Prime Minister Vladimir Putin chairs a meeting of the Government Presidium
27 september 2011
Transcript of the beginning of the meeting:
Vladimir Putin: Good afternoon, colleagues. Many of you were in attendance at the United Russia conference. I will repeat once again what I said there: the country is entering the long and critical period of the election campaign, debates and elections to various government bodies and structures of the highest level. This is a crucial moment in the life of the country and society. Much depends – in the economy and the social area – on the effective performance of the Russian Government. I ask you all to honorably perform your duties until the very end, until the time when a new government is formed, and to display even more discipline and responsibility.
Following Mr Kudrin’s resignation, Igor Shuvalov will take over responsibility of supervising financial and economic matters within the government. The ministry also needs a chief, and Anton Siluanov will step in as Acting Finance Minister. Everyone is acquainted with Mr Siluanov. He has worked with the ministry for a long time, and is a competent professional. Both appointments, of course, have been coordinated with Mr Medvedev – this was our common decision. I hope that these rearrangements will not interrupt the work of the government.
Let us exchange the current information on the priority areas of the government activities.
The Ministry of Economic Development is introducing a draft law that could simplify the allotment of land for construction. (To Elvira Nabiullina, Minister of Economic Development) Please comment on this.
Elvira Nabiullina: A draft law has been developed as part of the plan to reduce administrative barriers in construction. We have discussed the draft law with Mr Kozak, and it has been submitted to the State Duma as an approved document, with amendments made for the second reading. This is a serious law as it changes the procedure for allotting federal and municipal lands for construction. The purpose of the draft law is to make the land allotment procedure more transparent for investors and citizens; to reduce the potential for corrupt practices in managing the land; and to incorporate unused lands in turnover.
The first improvement consists of a series of requirements regarding the provision of land plots for auctions. From 2005 until now, this requirement was only valid for land plots intended for housing construction, while an individual procedure was observed in all other cases that could take from one to three years depending on the regional authorities, and the applicant was required to obtain numerous permits and certificates. The new draft law provides a fixed list of cases in which plots of land can be provided bypassing auctions. These include construction of engineering, utilities, transport and social infrastructure and exploration of mineral resources. For all other purposes, an auction is mandatory. The law also introduces electronic land auctions. In order to make procedures more transparent for investors, officials must post information about available land plots online. Should potential investors be interested in them, the officials must put them up for auction, thereby making the entire process more user-friendly.
As for citizens, the draft law stipulates a procedure for free allotment of land on grounds defined by the law. These grounds existed before, but there had not been any fixed legal procedure, which prevented citizens from exercising their rights. Now, this law will establish the necessary procedure. The law will also determine additional cases when land may be provided free of charge, and grant regional administration with the authority to specify occupations that can be eligible for free land. This will address certain problems, such as attracting professionals to work in rural and underpopulated areas (according to your instructions). Regional officials will have authority to deal with these cases.
Moreover, bodies of authority have often been complaining about a lack of funding and time for registering land plots in order to make land available to investors. This draft law will give potential investors an opportunity to form the land plots themselves. A list of documents is defined that are required for forming and registering land plots.
Another important point has to do with the allocation of land for comprehensive development. This procedure is in high demand. It is currently authorised only for housing construction, but the new law will authorise comprehensive development of land for industrial and commercial facilities. We hope that the draft law will be approved by the State Duma quite soon, so as to eliminate excessive administrative barriers for investment projects.
Vladimir Putin: Good. Mr Sechin, what is the present situation with jet fuel and kerosene?
Igor Sechin: Mr Putin, we carried out your instruction to resolve the unstable supply of jet fuel to Moscow airports in late August – early September. At that time, the shortage of jet fuel was caused by interruptions in railroad shipping, among other things. Now the problem is less acute and the measures taken have improved fuel supply to Moscow airports. At the same time, the government, the Ministry of Transport, have taken the measures that helped identify various systemic problems that have required repeated government instructions.
One of the key issues is that the fuel supply market is essentially a monopoly. Only one fuel-supply complex operates at the majority of Russian airports and dominates the market. In fact, air carriers have no alternative in choosing a fuel supplier. Following an examination of airport prices established by the Federal Tariff Service (in about 25% of airports) and by the fuelling complexes operating in these airports (in about 75% airports), regional price variation is often groundless and calls attention to itself, given that the technological process is comparable in regions. For instance, in Ulan-Ude prices have risen to 4,322 roubles per tonne, which is a considerable amount. The price has reached almost 5,000 roubles per tonne in Volgograd, about 1,000 roubles in St Petersburg, Pulkovo Airport, and almost 1,700 roubles in Sheremetyevo, Moscow.
