 in the run-up to the Russo-Japanese War. The Soviet Union was preparing for another war [in Asia], which fortunately did not happen but the Baikal-Amur Railway was built. And it all stalled there. The construction of a roadway from the west of the country to the Far East began in the 1960s but was later given up. We finished it in the last five years but some regions…

I don’t want to go off topic. I only want to say that however difficult this objective is, we will be working on it to make sure that people all over Russia feel equally comfortable. On our part, we will be helping with railway repairs and the development of nature reserves, and this is valid for all the administrative centres of this country.

Let me now go back to the Southern Federal District. You are aware of development programmes for Krasnodar, Maikop, Elista, Rostov-on-Don, Volgograd and Astrakhan, which are all regional capitals. We will set aside 2.9 billion roubles for road repairs and the development of road infrastructure in cities of the Southern Federal District. I would like to emphasise that I’m referring to federal funds while this issue is – as the experts say – the mandate of regional authorities and municipalities.

Naturally, one can always say that there’s not enough money. There is never enough money. The point is how you spend the money you have and what your priorities are. And these issues that directly influence the well-being of each individual citizen should not be neglected.

In the next nine years we must more than double housing construction in the Southern Federal District from today’s 6.5 million square metres to about 15 million in 2020. This is a substantial increase. I think when we plan something we must never inflate the figures for show but must always proceed from reality. In this case we proceed from the population’s ability to pay for housing, rising incomes and demand for housing, the future development of mortgages, and expected inflation that affects mortgages.

If we plan all this, the construction materials industry will double in the Southern Federal District, allowing us to build 15 million square metres of housing per year by 2020. These are serious plans and we must remove any obstacle in the way of their implementation. Regrettably, every region in the Southern Federal District has problems with modern town planning documentation.

We are talking about basic realities, like inflation, mortgages, living standards and the growth of the construction materials industry, but documentation is a purely bureaucratic thing and it is not so difficult to set it right. Rural municipalities are in particularly bad shape – they either do not have territorial planning maps or have old ones that were made in the 1970s and in the 1980s at best.

Out of 30 cities in the Rostov Region, only 11 have general plans. Villages do not have endorsed general plans at all. In the Astrakhan Region only 38 out of 239 villages have general plans. I’d like our colleagues in the provinces to pay utmost attention to this problem and set things right. The same applies to the regional authorities… Why don’t I hear any applause? You should applaud so that these guys can hear us. (Applause)

This is a case when the applause is not meant for me – it is a call for effective joint work.

The effectiveness of our efforts must be judged by the affordability of housing. We must enable people to resolve their housing problems. We must facilitate the construction of economy class housing, low-rise buildings and discounted mortgages for people who work in the social sphere and do not receive high salaries, such as physicians, teachers, young families and young professionals in general. We will support such initiatives and a responsible approach on the part of the regions.

The new Housing Federal Targeted Programme provides incentives for the regions that lead in housing construction. By May 2010 all veterans of the Great Patriotic War in the Southern Federal District that registered for the waiting list by March 1, 2005 received apartments – 1,461 people in all.

I went to Novorossiysk, met with veterans and looked at the documents. This programme has been carried out. We have provided 1,461 people with apartments, extended this programme and removed all formal restrictions on registration for the waiting list, after which another 11,545 people sign up. Almost 8,000 of them already have improved housing conditions.

The government has submitted amendments to this year’s budget to the Duma. We have asked deputies to increase allocations for housing for veterans to 24 billion roubles, which will allow us to speed up this work considerably.

I’d like to emphasise the necessity of responding immediately to any cases of an overly bureaucratic, formal attitude to veterans. It is inadmissible to make them go in circles in search of documents for apartments, social payments, medical services and health resorts. Regrettably, this still happens sometimes.

We have enough opportunities to help veterans in practical terms and not only with housing but also with other problems. There are plenty of opportunities. We must simply be attentive.

Workers of public and party agencies should not delay at all. They should be able to see these problems and act in advance. They should come to people who need support, and deal with urgent problems that affect the interests, rights and living standards of our people. These efforts are bound to produce political results.

Early this year United Russia started monitoring utility tariffs. We have managed to prevent price hikes. The growth of utility tariffs in all regions of the Southern Federal District has not exceeded the established limit of 15%.

Another problem… But by the way, why didn’t our agencies respond like this everywhere? I was surprised because we talked about this in the government and in United Russia and called upon everyone to stick to certain tariffs. Our colleagues enjoy the majority in almost every regional parliament, but despite that these utility tariffs were about to soar in some places. Why don’t party organisations control the tariffs in legislative assemblies? They should have taken administrative action and should have objected to excessive increases in tariffs.

There is also one more problem that must be dealt with. This is the responsibility of the regional authorities; the problem exists and we cannot turn a blind eye to it. I’m talking about defrauded equity holders.

There were about 8,000 of them in the Southern Federal District by the beginning of this year. We must look into every case and decide what can be done with incomplete construction. I know this problem inside out. Indeed, this problem is not a simple one. For some it amounts to a business failure, and to others it means the loss of all one’s savings. It is necessary to deal with this problem on a case-by-case basis.

This year three buildings were completed in the Krasnodar Territory and 368 people received flats. Two other buildings are about to be completed in the Rostov Region and another 246 people will move into new flats. I’d like to repeat that we must resolve the problem of defrauded equity holders by the middle of next year. According to our estimates, it is quite possible to resolve this issue in every region.

I’d like to mention one more sensitive issue that is common to every region. Now about 1.7 million children are waiting for seats in preschool daycare centres. This is an urgent issue in the Southern Federal District as well. Since 2006, 405 kindergartens were opened for more than 60,000 children, but the birth rate is still growing. We must thank women for not being scared to give birth to children. This is very good, but we must do something about the growing wait for kindergartens.

This is starting to impede the improvement of our demographic situation. Naturally enough, a young family thinks of what to do. How can a woman continue her career? She must do this because our families have small incomes. This is a very serious issue. It is not merely an infrastructure or social issue. This is an issue directly linked with demography, and we must understand that it is vital for our nation, for the survival of our multi-ethnic country. I’d like you to pay special attention to this. Please note that the salaries of kindergarten teachers are very low – a little over 6,000 roubles.

United Russia enjoys a majority at regional and local levels, as I’ve already mentioned. In this context, I think that our regional agencies must deal with this problem more seriously. Please pay attention to how much money is channelled into resolving this issue when regional and municipal budgets are distributed.

If we take a look at the regional or municipal budgets, I can assure you that I’ll find a few areas where you can squeeze some funds out and send them to a more needy area, such as the kindergartens.  

For its part, the Russian government… I’ll say it again, this is not our responsibility, but we have nevertheless doubled the federal spending on pre-school education and will use these funds to support the regions that are actively dealing with this issue. We went from 500,000 to a billion roubles this year and have appropriately amended the existing budget.

Colleagues,

Let me pinpoint the areas that largely define the sustainable socio-economic development of the regions of the Southern Federal District and create most of the jobs. These are the fuel and energy sector, small and medium-sized businesses and, certainly, agriculture. All these areas will enjoy special support. We should focus on increasing efficiency in introducing modern technology and enforcing environmental standards.

We’ll need to overhaul the region’s fuel and energy sector. The Southern Federal District has been experiencing power shortages. The area is home to power plants that generate 11 GW of power, which covers only 80% of the local need. Moreover, one-third of the power generating equipment is over 50 years old. Therefore, we will shut down the outdated power plants and build new ones. The total capacity of the area’s power plants will be increased by over 5 GW, or 150%.

Over 2,000 km of power lines will be built. We shouldn’t forget about the grid, either. Power generation alone is not enough. It should be made available to the consumers.

The Southern Federal District has already become a major centre of power generation not only in Russia, but in all of Eurasia. It’s quickly becoming Russia’s “gateway” to global markets.

First, a modern petroleum refining and petrochemical centre is being established here. Over 300 billion roubles will be invested within the next four years in the construction of new refineries and petrochemical enterprises and upgrading the existing enterprises, as well as in enhancing the depth of crude oil refining.  These are not empty promises, either; these are real investments that have been planned and, I am sure, will be realised, because we are adjusting the rules accordingly and forming appropriate regulations. For example, LUKoil alone plans to invest 149 billion roubles in the Volgograd plant.

The importance of these actions can be seen from the recent petrol shortages in isolated regional markets. As you are probably aware, we have adopted a number of urgent measures to this end, such as raising export duties as of May 1. The Federal Antimonopoly Service and other government agencies are conducting necessary inspections. However, the real solution lies in increased exchange trading in petroleum products and most importantly in boosting refining capacities so that maintenance work at one refinery does not interrupt supplies.

Second, the commissioning of new projects in the Southern Federal District will almost double petroleum production from the current level of more than 10 million tonnes to 20 million tonnes in 2020.

Russian companies are already working on the Caspian shelf; commercial production at the Korchagin oil field was launched one year ago, in April 2010. They use unique environmental standards in this oil field.  I don’t think any other international company adheres to such standards.

The Filonovsky field will also become a major producer in 2014. Along with our Kazakh colleagues, we plan to develop the Tsentralnoye field. It just so happened that when we drew the border line across the Caspian Sea, all the oil-bearing fields went to Russia. That happened without us knowing it back then. However, production will be conducted on a 50-50 basis, as agreed.

Third, we are building a very important pipeline across the Southern Federal District. The capacity of the Caspian Pipeline Consortium (CPC) pipeline will almost double. This pipeline is used to transport the Russian and Kazakh oil to Black Sea ports. The pipeline expansion work will begin this year. Its current capacity is 32 million tonnes and upgrades have been planned to boost its capacity to 67 million tonnes.

The Blue Stream gas pipeline across the Black Sea to Turkey was commissioned in 2007. Without exaggeration, the creation of this pipeline was a turning point in the development of Russian energy infrastructure. Russian gas found a direct path to new markets.

We are now looking into the possibility of building Blue Stream-2. As you know, we are now working on the South Stream project with our partners. I am confident that we will implement all our plans for infrastructural development and building an oil and petroleum transport route named South from Syzran to Novorossiysk. The project will see the investment of over 80 billion roubles. This pipeline will be used to export products with high added value, such as Euro-5 high-quality diesel fuel, not just crude oil. Certainly, we will first make sure we have satisfied our domestic needs for this product before exporting any of it. That goes without question.

Next, we will certainly put the regional coal reserves to good use, develop the eastern Donbas area, and address the issues facing mining towns and camps. They still have a lot unresolved issues. We will build new efficient mines and focus on the safety of mining operations.

Experts say that production in eastern Donbas can also more than double to 10-12 million tonnes. We are talking about high-grade coal here, which is in demand and commands steady market prices. In a word, Russia’s southern regions are building a major energy base to support the growing economy and enhance infrastructure.

It is important that tariffs for energy resources and, in a broader sense, for the services provided by all natural monopolies, including railway transportation, are reasonable for the economy, economic agents and private consumers, as well as for Russian industry and agriculture. We can’t afford tariffs that undermine economic activity. Therefore, we are now looking into an option in which the increase in tariffs will be limited to the next year’s inflation rate.

Inflation for this year was planned at 6.5%-7.5%; next year we plan to bring it down to 5.6%. This balanced approach will encourage Russian infrastructural companies to cut costs, improve their efficiency, and use resources sparingly. On the other hand, and this is the most important consideration, this will help us quickly lift the entire national economy. We can debate this issue. It’s not an easy decision. Not at all an easy one. That’s why we are still working on it, and experts are studying it. The question is if we can afford to limit tariff growth. I repeat that we still have time to discuss this issue. This is a really challenging issue. We’d like to limit the increase in tariffs. There are pros and cons to it. We’ll get back to it later.

In the first quarter of 2011, Russian industrial output was up almost 6%. Manufacturing grew at an even   faster rate – 10.6%. This is quite a good number.

We plan to build a network of high-tech clusters in the Southern Federal District, including metallurgy, agriculture and agricultural equipment, the pharmaceutical industry, shipbuilding and the aircraft industry. Currently, the Southern Centre for Shipbuilding and Repair is in the process of being established. The centre will comprise plants based in Novorossiysk, Tuapse and Astrakhan. There will certainly be a need for these new capacities considering our plans to develop sea and river transport.

Certainly, we will use the centre’s capabilities during the modernisation of the Black Sea Fleet and the Caspian Flotilla. Russian enterprises will absolutely be our first choice for placing orders for such equipment.

We’ve set up a powerful aircraft manufacturing base in southern Russia, and I hope that it will continue growing. The Rostov plant is the country’s only manufacturer of Mi-28N and Mi-35 fighter helicopters and Mi-26-T heavy cargo helicopters.

The Beriev aircraft plant in Taganrog is involved in the Superjet 100 project and in the project to build the MS-21 passenger plane. It also contributes to the assembly of parts for the Be-200 and cooperates on a programme to build the next-generation A-42 amphibian aircraft.

Metallurgical plants, are facing an overhaul as well, notably the Krasny Oktyabr plant in Volgograd, the Volga Pipe Plant, and the Taganrog Metallurgy Works. Considerable investments are being made in the renovation of production facilities and the introduction of modern environmental and other standards. Their products are in high demand on the domestic market, including pipes for the fuel and energy industry and metal elements for construction.

The regions of southern Russia traditionally pride themselves on their agricultural machinery. Rostselmash and the Volgograd Tractor Plant are the two flagship manufacturers here.

We’ve recently checked up on the situation at Rostselmash, and should acknowledge that it’s far from perfect. The Volgograd Tractor Plant, too, is facing quite a few problems.

But things are improving, little by little. As part of our efforts to support the agro-industrial complex, we give our agricultural producers incentives to purchase domestically-made machinery and equipment. And we try to provide targeted support for plants. As you know, we’ve helped Rostselmash launch the mass production of a modern 6^th-class combine harvester.

As in the automotive industry, we intend to draw from our experience in building technological and industrial alliances with foreign companies and to give further impetus to the assembly of foreign models here in Russia.

Despite all these difficulties, the Russian agro-industrial complex is making steady progress, and demand will continue to grow. We should try hard to meet that demand.

At the moment, aging harvesters and tractors account for the greater part of our equipment (70-80%) and need to be replaced with new hardware.

Starting in 2012, we plan to launch an old machine scrapping programme. We intend to invest 3.5 billion roubles, for a start. Then we’ll consider how to increase the funding.

As a result of the programme, Russian plants will receive additional financing, and the Russian agro-industrial complex will be able to get down to large-scale renovation.

It’s important that the programme should benefit not only large businesses, which have a strong lobby and can solve their problems in other ways.

It would be great if this programme proved equally helpful for small and medium-sized businesses in rural areas – if it helped people for whom farming is a way of life as well as a livelihood, something that allows them to preserve their family traditions. I hope the agencies running this programme will bear this in mind.

