14 june 2011

Prime Minister Vladimir Putin chairs a meeting of the Government Presidium

During the course of the meeting Prime Minister Vladimir Putin laid particular emphasis on the implementation of programmes to boost employment in Russia. “Job creation programmes have so far involved about 4.5 million people. Thanks to government support many people have kept their jobs, got new jobs, upgraded their skills and some have even started their own businesses,” the Prime Minister said. Other issues discussed included how to extend government support for agricultural producers to horticultural enterprises and organising summer vacations at the Orlyonok children’s centre.

Transcript of the meeting:

Vladimir Putin: Good afternoon, let’s exchange the latest information.

The laborious transition to the international system of financial reporting is nearing completion. Mr Kudrin, what can you tell us about this work? What is the status now?

Alexei Kudrin: Mr Putin, the law on consolidated financial statements was adopted last year. It lays the foundations for the application of the International Financial Reporting Standards (IFRS). This year, we must go through several stages of adapting these standards to Russia.

Their introduction will allow Russian companies to be more transparent and enhance investor guarantees and interests. This is why the document is essential for promoting investments in Russia.

On April 26, the Finance Ministry signed an agreement with the IFRS Fund – the international organisation handling all IFRS copyright issues and allowing us to apply the standards in Russia.

We received the IFRS Russian version that can be used in all Russian-speaking countries or states where Russian is used for audits according to IFRS rules.

We receive copyrights for using these standards on our territory. The Finance Ministry will conduct a tender in June to choose a public organisation that will carry out the IFRS expert evaluation.

Before we finally introduce IFRS by government resolution, our experts must evaluate them and decide if we should use them in full or with some reservations. We hope to be able to use them in full, although we have the right to reservations.

Hence, our goal is to adapt IFRS to Russia and, if this procedure is completed before the end of the year, to announce that in 2012 all companies that make consolidated statements will report according to IFRS rules. In 2013, all consolidated companies will have to go through this compulsory reporting for 2012.

During a subsequent transitional period, new groups of enterprises will be subject to this procedure. I’m referring to public companies that issue shares and borrow from the market. In other words, all companies will switch to IFRS reporting stage by stage.

Vladimir Putin: Well done. Thank you. This is a serious step in our financial system’s development that makes it more transparent. I hope this work will be completed in the period you’ve mentioned.

Alexei Kudrin: Yes, we’ll do everything as promised.

Putin: Thank you. Mr Zubkov, Saransk hosted the Second Forum of Rural Communities on June 10. One participant complained that gardeners are not registered as agricultural producers and, hence, are not entitled to certain forms of support. Ms Skrynnik (Minister of Agriculture) knows about this and has already briefly reported to me on this issue. As I understand, there are several groups of gardeners. Some have just two or three apple trees for their own fruit, but others have many more and their number is growing. In this case we are dealing with rather large enterprises producing fruit and vegetables for sale. Could you please explain what the problem is there?

Viktor Zubkov: Mr Putin, indeed, at this forum on Friday, Ms Suchilina, the director of the Mordovsky state farm, raised the issues of state support. She heads a major horticultural business which a real agricultural producer. Article 7 of the Law on Agriculture makes it plain that all measures of state support for agriculture must apply to agricultural companies, including horticultural companies, if they are agricultural producers. Her company is indeed an agricultural producer.

We have made a number of decisions (especially in the last few years) that make it possible to render substantial support to such agricultural producers. There are three forms of support.

First, there are direct budget subsidies per one hectare of the establishment and perennial plantings maintenance, including chemical protection.

Ms Suchilina said they did not receive subsidies for chemical protection. This is wrong. We have allocated subsidies for this year – 400 million roubles of federal funds, including 30,000 roubles per hectare for planting perennials, 100,000 roubles per hectare for intensive gardens, and 4,000 roubles per hectare of gardens for maintaining perennials in gardens, chemical protection and inter-row cultivation.