In some cases, the price for fuel storage even exceeds the fuelling price. For instance, fuel storage costs 400 roubles at Sheremetyevo and 1,473 roubles at the airport of Mineralnye Vody, while fuelling costs 1,484 roubles in Mineralnye Vody. Therefore, Mr Putin, we ask you to instruct the Ministry of Transport and the Ministry of Economic Development to take measures to create alternative fuelling complexes. Merely starting this work will stabilise the market. The Ministry of Transport should be instructed to create, in key airports, fuel reserves sufficient to ensure continuous work for up to 10 days. The Ministry of Transport, the Federal Taxation Service and the Federal Tariff Service should quickly approve the procedure for separate accounting for fuel-supply complex services, as they occasionally consolidate these data and it is very difficult to understand the cost breakdown. In addition, we propose that the Federal Tariff Service set prices for fuelling in all airports where there are no alternative fuelling complexes. Until there are alternative fuel-supply complexes in airports, the Federal Tariff Service should have the right to control the cost of this service in order to promote the creation of alternative complexes.
The Federal Tariff Service should also review whether the imposed prices and the unified approach to determining prices are justified. As we can see, this process often lacks the necessary economic grounding. Mr Putin, we request that you support these proposals. They are systemic in nature. Obviously, they require time, but they are necessary.
Vladimir Putin: All right. Thank you.
Mr Kozak, what can you say about the measures to motivate our most successful colleagues in the regions and the additional allowances that we envisaged for the regions performing well in terms of replenishing their budgets?
Dmity Kozak: Mr Putin, I believe that the decision you have taken is one of the most important solutions to increase the efficiency of the government’s regional policy. Let me remind you that the government’s resolution entails grants to the regions that show the most growth in their tax revenue (with an exception for additional taxes that enter the regional and federal budgets: revenues from commodities and oil and gas are excluded) only due to the growth of industrial and other forms of production. The resolution also takes into account the growth of industrial production and investment in the region of the 20 most successful entities.
A 10 billion rouble award for economic growth will be distributed this year between the top 20 regions – the ones that have steadily led the nation for the past three years, not just those doing the best today. Our preliminary estimates show that the top region will receive 2 billion roubles and the 20th region 233 million.
These sizeable awards will compensate for the fact that federal subsidies decrease as economic growth takes place. They will come as incentives to create new jobs and businesses, to increase regional and federal budget revenue, and gradually to start thinking in terms of self-sufficiency. Again, federal funding makes up only a half or even less of regional finances for meeting the regions’ public interests. When social problems are solved with federal grants, regions aren’t motivated to create new jobs, salaries, etc. New jobs, new businesses and greater revenues are the three basic incentives for dynamic development.
With this in mind, we should again reappraise the several hundred regional economic efficiency indices. The overwhelming number of objectives is inversely proportionate to the grants they bring, totalling 1 billion roubles – a token amount. More than that, this multitude of criteria misleads the regions when prioritising economic targets. The Ministry of Regional Development has been instructed to reconsider these indices, and I think we will see this issue on our agenda again soon.
Vladimir Putin: Thank you. The government council for grants has just summarised its second open competition for research grants of up to 150 million roubles for researchers with concrete projects. What are the results, Mr Fursenko?
Andrei Fursenko: These grants are paid according to government resolution No. 220. The first competition, a year ago, brought about 40 new university labs. The second, involving 517 major scientists and 176 universities, was even more productive, 39 participants winning grants in many fields of research. Nineteen of them are Russian citizens (13 of these have dual citizenship). Ten of the foreign winners were American, six French and four Germans. All are real stars, including two Nobel Prize winners – one of them, an astrophysicist, will work at Moscow State University, and the other, a Japanese biologist, at Siberian Federal University.
I would like to talk about three of the winners. One of them, Italian Professor Paolo Macchiarini, made an impressive breakthrough at the relatively young age of 52 – he transplanted the world’s first stem cell grown trachea. A researcher and practicing surgeon, he will establish a laboratory at Kuban State Medical University. The other two, also medical superstars, are American immigrants of Russian descent. They specialise in Alzheimer’s and other degenerative nerve diseases. One is establishing a lab at St Petersburg Polytechnic University, and the other at a Moscow Institute of Physics and Technology branch that’s affiliated with the Kurchatov Institute.