Leasing is another major tool of hardware modernisation. Leases on equipment should be made affordable and accessible to farmers. This year, we’ve allocated 3.7 billion roubles so that Rosagroleasing [the government leasing agency for agricultural machinery] will be able to offer machinery to farmers at half price.

In keeping with our pledge, we’ll make 6,000 pieces of machinery and equipment available to farms.

We should then try to make up for this year’s fieldwork delays, caused by the late arrival of spring. I hope the supply of new machinery will be instrumental in that process.

We’ve decided to increase federal allocations for the agro-industrial complex by 20 billion roubles and to bring the overall budget for the industry up to 170 billion roubles this year. A handsome sum, actually...

We have met the need for loans to finance spring fieldwork in full, and farmers will be able to further enjoy subsidised fuel prices.

Speaking of loans, Rosselkhozbank and Sberbank will disburse 150 billion roubles for this purpose.

We’ll provide aid to agricultural businesses of all sizes – large and small.

Heavyweights form the bulk of our agro-industrial complex. Interestingly, about 40% of dairy production in Kalmykia is provided by small farmers. In the Krasnodar and Rostov Regions, private farms produce about 4 million tonnes of grain a year. Quite a supplement, isn’t it?

Last year’s drought badly affected Kalmykia and the Astrakhan and Volgograd regions, but, thanks to good crops in Krasnodar and Rostov, the Southern Federal District managed to prevent any major decreases in production levels.

The district’s aggregate grain production in 2010 was 19 million tonnes, or 30% of the grain harvested nationwide.

Admittedly, southern Russia and Siberia made it possible for the country to preserve its grain sovereignty after two lean years of drought. I’d like to thank all those who contributed to that effort. Thank you very much, indeed.

As you know, we imposed a temporary ban on the export of grain so as to uphold the stability of the food market and maintain the growth of animal husbandry. This measure was adopted to benefit consumers as well as producers.

We may lift the ban this year if the harvests prove large enough to meet our domestic needs and stock up a reserve.

There’s no doubt in my mind that in the near future, we’ll restore and consolidate our position on the global grain market and on other markets trading in agricultural produce.

Until recently, few believed Russia would be in a position to export grain as well as meet its own needs. Yet, in the pre-drought years, this country became the world’s third largest exporter.

There’s also been some significant growth in husbandry, notably in poultry farming. Pig farms are also doing well.

I’m sure that the competitiveness of our agricultural products will continue to grow. And the government will carry on with its support of farmers. We’ll help them strengthen their position on international markets and apply all the levers we have in their interests, including internationally. This is no easy task. The competition is fierce. It’s next to impossible for an outsider to enter European markets, for example. Most of them are closed, despite so many calls for the liberalisation of commerce.

But, as I said, the competitiveness of our products will keep growing, and we’ll work to improve the efficiency of agriculture, investing in the development of irrigation and the improvement of soil fertility. It’s important to form a high-tech production, processing, and supply chain in southern Russia – the country’s primary breadbasket. As in tourism, the services sector, and commerce, agriculture offers huge possibilities for entrepreneurial initiative.

That said, I have to admit that the number of small- and medium-sized businesses in the Southern Federal District remained unchanged in 2010. I’d like to bring this fact to the attention of the district’s governors and mayors. Along with zero growth across the district, some of its regions reported a drop in the number of such businesses, specifically Volgograd and Krasnodar.

Please get to the root of the problems facing people who are starting private businesses. The number of small- and medium-sized businesses is growing nationwide despite the economic downturn, whereas the number of private farms is shrinking in your region, which means you have a problem. You should develop the infrastructure for small businesses – in particular, by promoting business incubators – and use fiscal incentives. 

The Krasnodar Territory and the Republic of Adygea have not yet decided whether to reduce rates on simplified taxation. I call on our colleagues in the regions to reassess their budget options and reduce taxes as much as possible. The Krasnodar Territory can certainly afford it, Mr Tkachev, what with your watertight budget and good economic indices. I thank you for your success, and I ask you to weigh your opportunities for the practical support of small- and medium-sized businesses.

Assistance to budding private businesses through grants, micro loans, consultations, and legal advice is especially important. It is also necessary to bolster the capitalisation of warranty funds, which are small enough for regional budgets to afford. Federal investments are incorporated into such funds, which bring fast returns. Take the Central Federal District: the total loans to small businesses exceed its warranty fund fourfold.

The practical and not merely nominal removal of administrative barriers will be our main yardstick for the regional authorities’ efficiency. 

Ladies and gentlemen, we are launching two critical projects that demand special monitoring because they concern the interests of an overwhelming majority of people. I mean regional programmes to modernise healthcare and our initiatives to support Russian schools. We will also draw up measures to promote national culture and start their implementation next year. We will dramatically increase their funding, however hard it might be to find the money – it's no wonder that there are heated discussions on the matter.

But, I repeat, we must hit our targets once we have announced the programmes and publicly pledged to implement them. Future funding will certainly bring tangible fruit. The population, however, should be able to feel the improvement of our social services: people should no longer have to line up in queues at clinics, schools, and libraries, and employees in culture, education, and healthcare should receive decent salaries.  

You know that I have met with medics and teachers, and I have to say that even head physicians and regional healthcare managers often have vague ideas about the significance of the healthcare modernisation programme. They don’t know how much equipment will be purchased or which projects will go under renovation. Surely the ordinary people for whom we work are even more ignorant on that score. Information shortages are evident in professional circles and the entire public.

I stress once again that we are supporting and developing healthcare, education and culture not for their own sake but for the sake of Russian citizens, and, in the end, it is up to them to evaluate our efforts.

That is why we have launched a nationwide public discussion of all our initiatives. A national medical forum has been held, the All-Russia Teachers’ Assembly will have a congress this month, and I have recently met with cultural activists in Penza.

The conversations are unflattering and rather harsh. I am sure that such straight talk is just what we want to take stock of the problems and make the correct decisions. I think that such frank discussions and dialogues with professionals and the public at large should be arranged in the regions and among our local party organisations. We should not shun public discussion of the problems we face. Please regard such debates as among the basic aspects of our work on these projects. There is nothing to be afraid of. We should not bury our heads in the sand. We should take stock of our problems and join hands with experts to find the best possible solutions. 

Where education, healthcare, and culture are concerned, we must realise that much depends upon managerial efficiency, as well as upon their employees’ professionalism and decency. If these elements are absent, even the best intentions will go nowhere, and even the most generous grants will be squandered. We are currently enhancing the independence of government-funded agencies and giving them the opportunity to provide incentives to the best workers. However, we see all too often that the salary gap between managers and rank-and-file employees is growing, and that is what corporate autonomy boils down to. We do not want this to be the case. I call not only on local and federal officials but also on party organisations to monitor the situation as closely as possible.

I repeat that United Russia can succeed due to its political dominance in all regions, which the party should use to public benefit. It’s a good, healthy dominance. 

I am repeating once again that the Southern Federal District will receive an extra 29 billion roubles in 2011-2012 to repair hospitals and clinics, buy cutting-edge equipment, and make a transition to the latest medical standards. We have signed a agreements with all its regions, and we should step up the work. Astrakhan was the only exception as of yesterday morning. I am not sure whether the agreement has been signed by now. Let us clear it up with the region's governor tonight.

Please pay special attention to the support of the low-level medical institutions, particularly in rural localities. I looked up district medical statistics as I was preparing for this conference, and I saw that morbidity in the Southern Federal District is 14% below the national average. Perhaps the local people are of a stronger constitution than others. But what if there is something alarming behind this figure? Experts say that it in fact signals problems in regional healthcare, such as inadequate screening, diagnosis, and monitoring of possible health hazards. If they are right, the situation must be urgently improved.

The Southern Federal District is short on doctors and nurses, and average monthly earnings in the medical profession are a miserable 11,500 roubles.

Please note that one of the critical goals of these regional programmes and the entire healthcare reform is to support the profession, attract more specialists, and provide incentives for efficiency. The healthcare payroll – not salaries, mind you – will increase by 30% over the next two years. 

Starting in 2013, after we finish repairs and install new equipment, payments to the mandatory health insurance fund will be entirely channelled into medical institutions. So salaries in healthcare will further increase.

I think that in all parts of Russia where healthcare institutions are understaffed, we should draw targeted employment programmes for the medical profession. This step is essential because we will never achieve the desired effect without such programmes, which should envisage the improvement of housing conditions and bonuses for doctors and nurses. We must cooperate with medical students and fund targeted tuition programmes.

Several regions are implementing such programmes to great success. You can obtain more information on their achievements if you like. The relevant orders were made following the national medical forum.

Teachers’ monthly wages in the Southern Federal District are presently at 11,900 roubles, at variance with the national average, which is somewhat below that of doctors. It is the other way around in the Southern Federal District, where the latter also differ internally. For instance, a doctor makes 8,800 roubles a month in Adygea and 15,100 in the Rostov Region.

As you know, school payrolls will increase by 30% starting at the beginning of the next academic year – the payroll, mind you, not actual salaries. I am underscoring that point to avoid misunderstandings. In the next two years, teachers’ salaries are to match the average wage in their respective regions.

Several regions – although not Tyumen or any other oil-producing regions – are addressing this problem now. So, you see, it can be solved as early as this year with available resources. We will address the matter as part of our project for the support of schools.

We intend to allocate 60 billion roubles a year from the federal budget within the next two academic years to purchase equipment, re-equip gyms and canteens, solve the problem of small rural schools, and retrain teachers – we mean all of this when we speak about upgrading schools and education.

Take the problem of small rural schools and the endless discussions about whether or not to close them. Russia is a vast country, and it is hard to object to people who say that a village is doomed once its school is closed. True, some schools really deserve to be closed, but others should be preserved whenever possible. 

However, small rural schools do have problems. Tuition is the biggest of them all. Can all classes from mathematics to athletics be good when the school has only a handful of teachers – ten, at most?

Our programmes envisage, first of all, the establishment of educational centres that incorporate small rural schools. It will then be possible to reduce the costs of such schools by cutting their managerial staff. Tuition will be improved by state-of-the-art online or long-distance learning classes.

Second, schools will be built, equipped, maintained and repaired at federal expense to reduce regional and municipal budget expenditures. These sums will go to school payrolls and increase them by 30%, as I said. The payroll and salaries should be increased not automatically but as teachers enhance their professional capability. The ultimate goal is for children to have better education and for their parents to be content.

In doing so, we should guarantee every teacher the opportunity to retrain through postgraduate courses, and so on. If we organise everything correctly, the comprehensive programme will improve the situation at schools and buttress the entire Russian educational system.  

These efforts must start immediately. All regions should make agreements with the Ministry of Education and Science before August 1, just as they do with the Ministry of Healthcare, with explicit criteria set on efficiency and goals for school development programmes. Regional governors and United Russia organisations must closely supervise this work. I am convinced that only by our joint efforts will we achieve the successful modernisation and all-round improvement of Russian schools.

These efforts will be made easier through the positive experience of the national “Education” project – suffice it to say that all schools of the Southern Federal District are now connected to the internet. It was a big job to purchase and install hardware, connect every school, and teach computer competence – and those who did so enjoyed it. The project provided federal support to the Krasnodar Territory and the Astrakhan and Volgograd regions to implement pilot projects for the comprehensive modernisation of education. As a result, 82% of school pupils in the Krasnodar Territory study under conditions of the highest standard level, compared to the former 20%. These are telling figures.

New remuneration plans helped the Astrakhan Region increase teachers’ average monthly salaries from 4,900 roubles to 11,400 – certainly not enough for decent living, but compare it to their previous earnings.  

The district is developing military schools with cadet and Cossack branches. It is a very interesting trend, and we will certainly support it, as such schools offer fair tuition and successfully educate children who found themselves in difficult situations, while reviving historic, spiritual, and cultural Cossack traditions.

As you know, on June 1, we will begin increasing government salaries by 6.5% to adjust them to inflation, and we will repeat this indexation in autumn, as I have said many times before. We will certainly see what else we can do.

Please note that a greater increase, set to match the professional average, will come into effect on June 1 for museum and library staffs, as well as others engaged in culture. Until now, they have barely been able to make ends meet.

Next year, we will begin to sizeably increase federal expenditures in support of national culture and the development of libraries and museums. Later on, we will launch the “Culture of Russia” federal targeted programme.

I have to acknowledge that the number of libraries, children’s art schools, theatres, and other cultural facilities has been shrinking in the Southern Federal District for five years now. Museums need another 30,000 square metres of space for depositories, and more than 30% of premises demand thorough repairs.

Average salaries in culture are extremely small. They were at 7,300 roubles a month in Kalmykia last year. Even in the Krasnodar Territory, which has the highest wages in the district, they are at 9,778 roubles – also nothing to write home about.

It is inadmissible to force cultural organisations from their premises – children’s libraries, for instance, are being replaced by houses and shops. If you want to help commercial enterprises, help them somewhere else.  Give them money, create the right conditions, give them tax exemptions, and so on.

In Penza last week, we took stock of the construction and reconstruction of regional cultural venues. I have some notes here on the condition of the Astrakhan Music Theatre. Mr Zhilkin, I hope the job will be finished as soon as possible. I call on the federal Ministry of Culture to properly monitor all such projects in the regions and on regional authorities to approach such matters responsibly.

The government is working on practical proposals to promote libraries nationwide. I don’t want to get into the technicalities now, but I will simply say that they envisage IT work on a grand scale, the replenishment of library stocks, the reconstruction of library buildings, and the establishment of targeted government grants. I ask the Russian regions to regard the support of libraries, museums, and culture as a top priority and to attract businesspeople and other interested parties to the job.

I would like to conclude this lengthy monologue with a few words about elections to the State Duma, the year’s central political event. United Russia representatives will run for parliament under a political programme containing a detailed plan of action for every part of Russia.

And not just a plan, but a plan that details the challenges currently facing us as well as specific proposals to address them. Strictly speaking, events like the one we have today are devoted to this.

I again draw the attention of all our regional organisations to the fact that it is imperative we establish a “career ladder” for young people, for every individual who has the capacity and desire to serve their country.

I have some suggestions. I will explain them now to you. I want to note that selections to the State Duma candidate pool must be completed before August. We then need to discuss the candidates, so that the electoral list can be finalised in September at the party congress. The selection procedure should not only involve party members, but non-affiliated United Russia supporters, trade union members, members of women's and youth organisations, public associations, citizens who take the initiative, who are actively engaged. In short, all those willing to have a direct influence on government policy through United Russia in the State Duma.

What am I suggesting and how do I propose we do this? Essentially, I propose creating what in political practice is called a broad popular front.

