Transcript of the beginning of the meeting:
Vladimir Putin: Good afternoon, ladies and gentlemen. You know that I attended a forum of rural intellectuals about a week ago. It was an interesting conversation that touched upon on a broad range of subjects, some of which I will highlight today. What I mean is that I have signed a number of instructions today. They concern issues that are nothing new to any of you, namely the provision of electricity and the development of culture and cultural facilities in rural areas, as well as healthcare – specifically, a proposal to revive an on-call service. We should consider this. I’m asking you to do this.
As for schools, I’m asking you to finish the relevant programme and to ensure – together with the regional authorities – that teachers’ salaries are raised to the average in the country’s economy. Not all of the regions have done this. Teachers’ salaries have been raised almost everywhere, but not to the average level in the economy. We must do this by all means.
Next to sports, primarily competitive team sports, popular sports, sports facilities and sports and health centres. By the way, athletes’ per diem in Russia is a problem. It is a laughable sum – 100 roubles. Have you forgotten where we live? What can you buy with 100 roubles? Several boxes of matches? I am asking the Ministry of Sport, Tourism and Youth Policy and the Finance Ministry to draft a relevant proposal. This issue is actually on the list of their instructions.
As for the simplified procedure for registering people’s ownership of real estate, there are a number of unresolved problems. Ms Nabiullina (Elvira Nabiullina, Minister of Economic Development), please, take this into account. I am asking you to once again analyse current practices and, of course, to draft proposals to simplify the procedure.
And one more issue. Is Mr Shoigu here today? (Sergei Shoigu, Minister of Civil Defence, Emergencies and Disaster Relief) The issue concerns safety and preventing forest fires. We’ve taken the appropriate measures. One of the municipality officials has said in a speech that in some cases, the requirements are unnecessarily high and redundant. Security must be provided, of course, and every effort must be made to ensure that preventive measures are taken in a timely manner. In some cases, though, they are simply redundant and we need to revisit them. So please look into this.
As I said, everything has been formalised through various assignments. Please, make sure they are carried out within the set timeframe.
Now let’s have a look at some current issues. We already have the socio-economic performance figures for October 2011. Would you please state them for us, Ms Nabiullina?
Elvira Nabiullina: The Russian economy was growing at a faster pace in October, and according to the ministry’s seasonally adjusted estimates, the month-on-month growth rate reached 0.9%.
Vladimir Putin: That is, nearly one percent.
Elvira Nabiullina: Yes, this is the highest growth rate since the year began. During the previous three months, it was at 0.4%. The aggregate growth over the last ten months came out to 4.3%. Agriculture contributed the largest amount.
Vladimir Putin: The growth rate in agriculture is at 14%, correct?
Elvira Nabiullina: More than that.
Viktor Zubkov: Sixteen percent.
Vladimir Putin: Sixteen percent?
Viktor Zubkov: 16.7, to be precise.
Elvira Nabiullina: Agriculture has been growing at an extremely high rate. Compared with last year, when there was a sharp drop due to severe droughts, the growth rate reached almost 52% in October of this year. This is a very high growth rate. Even with seasonal adjustments, this October’s month-on-month growth has reached 23.6%. The rates are really quite high, especially in the production of potatoes, grain, sunflower, and sugar beetroot (with the month’s output at 80%). It’s good news that agriculture is picking back up after suffering such a powerful blow last year.
Vladimir Putin: Good news, indeed.
Elvira Nabiullina: There was a slight decline in industrial output in September, but growth resumed in October, with the seasonally adjusted rate at 0.8%. Manufacturing industries are growing at a fast pace, with a month-on-month growth of 1.5% in October. This is a very good rate. Industry in the January-October period grew by 5.1% on aggregate, against the same period last year. Processing sectors grew 7%.
This past October saw further growth in domestic demand, both investor and consumer. Given today’s volatile situation on the world markets, it’s important to tap into interior sources of growth, such as consumer demand and investment.
