Transcript of the beginning of the meeting:

Vladimir Putin: Today is Ms Golikova's birthday. We wish you a happy birthday, and all the best!

Mr Siluanov, starting January 1 of this year, new rules on the capitalisation of banks went into effect. Before this decision was made and enforced, there were many doubts, especially among the expert community, on its potential impact on the banking and financial system. What are your first impressions? What is happening?

Anton Siluanov: Yes, Mr Putin, starting January 1 of this year we have set a minimum capital requirement for banks of 180 million roubles of their own funds. Before, the requirement was half of that amount. There were doubts as to whether banks would be able to increase their minimal funds to this amount. There were 185 banks that had smaller funds a year ago. What happened? We see that the majority of banks, 169 of them, have increased their capital to more than 180 million roubles. Three banks have merged with others. Only seven banks had their licenses revoked. Four banks have decided to change their status and turned into non-banking crediting organisations, while two more banks are now increasing their own capital. To sum up, most banks have managed to find the required funds. Their owners have capitalised their funds. The implementation of this new requirement has not upset the stability of the banking system.

Starting from 2015, we will increase the minimal capital requirement to 300 million roubles. Today, 304 banks have funds that are smaller than that but they have almost three years to increase their capitalisation. These requirements are designed to enhance the stability of the banking system. We believe that most banks will increase their own funds by 2015.

Vladimir Putin: Excellent. We must do the same in some other industries, for instance, tourism. They should have other procedures and requirements but we must be tough – judging by our banks, this increase in capital requirements is making the system more stable. We must keep this in mind in enhancing the performance requirements of other industries, including tourism.

Ms Skrynnik, we are still summing up the results of the last year in agriculture. We had a record beet harvest. What about sugar?

Yelena Skrynnik: Mr Putin, last year Russia produced 5 million tonnes of sugar – a record amount. This allows us to meet our domestic demand of sugar in full, and to export some of it. Credit for this record must go to government support. The programme for the development of the sugar beet sector has been effective and our main task is to balance the procurement and processing of sugar beet.

I'd like to note that this year we are continuing to export domestic sugar – 245,000 tonnes of it. This is also a record. Apart from that, we sell spin-offs, for instance, enriched dried pulp and molasses to livestock breeding farms, and we export one million tonnes of these products. Our export revenues amounted to $290 million. We will continue this work under a new government programme. These measures are also laid out for the period from 2013 to 2020 to help us build on this success.

Vladimir Putin: Good. Thank you.

On February 7, the world marked an event that is acquiring increasing global significance – International Safer Internet Day. This issue is becoming more and more urgent. I'd like Minister of Communications and Mass Media Igor Shchegolev to comment on this event and current developments in this sphere. To the best of my knowledge, the UN has, unfortunately, compiled some negative statistics. This includes mandatory compliance with standards which we’ve discussed, and which are linked with efforts to promote online freedom… What’s going on there in the context of our obligations to promote security and in the context of international organisations’ statistics?

Igor Shchegolev: Obviously, many positive developments are linked with the internet. But we are also aware of the various threats and risks that run through it. This includes online crime, an absolute evil recognised by the entire international community, as well as the spread of child pornography, a crime against children. Some unfavourable statistics have been posted in this respect. The UN estimates that Russia, the United States and Thailand lead the way in this negative development. Russian and international analysts estimate that the number of online materials with child pornography has increased 25-fold in the past ten years. Consequently, the number of child abuse cases has soared by a factor of 30. Surely, the state and society must pool their efforts to deal with this evil.

A year ago, on February 7, 2011, we established the public association, Safe Internet League, comprising representatives of public organisations, the public in general, major communications operators, content providers, security agencies and representatives of the federal assembly. This public association was established to facilitate a discussion of such measures and to implement them within a public organisation format. We can say that this struggle is already yielding its first results. In the past 12 months, about 10,000 online resources containing illicit materials directed against children have been shut down in Russia. One hundred and fifty is only the beginning of the materials which contained elements of drug propaganda. Apart from waging an online struggle, we are doing the same outside the internet. Notably, these public organisations and information from individuals has made it possible to expose a major pedophile ring in Russia. That ring included over 130 people. The ring-leaders have already been arrested and will be brought to trial.

Additional measures, which can be implemented, have been discussed. Notably, they are proposing various approaches like the introduction of so-called white and black lists. White lists are also known as the children’s internet. They comprise software and resources which have been accredited and certified by parent and teacher associations, as well as the associations of educators and psychologists. They are harmless for children. Also, Russian companies have already started providing services like the parents’ internet. Viewers can feel confident that these resources lack any negative content which might adversely influence their children. The introduction of so-called black lists is needed to promote this work all over the world. This includes resources which run counter to legislation and moral rules. Government organisations and NGOs pursue these issues in many countries. In Russia, we have discussed this issue for 12 months, and we have decided that this should be a self-regulatory organisation pooling the efforts of the most diverse parties to this process, including investors and parents. Right now, such a bill is being… The bill was drafted by the Safe Internet League with input from the public. It will be submitted to government analysts for further assessment. We hope to submit the bill in the near future and to prepare proposals regarding any specific Russian organisation, which might take on this issue, to cooperate with foreign parties on an equal footing and to pool efforts with them.