Thank you very much for that reaction, for your support.

This approach to consolidating the efforts of a broad range of political forces ahead of major political events has been taken in the past and is still practised in various countries at various points by a variety of political forces: by those on the left and by what we know here as right-wing liberal, nationalist and patriotic forces.

How it is called is not the issue. The issue is how we conceptualise it and what we want to achieve. This is a tool for bringing together like-minded political forces.

And I would very much like United Russia and other political parties, trade unions, women's organisations, youth organisations, for example, veterans' organisations, including World War II veterans and Afghan war veterans – everyone who is united in their common desire to strengthen our country, united by the idea of ​​finding optimal solutions to the challenges before us – to benefit from this single platform, let's call it, say, the “Russian Popular Front,” because ahead of May 9 and at Stalingrad, this kind of rhetoric is in the air, and the name “Russian Popular Front” seems quite apt...

Thank you.

But what is important and what I certainly want to stress, is that all political structures must be absolutely equal in this entity. United Russia, the trade unions and youth organisations must all carry equal weight. There should be no senior or junior partner, and everybody, and this is important, would have the opportunity and the right not only to articulate their ideas and suggestions for the best, most effective development areas for Russia, but would also be able to put forward their own candidates, which would remain independent, but which would win parliament seats on the United Russia party list and, once there, would work together.

Please go ahead.

Mikhail Shmakov: Mr Putin, thank you. This is a very important proposal, which I am sure, will firstly win over millions of our citizens to the side of United Russia, and secondly, the civic union or popular front that may thus be created would engage a broader range of Russians than just the party faithful, both in the nomination of their own candidates, and in putting sound policy into practice after the election.

Vladimir Putin: Exactly so. Thank you very much.

Do you support this?

Franz Klintsevich: Mr Putin, I would like to use one very important event to illustrate what you have just said.

A congress of the Russian Union of Veterans of Afghanistan was held on April 7-8, which brought together representatives of all public veterans' organisations, and 80% of the time the speakers talked about the need for something like this. They came to me saying: “you talk to them and work out how to propose this.” Today, you essentially gave me the answer to the challenge those veterans and congress delegates set me. And, most importantly, Mr Putin, as you mentioned at the outset – look at the people who are here now with us – we are surely underestimating the very real patriotism and capacities of people who have done so much for their country. And we have this potential: here alone. This is something our opponents are exploiting, without having any such capabilities themselves.

Thank you, Mr Putin.

Vladimir Putin: You thought about it, and we did it.

Vladimir Plotnikov: Mr Putin. May I, on behalf of farmers, offer my support for this wonderful cause? This is why United Russia will take an organising role, and people will understand and support that. So thank you. I think farmers will gladly expand the segment occupied by the United Russia party.

Thank you very much.

Vladimir Putin: Thank you very much.

Svetlana Orlova: Mr Putin, I think that, speaking on behalf of all Russian women, we will also back this proposal. This is important because people who care will get involved, sincere people, people who love Russia and who want to do everything that we have outlined together. So I think that this proposal, you know, represents the common foundations of Russian public opinion.

Thank you.

Vladimir Putin: Thank you for your support. I am sure that this way, through open discussion, we can guarantee the most important resource of any political power in a democratic society – citizens' support and trust.

Please go ahead.

Remark: Mr Putin, at first we were shy, but then our senior colleagues supported us. We would like to say thank you very much from United Russia’s Young Guard, because we are, after all, the youth movement and we are probably the most talented, most aspiring and most committed patriots in our country. Therefore, being able to nominate our own candidates would be very important for us and very important for all young people, who will gain a chance to be heard. Thank you for this proposal.

Vladimir Putin: That is the very essence of this proposal.

Thank you.

Colleagues, in conclusion I cannot neglect to mention that soon we will mark the 70^th anniversary of the Battle of Stalingrad. I think United Russia should take particular care of Volgograd and all hero cities, cities of Russia's military glory, war memorials and memorial sites related to the history of the Great Patriotic War. We must do everything within our power to support veterans, widows and the defenders of our homeland.

We should cherish their memory and be worthy of that generation of victors. We will always be proud of these strong, courageous people and just like them: believe in Russia.

Thank you very much.

Colleagues, let's continue.

As agreed, we will see and hear from those of our esteemed colleagues who are present here, with their ideas, proposals and projects.

Ms Sadovskaya, head of the Altn Farm in the Republic of Kalmykia, please go ahead. The project is called Kalmyk farms: characteristics and traditions.

Please go ahead.

Idzhilina Sadovskaya: Hello to everyone who is participating in this conference, this meeting, Mr Putin.

Today, let's take a look at how we work in Kalmykia, and at how my farm works.

Vladimir Putin: Ms Sadovskaya will tell us about her work.

Idzhilina Sadovskaya: First I would like to tell you all a little about myself, about my farm, and how I got there. By the time I was 18 years old, there were only women left in my family, having to care for my family was the starting point of my journey, and I never doubted it would work out. And the desire to continue the business my father cared about so much. There was not a moment of doubt in my mind.

I have been through a lot – I almost drowned, and burned, but my age proved the most serious obstacle, as did the fact that those around me did not believe I could successfully launch a business. But now I have already achieved some success, almost doubling the number of livestock in four years...

Vladimir Putin: How many do you have in total?

Idzhilina Sadovskaya: I have limited area of land. There are over 2,000 sheep and goats, 270 cattle and 210 horses on my farm.

Vladimir Putin: And how many employees do you have?

Idzhilina Sadovskaya: Eight.

I cannot expand, because the land at my disposal is limited. And so I am faced with ever more challenges, but the ways to overcoming them are clear to me.

I keep horses, so this means koumiss production, it’s a live, fermented drink that is both tasty and useful: reducing the incidence of tuberculosis in Kalmykia. Then there is also Kalmyk sheep breeding. It is the optimum breed, Mr Putin, for our region. Kalmyk sheep have distinctive hooves. They can reach distant pastures and eat coarse feed and roughage.

And, so I have brought some of these hooves with me as an example. Let's say merino sheep have sharp hooves. And when they graze – here some photos for you – they churn up our pastures, while Kalmyk sheep – on the left – have more rounded hooves, with pads.

Vladimir Putin: This is not some kind of “Antler and Hoof Company”. This is a serious enterprise.

Idzhilina Sadovskaya: And as you can see from the picture – it’s hard to make out, but I want to give you an example – merino sheep, besides the fact that they have sharp hooves, they graze like this. And ours graze like this, which has no negative effects on the pasture.

I will attain the goal I set myself by 2012, by then my farm will have started producing environmentally friendly products, lessening the impact on pastures. And I will have created more jobs, not eight, as now, but I'm already planning 18. And then our Kalmyks will not need to go to Moscow to work in sushi restaurants, but will instead come to my village, in that beautiful corner of Russia.

Vladimir Putin: But what's the problem? Is there really a land shortage in Kalmykia?

Idzhilina Sadovskaya: There is not much land. We have a lot of livestock, but little land. I live in the Yusta district – Kalmykia is divided into 13 districts – we suffer from poor feed supply, and there is already a lot of livestock, so we need to find solutions to these problems. And one way of  solving them is by producing koumiss and breeding Kalmyk sheep. The Kalmyk breed will lessen this impact on pasture. I'm not going to expand the pasture, but I will start producing other products. And I'll be richer if I have...

Vladimir Putin: That goes without saying.

Idzhilina Sadovskaya: But, Mr Putin, we also face problems. We need meat-processing plants in our area, feedlots and slaughterhouses, if we are to prevent speculators from neighbouring regions and republics from coming to buy our meat in live weight. We can do this ourselves, we have everything we need, it is in our genes. This was what my father did, what I am doing now and what my children, grandchildren and great-grandchildren will also do.

Vladimir Putin: So you have children?

Idzhilina Sadovskaya: No, but I will. I'm 22.

Vladimir Putin: Great!

Idzhilina Sadovskaya: Therefore, we ask your help in achieving this. We need incentive programmes. If not subsidies and grants, then perhaps government orders, giving us a concrete customer for our produce, making the sales and marketing infrastructure clear, you could help us with that.

And another issue, and one that we also feel is very important, and I know that this is already being discussed everywhere, and that you are working to resolve it, but I wanted to mention that in December, electricity cost four roubles, and 7.06 roubles in January. This has had a very serious impact on farmers, because ours is seasonal work – we have three to four earning months a year, but we have to pay for electricity each month. We cannot, say, slaughter two extra sheep just to pay the electricity bill.

If all of these issues are resolved, I assure you, Mr Putin, ask anyone in Kalmykia, I keep my word: we will lessen the impact on pasture and increase the number of livestock.

Thank you very much.

Vladimir Putin: Thank you.

We have a state support programme that is now in development – a state programme for the development of the agro-industrial sector – and it has a section relating to both meat and milk processing. I cannot currently recall the figures, but it's somewhere around 0.5 billion roubles, I think.

I do know that we have allocated slightly more than 100 million roubles to Kalmykia this year to precisely this end. However, we can add some for cattle if they really are so unique. You can use this programme no questions asked.

Ms Skrynnik, are you here? Please speak with this young lady. Please remind us what the numbers are. I think it’s about 102-105 million for Kalmykia.

Yelena Skrynnik: In support for sheep breeding. We do allocate these funds.

Vladimir Putin: There are two programmes. The one that the minister has just mentioned is about sheep breeding.

Yelena Skrynnik: Thorough breeding.

Vladimir Putin: Outdoor horse breeding. That’s what it's called.

Ijilina Sadovskaya: Then, it’s cows and calves.

Vladimir Putin: None of these. It’s for deer, sheep, and outdoor horse breeding. These are the three areas. The federal budget has allocated special funds for them. This is the first area.

The second one is part of the agro-industrial support programme, which has a separate section devoted to the support of the dairy and meatpacking industries. Discuss it with the minister, and use these programmes to support specific operations.

There’s nothing supernatural here. The fact that you haven’t mentioned it now indicates that the information is either unavailable or hardly available, but that such programmes already exist. The issue is about expanding, supporting, and funding them, but they can be used right away.

I wish you all the best. See how the audience reacted to what you were saying? I sincerely wish you success in what you do. The girl is only 22 years old, but she already has a stud of horses and engages in sheep breeding. She does everything herself and even hired eight employees. Quite a bride we have here!

I’m sure they’ll pay attention to these words in Kalmykia and in the rest of Russia.

Ijilina Sadovskaya: I’m already married.  My husband will be upset if he sees me on TV. He is a serviceman in Chechnya.

Vladimir Putin: He’ll love you even more when he hears this. He’ll be even more proud of you.

Thank you.

Please, Mr Fenkov. Limansky District, a municipal development. The project’s name is “Limansky District: A Sustainable Development Area.” 

Yakov Fenkov: Mr Putin, I’m the head of a rural district. I was born and raised there and started out as the chairman of a collective farm. I’ve been serving as head of the region for the past ten years. This district is the southernmost point of the Astrakhan Region, which is home to our famous Astrakhan watermelons. It has the entire requisite social infrastructure. We have retained it in full, including schools, kindergartens, healthcare facilities, and medical and obstetric centres. We continue to upgrade our facilities and expand their logistical base.

A sports and recreation centre with a swimming pool is being built under a United Russia-approved project. We will commission it early next year. I wouldn’t go so far as to say that everything is in order because the district is still heavily subsidised. Small- and medium-sized businesses are the key taxpayers, although this is mostly an agrarian region.

It’s good to know that young farmers are standing firm on their feet and using advanced technologies. But still, it’s not enough. The subsidies tie us hand-and-foot when we want to provide better municipal services. Therefore, we have come up with a comprehensive programme for our district, which is part of the strategy for regional development until 2020.

The primary goal of this programme is to lift the district to a level at which we no longer need subsidies and can raise the average wages in the district to meet the national level. What did we do to achieve this goal? The first step is to establish favourable conditions for investors. We’ve seen a lot of them already. We studied the experience of Russia’s most advanced regions; we went abroad to see if we could find anything that would be of use to us and our climate. We are lucky that the district is located exactly… You mentioned that the North-South transport corridor will cross the district… Construction is under way…

It used to be a wasteland a few years back – a neglected wharf for shipping watermelons. Today, the port is quickly expanding with about 14 moorings under construction and six operating. The outlying areas are also being developed. We see investors coming in. The task of the municipal authorities is to quickly complete the paperwork on plots to be used for the development of outlying areas and quarries. We are developing the social infrastructure and commissioning new schools. We are also renovating a large water treatment plant that supplies water to the entire district. We do staff training and are redesigning our vocational schools to train dock workers.

The port is expanding, and it’s truly gratifying to see. We see new jobs coming up. Despite the crisis, cargo turnover currently stands at 1 million tonnes and is expected to reach 8 million tonnes in 2015.

Our next step will include agrarian projects. I have already said that it’s comforting to know that young farmers are standing firmly on their feet, but we believe that the district’s potential is far from being exhausted because we are home to quite a special climate. We have also studied foreign experience. We now have investors with unique production technologies for a greenhouse project involving 215 ha of land, which will give us an additional 3,000 jobs and boost our net output. We plan to produce 120,000 tonnes of greenhouse vegetables, which is 20% of overall production in Russia. However, we are lagging far behind other producers with similar climates, such as Israel with its 80,000 ha of greenhouse land, or Spain and Turkey, where major producers account for 85% of all greenhouse vegetables worldwide. Therefore, we believe that this is a very promising area. The investors are bringing in the money, the utility networks are being built, and the equipment is being imported. The project is in progress.

Next, the meatpacking plant, which is a cluster. The goal is to introduce innovative technologies to cattle feeding and the selection process. We are building feedlots for family farms and small farms.

The meatpacking plant is being built under current agro-leasing arrangements. We have received 126 million roubles for equipment purchases. The total project is worth 800 million roubles and will allow small farm owners to use highly effective technologies to boost their output and fill supermarkets and groceries with Russian-made products.

At face value, it’s all very good and the progress is there; however, there are problems, and we would also like to see things happen a bit faster. Take, for instance, our capital-intensive greenhouse project. We have a serious investor, but the bank is setting terms at 30%, this money is not enough.

Vladimir Putin: What? 30%?

Yakov Fenkov: 30%.

Vladimir Putin: You don’t say so!

Yakov Fenkov: Yes, 30%.

Vladimir Putin: What’s the name of the bank?

Yakov Fenkov: Rosselkhozbank, Sberbank. It's a 30% requirement on investor capital, not in interest.

Vladimir Putin: I thought you were talking about a 30% interest rate.

Yakov Fenkov: No, no, not the interest rate.

Vladimir Putin: So, you are to invest 30% of your own capital in the project?

