Transcript of the beginning of the meeting:

Vladimir Putin: I reviewed your region’s performance for the first six months of the year. The overall results look good, industrial production has been growing, and there are positive results in some other areas. But I also see some problems. The number of cattle and total planted farmland area in the region have both decreased. There are also some things that worry people, especially in the housing and utilities sector. I also see that one of your companies raised hot water rates 70% in June. The average wage in the region is lower than in the country in general. Let’s talk about these issues.

Sergei Morozov: Mr Putin, thank you for this opportunity to report on the Ulyanovsk Region’s performance and problems. Overall, the atmosphere in the region is quite positive, with generally good optimism, even though it has been dampened by the tragedy in the nearby republic of Tatarstan. First, the riverboat sank nearby, and second, there were many people from the Ulyanovsk Region on it. We contacted Minnikhanov (Rustam Minnikhanov, head of the Republic of Tatarstan). I have talked with him and have dispatched a group of regional officials to coordinate our efforts. We promised to assist them in keeping with your instructions. We will not leave people in trouble.

As for economic issues, you know that mechanical engineering enterprises make up the majority of businesses in the region. The region is one of Russia’s top five engineering areas. Our automobile plants, including assembly and component plants, were hit the hardest by the recent financial and economic crisis. We were very heavily affected.

Vladimir Putin: That industry is now recovering faster than others. There are some promising projects.

Sergei Morozov: You helped us very much within the programme of assistance to the auto industry. UAZ began performing strongly late last year and is increasing production this year.

As for agriculture, I have reported to you about the problems. Last winter we had icy rain. In fact, we have had many problems over the past two years: an explosion at a weapons depot, a drought two years running, a long heat wave and wildfires, and then icy rain. It is no wonder that we were short of fodder. But we survived the winter and the planting area this year is nearly one million hectares. We expect a good harvest, nearly 1.2 million tonnes, which is approximately 125% more than we need.

There are indeed many problems in the housing and utilities sector. You personally contributed to a solution: back in the early 2000s, you extended the timeframe for the payment of our debts to generating companies and gas providers for 15 years. Still, I would have to say that reform in this sector is proceeding rather painfully. Many of these managing companies were created in place of the former housing and utilities administrations, which were good only at collecting money from people, not at modernising equipment. We are trying to increase the efficiency in this sector. We have set up a special institute for the housing and utilities sector and also a public council. We are currently analysing the performance of each managing company. Acting in compliance with the government resolution, we have established websites for each managing company and are monitoring them. But our wages are indeed among the lowest in the [Urals Federal] District, about 13,500 roubles, or 65% of the national average. We have formulated a goal this year…

Vladimir Putin: The average wage for the country is now 21,600 roubles.

Sergei Morozov: Our target this year is to increase wages by 18%. We have discussed it with most employers – large, medium and small ones. We expect wages to be increased 14.5% in the first six months. This is less than the 18% target, but we hope that we will attain this goal, acting in compliance with your instructions on raising wages at publically funded companies.

Vladimir Putin: Have you agreed on the healthcare modernisation programme?

Sergei Morozov: Yes, we have.

Vladimir Putin: How much will it cost?

Sergei Morozov: A total of 4.3 billion roubles. The agreement has been signed. We are planning facility repairs at 65 medical establishments, including 49 this year. The tenders have been announced and we hope repairs will start in August. We will also re-equip about 55 medical facilities. We have been allocated about 1.5 billion roubles for this purpose, so we don’t expect any problems. The tenders have already been announced for 12 groups of equipment.

We are now focusing on salary increases. The salaries of more than 4,000 people should be raised substantially. I analysed wage increases for doctors, including rural doctors, and can tell you that the average monthly salary for doctors will be 25,000 roubles, and for nurses and paramedics, about 15,000-16,000 roubles.

Vladimir Putin: And teachers?

Sergei Morozov: Mr Putin, we are also acting in compliance with your instructions regarding teachers. We have drafted a modernisation programme in education and are ready to sign an agreement with the Ministry of Education. We will sign it in early August. We will receive about 200 million roubles for the educational modernisation programme and the purchase of equipment, including buses. Now about salaries: the teachers’ average salary is currently 10,240 roubles, or nearly 76% of the average salary in the economic sectors.

Vladimir Putin: But bearing in mind that the average wage in the region’s economy is also modest, you should raise teachers’ salaries at least to that average level.

Sergei Morozov: We have decided to raise their salaries 32%. Salaries were increased 6.5% on June 1, in accordance with your resolution. On September 1, we will raise them another 6.5% and benefits by 17%. Overall, the increases will benefit over 13,000 educational personnel.

Vladimir Putin: How much will teachers receive on average?

Sergei Morozov: As of September 1, they will receive 13,500 roubles a month.

Vladimir Putin: So, it’s almost your economy’s average?

Sergei Morozov: No, it is slightly smaller than the average, taking into account…

Vladimir Putin: Did you say 13,900?

Sergei Morozov: I think it will be more than 14,500 by the end of the year.

Vladimir Putin: No, I meant by September.

Sergei Morozov: It will amount to 98% of the total by September, which is almost our economy’s average. We will fulfil your instructions…

Vladimir Putin: Yes, but do it by September, alright?

Sergei Morozov: We will, Mr Putin.

Vladimir Putin: Good.