Investments, which had made us nervous at the beginning of this year, have been posting rather high growth rates for three consecutive months. October saw a 5.1% month-on-month seasonally adjusted growth and a 5.3% growth year on year.
Hopefully, we’ll be able to reach the investment growth rates forecast for this year. We expect a 6% growth toward the year’s end. There is usually a seasonal growth in investments, especially in state investments, and government-run companies also tend to invest more during the final months of a year.
Construction has also been on the rise, with October’s month-on-month seasonally adjusted growth at 1.3%. Some 38.8 million square metres of residential space was built in the first ten months of the year – 3.3% more than in the same period last year. Consumption growth continued, with October’s growth rate at 0.2% month-on-month. Part of the reason is the ongoing growth in consumer loans offered by Russian banks.
We have also performed quite well in foreign trade, although the growth of exports and imports has slowed down somewhat in the last few months. We had an unusually high import growth rate of 40% at the beginning of this year, and we even found this to be somewhat disconcerting. But the year-on-year rate in October came out to 18.4%. Exports grew by 29.4% on last year’s figures. We had a trade surplus, with exports exceeding imports by $164 billion. Let me remind you that this figure was $125 billion last year. This means we had a 30% year-on-year growth in trade surplus. In October of this year, the inflation rate reached 0.5%, with an accrued inflation of 5.5%. In the first ten months of last year, inflation was at 7.2%. Now it’s 5.5%, so we have every reason to expect that annual inflation will not surpass the forecasted rate of 7%.
Vladimir Putin: It will be less than 7%?
Elvira Nabiullina: Yes, maybe less that 7%. Of course, it depends on the developments in November and December. Prices grew at a rate of 0.1% over the past few weeks. So far, inflation is within the projections.
Vladimir Putin: Very good. It looks like we are going to have budget surplus.
Elvira Nabiullina: Yes.
Vladimir Putin: We won’t just avoid deficit or break even, we will have a surplus. Is that right, Mr Siluanov?
Anton Siluanov: That’s correct, Mr Putin, we expect to achieve a budget surplus by yearend. I believe it might be about 300 billion roubles.
Vladimir Putin: About?
Anton Siluanov: 300 billion roubles or about 0.3%-0.4% of the GDP. We believe that the best use for the surplus funds that we will receive this year will be to cut the amount of borrowing on the domestic market next year so as not to remove liquidity from the market that can be used in the economy.
Vladimir Putin: Correct. Support employment and real sector enterprises. That’s right.
Mr Avdeyev, in addition to the economy, cultural life has become more lively. There are many new performances in theatres; the season has begun.
Alexander Avdeyev: Yes, Mr Putin. I would like to draw the government’s attention to the Caravaggio exhibition opening soon.
Vladimir Putin: On the 25th?
Alexander Avdeyev: Yes, exactly so. Italy is taking this exhibition abroad for the first time ever. It includes 11 masterpieces. Italians have done a lot to ensure that the Year of Italy in Russia was held at a high level. By the way, we are taking an excellent exhibition of impressionists from the Pushkin Museum to Italy. This is a very high-quality exchange.
As for theatrical performances, I would like to mention The Three Sisters directed by Lev Dodin at the Theatre of Europe in St Petersburg.
Vladimir Putin: He has invited me. I think I will go.
Alexander Avdeyev: Yes, good choice. This is an outstanding event in theatrical life. We have celebrated the 90th anniversary of the Vakhtangov Theatre, and chief artistic director Rimas Tuminas has come up with The Berth specifically for the veteran theatre actors, such as Yulia Borisova, Yury Yakovlev, Vladimir Etush and Vyacheslav Shalevich. The atmosphere at the performance is very warm, and all the performances of the veteran actors are magnificent. There also was the world premiere of The Sleeping Beauty ballet at the Bolshoi Theatre. It was aired live on all major international networks. In other words, they broadcast it live in cinemas and on Russian television. Experts believe that this is a masterpiece, an impeccable, very beautiful show featuring great ballet, excellent stage design and beautiful costumes.