Yakov Fenkov: Yes. It’s a major project. The total cost runs to 12 billion roubles, but we split it into several phases so as not to scare people off with the numbers. The first phase involves 21.5 ha worth about 1.2 billion roubles. It would be nice to get some support. There are financing techniques for when a major financial institution enters a project with a 15% investment, and, as the project progresses, it sells its share in the authorised capital to an investor, thereby providing support to the project. We believe this is a very important project, which is why we’ve put so much effort in it. It’s very important for the development of such areas and the use of innovative technologies. We have already seen some serious results, including the introduction of drip irrigation and other highly effective watering systems. The federal targeted programme “Reclamation of Farmlands” should be adopted as soon as possible. It should make provisions for compensating 50% of the expenses incurred by our farmers.

That would give a major boost to our economy and make it possible for us to commission at least 20,000 hectares annually and increase annual agricultural production by 30%. It would give us a second wind. It’s true of the entire Southern Federal District, not just the Astrakhan Region.

We believe this is the way to go – creating favourable conditions for investors. We do have a certain degree of experience in this area because we have the region’s lowest profit margin and property lease payments. We try to make lease payments affordable for investors with good projects, who would share their innovative investment techniques with our farmers. The investment attractiveness of a region gives a major boost to its economy.

I am positive that we will have a subsidy-free budget by 2015 and that average wages will be 25,000 roubles in the district. This will help us provide better municipal services and get closer to the rural people. I believe we will fulfil our goal.

Mr Putin, let me say a big thank-you to you for the outstanding sports and recreation centre and swimming pool. This is particularly important for rural children who engage in new sports.

However, the fifty-fifty arrangement is a bit burdensome for rural people. If only they could have it a little bit easier, we would be very grateful. Some of my colleagues envy me, and some think I’m demented because the project is so ambitious. But we’ll do it, no matter what.

Thank you for listening.

Vladimir Putin: Mr Fenkov, you should discuss the sports facilities issue with Mr Zhilkin. We help the Astrakhan Region in many ways. The activities you’ve told us about are very important for rural areas. Many Russian villages and small towns can offer nothing to their children and young people. They have nothing to keep themselves busy in their spare time. That’s a real problem.

I’d like to tell the regional and municipal authorities once again that this is a highly important area of work. You can see so for yourself. Young people just loiter around and don’t know any better. This is a quintessential social issue. 

You are aware of United Russia’s projects. Mr Gryzlov often talks about them and supports the construction of sports and recreational centres. These programmes need to be expanded. For our part, we will also support them.

Now, as for the work-related issues. I want to bring up the 30% investor capital issue as regards this new project. I hope you understand the reasons behind such a requirement. It's there because people don’t value borrowed money. If someone receives 100% financing with no money down from his own pocket, then that person’s desire to succeed and protect the investment at all costs begins to approach zero. Whenever out-of-pocket money is at stake, the investor will always strive to do his best and be successful. Psychologically, that is how the entire economic mechanism works.

Certainly, projects should be considered on a case-by-case basis. Project financing can be supported by certain entities, including our financial institutions – primarily the development agencies. We and Vnesheconombank have established such mechanisms. There are funds in Russia’s regions that support small- and medium-sized businesses. From among other things, these funds are financed from the federal budget.

We might give this some thought and see how we could cut down the investor’s share.

Yakov Fenkov: That’ll be really helpful.

Vladimir Putin: Yes. Let’s look into the possibility of decreasing the investor’s share.

You also brought up the issue of land reclamation, which is of truly nationwide importance. Unfortunately, much of the Russian farmland has fallen into disuse. Everybody knows it, especially here in the south. The land reclamation problem is very acute. You said you were looking to get compensation for 50% of the reclamation costs. Let me tell you that we are drafting a law providing for 50% government participation in these land reclamation costs. We have plans to do exactly what you’ve just mentioned.

Please, go ahead.

Olga Romanenko: Thank you. Good afternoon! Olga Romanenko, chairman of the Astrakhan Tourist Guild, a non-profit organisation…

Vladimir Putin: What’s the organisation’s name again?

Olga Romanenko: The Astrakhan Tourist Guild.

Vladimir Putin: Tourist guild?

Olga Romanenko: Yes, tourist. I have a question that concerns the tourist industry, which is also very developed in our region. Lately, they’ve been talking a lot about the allocation of paid and free land parcels, service formation, and other such issues. We have all of that at our sports and recreational fishing facilities. We have 400 tourist business agencies working in this area. However, lately they’ve been talking about shutting down the sports and recreational fishing activities in Volga’s estuary by way of adopting amendments to the fishing regulations in the Astrakhan Region.

My point is that our industry has never been subsidised or received interest payment compensations. We always expanded using our own funds, and I can tell you that firsthand. We didn’t have any budget support. However, we managed to attract and accommodate about 2 million tourists yearly out of the 14 million you mentioned earlier. Our industry can take credit for that. We also invest in land reclamation. And I haven’t even started talking about how we use solar panels at the fishing camps because many of them are remotely located in the estuary.

If these amendments are adopted, what can we do? We have 12,000 people working in this industry and providing its services. What do you think? I hope to hear a favourable answer.

Vladimir Putin: You do understand what it’s all about, don’t you? The Federal Fisheries Agency stirred the public with all kinds of ideas related to the commercialisation of sport and recreational fishing. Really, I again want to make my position clear: it’s absolutely wrong to impose restrictions on traditional fishing areas.  

That makes no sense whatsoever. People have been going to the same fishing holes for decades. Now, they want to charge them to do the same thing. I’ve already said that they are charging 1,000-1,500 roubles for access to fishing grounds in the Moscow Region.

This money can buy vitamins enough to last for a whole day or even seven days, letting one spend a whole week on a fishing trip. But this is unacceptable, of course. That’s why I’ve suggested setting a top limit of 5% of the water table. We could come up with some other restrictions. But, clearly, we won’t be able to do without any constraints whatsoever.

There’s something else that makes our counterpart worry. We’re saying we’ll start liberalisation and try to prevent commercialisation, and she says, “Everything is already commercialised here; there are small businesses operating and lots of tourists coming in.”

I’d like to reassure you that no extreme decisions will be made in this regard, either. Rumours about imminent changes in the current regulations in the Volga Caspian Region are absolutely unfounded. Nothing of the kind has been contemplated.

Ok, let’s move on. Mr Bakulin, of the investment industrial group Volga Bas, please go ahead. (Applause)

Alexei Bakulin: Mr Putin, you’ve already seen our buses, but you haven’t seen the plant.  I suggest we show you around and then discuss our project.

(They watch a video)

Vladimir Putin: Thanks.

Alexei Bakulin: You see Volzhanin…

Vladimir Putin: How many people are employed here?

Alexei Bakulin: The staff of the entire group totals one thousand people.

Vladimir Putin: What does this group consist of?

Alexei Bakulin: It incorporates production units, R&D, service centres, and a distribution network.

Vladimir Putin: Are all of them located in Volgograd?

Alexei Bakulin: The distribution centres are located in Moscow, St Petersburg and Surgut. We have a production facility in Kabarda-Balkaria. But the main office and the research centre are based here, in Volzhsk.

Vladimir Putin: The brains are all here, in the Southern Federal District, right?

Alexei Bakulin: True. You see, Volzhanin, as we know it today, is a modern manufacturer. The people who work here have built everything from scratch. We’ve made a breakthrough on the Russian market, as we rely on fresh talent, innovative technology and international cooperation.

Sure we cooperate with European companies these days, but this shouldn’t be a one-way street. We’ve created an R&D centre, and should now try to develop our very own school of engineering. The sets you’ve seen today have all been designed by homegrown talent – graduates of the local polytechnic and others schools.

As you may remember, I showed you our low-floor aluminium bus City Rhythm four years ago. That was a prototype. Today, hundreds of vehicles of this kind are used in public transportation across Russia. They are designed especially to make travelling more accessible to elderly and disabled people.

I also showed you a design for the minibus Dolphin. This model is presented here now; it’s competing to become the official bus for the Sochi Olympics.  We’re working toward that goal in collaboration with our Swedish partners.

We’re also presenting a brand-new project here. We launched that one with  the belief that the Russian public should be able to get around in modern, safe and comfortable buses, manufactured domestically. This particular vehicle is 9 metres long, and carries 30 passengers. It will be in especially high demand with transport workers. We expect it to become a popular model, practical for schools, hospitals and other public-service institutions. But its main domain should be public transportation – the vehicle doesn’t cost much to make, or to maintain.

What is so special about this project? That’s a bus built from modules. Thanks to that know-how, we could arrange manufacturing anywhere in the world. One new example is a plant in the Lugansk Region, in Ukraine.

Among those at the conference, we have our international partners from General Motors. In cooperation with them, we’ll be developing production facilities for that bus worldwide. Lines for the assembly of Volzhanin buses will be launched later this year in the United Arab Emirates and in the Czech Republic. And that’s just the beginning.

Vladimir Putin: What is the structure of your authorised capital like?

Alexei Bakulin: It’s 100% private.

Vladimir Putin: And what about foreign capital?

Alexei Bakulin: There’s no foreign capital involved so far. We’ve just signed a memorandum on the establishment of a joint venture to build such buses.

Vladimir Putin: You’ll just do the assembly?

Alexei Bakulin: We’ll be manufacturing all the parts on our own. We’ve designed the body by ourselves, and will make all the parts of the interior on our plant’s premises.

Vladimir Putin: And the engine?

Alexei Bakulin: We’ll bring them in, including from Naberezhnye Chelny, where a large manufacturing cluster is now being set up.

Vladimir Putin: Diesel engines?

Alexei Bakulin: Exactly.

Vladimir Putin: Are these the engines they manufacture under an American license?

Alexei Bakulin: Yes.

Vladimir Putin: What kind of transmission?

Alexei Bakulin: ZF. They’re also developing this project in Naberezhnye Chelny.

Vladimir Putin: Good!

Alexei Bakulin: You’ve raised a very important issue. We make modern buses, but we are dependent on imports. Seventy percent of the buses are currently assembled from imported parts, made outside Russia. We’ve set ourselves the task of bringing the share down to 30%.

How can this be achieved, you may ask? There are many talented people out there in Russia, who could start or have already started small businesses of their own. But they do need support. They need premises and the guarantee of sizable orders, and we provide them with that. We’re creating a technopark for them. Near our plant, we’ll build a technology park for the production of parts for motor vehicles. There, they’ll be able to base their production lines so as to then supply automotive parts to Volzhanin and other Russian car manufacturers.

Then air conditioners, interiors, doors, heating systems and so on will all become Russian-made. Indeed, this is a very important condition to us today.

Summing up the expected results, we’ll create a powerful manufacturer in the Volgograd Region, in the Southern Federal District. This will let us increase the annual output to 300,000 cars, up from today’s 500. We’ll create an additional 1,500 jobs, providing the region with additional tax revenue.

Young researchers are the driving force. Some of them are at this conference.  They have a challenge to meet, an ambitious task to carry out. As a result of their work, the Russian public will get modern, comfortable and attractive buses, made completely in Russia. I hope that passengers appreciate our concern for them.

Do we need any additional support? Well, the project currently has sufficient funding. Sberbank is the sponsor.

Vladimir Putin: What bank line do you have?

Alexei Bakulin: It has been opened for 1.5 billion. That’s serious money. We have enough now. The project has support. In principle, we have no financial problems because it concerns vehicles in high demand, and so it pays. But there are problems to be addressed at the federal level, for example during the latest crisis, when a working pattern was found.

Vladimir Putin: “The latest crisis”? Why do you put it that way, as if more crises are yet to come?

Alexei Bakulin: I mean the recent crisis, during which you truly found a way to keep the Russian auto industry afloat. I can say with full account of my responsibilities that several thousand families of Volzhanin employees and our contractors thank you for assistance. Now, however, we are asking you to help not us but the transport industry.

Mr Putin, I have only one question, but it is a big one. The car scrapping programme was a great success. Does the government intend to take similar steps to promote and update public transport? It’s very important.

Vladimir Putin: We really did much to promote the auto industry during the crisis. We took a wide range of measures: loan interest subsidies, direct support, and an increase in government orders for various ministries. We gave them larger grants than planned to purchase new equipment, which they did. Some companies survived solely due to this support.

This was also the case with municipal transport. We made extra allocations – 30 billion roubles, if I am not mistaken – through the Russian regions to purchase buses and other vehicles. My colleagues told me that certain bus manufacturers survived the crisis, regained stability, and even increased production solely due to our support. We continue to implement the car scrapping programme. As you know, it had more than half a million clients. We have allocated another 5 billion roubles for it. Now, we are assessing the opportunity to launch a similar scrapping programme for farm machinery. We have earmarked 3.7 billion roubles in start-up money, and we will wait and see how it goes.

I gave orders to my colleagues at the Ministry of Economic Development and the Ministry of Industry and Trade concerning buses and other special-purpose vehicles. We must understand the details of the project. When a programme is designed to scrap and replace private cars, it is easier to arrange because it concerns private persons who determine independently whether they should participate and whether they really need the 50,000 roubles of reimbursement for their old vehicles. As we can see, the programme has been popular because it offers people what they really need.

In contrast, rather than individuals or even private enterprises, the bus programme involves municipal authorities. I think it would be more reasonable to place an emphasis on leasing in this instance, and we might dole out grants to leasing agencies affiliated with certain financial companies.

In principle, we might repeat the arrangement we used during the crisis. But I would like to stress that it was twofold – it contained both an anti-crisis and a social measure to support lower-income people who wanted to exchange their old cars for new ones of the same make. So it was success.

Such a programme would be more difficult to organise with buses. However, our colleagues have their instructions, and we will see what comes of it. I don’t rule out that it, too, will be success.

One thing is clear: the entire fleet of public buses is very old and must be updated. The same is true of trams and other municipal vehicles that are used alongside them. Such programmes are already underway in some regions of the Southern Federal District. We intend to allocate up to 1 billion roubles to them through leasing agencies quite soon, and we will see later how to increase the funding. I repeat, I don’t rule out that it will eventually receive the footing of a special programme. 

Alexei Bakulin: Leasing is a very useful, even indispensable arrangement. It really works.

Vladimir Putin: Mr Bakulin, believe me, I am eager to give a hand to companies like yours, provided that our support is economically sound, effective, and fair to other industries. Anyway, we will consider it. I wish you every success.

Irina Baskakova: My name is Irina Baskakova. I am the president of the Rostov regional branch of the All-Russian Society of Hearing-Impaired Persons.

Mr Putin, I would like to begin by expressing gratitude for your truly impressive address concerning the development prospects of the Southern Federal District. Thank you very much.

I hope no money will be misspent, and I guarantee that this is true of the Rostov Region. Not a kopeck will be wasted or pilfered – our authorities can vouch for that.