All told, 42 universities in 18 regions and every federal district are establishing such laboratories to employ a total of 2,000 young Russian specialists who are gaining and exchanging new experience. Even their first achievements show tremendous progress in research and education at these universities.
Vladimir Putin: That’s very good, thank you.
Our demographic situation is improving. If I am not mistaken, the fatality rate has dropped 6%, while the birth rate is increasing impressively. Ms Golikova, please give us some details.
Tatyana Golikova: There were 173,200 births last August, 8.5% more than in August 2010, and a peak since the baby boom of 1991. The birth rate exceeded August 2010’s in 72 regions – by more than 10% in 33 of them. The increase was the greatest, 33.6%, in the Kaliningrad Region. The republics of Altai and North Ossetia (Alania), the Novgorod Region and Moscow, follow in descending order. The increase exceeds 10% in all of them.
Comparing the same months for mortality, we see a 15.4% decrease in the national average. That’s natural considering the appalling death rate of August 2010, with the abnormal heat in many parts of Russia. Now, the worst-affected regions have the greatest decrease. The Lipetsk Region has the highest – 39.4%, with the Moscow 38.2%, Tambov, Voronezh, Ryazan, Samara and Volgograd regions, and the Republic of Mari-El next with 30%-35%, the Central Federal District is at 25.3%, and the Volga Federal District is 22.4%.
You have your figures right, Mr Putin, the mortality rate fell by a national average of 6.1% in January-August. This is the second time for a natural population increase in August since 1991, but now the number of births exceeds the number of deaths by 10,700 against a mere one thousand in August 2009 – a real boom.
The natural decline in the population dropped 35% in the first eight months January-August 2010, and infant mortality at 4.1%, was down. The current rate is 7.2% against 7.6% last year. We are monitoring the most widespread causes of death in the national healthcare project – cardiovascular diseases, cancer, TB and traffic accidents. Mortality caused by heart disease fell by 7.6% in the first eight months, cancer mortality by 1.9% (it always has its ups and downs but is currently decreasing), TB by 6.7% and traffic accidents by 5.8% despite a great number of recent accidents taking a heavy toll. These are the basic demographic statistics for today. I would also like to add that a natural population increase is occurring in over half of all Russian regions – in 44, to be precise.
Vladimir Putin: Which regions?
Tatyana Golikova: There are forty-four…
Vladimir Putin: Forty-four regions, you say?
Tatyana Golikova: Yes, more than half. The second stage of our demographic policy envisages the situation in the regions and the relevant indicators will be monitored. Since the beginning of the year, all regions with token exceptions have extended their programmes with decisions to support families and increase maternity capital. These measures don’t have a direct impact on birth rates, but they certainly improve the demographic situation.
Vladimir Putin: Good! Nice to hear it.
It is time now to summarise the harvest and farm work in general. We can say that we have overcome the agricultural recession caused by the two drought years with exceptional heat, which was the worst last year. We roughly estimate the total grain yield at 90 million tonnes against 61 million last year.
Though we harvested about 96 million tonnes in 2009, if I have the figure right, 90 is good, all the same. In addition to supplying the domestic market, Russia will also rejoin the world’s leading grain exporters. We certainly owe it to our farmers but don’t forget that the government gave them a hand in hard times, helping not only with the work but also with maintaining development capital.
This year’s federal funding of the agro-industrial complex was a record-setting 163 billion roubles, and the farmers used this money to full effect.
The draft budget for next year also earmarks generous agricultural allocations, roughly 170 billion roubles. The methods of supporting agriculture leave ample room for progress, particularly through precisely prioritised long-term development programmes. Today we will discuss legislative amendments that will extend agricultural planning and allow us to launch the next stage in the state programme for agricultural development in 2013. The present stage will end next year.
Another vital item on today’s agenda is the Customs Union of Russia, Kazakhstan and Belarus – an integration project that is bringing practical fruit even at its inception. Trade is increasing in our single economic space as we go on refining the union’s legislative foundation. Every question matters here as we fine tune every procedure with business and with the public. This is all the more important as we will make another step quite soon – a step toward the Single Economic Space.
We need state-of-the-art technology for customs regulation – I mean an integrated information system for foreign and customs union trade. We will discuss the tripartite agreement today. When it is enacted, it will simplify commercial paperwork for thousands of businesses in Russia, Belarus and Kazakhstan.
Let’s get to work.