To conclude, a few words about rural culture, Mr Putin. On December 15, we will present 15 Soul of Russia prizes to major rural cultural activists and amateurs who won this contest. It would be great if someone from the government attended the ceremony.
Vladimir Putin: Good, thank you.
Alexander Avdeyev: Thank you.
Vladimir Putin: You finished with rural areas, and we have started out with discussing them. I would like to get back to this issue again. First thing we need to do for rural people is to organise transport for them. They mentioned the beets, which are grown in an area located far away from processing plants, so they have to be transported. This is true of other produce as well. How are things with railway transport now?
Igor Levitin: Mr Putin, almost all major enterprises are fully outfitted with railway transport. The only problem is late car supplies for small shippers, but we are working on it together with the Ministry of Agriculture and Russian Railways. Mr Zubkov has chaired such a meeting recently. We have conference calls regarding produce shipments every ten days. Unfortunately, train cars are being unloaded at sea ports and stay idle, but overall car supplies for shipping produce are up.
Vladimir Putin: Don’t forget about small- and medium-sized businesses; they need your help, too. They have it even harder than the larger ones.
Igor Levitin: Yes.
Vladimir Putin: They can’t solve their problems on their own. How are things with upgrading road infrastructure? What are the results for this year?
Igor Levitin: Mr Putin, the construction season is almost over, and they have commissioned new road sections on highways such as Baikal, Kholmogory, Ussuri – this highway goes around Ussuriysk – and the St Petersburg-Petrozavodsk highway. There are new road sections on seven highways after renovations. All of them are being built with dividing barriers to separate oncoming traffic. I would also like to mention that 16 bridge crossings and overhead roads were built this year as scheduled.
I would like to say a few words about the Don highway. It’s under control. This highway goes from central Russia to southern regions, which is the main road for cargo traffic. Out of a total of 1,500 km, 750 km are currently undergoing renovations. There will be at least four traffic lanes also outfitted with dividers. There are three cities – Voronezh, Rostov-on-Don and Krasnodar – and a village of Tarasovka that pose a traffic problem. We started building bypasses around them. We plan to make this road a Class A highway before 2018.
We have used a lifecycle contract for the bypass around Voronezh for the first time, which means that the company that was awarded the contract will also maintain it. The contract was signed until 2029 through the courtesy of the Road Fund, which provides the financing. Another 33 km of the road will be commissioned in the near future. All these road sections are scheduled to be completed this year.
Vladimir Putin: Where does the Don highway end today? Is it Rostov?
Igor Levitin: Novorossiysk.
Vladimir Putin: We know that part of the road that goes from Novorossiysk to Sochi is a very complicated one, particularly from Tuapse to Sochi, correct?
Igor Levitin: From Tuapse to Sochi it’s virtually a ...
Vladimir Putin: …spiral.
Igor Levitin: We propose moving teams currently working on the construction of tunnels leading to Krasnaya Polyana to this section of the road once they are done with the tunnels …
Vladimir Putin: You have to have a project in advance.
Igor Levitin: We agreed with the governor of the Krasnodar Territory to join our efforts on this project.
Vladimir Putin: Still you need a project.
Igor Levitin: A project for design.
Vladimir Putin: You must start the design now.
Igor Levitin: Good.
Vladimir Putin: This is a very important highway. People from northern regions, from Moscow, central parts of Russia and even eastern Russia use this highway and their destinations are normally further than Novorossiysk.
Igor Levitin: Yes, coastal areas.
Vladimir Putin: You can’t make it to Sochi by car. It’s simply impossible.
Igor Levitin: All traffic from the Northern Caucasus also uses this highway, because there’s no other way to get to the coast.
Vladimir Putin: Well, it’s not that far away from the Northern Caucasus and the climate isn’t all that bad there. However, people from central Russia, the Urals or Siberia heading to this destination find it extremely difficult to use this road.
Igor Levitin: All right, we will look into the design.