Like many other Russians, I begin every workday with a commute by municipal transport. It leaves some unforgettable impressions – tougher than a roller coaster, believe me.

I often accompany people with hearing impairments as a sign language interpreter. People are late for our engagements more often than not, and they inevitably tell me that they waited for an overcrowded bus and that when it finally came, the trip was sheer torture.

Everyone knows how decrepit our buses and fixed-route taxis are. We have now heard about the federal programme for the development of municipal transport. Would it be possible to launch a related party project? It should be top priority for municipal and regional legislatures with federal assistance. After all, municipal transport is one of the essential factors in our citizens' quality of life.

Thank you.

Vladimir Putin: I see what you mean. Really, when people encounter these problems every day, they inevitably develop a negative impression of our entire country’s efficiency.

To say no to your proposal is the last thing I want. However, I would like to remind you all that when we appoint duties and responsibilities, it should be eminently clear who is responsible for what.

Municipal transport is among the responsibilities of municipal authorities and, in part, regional ones. As I said in my address, there is never enough money. But, on the other hand, the priority arrangement of expenditures is very indicative. We should prevent the underfunding of kindergartens, clinics, municipal transport, and other critically important areas.

Next, I want everyone to understand that the federal budget cannot pay for everything, including municipal and regional responsibilities, because the federal budget is in place to fund the work of national goals and priorities, such as defence, national infrastructure, energy, and so on. You can see how many necessities, including public welfare, fall under the federal purview and directly depend upon the federal budget.

I don’t mean to say that we should shrug off such problems as if they were none of our concern. We will certainly think about them.

I’ve already mentioned one of such arrangements. It’s an optional leasing arrangement. I’ll say it again. I think they already use such leasing arrangements in Rostov to replace the tram fleet. Same thing can be done for the buses. I always remind our regional party organisations to be mindful of the priorities when they decide on fund allocation at the regional legislative assemblies.

Irina Baskakova: Yes, and make it a priority in their work. Thank you.

Vladimir Putin: We’ll get together with the regional authorities and think what we can do in addition to that. We’ll give it a thought.

Let’s move on. Ruslan Teshev, please, the Republic of Adygea, Tambovsky company.

You are from the Republic of Adygea, but your company is named “Tambovsky” which reminds me of the Russian city of Tambov. Why Tambovsky?

Ruslan Teshev: That’s because the farm’s name is Tambovsky.

Vladimir Putin: Look how much things are tangled in our state. That’s good, by the way. Really good.

Ruslan Teshev: I’m representing three factories today, and all three of them are located in the rural areas providing jobs to 750 people.

I’m here to tell you about a part of Russia populated by hardworking people who take pride not only in the beauty of the mountains and cleanliness of the rivers, but also in the Adygean cheese, which has become a trademark of our republic.

Vladimir Putin:  I know that wrestling is popular, too.

Ruslan Teshev: The Adygean cheese was first mentioned in the Nart epos dating back to the 7^th century B.C.E.. Since then, it’s been considered a symbol of beauty, health and longevity typical of the people living in the Caucasus region. As little as 80 grams of this cheese contains a daily dose of calcium and protein. However, this  is unique in more than one way…

Vladimir Putin:  Is it made from sheep milk?

Ruslan Teshev: No, cow milk. The success of this cheese isn’t really about a secret recipe. We, as people respecting our customs and traditions, learned to carry the best things unchanged through the millennia. We have preserved our pristine forests, clean rivers, and Alpine meadows. Only in our republic you can get the kind of milk that makes the real Adygean cheese.

Some foreign companies noticed high quality of our cheese. They suggest that we start exporting it to Germany and Japan. Interestingly, Japan does not have any cheese traditions. We thought our agreement would fall through after all that had happened in Japan. However, they contacted us and said the following, I quote: “Now that the nation’s health is in jeopardy, we do need your cheese.”

The quality of the cheese is not the only thing that attracts the importers. They know that it’s an organic product. I think that it’s a rare occasion, at least in Russia. We take pride in knowing that we live in an environmentally safe area.

Vladimir Putin:  That’s a bit of a stretch to say that it’s a rare occasion. Russia has plenty of environmentally clean areas..

Ruslan Teshev: Well, you know that we in the Caucasus have a thing for ...  We are facing certain problems on the domestic market, which we felt particularly hard during the crisis. The market was looking for good prices, not quality, but we still emphasised the quality to keep up our name, brand and identity. And we won. Our plant added 35% in terms of gross turnover.

When price trumps quality, people start building mini-shops. If you search for the “Adygean cheese” in the internet, you’ll find about 200 shops that make the alleged Adygean cheese.  

Vladimir Putin:   It’s all fake?

Ruslan Teshev: As a matter of fact, yes, because it’s either a cheese product with additives or just plain cottage cheese. For us, cheese is an object of pride; we appreciate this product and have a lot of respect for it. This what we are all about and we want to maintain our reputation.

One of the ways to fight the illegal producers is to use the controlled designation of origin. Unfortunately, it doesn’t work as well as we’d like it to. Take, for instance, the Vologda butter, the Astrakhan watermelons, the Adygean cheese, or the Tula gingerbread. If you use such brands in the foreign countries, you can achieve a tangible socio-economic effect. The situation is different in Russia. Take, for instance, the Vologda butter producers, who have been trying to prove in court for six years now that the Vologda butter can be produced only in the Vologda region. They do have a certificate. So, if we want to prove that we can guarantee the quality of our cheese, we need to spend that much time in court. I am deeply convinced that the producers should deal with manufacturing rather than litigations.

As I said earlier, three factories provide jobs to 750 factory employees and farmers. However, there’s another side to it. If we get the government protection and the government helps us deal with such competitors, we’ll be able to expand our cheese-making operations. And not just expand - we’ll feed all of Russia with high-quality product. We are ready for the international markets. Our plans for the immediate future include commissioning of a new factory, the fourth one, which is also located in a rural area, and will employ 100 workers at its initial stage of operation. The number of workers will increase to 400 when it reaches full capacity.

This factory is outfitted with the unique unmatched in Russia equipment that is made in Italy, Germany and Bulgaria. Not Russia, unfortunately, no one makes it here.

The factory is designed to cater to foreign consumers. We are trying to sell our cheese in Germany. There is an EU commission that checks the cheese quality. They visit the factories and conduct inspections. We decided to take advantage of this opportunity and invested 300 million roubles to build the factory. We plan to commission it in late May. I invite you to the opening ceremony.

Vladimir Putin:  Thank you. Mr. Teshev brought up a very important issue about the trademark protection and protection of the intellectual property rights in a broader sense. These rights are quite effectively protected in the developed economies.

Unfortunately, I have to agree with you and admit that these tools and protective mechanisms often fail in Russia. Certainly, this is very detrimental to the bona fide producers and undermines Russian enterprises.

We have done a lot lately to improve these protection mechanisms. We should acknowledge, however, that despite the difficulties Mr. Teshev and his partners plan to open the fourth factory. That tells me there is some progress, indeed.

I concede that this isn’t enough. However, there are criminal sanctions for such violations. There are criminal sanctions involving fines and imprisonment if it’s done by a group, intentionally, by previous concert and under aggravating circumstances. That’s several years in prison.

We should continue to improve the regulatory base and the enforcement practices. Certainly, there is only one remedy, which is court. The issue is not about staying away from court, but rather about the government creating an environment where litigation becomes less burdensome for the real producer, government protecting the interests of bona fide producers and their employees.

You are actually doing it already; you can see the legislative loopholes and believe that certain changes are needed. Put your ideas together and share them with us. These issues can be straightened out by the leading majority in the State Duma.  I fully agree that this is a very important issue.

Do you sell anything in Europe?

Ruslan Teshev: No, we are about to sign an agreement with Japan. Honestly, we are somewhat stuck in the red tape, because there are no precedents of exporting rennet and soft cheeses. We are almost there, but there are things that hold us back…

Vladimir Putin:  Are these issues caused by the Russian side or your foreign partners?

Ruslan Teshev: No problems with the Japanese. We need to get certain things straight.

Vladimir Putin:  Any problems with the Russian authorities?

Ruslan Teshev: I don’t know how to put it.

Vladimir Putin:  Speak your mind. You might not get another chance, so say it now.

Ruslan Teshev: It’s very simple. Maybe it has to do with the customs officers’ or somebody else’s incompetence. When we asked them what paperwork they needed in order to give us the green light, different customs agencies gave us absolutely different lists of documents.

Vladimir Putin:  That’s interesting. I will help you, I promise. Since we are on the first name basis already, I believe it’s a matter оf honour. I wish to draw the attention of all Russian agencies, including customs authorities, respective ministries and agencies to the fact that supporting Russian enterprises that have even the slightest chance of accessing the international markets is a matter of honour. It’s very important, especially in agriculture. I’ve already said that making it to the global markets is almost impossible.

You will change your mind about the Russian customs when you start dealing with the customs and bureaucracy in Europe.  You’ll know you had it easy with the Russian customs.

Nevertheless, I’ll say it again that we’ll do our best to remove all the bureaucratic and customs hurdles. We will do it by all means.

I wish you the best of everything.

Ms. Pokinbura, please go ahead.

Margarita Pokinbura: Mr Putin and conference members!

Vladimir Putin: What an unusual name “Rusjam-Kuban”. What’s Rusjam?

Margarita Pokinbura: Rusjam means Russian glass. I was born in the town of Krymsk. It’s a small town, former Cossack village Krymskaya, with a population of about 63,000. The construction of a large modern enterprise was a big event for us. The plant already manufactures one quarter of entire district’s output.

The investors did not choose Krymsk by accident. We have a well-developed transport and engineering infrastructure with 40 out of 60 major wine and soft drink enterprises located in the vicinity.

As you know, Krasnodar Territory grows and processes grapes.

Vladimir Putin: Krasnodar sounds like a great place to be for wine and food. You make good wine, your neighbours make excellent organic cheese. Excellent! You’ve got meat, too. Super!

Excuse me for interrupting you.

Margarita Pokinbura: That’s nice to hear. As you know, top-quality Kuban wine is in no way inferior to its French or Italian counterparts. The art of winemaking in Kuban goes from generation to generation. However, the wine is bottled into the bottles imported from Italy and Moldova. That means we have to deal with the delivery deadlines, customs duties, higher prices for the finished product and, ultimately, with weaker competitiveness of the Russian producers.

They say that timing is everything. I believe that the construction of the plant was timed very well. The Krasnodar Territory experiences shortages of glass containers in the amount of 700 million units. Russia consumes over 1 billion units of glass containers a year, and this number is increasing.

Our plant is ready to fill this gap. We manufacture 36 million glass containers a year already. I came to the plant, when it wasn’t there yet. They were doing project design work back then. I remember how proud we were to commission the first phase in 2009 amid the economic turmoil. We are looking forward to commissioning the second and the third phases. The plant will manufacture glass jars for canned fruits and vegetables. The plant will give a boost to the farms and small businesses.

I’d like to mention a few advantages offered by glass containers. First, glass is safe for humans and does a good job of preserving the nutritional value of food.

Second, glass containers are fully recyclable unlike polymer packaging, which they …

Vladimir Putin: You’d better say it into the camera, so that the Russian people can hear what you’re saying. You do want them to hear what you are saying, don’t you? Talk into camera, don’t look at me.

Margarita Pokinbura: … use to sell us milk, wine, mineral water and even vegetable oil.

I also want to say that the quality of our product was recognised by such international brands as Efes, Heineken, Baltika, Abrau-Durso, Myskhako, and Mineral Waters, to name a few.

People are the most important link in our manufacturing process. We have 500 employees now, and this number will increase when we commission the second phase. The average age of our workers is 35, and the highest salary is 21,000 roubles, average monthly salary. We have managed to build a team at our plant. The enterprise organises training for its employees and takes care of the workers’ welfare. We provide full package of social benefits, including free medical care, free meals. We work in shifts and have a shuttle service for the workers.

Advanced training is mandatory, since we use equipment made by different manufacturers located in different European countries. Our minimum requirements for the engineers include fluency in English and good writing skills.

The socio-economic effect of the project is obvious. It’s about new jobs and fiscal payments, over 300 million annually, and greater role of the Krasnodar Territory in manufacturing glass containers: five-fold increase in a matter of five years, from 4% to 20% in 2013. The environmental situation will improve accordingly, because we recycle scrap glass, 50,000 tonnes annually. It’s also good for the environment.

We talk a lot about Russia’s demography and health of the nation. You spotlighted very important issues today. I am with you on that. Another issue that relates to health issues and glass container producers is about reuse of glass containers. Many countries have imposed a ban on repeated use of glass. So far, Russia has been reusing it. What do you think about it, Mr. Putin?

Vladimir Putin: You want me to impose a ban on reuse of glass containers so that you can have a market for products?

Margarita Pokinbura: It’s safe for humans.

Vladimir Putin: Safe and very healthful.

Ms. Pokinbura has a point here. By far, not all the countries banned the reuse of the glass containers. It’s used in some European countries, such as Germany, and also in the United States, Czech Republic. Truth be told, they reuse only about 15%. Poland reuses as little as 5% of the glass. Here in Russia, the breweries reuse up to 90% of the bottles.

Certainly, it’s an important issue. Really important. It has to do with the people’s health. We believe that the sanitary services should inspect the cleaning of glass intended for reuse. We in Russia reuse it up to five times.

In general, we absolutely need to switch over to the forms you just mentioned. This must be done to prevent problems for both alcoholic and non-alcoholic beverages. Up to 90% of recycled bottles are used in beer production, and, as far as liquor is concerned, vodka, for instance, the figure is some 40%, I believe.

We need to develop corresponding production facilities in order to successfully transfer to a ban on secondary use. Unfortunately, your enterprise of 100 employees, although we wish it every success, will not be able to satisfy the needs of the entire country. 

Apart from increasing these capacities, we will need to create absolutely different production models for the collection of used bottles and their secondary use as raw material. We need to turn bottles and jars into raw materials and then manufacture new products, and it will naturally require time and capital investment.

We are pursuing this goal, and I think we will be able to accomplish it in 3-5 years.  In order to encourage your staff, I promise that we will be gradually pursue this goal with whatever it takes. We wish success to all of you.

Margaria Pokinbura: Thank you!

We invite you to visit the Krasnodar Territory.

Vladimir Putin: I will visit it soon.

Thank you.

Eleonora Ervandyan: Good afternoon! My name is Eleonora Ervandyan. I am a deputy of Sochi’s Municipal Assembly. I am also a Sochi native. My family has been living in Kuban, the gem of Russia, for more than two centuries. Kuban is famous for its traditions, and the whole country knows and loves our goods.