These funds have been earmarked and must be used.

The second form of support is subsidising interest rates on long- and short-term loans. Ms Suchilina also mentioned this. This applies to subsidising interest rates on investment loans for a term of up to eight years. These are loans for establishing perennial plantations and vineyards, and building and rebuilding irrigation systems for perennials. The budget allocates 200 million roubles to subsidise interest rates in 2011-2013.

In addition, we are also subsidising short-term loans for replenishing operating funds. This is exactly what could help the aforementioned farm. It buys fruit and berries from the public. It has built a large refrigerator to freeze and process them. Then they sell this produce to confectioneries. We subsidise loans for this work as well, and have adopted a relevant resolution.

And the third aspect of the problem raised by Ms Suchilina is state support in case of a drought. Last year, her farm received 1.26 million roubles in state support, including 783,000 in drought relief money. The Finance Ministry provided two types of support: credit to regions and direct subsidies. They got 783,000 roubles in direct subsidies and asked for 2.4 million in credit, which the regions approved. The Agriculture Ministry refused to pay that sum, and we should look into their reasons and the problems that caused it. They already received 824,000 roubles in 2011 for laying the foundation and doing maintenance and 783,000 roubles from the federal budget.

Of course, they would like to get more funding, and I understand, Mr. Prime Minister, that, due to the drought, more attention was paid to the farms that produce grain, fodder, and other industrial crops. Perhaps not enough attention was paid to horticultural farming, and it is not by chance that the question has come up.

I issued instructions today to make a full review of the current situation at horticultural farms and cooperatives. We will consider this situation together with the regions: I think that many regions are in a position to help them. But if some regions need assistance, Mr Kudrin (Finance Minister) and I have agreed to allocate the same amount of credit to the regions for these enterprises as was allocated last year on a three-year term, so that they can be disbursed in the form of subsidies. We will do this in the very near future and render the necessary help to these entities.

I think that the Agriculture Ministry should put in place a regular mechanism for supporting horticultural farming and gardening cooperatives. Many issues arise not because the state is not helping but because many producers are unaware of the measures that the government has been taking, especially in recent times.

Vladimir Putin: I would like to pick up where you left off. First, it is necessary to provide the people working in this sphere of production with more information as to the kind of assistance available from the state. Second, I still do not quite understand whether or not these enterprises have been recognised as agricultural producers.

Viktor Zubkov: They have.

Yelena Skrynnik: There are two types of gardening. There is industrial gardening – that is, the enterprises that produce vegetables and fruits as part of agricultural production.

Vladimir Putin: I understand, market produce.

Yelena Skrynnik: Yes. And then there are not-for-profit gardening organisations and cooperatives. We have 83,000 of them, and that only includes those that are registered as non-profit – another 583 are not registered. They are owned by urban dwellers who also grow produce in the country. The question in Mordovia was: what assistance should be given to non-commercial gardeners?

Vladimir Putin: No, no, no. That was not the way she put it.

Viktor Zubkov: No, it’s not like that at all. She raised a question concerning her farm, and I have looked into it. The farm has been in existence for 28 years. It is a major gardening complex, a real agricultural producer.

Vladimir Putin: Yes, yes, that is correct. She spoke about her own farm. I want you to clear it up. Do the enterprises that definitely produce for the market have the same status as agricultural producers or are there some exemptions? If there are, they should be eliminated because that is unfair.

Second. As Viktor Zubkov has rightly said, we should provide enough information; you should have websites and other effective channels of information. Follow through on it, please, and report back to me.

Yelena Skrynnik: Yes, in fact they benefit from all forms of support. We have earmarked 400 million roubles for this purpose this year. But there is also the issue of not-for-profit organisations. I have prepared a resolution…

 Vladimir Putin: That is a separate question, and you will report on it as well.

Yelena Skrynnik:  Very well.

