Transcript of the beginning of the meeting:

Vladimir Putin: Mr Yakushev, the Tyumen Region looks good in most indicators. There are no wage arrears, unemployment is not a big problem, income is decent... It is clear that the resource base is good. Nevertheless, there's never a time when there are no problems at all. As you yourself think about that –recently, what problems do you see as being the most significant in the first quarter? Although it looks fairly decent...

Vladimir Yakushev: Indeed, Mr Putin, just a few figures, so as not to become tiresome... Regarding the first quarter. The economy continues to recover, and the figure for industrial output – 21.8% – shows this. The gross regional product grew by 4.7% at the end of 2010. The final figure will be available late in the first half of this year, because that is how the statistics are calculated, but it will look roughly that way. With regard to wage growth, it, too, has grown somewhat. Maybe not as much as we would like, but, nevertheless, there is positive growth in this area.

So what is a concern today? Some industries are showing rather good progress and high growth – both the extractive industries and our Uvat project in the north of the Tyumen Region. Hydrocarbon processing at the Tobolsk industrial hub is also doing pretty well. But other sectors such as wood processing and the furniture industry have not regained pre-crisis levels, unfortunately. Here, we have some problems. I recently met with the business community, with those who represent this industry. We discussed this topic at length. They said that there is some progress to date there. We are a border region and are close to Kazakhstan, so Kazakhstan was buying quite a lot of our wood products and furniture at one time. Their market is also starting to recover. But we have not achieved 2008 levels yet, unfortunately.

I would also like to say a few words about agriculture. Last year, the drought affected us probably less than other central areas of Russia. But nevertheless, it still had an impact. Somewhere around 23,000 hectares were impacted by the drought. This is no less than 102 farms. And the harvest was only 80.1% of the size of the 2009 harvest. That is 1.2 million tonnes. But nevertheless, we managed to fully preserve the feed supply and start the spring sowing. Sowing is currently in progress, and 50% of the area is already sown. It is alarming that there has not been any rain so far. In other words, we're sowing, but the land is dry, and the short term weather forecast is not very comforting. God forbid we have the same scenario as last year. But we are generally prepared for the sowing process, we have the necessary supply of fuel, mineral resources, seed – everything is ready. The agricultural machinery is also 99% ready for the sowing season. So now the work is in full swing at all the fields, but this drought variable is troubling...

And another, separate issue. All of Russia is concerned about it, and you are as well, I know... And the problem is still here today – forest fires. I'll tell you specifically about our region. This year, we have had 80% fewer fires and the affected area is 93.4% smaller. At this point in 2010, the situation was quite tense. Of course, we have drawn some conclusions from last year. We worked very closely with the federal ministries and used the funds allocated from the federal budget.

We, in our constituent entity, are setting up a Class 3 forest fire station, ensuring that the most agile and versatile equipment can be rapidly re-deployed to a fire’s hot spot, to the areas of forest most prone to fires and that are closest to population centres. This means our Zavodoukovsky district. It was there that we agreed to establish this station. We received 35 million roubles from the federal budget, and with 50 million more from the regional budget we will establish this station.

Plus, there was another problem. Unfortunately, given the drought, several water bodies from which we were supposed to draw water in case of fire, have gone shallow. Therefore, we did a lot of work during the winter. We made ​​special piers to enable us to draw water in case of emergency. It was inefficient to do this from the shore. It was a special programme that we funded from the regional budget and it protects those settlements that are very close to the forest zone. These are the measures we have implemented to date. We continue to continuously monitor the situation, using satellite surveillance and aviation. The situation currently looks more favourable than last year. We hope that we will keep this situation under control and in any case will not have the problems that we had last year.

Vladimir Putin: Alright. Keep on taking control over it, and don't back off. And how is the work progressing at facilities that are funded by the federal budget …the university, the secondary institution of higher education and other facilities?