The features of our region and its natural habitat allow it to grow tea and vineyards. We are all aware of the fact that Krasnodar’s tea was considered the world’s best in 1911. And Kuban’s wine is very special, indeed.

But there is one problem, Mr Putin. The ordinary farmer cannot afford to operate a vineyard, at times largely due to technical regulations. And every time I meet with our electorate, they ask me when the government will start supporting these fields. Subsidies, preferential loans, and amendments of the technical regulations are implied. Mr Putin, how will we resolve this issue?

Vladimir Putin: We will resolve this issue in accordance with your proposals. We have many problems in this field, and a lot has been lost. Current wine production rates make a mere quarter of those in the late 1980s.

Of course, the anti-alcohol campaign, which was too severe, has also seriously affected wine-making. Today, we understand that such restrictions can only result in the expansion of illegal production and consumption, to almost no other end; and if there are any positive results, they are minimal, while the negative effects are usually both avoided and substantial. They are simply omitted from the statistical data. And there is no need to remove vineyards in the fight against alcohol abuse. Other measures are needed. We have said that we need to develop athletics and the principles of a healthy lifestyle. And the culture of consumption around these drinks, which are produced in Kuban as well as other regions, is also very important. And we need to work on it, too.

Wine-making has been developing recently, but, unfortunately, only 50% of Russian consumption is domestic. The rest is imported. And the greater part – I don’t know the exact figure, but the greater part of that 50% – is produced from imported grapes.

We implemented measures of tariff regulation, increasing the import customs duties on these products very carefully so as to avoid damage to the market and to consumers and, first and foremost, to provide favourable conditions for our own producers.  It’s worth mentioning that there have been positive results, especially in Kuban, where wineries are developing quite successfully.

I believe, though I don’t consider myself an expert of course, that our products are even better than the imported ones.

We already have measures for supporting tea plantations and investments in wine-making. Such measures are stipulated in the budget. I think your case is similar to that of our colleague from Kalmykia – either there is simply a lack of information or the mechanisms for accessing these support measures have been poorly studied. Just like representatives of Kalmykian production, you need to talk with the Ministry of Agriculture, and they will tell you what to do to provide access to these measures of support.

I admit that maybe this is not yet enough, but I would like to underscore that these measures exist. There are support measures for this field, including in the federal budget. One just needs to know how to reach these resources and how to channel them into the production of tea, grapes, or wine.

I reiterate that this may be not enough, but we will continue our work in this field. We need to use the resources that we have today.

United Russia will make a commitment to consume only domestic products. Please.

Vladimir Struk:  Vostok agricultural firm, CEO Vladimir Struk.

Today you praised poultry farmers for succeeding in our work. We are looking into different projects for increasing the consumption of various products.  I am speaking on behalf of Russia’s poultry farmers. We found ourselves in a very interesting situation.

The wholesale price on eggs is 10 roubles. The prime price for buyers is 16 roubles per ten eggs today. Our relations with trade agencies and the law on trade, which we adopted recently, do not allow us to sell our products at worthy prices or ensure their profitable production. There are thousands of poultry farmers who found themselves in an interesting situation.  We will not even be able to… 

Vladimir Putin: An interesting situation not in terms of the demographic programme...

Vladimir Struk: In financial terms, of course.

Vladimir Putin: Then describe the problem to me and explain how it is connected with the law on trade?

Vladimir Struk: The problem is directly connected with the law. Try to find eggs at the price of 10 roubles. Very difficult, isn’t it?

Vladimir Putin: And how is this related to the law?

Vladimir Struk: It is related to the fact that they allow themselves to set their own rules. Take the chain stores working in the region, for instance. Today we got in touch with Magnit and Radezh stores, and we submitted an application: 26 roubles per ten eggs. They tell us that our prices are groundless. Some 10 roubles is fine with them, and they will not go any higher.

And as for the small wholesale buyers who mediate between us… They are intermediaries for a single reason: they have the financial power, and we don't. And they do not give us a chance to pay the money back in two or maybe even three months. Farms cannot afford it. And thanks to that niche, they wedge themselves between us, between manufacturers and commercial enterprises, and set their own rules for the market. 

West of the Urals, the entire European part of the country is in a very difficult situation (we, poultry farmers, all get along and communicate with each other). They are already killing livestock in the Leningrad Region (that they can't afford). And it's difficult for us as well.

Vladimir Putin: First of all, thank you for saying that.

Second, we will absolutely analyse the situation. We will attract the attention of the Federal Antimonopoly Service. We will see whether the primary chains are operating in collusion. We will request that law enforcement bodies examine the way the trade laws are being used by way of general supervision. You said it is impossible to get the money in two or three months. In accordance with the law “On Trade,” the purchasers must pay agricultural producers for perishable products within ten days.

Vladimir Struk: They concluded an agreement with us – the term is 21 days. And the intermediaries allow themselves even more liberties.

Vladimir Putin: It is necessary to investigate law enforcement practices to discover why the law is being applied this way and to make the corresponding amendments. It was all well and good on paper, as the saying goes. We will eliminate these problems at the legislative level. We must. And we will analyse the situation. We will start doing so tomorrow, I assure you.

As for the prices, it’s necessary to make them fair and well-grounded from an economic standpoint both for producers and consumers. We will look into the other side of this case and see what’s going on with imports. 

Vladimir Struk: This is another important issue. Some 700,000 tonnes are being imported.

Vladimir Putin: Yes, I understand that. And we will act accordingly.

Please.

Viktor Sergeyev: Viktor Sergeyev. I represent Kuban’s farmers.

The issue of meat production has been raised in these discussions, and, as you have rightfully said, meat production in Russia is increasing: three fourths of our meat is already domestic. As farmers, we would like to see the remaining 25% incorporated into our own meat production. 

But I would like to propose the following. My colleagues are already building farms. As a rule, they accommodate imported cattle and thus spend large sums of money. At the same time, we know that the government supports agricultural science through the Russian Academy of Agriculture Sciences and other research institutes, but we’ve seen no results so far. We don’t see any breeds of national cattle that are highly productive.

I don’t think we need to buy imported cattle – it’s time we bred our own.

Thank you.

Vladimir Putin: Now, if you will permit me, I will answer very briefly.

The issue is not a trifling one. Unfortunately, many things have been lost in certain segments of livestock production. This also applies to breeding livestock, primarily cattle breeding. We have almost no beef-producing cattle breeds. We bought beef in the Soviet era, and we are buying it even now. What does this mean? These are cattle that can no longer be milked, and so on. That's what they are. They are not special beef breeds. We have little to none of these. We have some, but still only very few.

We have two regions that are working on this endeavour – the Volgograd Region and Kalmykia. But that's still not enough for the entire country. We need more regions to get involved.

Of course, we have certain expectations of our Agricultural Academy. And of course, there are issues. We need to improve their efficiency – in this endeavour, in any case. We will still have to import breeding stock. We need to use our country's capabilities in importation and breeding. We need to act simultaneously on several fronts.

I'm confident that we will be successful. Ultimately, we must move to ensure that we have our own breeding stock here in Russia.

If you please.

Vladimir Porkhanov: Mr Putin, I don't want to ask for anything. My name is Porkhanov, and I'm the head physician at the clinical hospital of the city of Krasnodar.

I want to tell you that in Kuban and Adygeya, you can not only eat and drink but you can also receive medical treatment. That's a joke, but...

Vladimir Putin: First you eat and drink, then you receive medical treatment. That's right.

Vladimir Porkhanov: I want to thank you – I've been working in medicine for 40 years, and you're the first leader in Russia who really raised the issue of our nation's population dying out.

It didn't use to be this way. Previously, there was balance in the figures – we did not have TB, and the incidence of cancer was down. You raised this issue, and you're the first to begin building national centres.

I have one request. We in the Krasnodar Region have embarked on a massive endeavour – our local government has built a regional hospital, and it is currently being renovated. Since you're here, please note that we perform 6,000 heart operations per year; 2,000 of them are performed with co-financing from the federal budget and the rest from the regional budget.

We don't have waiting lists for heart operations for adults or children. We have done 110 organ transplants this year, including 41 hearts, 19 livers, 70 kidneys, and two lungs since March 2010.

I know my colleagues – you visited my friend and colleague, Yevgeny Shlyakhto. He told you about his results, and I'm friends with him. I just want to thank you and invite you to visit us.

You were going to visit our hospital once, but your schedule changed. I'm asking you to visit our hospital. We are waiting for you.

Vladimir Putin: Thank you for your kind words.

Please tell me once gain, which organs have you transplanted?

Vladimir Porkhanov: It was 41 hearts, 19 livers, 70 kidneys, and two lungs.  The second patient is now walking – the operation was performed in St Petersburg by my friend Yablonsky.

Vladimir Putin: I want our colleagues to know what we're talking about.

It may sound run-of-the-mill, but, nevertheless, some transplants – such as lung and liver transplants – are heavy-duty operations. In order for those who have no direct relation to this and, God willing, never will – these are extremely high-tech types of medical care.

The teams work 15, 16, and 17 hours, in changing shifts around the clock. Is it really that easy? Well done! I congratulate you!

Vladimir Porkhanov: Thank you.

The governor provided the funding. He gave us the go-ahead, and we were ready.

Vladimir Putin: And the fact that you're performing such operations in Krasnodar is, of course, truly excellent. And this will be developed in other regional centres, I'm sure.

Vladimir Porkhanov: I want to thank you.

Vladimir Putin: Thank you – very much!

Yury Kashirin: I will continue with the discussion of agriculture.

Rostov Region, AO Shumilinsky, Yury Kashirin.

Our farm produces agricultural crop and livestock products. We process 15%-20% ourselves and sell this portion through a chain of shops owned by a closed joint-stock company; we sell the rest directly to consumers.

In selling these products, we lose somewhere around 20 to 30 million roubles. This is because we still cannot come to an agreement with our partners. The market isn't working, and the price spikes constantly. When they want to, they raise it again in order to increase the price of the final product. Then they let it back down. Ultimately, even counting across the region, it comes out in the billions, and nationwide, it's in the tens of billions.

I would like to ask for your support in this matter in the form of a legislative act or the addition of new regulations because agricultural producers are not protected. Everyone wants to eat well. The media report that the price is rising constantly, but consumers and agricultural producers are the ones who suffer.

And I have a second issue to raise.

Vladimir Putin: What was the first one?

Yuri Kashirin: The first issue was the chaos in the pricing of agricultural products.

The second issue. We, the residents of rural areas, carefully listen to your speeches and are very grateful to you. Again, I cite the example of my own farm – every year, we receive 10-15 million in grants, subsidies for petroleum products, and fertiliser. That, of course, is all very good.

Observing the congress in Tambov, we heard the joyful news that agricultural producers will be provided with fuel this year at last year's price – that is, at a discount of 10%. To date, at our farms, we were told not to expect more than 30%. This is still a slow process. When will this issue be resolved?

Vladimir Putin: I'll start with the first issue – pricing. The problem is not limited to the pricing of agricultural products. Unfortunately, we are very often faced with similar problems in other commodity groups. I will not go into detail, but there is still much that needs to be adjusted. For example, automobile plants all but halt production when they cannot agree on prices with iron and steel producers. This is, in essence, one and the same problem.

Price parity among those who produce petroleum products, those who produce mineral fertilisers, and agricultural producers are also constantly in the spotlight. Unfortunately, this is a problem with all so-called emerging economies. Much remains unregulated by civil and commercial law. There is still very much to do so that the mechanisms begin to work automatically, resolving issues associated with revenue and expenses and the profitability of certain industries or even entire sectors of the economy. But this, of course, will remain on our radar. While we do not yet have this in place, we need to regulate, say, transport tariffs for agricultural producers.

Let's say that in 2010, after two years of drought, we had to regulate, or rather, subsidise, in essence, the transport of grain from the southern regions, where crops are more or less abundant, to those regions that need grain, primarily fodder grain. This is a solution that represents the lesser of many evils, but we will use such tools if necessary.

The same goes for petroleum products. In fact, there is nothing to be proud of here. If we do not have a more market-orientated regulator, oil companies will be forced to charge low or even below-market prices for petroleum products, which is none too pleasing because this is also a very important sector of the Russian economy. But today we simply have no way out, and unfortunately, we are forced to apply, and we will apply, these procedures for a while yet.

If you are talking about only 30% of our reserves, then we should reassess what happens in reality. I do not know if they showed it yesterday on television or not, but we just discussed this issue at the Government Presidium because it's not the first time it has come up. I think that people from the Volgograd and Saratov regions are just the ones to raise the issue. Without question, it's something we have to deal with.

Just yesterday, we issued the appropriate instructions to our Energy Ministry and Agriculture Ministry. But I can tell you that, in terms of petroleum products for agriculture, according to the available data submitted to these ministries by the producers of this type of fuel, we are 100% supplied. And procuring this fuel should not be done through the distribution network but directly from the producers. If corporate interests intervene and hinder the implementation of these plans at the volumes we agreed upon, we will certainly correct it. There is no question that we will be monitoring it. Rest assured.

Let's give the floor to the next person, please, and then we can continue to discuss this later. Alright?

If you please. Mr Vasily Dontsov.

Vasily Dontsov: Mr Putin, conference delegates. Allow me to show you scenes from the activities of the Cossack Aksay Military School. Some scenes from everyday life. (Video is played)

The Don Cossack Cadet Corps project is primarily focused on education. The regional administration allocated about one billion roubles in 2011-2013 for the development of Cossack cadet schools.

Our project involves six Cossack cadet corps, six Cossack vocational schools, and more than 170 educational institutions with Cossack status. This means kindergartens and various centres. Next. The administration sees this as an important project, so now it is working out how we will build, as of 2015, four more cadet corps and one Mariinsky school in the city of Novocherkassk.

Our project is social in nature. More than 1,500 cadets are training in the Don corps, and 70% of the students are children from abusive or dysfunctional families, orphans, wards of the state, and children whose parents died performing their duty. These cadets are accepted without entrance requirements. There is generally competition for the remaining spots – 10-20 people per spot. There are also full-fledged families with both fathers and mothers who bring their sons to us and say, “Mr Dontsov, make him a real man, we cannot,” and then we follow through.

One of our correspondents once asked, “Mr Dontsov, how do you bring these boys up to be highly educated citizens and patriots of their homeland? What are your techniques? What is your secret?”

It's all very simple. Every day, from morning to evening, our educators work with these kids for a pittance – 6,000-8,000 roubles a month – and they invest their hearts, souls, and love into these children. Some 50% of the educators are reserve officers with combat experience. And I believe this is the innovation and secret of our work.