Vladimir Putin: If some additional help is needed (Viktor Zubkov and the Finance Ministry have discussed the issue together), then report back to me, and we shall see together what can be done.

Ms.Skrynnik, the period from early May through early September is the so-called big milk season, when milk yields increase sharply and, as a rule, prices drop. I discussed it with the milk producers in Saransk, and they seem to be having some problems there. How do you asses the situation today?

Yelena Skrynnik: Thanks to all the systemic support measures taken pursuant to your instructions, Mr. Putin, the current situation is stable. Procurement prices for raw milk vary across the regions from 12 roubles to 16 roubles. I talked to the regional officials this morning, and they confirmed that the procurement prices range from 12 to 16 roubles. This has been the situation in 2010 and the first half of 2011. In part, this is all thanks to the 5 billion roubles allocated to the regions that kept their cattle in accordance with your instructions. Thirty-two regions are eligible, and we are already in the process of remitting the money. In addition, more than 4 billion roubles have been allocated for the selection of livestock breeding, and more than 2 billion roubles are being channeled under key economic programmes. Besides, the raw milk producers and processing companies have signed an agreement: Danone and Pepsico have agreed on a raw milk price corridor between 12 and 16 roubles. We consider the situation to be stable as a result of a complex of measures, including customs and tariff regulations. The consumer prices for milk are also stable, with a downward trend.

Vladimir Putin: Good, keep the issue under review.

Yelena Skrynnik: Yes.

Vladimir Putin: Mr.Zhukov, we are now in the period of school holidays, during which children’s leisure needs to be organised. We have prepared a government resolution that I have already signed on investment in the Orlyonok children’s camp. What is the situation there? What are the plans?

Aleksander Zhukov: The Orlyonok national children’s centre is the biggest place for children’s leisure. Under the current plan set for 2012, Orlyonok will accommodate 5,000 children at a time. There is a need for more infrastructure in terms of accommodations, especially temporary accommodations because most of the children come from remote parts of the country. They arrive in Krasnodar by plane at night, and they have to spend hours in the airport terminal, which creates a security risk and does not conform to existing requirements. So, a site has been designated in Krasnodar where a multi-functional hotel-type centre for 500 persons will be built. It will have a cafe and dining rooms, a concert hall, and even a sport facility. The work is scheduled to be completed by 2013, and it is being financed out of the budget to the tune of 2 billion roubles.

Vladimir Putin: That’s by 2013? By the summer of 2013?

Alexander Zhukov: I think it should be ready by the beginning of the summer 2013 session. On the whole, the summer holiday season is going according to plan: more money has been allocated, and the regions are better prepared.  

Vladimir Putin: Very good...

Mr Avdeyev, the Kionotavr Film Festival has ended, and preparations for the 33d Moscow International Film Festival are under way. How are the preparations coming along? And, by the way, how did the Kinotavr festival go?

Aleksander Avdeyev: It so happens that the biggest national film festival, Kinotavr, has just ended, and our biggest international festival, the Moscow Film Festival, one of the most important world's film festivals, will be underway on June 23.

More than 100 films were screened during Kinotavr – some very interesting works, including documentaries, feature films, and youth films. A new generation of filmmakers has come along between the ages of 25 and 40. There were many experimental films, many creative works. Sochi, which is all under scaffolding and construction, took a bit of getting used to, but it actually lent a special charm and character to the festival.

I have to say that the top prize, oddly enough, went to a film made 20 years ago by Fyodor Bondarchuk. They deliberately awarded the top prize to a film that was underrated 20 years ago because it was impossible to select a favourite among the contemporary works.

Two films stood out: Zvyagintsev’s Yelena (which was shown at Cannes hors concours) and Bakuradze’s The Hunter. These are two Russian films that have a European resonance. They were shown out of competition here, too. The actors won prizes, but no top prize was awarded. There is nothing wrong with that.