Vladimir Yakushev: As for the facilities that are funded by the federal budget, work on them is currently in progress and the necessary tender procedures have been conducted. There are no complaints, aberrations or problems in what we are implementing. Despite the fact that this is a federal targeted programme, we still believe that since it is being implemented in our region, we are jointly responsible for all these activities.

Vladimir Putin: Tyumen State University, The Oil and Gas University…

Vladimir Yakushev: Yes, yes. All these activities are now under control. Together with the rectors, we are monitoring all the activities that should be funded through federal programmes. The rectors have not raised any concerns with me. I think we’ll finish all of these programmes.

A few days ago, Mr Putin – with regard to federal programmes – it has not even been a month yet – we opened a national neurosurgery centre. It was built within a joint programme of our region and the federal government. We hooked up utilities, laid the foundation and then the Russian Federation funded the rest of the work plus the purchase of equipment. The first patients have already had about 20 operations. Done quite successfully. The centre is equipped with quite modern equipment. Now it is in high demand, including among our neighbours. Recently, we had visitors from Kazakhstan – they are very interested in this project since they have many patients who want this high-tech aid. I think this centre will be used, as they say, “to the hilt.” This programme has worked great and we're satisfied with the results.

Vladimir Putin: Have you submitted your healthcare modernisation programme?

Vladimir Yakushev: Yes, we handed in our programme and justified it. Under this programme, we will get about 6.2 billion roubles from the federal and regional budgets. With regard to funding for 2011 and 2012 – we will get two billion roubles each year from the federal Health Insurance Fund. These activities have been agreed to with the ministry. There are no problems, and we received the first tranche in the amount of 500 million roubles.

We assume, of course, that with the infusion of these funds, our citizens' access to healthcare will rise to a new level, all the more so since the measures that are included are what healthcare really needs today. Local healthcare needs to be computerised, because we need to move to a higher level of service. I believe positive results from this programme will not be long in coming.

Vladimir Putin: We can only hope. What about the modernisation of the school system?

Vladimir Yakushev: As for the school system, Mr Putin, do you remember when you were here on your last visit, we examined the issue of education. I reported in detail on how the Tyumen school system made a few steps towards optimisation. We currently believe that the general education system we have looks pretty decent. We have optimised as much as we can – this concerns both small schools and rural areas. And we did it by properly assessing the situation – where it was possible to do and where it wasn't. Because it is specifically this issue that is usually under discussion. I believe that the Tyumen Region did ​​it appropriately and in an orderly manner. As for transport, we have no problems with it today. The school bus programme is also running, and the federal government provides support. In terms of general education, as such I do not see any problems in this area.

We are involved in a reform of professional training, especially vocational education. Here, we are working within the framework of a public-private partnership and we have about 20 agreements directly with employers and those vocational schools that train personnel for these particular profiles. And in the agreement, we set the following conditions – business takes it upon itself to design a programme, select qualified teachers – today, there is also a shortage of the latter, to the extent that those who can teach young people anything stand out. We take it upon ourselves to retrofit facilities and bring them up to standards. Business also undertakes to voluntarily take young people and not under pressure, as is usually done. Well, then there is the issue of job placement after they graduate from these schools.

I must say that we have already had a positive experience. Of course, not everything is perfect – I won’t boast; there are still problems. But in this area, we are currently managing to get young people into professions using real equipment, real machines, and they're not learning it from diagrams or manuals.

I fully understand how important this issue is; there are not enough qualified personnel, especially workers. We are working on this.

Vladimir Putin: What is your level of teacher salaries relative to the average regional salary? I know that it is more than the average for Russia, but how is it in relation to earnings on average?

Vladimir Yakushev: It is lower, Mr Putin. And, of course, we see this problem. We are considering raising it this year, as the federal government proposed, by 6.5%. But we fully support your initiative, and today, forming the budget for 2012, we are including the necessary funds to raise wages to match the level in the main sectors of the economy. We currently have the assets.

Vladimir Putin: Good.