I want to cite examples illustrating how the cadet corps has become a “forge” for preparing young people for public service to their homeland. Some 95% of graduates of the cadet corps matriculate to higher education institutions, and 82% of these graduates go on to attend educational institutions of the Defence Ministry, the Emergencies Ministry, the FSB, and other security agencies.

I want to cite some figures. Approximately 140,000 roubles is allocated per cadet per year, and up to 180,000 roubles for orphans. Meanwhile, the treatment of a teenager in a drug rehabilitation centre costs up to 250,000 roubles, and 300,000 roubles is spent per year for each incarcerated juvenile offender. It is no secret that there are many abandoned children in our country today, many children who have lost their parents for various reasons, and this is our future, our continuation – who, if not we, as adults, should come to their aid? And one of the solutions to this problem is to expand existing cadet corps and create new ones.

Our project is the spiritual upbringing and education of a physically tempered person. Entirely 100% of all cadets in the corps are involved in sports. A large number of athletes are at advanced levels, and 12 of them have met the standards of candidates for Master of Sports.

Here in this hall are two of my cadets, Maxim Kvachev and Albert Khabibullin, who were made champions of the All-Russian Pre-Conscription Youth Sports Days in Krasnodar in 2010 and champions of the Fifth International Martial Arts Olympics in St Petersburg in April 2011. These boys fought there, and professional athletes from 52 countries worldwide attended the event. And they won on the mat against the Koreans, the Iranians, and the Japanese. And when they were asked how they did it? First and foremost, because they are patriots of their homeland, citizens of our great Russia. This is what guided them, and why we won against these professionals.

Vladimir Putin: Maybe we should have you train, say, football players or athletes in other sports?

Vasily Dontsov: The cadet corps are engaged in various sports. They go paragliding, parachuting, scuba diving, horseback riding, and play football and basketball. And now, at the governor's request upon visiting the cadet corps, we are making the corps a springboard for training our Olympic reserve. We have already signed an agreement with the Modern Pentathlon Federation, through which athletes are engaged in professional sports. I believe that we will be successful.

What do I want to say? We would not have achieved such results – the establishment of the Cossack Cadet Corps and the Don cadet programme – if it weren't for the continued support of the ruling party, on both a federal and regional level.

First and foremost, I want to say thank you, Mr Putin, for visiting our corps in 2008 and resolving the issue of building the dormitory. The number of children we were able to house increased almost three-fold. And this year, we will complete construction of the dormitory, for which the government of the Russian Federation allocated more than a hundred million roubles from the federal budget.

I invite you to the opening, since you are our godfather.

Vladimir Putin: I would never have made this decision if I had not seen you and your colleagues there, the officers who are rendering such an important service to the country.

Vasily Dontsov: Thank you. Our project does not work for financial gain. But it does address one of our major social issues. It is training a new generation for the sake of Russia. Here with us is cadet Vladislav Konstantinov. Our cadet corps is engaged in bringing up patriots like him, who, above all, know the meaning of honour and duty to one's homeland.

In the near future, these children will grow grain, build cities, build a modern Russia, and if necessary, defend it with their lives. Our cadet corps are but small islands that nurture patriotism, spirituality, love for one's homeland, and respect for one's elders. However, with the support of the United Russia party, I think that we can turn these “islands” into continents, invaluable pieces of our invincible and glorious country.

On this occasion, however, I have to say that we face problems.

Vladimir Putin: Another corps?

Vasily Dontsov:  Yes. We are expanding. The issue is being decided, but the legal framework for the cadet corps has not been completely resolved. It is already at the level of the State Duma. The issue is being decided, but it has not yet been resolved. The new law on education does not exactly address cadet education. I want to ask you straight away, Mr Putin: in 2009, we adopted a programme for three years (until 2012), titled “On the development and support of the Cossacks and Cossack communities.” It ends in 2012. What happens next? Will there be some sort of strategy for the development of Cossack culture, or not? I would like to see one of its aspects be the patriotic education of youth, which I think would resolve the issue very well.

And I would like to take this opportunity to congratulate you personally, Mr Putin, as well as the conference participants and the citizens of our country, especially veterans, on the upcoming Victory Day. I wish you all the best.

The director has another request, if you please, Mr Putin. These guys that I mentioned – Maxim Kvachev and Albert Khabibullin – they're finishing school and will soon enter the FSB border school in Kaliningrad. I want you to take them under your patronage, as you once took the construction of our dormitory under your patronage. And at the end of the conference, let us present you with this memorial album of your visit here, a pennant of our Don troops, and memorial photographs. Thank you for being with us.

Vladimir Putin: Indeed, what you are doing and what your officers are doing for patriotic education – this is one of the most important issues facing the country today. And it's not about some kind of “jingoism”, as we often like to say, closed in some sort of narrow national framework; it is about respect and love for one's country, one's family, one's people, one's history, and its values​​, which, as I have said here, is what makes us a unified nation. We have much to be proud of, and one of our sources of pride is Cossack culture, which is, of course, associated with devotion to one's homeland – one's native land.

It is no coincidence that Cossacks were the protectors of these ideals at critical junctures in the country's history, and, unfortunately, often suffered more than others.

But today, I reiterate, this work is very important. Of course we will support it, and we'll see what we can do in terms of strengthening the legal framework. Andrei Fursenko has raised his hand and probably has something to say about the education law and the legalisation affecting the Cossack Cadet Corps.

The floor is yours, Mr Fursenko.

Andrei Fursenko: I would like to say that the first reading of the law on the Cossack Service includes a special article that delegates our ministry the authority to establish a Cossack Cadet Corps and a Cossack Service. The Education Law confers the most extensive powers, in terms of types and kinds, so that there are no clear restrictions on this, that, or the other... All the options have been accounted for, but I stress that we believe that it is fundamentally important that the law on the Cossack Service in particular prescribe possibilities for training and educating children in this area.

Viktor Basargin: Mr Putin, I might also add something. The subject of 2012 was mentioned, and I would like to note that we are not waiting until 2012. The Regional Development Ministry has prepared a draft strategy for the development of Cossack communities from 2012 to 2017.

The document stipulates various support measures, as well as the social protection of cadet corps and their development. The Ministry of Regional Development and all our departments realise that these are state-oriented individuals and state-oriented public organisations.

Vladimir Putin: This implies that, in our opinion, a Cossack development strategy is essential. This strategy is being drafted accordingly and will be adopted.

Moreover, as you know, the Presidential Council for Cossack Affairs was established in turn and is now functioning successfully. It is there and will continue to work.

Please.

Nadezhda Babkina: Good afternoon, Mr Putin and conference participants.

I have listened attentively to your report today, and the one you made in Penza today, and I would like to say first of all that you placed an emphasis on the culture of a society. This is quite important because people judge states according to their cultures. When I hear these serious and important statements, I experience great pleasure, and I jump for joy. Truly, I do.I didn’t come to this region by sheer coincidence. It is because I was born in a southern region. Actually, I was not born in the Volgograd Region, but rather around the corner, in the Astrakhan Region.

A little girl named Nadya grew up in Chorny Yar, Zubovka, and Michurin and eventually became the Nadezhda Babkina who stands before you today. Naturally, I grew up as part of a vast, multi-ethnic nation.

I welcome and support the state programme to expand and strengthen the Cossack cause. I am a Cossack woman myself, and I was brought up in line with a strict Cossack regimen. And I have no regrets about it. There is a 100% guarantee that, if this programme has state backing, it will succeed. I have absolutely no doubts about the success of this programme.

I am a successful person. I have headed the
Russian Song Moscow State Folk Music Theatre for 35 years. The theatre now comprises 11 companies and a three-group studio for children and teenagers ages 4-17. It is wonderful, and it is my professional activity. Apart from all that, I conduct a lot of social work.

I would like to express tremendous gratitude for my promotion. When the United Russia party was established, I became the first artist to join it. No one forced me. I did it from the bottom of my heart because the words “United Russia” express everything that stirs me.

I would like to say that United Russia and the charity fund for folk song culture that I head have conceived an ambitious project called the “Songs of Russia” National Festival and Marathon. This rather complex marathon is not some kind of pop music event. This programme embodies a tremendous amount of activity.

We are organising a multi-ethnic cultural tour of Russia. I am responsible for the cultures of southern Russia, northern Russia, and Siberia. We go to other regions lacking such cultural programmes and select local performers on the spot. A tremendous number of amateur and professional companies have become involved.

I suggest a certain programme that is to be expanded in the regions. The programme includes master classes. We also work with children and educators and meet with the public, the press, and regional leaders. You know, some results have already been achieved. I am very happy because they are writing to us and asking us to come back.

But I want to tell you that this festival got off to a very good start in 2007. The results have been wonderful because, as you say, cultural products have to be created. As you have said, this is an investment in the future. It is essential because songs unite people into a whole. Important state problems can be tackled when they are lent the strength of this emotional atmosphere.

Our festival is called upon to facilitate national awareness on behalf of various ethnic groups in Russia’s common cultural space.

Although the “Songs of Russia” Festival and Marathon lacks state support, I have support on a grand scale.

I am grateful to Boris Gryzlov. Thank you very much. We were the founders. Mr Vyacheslav Volodin managed the entire festival. Svetlana, thank you very much, my dear! You provided substantial, all-out support.

But there is no state support. Consequently, there are no budget allocations, and the “Russian Culture” targeted programme has also failed to contribute. They told me to inquire as to whether the state needs cultural programmes, etc. Why should I ask an abstract question? Mr Putin, may I ask you a specific question?

Vladimir Putin: How many?

Nadezhda Babkina: You know, while I ask my question, I will give you pictures for illustration, to see what this is all about. They have also prepared albums and other basic materials for you.

Vladimir Putin: Forgive me, but I simply cannot get up. I am surrounded by microphones that will fall if I stand up.

Nadezhda Babkina: So, here is my next question. Do you support the nationwide festival concept and its venues? If so, then please support us or instruct the Ministry of Culture to include the festival’s estimated cost in the “Russian Culture” federal targeted programme. I would like to explain all this to you to prevent this festival’s significance from being underestimated. If its significance is underestimated, then it will be pointless to hold a large-scale event that will yield no results. It would be like shooting at flies. You see, it would be pointless to waste so much of our energy and love for our nation. What we need is something large-scale.

As you have said, I must take advantage of my popularity, of the fact that I am a People’s Artist of Russia, as well as my resources, knowledge, and experience. Why not? I guarantee that these things will result in a top-quality product.

I you want me to, I can sing for all those present here.

What would you like me to sing? Here is what I will perform. You see, any culture begins in farm communities. Folklore implies the passage of knowledge through the ages – cultural continuity, respect between generations, and respect for one’s nation. This is very important. I will perform a mowers’ song. Folk songs always have some indirect connotation. I will perform a love song that has a deeper meaning.

Mr Putin, will you support the project at state level?  

Vladimir Putin: First of all, I would like to thank you and say that I am happy that people like Nadezhda Babkina, beloved by millions, are staying not only with us but among us. Thank you very much.

As for the “Russian Culture” programme, support for folk art, and related areas, it is a very important undertaking. One of the most important.

I suggest that United Russia support your festival, rather than the state. The thing is that other artists would then say that their colleagues possess certain advantages simply because they have either joined United Russia or support it. They would ask why they are being deprived of such support. United Russia will provide the entire budget that you stipulate. I can promise you this.

Nadezhda Babkina: Mr Putin, this is all wonderful. I agree with you, as I did before. But we are financed by the Ministry of Culture, which does not fully appreciate this issue. They consider such grand projects to be inappropriate.

Moreover, my colleagues have so far failed to propose such projects because they imply great responsibility.

Vladimir Putin: We will correct this.

Nadezhda Babkina: That is all I wanted to say.

Thank you very much. I have hope. Thank you.

Dmitry Zakharov: My name is Dmitry Zakharov. I am an assistant professor with the Interior Ministry’s Volgograd Academy and a retired police colonel. 

Mr Putin, it is hard to reorient oneself after such a powerful speech, but I will try to formulate my question. I would like to discuss Victory Day celebrations once again. My father, a war veteran, used the example of courage and heroism displayed by Soviet soldiers and workers at home to educate me and my son, a cadet at our academy. Incidentally, both my mother and mother-in-law were home front workers during the war. My son and I were born and raised in the heroic city of Stalingrad, now Volgograd.

Of course, I realise that far from every family provides its children with such ideal opportunities to study our history and the history of the war firsthand, rather than from hearsay. But I didn't believe the situation was so grim in other places. Judging from media reports, opinion polls, and talk shows, young people don’t know very much about the events of the Great Patriotic War of 1941-1945 or about World War II in general. They don’t know the names of Soviet military leaders, marshals, army and front commanders, and commanders-in-chief or the dates of major and less important battles. Some of them even have doubts as to who won the Great Patriotic War or World War II, as well as who bore the brunt of the fighting. This is rather alarming. Sometimes, one even feels ashamed for the Russian veterans who spilled their blood and defended their homeland.

At the beginning of your report, you recalled how the eyes of boys and girls shine when they see the awards of our veterans. Heroic and patriotic education continues and is being reinstated in another environment. Still, one gets the impression that there are some problems in the sphere of patriotic education.

Mr Putin, if you agree, then what would you like to do, draw attention to, or prioritise?

Vladimir Putin: First of all, I agree. And I believe that there are many problems here. Unfortunately, such problems cannot be solved from the standpoint of patriotic education. You and I, as well as an overwhelming majority of those present here, are all former Soviet citizens. The Soviet Union was dominated by one leading political organisation. Unfortunately, we are now unable to organise our work along these lines.

Patriotism-related issues should not divide people according to their political affiliation. These issues have nationwide significance. Consequently, we must unite all national political forces in working towards this objective.

I believe that school education also faces some obvious problems. Until now, one was afraid to read textbooks on history. Hopefully, some things are now moving in the right direction. We have repeatedly discussed this issue with the Ministry of Education and the people selecting these textbooks. In some books, one can find everything, except the fact that the Red Army broke the back of Nazism. Such obvious facts are backed by statistics.  This is proved by the number of divisions and military personnel serving on the Soviet-German Front and in other theatres of World War II.

Few people know that Axis forces sustained a greater number of casualties than the Red Army during the Battle of Stalingrad. This was probably the only such case in all of World War II and the Great Patriotic War. No one knows this. This fact speaks volumes, and, unfortunately, we have many other similar problems.

We need to pool our efforts, including those of government agencies, public organisations, and political parties. Naturally, I expect United Russia to make this a nationwide priority.

Please.

Nikolai Lukyanenko: My name is Nikolai Lukyanenko from the Delovaya Russia organisation. I would like to ask a somewhat different question.

Today, we have talked a lot about our youth and cadets. This is all wonderful. Our region has passed a law on allocating land plots for families with many children. As a father of many children, I am concerned as to whether this law can be implemented more quickly.

