Transcript of the beginning of the meeting:

Vladimir Putin: How are things in the republic?

Magomedsalam Magomedov: Quite well, Mr Putin, thank you. The republic is developing despite existing problems. We have registered good performance results last year and during the first nine months of this year. Our performance in key economic areas is better than average in the country. Last year, the region’s gross product was 7.1% and I expect it to reach approximately 8% this year. These are good indicators.

Our industry has been developing especially rapidly this year, although production in the power industry is slightly lower. But we will report an overall production growth of 10%, thanks to manufacturing. Our performance results in agriculture are very stable.

I would like to thank you, Mr Putin, for your instructions with regard to providing support to our key agricultural sectors, sheep breeding and the growing of grapes. They have been carried out.

Vladimir Putin: Is this a regional programme?

Magomedsalam Magomedov: Yes. In accordance with your instructions to the Agriculture Ministry, we have signed an agreement, and this year we have collected a record-high grape harvest, more than 140,000 tonnes. This is a very good result; I would even say it is a record-high harvest over the entire post-Soviet period, even despite the sobriety campaign.

We still have country’s largest flock of sheep and goats: more than 4.5 million.

The situation in the other industries is also good. In construction, for example: last year we turned over more than 1.1 million square metres of housing, which is one of the highest figures across Russia. I think we will do even better this year.

And trade…

Vladimir Putin: I see that you have registered good results in agriculture this year. To date, your harvest of grain and bean cultures is 52% larger than last year.

Magomedsalam Magomedov: We have increased the crop area, and the yield this year is high. Of course, we are not a leading republic in terms of grain; we specialise in growing grapes and vegetables. We have grown nearly a million tonnes of vegetables, which is a very large figure.

This performance has also enabled us to cut unemployment. Registered unemployment is currently at 3.2% in the republic, which is not high. The average figure for the country is 2.1% and it is 3.2% in Dagestan, or 11.6% according to the ILO (International Labour Organisation) standards. Last year, the figure was higher, 14%.

Vladimir Putin: As I understand, your more serious problem is a lack of childcare centres.

Magomedsalam Magomedov: The social problem, in particular regarding the number of childcare centres and schools, is most acute. Dagestan remains a region with one of the lowest proportions of social infrastructure facilities. Earlier you issued instructions for a targeted federal programme. The Economic Development Ministry and the Ministry of Regional Development are drafting this programme jointly with us, but they have suspended this project because a development programme is currently being prepared for the whole of the North Caucasus Federal District. However, if the drafting of this programme for the North Caucasus district lasts longer than expected and continues into 2015, we would like to create a separate programme for our republic, in particular for improving the social sphere.

Vladimir Putin: Good. What is your key priority among your investment projects?

Magomedsalam Magomedov: We have been working hard on our investment projects this year. We have held the republic’s first international economic forum, which was attended by representatives from all regions of the [North Caucasus] district and 15 foreign countries. We have formed a package consisting of 72 investment projects worth a total of 207 billion roubles, and 25 of them are being implemented. We have invested 18.7 billion roubles. This will help us create about 30,000 jobs. In addition, we are working on a large, important project to establish a tourism cluster.

Vladimir Putin: And what do you consider to be more important – a glass plant or the animal husbandry project? This is a good project.

Magomedsalam Magomedov: We are implementing three agribusiness projects, which are very important for the republic. We have shown you one of these agribusinesses, which will cost 19.8 billion roubles. We are implementing it together with American colleagues and we will be using American technology. The government commission has analysed it and has granted it state guarantees. Under this large project, we will use 80,000 hectares of land and will create 15,000 jobs. Three districts of the republic will be involved in this project, which consists of growing sugar beet, a sugar refinery, fodder production and the production of alcohol as raw material for the manufacturing of detergents. We also have a large livestock growing project.

Mr Putin, I’d like to draw your attention to state guarantees as a form of assistance for agriculture, which is very important. But farms still have to go to banks in order to receive loans, and banks offer conditions that are very difficult to fulfill, especially for greenfield projects, which are offered a  very high initial interest and no grace period.

Vladimir Putin:  Which bank are you working with?

Magomedsalam Magomedov: We are currently working with the Russian Agricultural Bank.

Vladimir Putin: Who are the project’s shareholders?

Magomedsalam Magomedov: They are local investors. There is a large cannery in Khasavyurt, which initiated this project.

Vladimir Putin: We will talk about this in greater detail. What about your social programmes, schools and healthcare establishments?

Magomedsalam Magomedov: We are on schedule as regards the programmes to modernise the education and healthcare systems. On September 1 we raised teachers’ salaries 30% to 10,530 roubles, which is more than the average in the economy.

Vladimir Putin: Almost the same.

Magomedsalam Magomedov: It's true that the average wage in our economy is not very high, but teachers are now receiving more.

The same is true of the healthcare modernisation programme – we have been allocated over 5 billion roubles for our healthcare system over the past two years, which we are investing in modernisation and technical upgrade.

Vladimir Putin: Don’t forget about the rural areas when implementing the education and healthcare programmes. Be sure that you by no means forget about the rural areas.