Some interesting discussions took place. Documentary filmmaking is on the rise, and although it used to be underestimated, it is the chronicle of our times. It brings little profit, but it has to be done because, for example, there are many things we are learning about the history of the Soviet Union thanks to the documentaries. They should be left to our children and grandchildren.

The international festival will have a thousand guests. The last meeting of the organising committee was held this morning. Nikita Mikhalkov reported that everything is ready. The international jury will be headed by Geraldine Chaplin. The biggest names in world cinema are coming. What will happen, remains to be seen, but there will be some inconveniences due to the fact that we still do not have a hall for festival screenings and other activities, which is an old and familiar problem. Thus, the festival will be held at the Pushkinsky Cinema, which is not a bad theatre. But it has no lounge. Competitions have been scattered among several cinemas. The press centre will be at the Khudozhestvenny, and screenings will take place at Oktyabr Cinema and at some other place, in addition to the Pushkinsky. That makes the festival less effective. I am aware, Mr Putin, that the government and you personally attended to this matter and have issued instructions, but a site has still not been chosen. We at the Ministry of Culture believe it is partly our fault as we have not been aggressive enough in getting land appropriated. Regardless, the problem is still there.

Vladimir Putin: Let us revisit the issue, discuss it with the Moscow authorities, and take stock of our opportunities.

Aleksander Avdeyev: Thank you.

Vladimir Putin: As for the films, it is for the experts to decide which are awarded prizes. When Alfyorov (Zhores Alfyorov, Soviet and Russian physicist) was awarded the Nobel Prize for a discovery he made 40 years ago, it was clear that he got it for work that endured and proved its relevance. Perhaps the same can be done in film. But, of course, we would like to see new filmmakers – new films that address current problems. But, I repeat, it is for the experts to judge.

Aleksander Avdeyev: There are two new films, but they cannot be entered into this competition because they were shown at Cannes. They are Yelena and The Hunter. They are thought to be the highlights of the year. 

Vladimir Putin:
They were at Cannes? So what?

Aleksandr Avdeyev: They can’t be shown here, those are the rules.

Vladimir Putin: Change the rules. What difference does it make if they were shown at Cannes? Well, anyway, it’s up to you.

From what I heard, there are problems with animated films. Let us take another look at the problem.

Aleksandr Avdeyev: Yes, and you have a letter from the animated film makers.

Vladimir Putin: Yes. Let’s see. I have asked Aleksander Zhukov to have a preliminary meeting with the colleagues before meeting at my place to see what we can and must do to support them. Good?

Let us look at the items on our agenda. We will be briefed on the progress in the implementation of regional employment programmes and discuss long-term measures to develop the labour market. Right off, I must say that the situation in the labour market is fairly stable. In April of this year, unemployment stood at 5.4 million, which is no small figure, but still 700,000 less that last year. Unemployment according to the ILO has dropped from 9,4% to 7,2%, although we understand that it is still high. The Russian Government is committed to an active labour policy and will use the experience of regional employment programmes launched at the peak of the crisis.

The economy and jobs are on the rise, and we need to shift the focus of our work. What is to be done? We should not just provide jobs but improve workers' professional skills and create conditions for people to acquire new, more needed, more prestigious, and better-paid jobs. Labour mobility must be encouraged.

We disbursed about 70 billion roubles from the federal budget in the last two years on employment programmes. A further 28 billion roubles is being allocated for the same purpose this year. I think it is money well spent, and it has already yielded tangible results. In general, action directed at the labour market must be recognised as a successful component of the anti-crisis measures. Suffice it to say that employment programmes now cover 4,5 million people. Thanks to government support, many people have kept their jobs, gotten new jobs, upgraded their skills, or even started their own businesses. The enterprises have preserved their staffs. In 2009-2010, as part of the measures taken to defuse tensions in the labour market, about 2 million jobs were preserved and 4 million jobs were created, 390,000 of which were in the small business sphere. In other words, people who lost their jobs were able to start their own businesses with the assistance of our grants. Pre-emptive training was received by 350,000 people at risk of losing their jobs. About 20,000 people found jobs in other places. More than 7,800 jobs were created for the disabled.