First of all, it should function with clockwork efficiency. Moreover, it should not be shelved, including by the authorities in our region. Second, if possible, it should become a United Russia project.

Vladimir Putin: As you know, this positive initiative was conceived by Dmitry Medvedev. Naturally, the government and the State Duma will implement it. This is a good additional measure for supporting families with many children.

Of course, questions arise as to what one should do with such land plots and how one should build homes on them. As a rule, families with many children are not wealthy enough to build homes. At any rate, this is an additional resource. Certainly, we will do everything in order to implement these proposals.

Nikolai Lukyanenko: The procedure itself should be simplified.

Vladimir Putin: It should become accessible.

Nikolai Lukyanenko: Yes, accessible.

Vladimir Putin: Good.

Nikolai Lukyanenko: Thank you very much.

Vladimir Putin: We will work on it, no matter what. Please.

Mikhail Bespalov: Mr Putin, my name is Mikhail Bespalov, Deputy Director of the Rostov Regional Administration for Cossack and Cadet Corps Affairs.

I would like to ask a question and to request your assistance in the sphere of patriotic education. Cadets from the Nakhimov and Suvorov military schools have not marched in the Victory Day parade for the past three years. Their first, wartime cadets earned this right with their blood. I am asking you to allow Suvorov school cadets to march in the Victory Day parade once again. It is a great honour for our cadets, our boys.

Vladimir Putin: I am sure you understand the reasons for this. The Defence Ministry's stance is that kids cannot be distracted from the educational process for prolonged periods at the end of the school year.

Troops prepare for a parade for six to eight weeks, and in fact training often starts even earlier. This is the only reason, and not that the Defence Ministry believe they are unworthy of participating. Of course, not. The boys deserve to serve with the adults. Well, we will come back to this and think about it.

Go ahead, please.

Irina Guseva: You can't keep up with men.

Vladimir Putin: Cossack women can keep up with anything, believe me.

Irina Guseva: That’s just what we’re like. My name is Irina Guseva and I'm Regional Duma Deputy and, chairperson of the Committee on Social Policy.

A great deal has been said here today about development in some areas and problems in others, and I want to tell you that in 1994 I graduated from university and came to work as a teacher. My husband was fighting in Afghanistan and we were not paid for eight months. Our family had nothing to eat.

I now just want to thank you – as a person, as a patriot, as a citizen – on behalf of all teachers. Because both the party's project and your initiative are associated with equipment in schools, with child nutrition, with school buses... And when Boris Gryzlov spoke about salaries, the status of teachers, believe me, I've been a teacher for years, and everyone said the same thing: this is a party of deeds, not words.

Thanks to your involvement, we took a hard look at salaries. And as part of your initiative, our governor called for a review of educators' salaries, and we will raise them without fail.

You are quite right in saying that a federal initiative must necessarily go hand-in-hand with a regional programme to reduce the burden on the federal budget.

Once again, on behalf of all teachers and all Russian children, thank you very much. May God give health to you and your family, and in the words of my colleague, Ms.Orlov, “the women of Russia really, really love you.”

Vladimir Putin: Thank you. The feeling is mutual. Thank you very much.

I am very pleased to hear these words of both emotional and practical support, and I will think of it as an advance payment for me and for many of our colleagues, including those in the regions of the Russian Federation.

You know, I have very different feelings when I hear about the incomes of some of our people. Nevertheless, over the past few years, we at least have gone from the humiliating state where no pensions were paid for periods of six months or more, and even military personnel did not receive their pay, not to mention other people in other professions. Agriculture was considered to be a “black hole.” The healthcare system was simply falling apart everywhere. This is no longer the case today, but there are still many more problems than achievements.

 As for this programme that you mentioned, it is only the beginning. We simply cannot afford to miss this opportunity.

This can be done only by working together with the regions. We need to write reports on every facility that is to be included in the programme and submit these to the Ministry of Education, describing what specific measures are required. I ask the minister to take this in earnest and assign a special group of people to do approximately the same thing that the Healthcare Ministry has done. There should be a report on each school – what kind of repairs it needs, what kind of equipment, etc., etc. We must do this without fail. It must be spelled out on paper.

Incidentally, I mentioned that in one of the regions... There’s no need for secrecy: I visited Penza recently. The governor tells me, you propose to raise teachers' salaries to the average level of the economy over two years. We calculated how much we have this year, and in the first quarter of this year, the average for the economy is 14,000 roubles in the Penza Region. This year, we will bring teachers' salaries to at least this level. And Penza, by the way, is no Moscow, Tyumen or St Petersburg, there’s no oil or gas. It is an ordinary Russian region, and they are able to do it.

I assure you, this can be done within a year in the overwhelming majority of regions. This is what we're striving towards.

We need to wind this down.

Go ahead, please.

Valentina Dontsova: My name is Valentina Dontsova and I’m chairperson of the interregional public movement Pensioners of the Southern Federal District.

Mr Putin, I have a question from pensioners who have dachas. We have a huge problem at the start of the dacha season. In what sense? In terms of commuter trains, which are generally overcrowded and, of course, they are stuffy, hot and dusty. The conditions are terrible. As for the prices, the prices for rail service are constantly rising. As soon as pension increases are announced, prices sky-rocket. It gives the impression that we should keep pension increases top secret, so that they don’t raise the prices.

What are dachas for pensioners? Dachas are their recreation, opportunities to socialise and grow their own food for the winter. It is like a local Courchevel.

Therefore, Mr Putin, could we somehow resolve the issue so that travel is not a major expense for our pensioners? Because even within a radius of, say, 40 km, the price is 45 roubles. That's 180 roubles for a pensioner to travel twice a week, and that's expensive. The question I have is this: is it possible to somehow help resolve the issue?

We pleaded, we asked, but what are pensioners in this country? We are all penniless. Perhaps one could ask those who really go to Courchevel to give some financial support for our seniors? Because we have no source of funding. But there are some pensioners who are so poor that we really need to help them.

And I cannot invite you over, so I’d like to invite you, Mr Putin, to come and visit us with your Lada Kalina and your own tent, because we have no office.

Vladimir Putin: You don't have what?

Valentina Dontsova: We don't have an office. Therefore, I can only invite you over if you bring your own tent.

Vladimir Putin: You mean invite me over to your organisation?

Valentina Dontsova: Yes, come to Rostov-on-Don.

Vladimir Putin: Alright, thank you.

It’s not me you're dropping a hint for, it's the governor. I'll also drop a hint. Where is the governor of the Rostov Region? You understood everything, didn’t you? He understood everything.

As for commuter rail prices – it's a very important issue, it's a very important and very sensitive issue to millions of people, not just pensioners. But for pensioners most of all, because their income is low and they use the services often.

This year, prices should grow by no more than 11%. Such parameters have been set. Legislation classifies suburban rail services as the domain of the regional authorities. However, we understand there are certain difficulties and in order to minimise the cost of subsidising transportation for these regions, we have allocated 25 billion roubles for a rail fare subsidy in the current budget of the Russian Federation, and accordingly, for the ticket price, excluding the so-called infrastructure costs associated with railroad maintenance, etc., etc., because these costs are always included in the fare and the final cost of the ticket. We have specifically made ​​an allocation of 25 billion roubles in this year's budget so that this component of the ticket is reduced to zero.

As for next year, I have talked about this and thank you for raising the issue as it gives me the opportunity to say a few words about what we think and what decisions we plan to make. This year we forecast increases in consumer prices and inflation of somewhere around 6.5%, or most likely, 7.5%. Next year, it will be 5% to 6%.

The Economic Development Ministry, other departments and colleagues have a proposal for next year to indicate the price growth of the so-called infrastructure monopolies, and this is connected with the prices of gas, heat, electricity and rail services, in order to limit them to the rate of inflation: say, 6%. (Applause.)

Despite your applause, I would like to tell you what it is connected with, and what potential problems we face. We must understand things clearly when we make such decisions. The very same rail transportation must be provided with repairs, new cars and locomotives, diesel locomotives, because the current rolling stock needs replacing, etc. And, let's say, the same transportation workers, or energy workers – our power grid is in a sorry state – they say that if you confine the growth to the rate of inflation, they will not have the money to order rolling stock, order additional rails, etc., etc., and that means the whole economic chain may experience setbacks.

If no cars and rails are ordered, it will affect the activities of the iron and steel industry. If the iron and steel industry reduces its production, this impacts miners. In other words, everything is so interconnected here that we will have to consider all these factors, and, yet, in any case, we are inclined to limit price rises to the inflation rate, but we will make the final decision a little later.

If you please.

Vladimir Sukharev: Good evening. Vladimir Sukharev, Astrakhan Region, head of the Chistiye Prudy farm.

Mr Putin, I'm a fish farmer and I have always been concerned about the water shortage in the Astrakhan Region and poaching, especially because to date, the scope and the very methods of poaching never cease to amaze. These are the latest electronic tracking devices, and ours are old-fashioned, and the most burning issue, I think, is the nets that are commonly referred to as “Kitaiky”. “Kitaiky” are just ordinary disposable nets.

I myself like to fish in my spare time, which, unfortunately, I have little of. I go out to the river, especially now, when the Caspian roachfish is running, and many times I get my fishing hook stuck in the nets, though I don’t break any laws when I’m fishing. This is a big problem, and it concerns absolutely everyone, because everyone who goes fishing, always gets stuck in these nets.

So I, like many people in Astrakhan who attended the March meeting  on the protection of fishermen’s rights and of local waterways, suggest that come hell or high water, find some way to restrict the sale of these nets, perhaps even borrowing the methods used on the firearms market. What do you think about that?

I would also like to take this opportunity to express my concern regarding the development of fish farming. Since I am a fish farmer myself, what is quite difficult today is the process of concluding agreements on water consumption and payment for the water itself. This is a major problem for us farmers. And if prices grow at the rate they have been recently, fish farms will go belly up in the next two to three years. Thank you.

Vladimir Putin: The problem of water management and providing the resources you mentioned really exists, and the government is currently discussing it. We are aware of it, and the fact that you raise the issue again will be an added incentive to continue discussing this issue at government level and to prepare appropriate solutions that would ensure a normal, functioning and economically sound framework for the water utilities and farmers who are engaged in this activity – fish farming, in this case.

But I want to draw the attention of our colleagues to this excellent case in which the person’s work and hobby coincide. Congratulations, that’s great. About poaching. First we need to increase liability. We must also do everything to restrict the circulation of the fishing gear you have mentioned. This includes nets with small cells mostly made ​​in China, electrofishing equipment, etc. Incidentally, there are already quite strict sanctions in place, but if that's not enough, we can strengthen them.

Colleagues, we should bring this to a close. I'm ready to sit here and listen to you for a long time, I understand that there are lots of issues…

Let's take one last question from a veteran.

Vladimir Zakharov: Mr Putin, my name is Colonel Vladimir Zakharov, retired. I am the father of this very gentleman you spoke with and the grandfather of this cadet. We are only missing the fourth generation today – my father, who was a Red Army commander during the Civil War.

Unfortunately, the prestige of the profession of defending our homeland has waned. Do you agree with this? I know that you are taking certain measures in this regard, which will take effect on January 1, 2012. But in any case, we must strongly encourage the revival of respect. And it also hurts to see the media, under the pretext of the freedom of speech, blacken our army's name in every way. There was a time, you know, when mothers whose children were rejected from active service because they did not pass the physical exam wrote letters to the People's Commissar Voroshilov saying that their sons were healthy and asking him to let them serve in the army. And now the Union of Soldiers' Mothers thinks more about how soft the soldier’s featherbed is. We need solve these problems once and for all.

The last thing I want to say is a wish. We, the generation who defended our homeland with arms are nostalgic about how great our country used to be. You know, it's like Nikolai Gogol wrote: “Eyeing it askance, all the other peoples and nations stand aside and give her the right of way.” But today, that pygmy Saakashvili dictates to us whether we should join the WTO or not. Yet, as I understood from your repeated statements and speeches of our farmers, we need the WTO like we need a hole in the head.

They are already trying to dictate who should be president, who should be prime minister, who should be the minister of foreign affairs. I would like to wish you, a decisive and determined man, respected for your firmness and consistency of spirit, to continue on this path faithfully.

Vladimir Putin: Thank you very much.

Indeed, the prestige of the officers and all soldiers suffered in the 1990s. I vividly remember the early 1990s, when people were knocking the caps off officers in the public transport. I have not forgotten this, and I think the officers haven't, either. But for all this, I can say that the situation has changed, and public attitudes have changed dramatically, and our society has realised that the possible collapse of the Armed Forces is fraught with a terrible danger.

Society has realised that the armed forces, even if they are inactive, but are effective and capable, are an important guarantee of the state’s very existence and are an essential prerequisite for economic and social development.

That is why we are planning to allocate considerable funding for the development of the Armed Forces in the coming years. We will spend 20 trillion roubles – a figure unheard of in recent history. This is only for new weapons. Further three trillion roubles will go for the re-tooling of the defence industry. Because it is impossible to manufacture modern military hardware, modern missile systems and advanced missile systems using old, obsolete equipment.

This is major, serious, large-scale work, which I am convinced will also be beneficial for civilian industries because the production of weapons systems is high-tech manufacturing.

This will, of course, have an effect on the civilian sector. It is associated with considerably increased allowances of military personnel. We have discussed it many times. Once again, I can say that lieutenants' pay will start at 50,000 roubles. Considerable improvement in pay is expected for personnel of the Interior Ministry, special services and military pensioners, as I already said, no less than 50%. This is a great range of activities and efforts on the part of the government to strengthen the country's defence capability.

By the way, I can tell you and all citizens of Russia – many people know about this, but it will be a reminder to some: this is not at all a militaristic budget and not a change in our policy. Because our military spending still remains about 96% less than that of the U.S. – 96% less. Not any just a few percentage points but 96%! But bearing in mind our unconditional competitive advantages associated with the achievements of all the previous generations – may God give them health – in military science, the military industry, military staffing, we can certainly ensure our defence for this amount of money. It is already a considerable amount for us.

Another important factor is that it certainly gives us an opportunity to preserve the sovereignty and independence in decision-making in key areas of development and to feel that we are masters in our own land.

I think it's no coincidence that precisely these issues or considerations were sounded in closing, and this happened in southern Russia, which has always had a strong patriotic streak. I want you to thank for this and, once again, congratulations on the upcoming Victory Day.

* * *

After the plenary session of United Russia’s interregional conference titled, “Strategies for the Socio-Economic Development of Southern Russia up to 2020. The 2011-2012 Programme”, Prime Minister Vladimir Putin took part in a business lunch with the heads of regions, legislatures and regional party branches. They continued discussing the Southern Federal District’s development prospects and the party’s initiatives.