Vladimir Putin: The first item on today’s agenda is about interim results of the Integrated Programme for Transport Safety. Passenger traffic in Russia is gradually recovering after the crisis. As of the end of nine months of 2011, the total passenger flow grew by 4%. Further development of the industry involves improvements in comfort and affordability of travel and, most certainly, safety. The first point is about replacing vehicles, upgrading infrastructure, and replacing morally and physically obsolete equipment, as well as professional training.
We need to expand the carriers’ capabilities regarding acquisition of new equipment and introduce more effective leasing arrangements. It’s no less important to renovate the transportation infrastructure – we have just mentioned it – and outfit it with reliable inspection and control equipment. The transport industry should adhere to the latest safety standards. These standards should serve as a foundation for regular professional training, retraining and evaluation of the industry’s employees.
The legal basis for such work has already been worked out by the Ministry of Transport. A training centre for air transport employees has been established, and the first trainees will come to classes in January 2012. Educational programmes for employees of sea and inland water transport have been approved.
In order to ensure the efficient work of the industry, there is a need to straighten out the organisational and managerial arrangements, weed out unreliable companies that don’t have proper equipment or specialists and often ignore safety rules and basically don’t have any sense of responsibility.
Last year, the government adopted an Integrated Programme for Transport Safety. Today, we should take a look at how it’s working.
The development of the Far North and the Arctic regions is another item on the agenda. This includes large-scale off-the-shelf projects, expansion of transport infrastructure and restoration of the ice-breaker fleet and the Northern Sea Route. The implementation of major research programmes has been resumed; rescue centres are being set up. We have launched an initiative for a major cleanup of the Arctic regions and establishing environmental and climate monitoring there. Over 21 billion roubles will be allocated for the construction and upgrading of Arctic sea infrastructure.
I would also like to mention another similarly remote part of the world - Antarctica – a place with many overlapping interests. Russian seafarers Faddei Bellinsgauzen and Mikhail Lazarev discovered the Southern Continent in 1820. A special permanent Antarctica expedition was set up in 1955 and is operational now. In addition, Russia initiated the signing of the international Treaty on Antarctica, which was effectively signed in 1959.
During the economic turmoil, we managed to preserve Russia’s presence in Antarctica, including five year-round research stations and five seasonal field bases. Certainly, we must and we will expand them. Russia is playing a major role in scientific research in Antarctica with over 200 people working in the Russian expedition. Routine work performed by polar researchers and new areas of such work need to be properly regulated on a national basis. We need to summarise the results achieved over many years of our presence in this region and build a legislative base underlying work of Russian citizens and organisations in Antarctica for decades to come in accordance with intergovernmental agreements.
Today, we need to consider draft laws prepared by the Ministry of Natural Resources and Environment and the Federal Service for Hydrometeorology and Environmental Monitoring. They have to do with protecting rights and social protection of Russian citizens working in Antarctica and, most importantly, our obligations to preserve the environmental well-being of this region.
I would like to raise another issue in this connection. We have discussed it a lot over the past years; in fact, they’ve been talking about it since Soviet times… The issue is about the future of the Baikal pulp and paper plant, which is at times shut down and then re-opened. The issue is complicated, because people’s jobs are at stake. We need to preserve these jobs and the environment, which may seem like mutually exclusive goals. The Ministry of Economic Development, the Ministry of Industry and Trade and the Ministry of Natural Resources and Environment, as well as the regional authorities and interested businesses should submit to the government specific proposals regarding the modernisation and reorientation of the enterprise. There are several key requirements. First, the implementation of environmentally safe manufacturing processes that are safe for Lake Baikal and the adjacent areas. Second, we must preserve jobs at the enterprise and related companies, which is also very important. Please keep this in mind.
They think that closing the Baikal plant and laying off workers will put an end to the problem. But this is not so, because there are also transport workers who supplied raw materials to the plant, lumber producers, and so on. All of them lost their jobs. The problem has more than one aspect; please think about it beforehand.