However, employment programmes have been more successful in some regions than in others. For example, the situation in most North Caucasus republics is unsatisfactory. On average, they have used only 3% of the budget money allocated this year to relieve tensions in the labour market. And unemployment in the North Caucasus is much higher than the national average. There have been some setbacks in implementing employment measures quite recently. That cannot be tolerated. As of the beginning of May, for example, no money allocated for this year has been used in some North Caucasus republics, such as Chechnya, Ingushetia, and Karachayevo-Circassia. Perhaps the situation there is more complicated than it appears at first glance. We should take a closer look at what is happening. Obviously, the federal and regional authorities should pay more attention to the problem. During our meeting today, I would like Tatyana Golikova to report on the measures being taken to step up the employment programmes in the North Caucasus, and I would like for the deputy prime minister and presidential envoy to the region to tell us how he sees the situation. I repeat, many people still need help in finding a job. So, far from curtailing our employment programmes in 2011, we intend to expand the categories of citizens who are eligible to be beneficiaries. In the first place, these are people who have objective problems in finding employment. They include parents raising children with disabilities and women on a three-year childcare leave. When we made the decision to expand the list of beneficiaries (for example, by including women on childcare leave), we considered it to be part of our demographic programme. Or take the people engaged in hazardous occupations. We hope that new opportunities will enable these people to acquire skills that are in demand on the market and get a good job.

We will shortly need to come to grips with yet another important task. I am referring to the creation of an effective system of employment forecasting. The programme should reveal future labour needs in the real sector of the economy – how many specialists, the level of skill, and so on – and then commission the training of personnel to professional education establishments. In other words, we are talking here about an important element of balancing the labour market.

Another issue I would like to single out is the preservation of cultural valuables in Russian museums.  As you know, the situation is far from simple: museums are short of space in which to keep and restore works of art; the quality of technical equipment in museum buildings is admittedly low; about half of regional and municipal museums have no internet access; and more than 50% of museum items are not restored in a timely manner. Museums are very short of storage space, exhibition space and other facilities, both in the regions and at the federal level. The low salaries of museum workers are a special problem that is holding back the flow of young, skilled specialists into the sector.

Of late, we have discussed again and again various aspects of support of national culture, including museums. Something has been done. As of June 1 of this year, while the pay of federal public sector workers will be raised by 6.5%, that of museum workers will be further increased to bring it up to the level average for the sector. But I want to draw your attention to the fact that this first and most urgent measure is not sufficient. The salaries should be brought to the average level of pay in the regional economies. They will get a real pay rise as early as July. The money for this was included when the 2011 federal budget was adjusted. At the same time, an additional 1.1 billion roubles have been allocated for the capital repair of museum buildings. We intend to adopt a government programme Russian Culture, which we have already discussed.

One of its main elements will be the development of museums in Russia and the preservation of museum collections. Under the programme, the material and technical base of federal and municipal museums will be strengthened, some of the museum items will be restored, and conditions for the safety and accessibility of exhibits will be created. In short, it is a massive task, and, obviously, it will call for the close and prompt interaction of all the federal, regional, and local government bodies and, of course, the Russian Union of Museums. We should keep in close touch with our colleagues on this matter.

I think it would be proper to form an interagency commission to ensure the preservation of the museum collections of the Russian Federation. Its work will be a logical sequel to the work of the commission, which carried out a comprehensive verification of the preservation of cultural valuables at Russian museums and successfully completed this, and other tasks set last year. The new commission will coordinate the actions of executive bodies aimed at the preservation of museum collections. I ask Aleksander Avdeyev to approve the composition of the commission and get its work started within two months.

Let us get down to the other items on our agenda. Tatyana Golikova, please, you have the floor.