Vladimir Putin: Negative developments, which, doubtless, exist everywhere, including the internet, should not be used as a pretext for curbing online freedom. To prevent this from happening and to enable society to shield itself from these negative developments, all actions in this effort should be as transparent as possible. They should be undertaken and worked out together with the online community. I hope that work will be conducted along precisely such lines.

Mr Braverman (Addressing Alexander Braverman, director general of the Federal Fund for the Support of Housing Construction), a resolution on approving a list of individuals who can join housing construction cooperatives has been signed. This document has been drafted by you. Could you say a few words on this issue?

Alexander Braverman: Mr Putin, the basic category includes scientists, engineers and technicians, military personnel serving on contract, employees of state unitary enterprises involved in high-priority programmes and families with many children. In all, there are seven categories. These categories receive three basic benefits. They get land plots, the required infrastructure and a standard project regarding their use free of charge. Analysts agree that this makes it possible to save 30% on construction costs. Other cost-cutting measures are linked with the entire life cycle of flats, the ownership of these flats, to be more exact. Analysts say this also accounts for an additional 25-30%. This makes it possible to cut costs a great deal. Considering the environmental safety and energy efficiency requirements, this will ultimately prolong human life. We have a roadmap for our subsequent actions and have already drafted a standard charter for such housing cooperatives, which has been coordinated with the concerned ministries and departments and forwarded to the Justice Ministry. We hope it will be submitted soon to the Government Staff and approved.

Mr Putin, we suggest that to enhance this project’s efficiency it should be transferred from the federal to the regional and municipal levels and that the regional authorities should be directed to adopt corresponding enactments adjusted to the said resolution. This will allow us to move the project all the way down to the municipal level.

Second, the federal authorities and state academies of sciences should quickly compile the list of those who have the right to become a cooperative member. Land plots have been issued to us for this purpose; there is high demand, and we know what to do next.

Vladimir Putin: Good. Colleagues, the measures we are applying in some areas have allowed us to achieve significant results, such as the considerable decrease in the mortality rate. Last year we recorded a 3.5% decrease, on average, in the mortality rate. Ms Golikova, (Tatyana Golikova, Minister of Healthcare and Social Development), will you provide the details, please?

Tatyana Golikova: Mr Putin, colleagues, last time we said that the Federal State Statistics Service had provided preliminary data about the decrease in the mortality rate. They have been confirmed for the whole nation. We now have information, collected jointly with the statistics service, about the causes of mortality and also data on the decline in the mortality rate by region.

I would like to say that apart from a decline in the overall mortality rate, we can also report a 2.7% decrease in the infant mortality rate in 2011. Infant mortality rates are lower than the country’s average in 46 regions and are close to or even lower than in Europe in 23 regions. I would like to mention some of them – Chuvashia, the Tambov Region, St Petersburg, the Sakhalin Region, Komi, Tatarstan and the Belgorod Region, where the rate is 3.5-5 per 1,000 live births.

Vladimir Putin: Is this figure like in Europe or better than in Europe?

Tatyana Golikova: Better.

Vladimir Putin: Better than Europe?

Tatyana Golikova: Yes, in some regions. We can also report positive results for routinely monitored mortality causes, including those entered in the healthcare modernisation programmes such as cardiovascular diseases, cancer, traffic accidents and tuberculosis. The mortality rate for cardiovascular diseases has decreased by 6.2% compared to 2010. Very good results have been reported in the Ivanovo Region, where the rate fell 23.6%; the region has been doing very well in this respect and is even improving its operation. The decrease in the Saratov Region is 17.5%, in the Lipetsk Region 11.7%, in Tatarstan 11.5%, and so on.

The rate of traffic fatalities has decreased by 5.8% across Russia and by 39% in the Ryazan Region. As for the Trans-Baikal Territory, which you pointed out had long stretches of road without communities or medical facilities, we tackled the issue jointly with the territorial government, and they showed very good results in 2011: a 29.5% decrease in the mortality rate. The rate in the Republic of Adygeya, the Primorye Territory, the Voronezh and Moscow Regions is above 10%. Our cooperation with the Interior Ministry and the Emergencies Ministry has helped cut accident response times and has speeded up emergency and clinical assistance, which helps save lives.

