Transcript of the beginning of the meeting:

Vladimir Putin: Mr Tkachev, we meet quite often, don’t we? Today I’d like us to discuss the situation in your territory at length. You’ve done a lot of work recently, and you’ve done it quite well, and you had a record harvest.

Alexander Tkachev: Indeed, nearly 11 million – a 1.5 million increase.  

Vladimir Putin: Yes, an almost 11% increase year on year. This is, indeed, a spectacular achievement. Once again, congratulations to all those who work in your agricultural sector… Another positive achievement, as I can see, is that your industrial growth rate has surpassed the national average, albeit slightly.

Alexander Tkachev: Ours is not an industrial region, you know.

Vladimir Putin: That’s true. The best piece of news is that you’ve had as much as 22.8% in direct capital assets investment. The nation’s average growth rate is currently at 3% while you’ve posted a figure ten times as high. That’s really impressive. Later on, we’ll discuss how you managed to do that. It seems the expert community’s assessments of your region’s appeal…

Alexander Tkachev: … are well justified. 

Vladimir Putin: Justified, yes.

Alexander Tkachev: And, consequently, we’re enjoying decent budget growth.

Vladimir Putin: Having said that, you have problems to address, such as outstanding wage arrears. 45 million roubles. This isn’t much, but yet… Housing construction has been on the decline. Elsewhere in the country, there’s been modest growth (3%) in housing construction, while you have posted zero growth. As for agriculture, your grain crops are excellent, but the number of cattle is decreasing.

Alexander Tkachev: I’ll explain.

Vladimir Putin: Please do. And I also wonder how you are doing with the public mortgage programme. This is a very positive undertaking.

Alexander Tkachev: Regarding housing, we’ll have a total of 3.6 square metres of housing built this year, which puts us in second place after the Moscow Region. We’re lagging behind somewhat as compared with last year, when we showed rather impressive results. But, perhaps, it’s just that we’ve reached our ceiling already. Anyway, I have a sense that we’ll be able to meet the government targets set for the period through 2012, rising back to last year’s level and maybe even 2%-3% above it.

Vladimir Putin: You mean you will have better housing figures by the year’s end when more projects are completed?

Alexander Tkachev: Yes, absolutely. We’re keeping record of all newly built residential space. As for the recent drop in cattle numbers, this is a policy we’re pursuing for some time now. We’ve had no decrease in milk output, though. Our current level is not lower than that of the 1970s and ‘80s. But we are now in the process of renewing our livestock. We don’t need goats and cows that produce just 3 litres of milk. There are a lot of old animals among our cattle, who create an excessive burden on us. We get meagre milk output, higher fodder costs, and greater incidence of disease. This is why we’re now replacing part of the livestock…

Vladimir Putin: How do you mean higher fodder costs?

Alexander Tkachev: We actually waste fodder by feeding cows with very low milk yield. So we’ve decided to replace such animals with more productive breeds, including Russian, Australian and American ones. We’ve brought in the first batch of 5,000 head earlier this year.  Our milk production has grown accordingly, and so, too, has our processing industry.

Vladimir Putin: So this is a deliberate measure on your part, right?

Alexander Tkachev: Deliberate, yes. We understand that by doing this, we’ll end up better off in terms of quality, fat content, and so forth. Ageing and sick cattle should be replaced, I think.

Vladimir Putin: Of course.

Alexander Tkachev: I think our current positions are quite good and we know how to make things better.

Vladimir Putin: Now on to your arrears. Where do they come from?

Alexander Tkachev: We currently have some 40 million roubles in back wages. This figure keeps oscillating between 20 and 40 million. We know which enterprises are to blame. There are both objective and subjective reasons behind. Together with the prosecutor’s office, we are carrying out inspections and encouraging the debtor enterprises to meet all of their arrears within 1.5-2 months’ time.

Vladimir Putin: I know you’re working to help them overcome the insolvency. Some companies could be bailed out. But the payment of wages must be the number one priority.

Alexander Tkachev: Unfortunately, there are shareholders whose behaviour on the market couldn’t be described as adequate.

Vladimir Putin: Do they own any property?

Alexander Tkachev: They do. And we are now looking into (their assets) with prosecutors’ help.

Vladimir Putin: Do keep things under scrutiny. 

Alexander Tkachev: We may have to make a few cases. But let me assure you that this isn’t that big a deal.

Vladimir Putin: But you will keep working on this, yes?

Alexander Tkachev: Sure.

Vladimir Putin: Will you now tell me all about your mortgage programme?

Alexander Tkachev: As you know, there’s a public mortgage pilot programme running in our region. It involves the national savings bank Sberbank and the regional government. The idea behind is to provide affordable housing for low-income population groups. To get a mortgage loan these days, one has to have an income of 70,000-80,000 (roubles).

Vladimir Putin: This is what everyone aspires to. How do you make the scheme work in your region?

Alexander Tkachev: It’s all about being patient. One person or a family have to spend five years saving money. They will pay 5,000 roubles per month for a period of five years and at the end of that term, the regional government will supplement the savings with a 30% subsidy. Sberbank will contribute another 2% and provide a loan at 6% interest, with eight-year maturity. So a mortgage holder will be able to get a one-room flat by putting aside just 5,000 roubles per month. Double that sum, 10,000 roubles, will buy you a two-room flat or a small country house. And there’s no need for any down payment.

Vladimir Putin: These are replaced with savings, right?

Alexander Tkachev: Yes, people have to save up a certain amount, instead.

Vladimir Putin: No need for down payments on one’s mortgage here.

Alexander Tkachev: Normally, one may have to put down as much as 0.5 million these days. I personally would never take a loan on such terms. As things stand now, only 3% of the territory’s population may benefit (from regular mortgage schemes). While this programme makes it affordable to as many as 25%.

Vladimir Putin: Are you referring to your public mortgage programme?

Alexander Tkachev: Yes. As many as 30,000 applications have been filed already. Meaning there are 30,000 aspirants who have been furnished with all relevant information and are now reviewing it carefully. While 1,000 are already involved in the programme, which I think is the only option available today in the region for a young person, a public-sector worker, a doctor or a school teacher to buy their very own home.

If I were, say, a student and my parents joined the programme to buy me an apartment with 5,000-rouble monthly instalments, I would get one right upon graduation. Or I could try to save up for a flat on my own, taking odd jobs here and there. This is a good incentive to motivate people, you know. And a realistic option. We’ve borrowed this from the West, actually. Germany, Austria, and Slovakia used such schemes to build their cities in the 1960s-‘80s. Which is why their residential areas look so different, so appealing to the eye.

Vladimir Putin: How How are you going to go about this in the future?

Alexander Tkachev: We’re following in Europe’s footsteps here, so we’ll try to do things in the European style.