We have the best oncology figures in 15 years: the decrease in 2011 was 1.1%. Mordovia is the absolute leader in this respect: its cancer mortality rate fell by 12.2%. The decline in the Tambov Region is 8.2%, in the Vladimir Region 4.7%, etc. There are many such regions, which is good; it means that we are gradually, even if not rapidly, developing the right system for medical assistance in terms of sequence.

And lastly, about tuberculosis: we can report a major decline in the mortality rate, 7.3%, in this sphere too, but in other regions, not the ones I mentioned above. The decrease in the Penza Region, the Republic of Komi and several other regions is 25%.

We researched one more cause of mortality: alcohol poisoning. The mortality rate for this fell 18.8% compared to 2010. We will know the details by late March.

Vladimir Putin: Good. But we need to keep up or even intensify our efforts in these areas. All measures that lead to such an outcome should be analysed. We need to understand the things that work most effectively and keep using them in the future. Thank you.

Before we move on to the other items on the agenda, I’d like to say that our colleagues, some of whom are present here, and I, along with business associations, have been focusing in detail on how to improve the investment climate in Russia. I suggest that today we take stock of our joint efforts in this area.

As you may recall, the Delovaya Rossiya convention was held in late December 2012, followed by the Russia 2012 forum and the meeting of the supervisory board of the Strategic Initiatives Agency. Today I met with businessmen at the Russian Union of Industrialists and Entrepreneurs. We discussed specific steps and initiatives designed to establish a truly competitive business environment in our country. Our task now is to bring it all together, start working and enshrine these measures in government resolutions and laws. Colleagues, please take note of this. I believe that we can work through all the necessary documents. Draft decisions should be submitted to the government by April 30. I’d like the Ministry of Economic Development to coordinate this work between the various ministries and departments.

Next. Today we will listen to a report about regulations on regional electricity tariffs in 2011. Last year, electricity bills for households went up by less than 10%. OK, there were tariff spikes in certain regions, but tariff increases in Russia averaged around 10%. This suggests, and I want to emphasise this, that we managed to stay within the planned targets. At the same time, almost 30% of the 11,000 decisions that were made by regional authorities in this sphere prompted perfectly justified questions on behalf of the Federal Tariff Service. The disputed decisions include instances of excessive increases in tariffs and unsatisfactory investigation of complaints by inordinately inflated staff.

I believe that the state should have more effective prevention and control tools in this sensitive area, and electricity pricing should be transparent. By the way, during today’s meeting, businessmen brought up this issue many times saying that any and all attempts to dip into customers’ pockets should be nipped in the bud. Therefore, I would like to see the administrative liability for violating tariff regulations to be increased. Staffing regulations should also be reconsidered. I’m referring to streamlining the number of employees at the bodies involved in the regulation of regional markets and disciplinary measures against executives whose performance consistently falls short of what is expected.

In addition, we need to revise what information provided by energy companies is available in the public domain and establish adequate public pricing controls in this sphere. We have brought these issues up on many occasions, so I’d like to have this matter seen through to a satisfactory conclusion with the relevant websites set up. Please submit the relevant proposals to the government within the next few months. Do not procrastinate: make sure that these proposals are ready within the next two to three months.

My last point today is on our plans to develop and use the GLONASS system until 2020. Despite all the difficulties facing our space industry, we managed to deploy an operational orbital group in late 2011, and the global navigation system became a reality. The system includes 24 space modules which secure 100% navigational coverage across the globe. We have even more of them now. How many exactly?

Vladimir Popovkin (head of the Federal Space Agency): 31.

Vladimir Putin: Of them, 24 are active satellites. Some of them are being tested; some of them are part of the backup supply. It has taken an enormous effort. Some time ago, I believe it was 2006 or 2007, we decided to allocate additional funds and speed up the creation of this system. Generally speaking, we have managed to fulfill the programme. Let me explain why I said “generally speaking.” Obviously, there are things that need to be improved. In order to be able to keep up with the competition, we need to improve the reliability of these satellites and extend their lifespan. The latest devices do actually meet these standards. They are supposed to stay in orbit seven years now instead of two or three, is that correct?

Remark: It’s seven years this year...

Vladimir Putin: Six or seven years is our goal. We need to improve our work on our land-based equipment. I’d like to draw your attention to the fact that we have already suggested working together with our European partners. They have, in fact, declined our proposal. Nevertheless, we have accomplished this task, and it’s a great result. In fact, this is the world’s second largest global system behind the American GPS system. We have improved signal accuracy many times over going from 35 metres to 2.8 metres. For GPS it is slightly better at 1.8 metres, but these are quite comparable figures: 2.8 and 1.8. In fact, this makes no real difference to the general consumer, but we should still aim to make all our figures better than the American ones. The same applies to the land-based equipment and the implementation of the system, so that it becomes commercially available and economically viable for consumers and the state.

Let’s get to work.