Vladimir Putin's opening remarks:

Good afternoon, colleagues.

Thank you for the applause. In turn, I'd like to thank you for your work during this time. This was an intense period – there were many political battles and disputes. Nonetheless, the government was working smoothly, without any mishaps. This was very important. In general, the government must always work as a team, all the more so during major domestic political events, because there are many things that interfere with the normal pace of work. We worked normally, without a hitch, and I'd like to thank you for this.

I'd like to say that we have formulated the tasks for the future and you know this – we have discussed programmes for national development, the social sphere and the economy. Let me repeat that we have set tasks for the social sphere and the economy. In this context we must make certain plans and sound moves.

This is why I have already said and want to repeat that we must start making specific plans of action now, without any delay, and not only for us but also for the future government.

As for the social sphere, I'd like to emphasise once again that we have not formulated anything that could not have been carried out. I'd like to remind you of our tasks in this sphere. Our first and most important task is to encourage the birth of a third child in families. I don't think this measure will cost too much. Let me repeat what I have said in my recent article and speeches. I was referring to the need to encourage families to have a third child in demographically stagnant regions that have registered a negative demographic trend for several years in a row. This is the first point.

Secondly, we must support low-income families – those whose incomes are below the average for a particular region. This support must be targeted. Of course, this will require certain funds, but they will not be excessive and we must spend them if we want to resolve the demographic issue in Russia.

One more important point is to bring stipends for students up to the subsistence level in the regions they live. This level will be around 5,000 roubles in the next calendar year. Of course, this is a big sum. They receive an average stipend of 1,200-1,400 and now it will jump straight to 5,000. I'd like to emphasise again that this support must be more targeted – first, for students that need state support and, second, for students with a good academic record.

I've said it many times and would like to stress that in general we must switch to more targeted support for our people and provide government support for those who need it.

We must bring the incomes of university professors and teachers up to the national average (starting next September) and then double this figure. This is an expensive measure but we will resolve it over the course of several years, notably until 2018 – I have said this in my article on this issue. This is the first point.

Second, we will have to think, of course, together with the public and the Council of Rectors – they agree with this position – how to reduce the number of ineffective universities. We know that their network is extremely large and exceeds what we had in Soviet times. We will have to conduct certain work inside these institutions. Rectors agree with me that many universities have too many teachers for their students. For example, Moscow State University, as its rector said on the record, has one teacher per four students, whereas our norm is one teacher per 10 students.

Furthermore, the ratio between professors and teachers, on the one hand, and service personnel, on the other, is fifty-fifty in universities and this is not a good thing. We must think about this as well. What am I talking about now and why? My point is that the financial expenditures that we will have to make directly from the budget to increase financing should be combined with well-considered measures on streamlining these networks and putting things in order inside these institutions. In other words, we must seek to save money. All this put together – additional resources and saving – should produce a positive effect. I hope we will accomplish this and start working on this now.

Yesterday, we had a conversation at Dmitry Medvedev's place. I think we must allocate an additional sum of up to 1.5% of the GDP for this work. We must also look at the spending we planned for 2012 and in the next few years. Somehow, we will have to streamline spending. I'd like to draw the attention of the Finance Ministry, the Ministry of Economic Development and other departments to the following – we will not violate the principles by which we were guided in the previous years. Macroeconomic stability and policy remain our number one priority. This is why we should think about better tax administration and other measures. We understand this and I would ask you to submit your proposals on this score as soon as possible.

Today, I signed instructions on the timetable of work on the 2013 budget. I hope that the Finance Ministry and other ministries will work (in fact, this work has already got underway) on this timetable without mishaps. We must compile a draft budget by the time envisaged by law and be able to discuss it professionally with State Duma deputies. This is what I wanted to say in the beginning.

Now I'd like to say a few words on the agenda. I'd like to emphasise several issues, primarily those linked with the protection of children and their rights. Today, we must take a decision on Russia's accession to the International Convention on Parental Responsibility and Measures for the Protection of Children. We must improve the protection of rights and interests of children born in marriages with foreigners.

There have been many high-profile scandals that were not restricted to individuals. They spilled over into the media and even poisoned international relations.

We must do everything to protect the interests of children and guarantee the settlement of all these disputes and conflicts by legal means alone.

Thus, the aforementioned international convention will allow us to clearly define parental rights and duties in marriages with foreigners, resolve the issues of guardianship and protect the rights of children to a decent and peaceful life and education.

The next question is linked with protecting the lawful interests of children adopted by foreign families. I'd like to make a reservation from the start that Russian families must have priority in adopting orphans. However, we understand that the modern world also offers other alternatives and adoption by foreign nationals is also possible.

I must say that in the overwhelming majority of cases, children adopted by foreigners find a real new family and are surrounded by loving people. It is no secret that, regrettably, there are also other cases, some of them appalling and simply tragic and even involving the death of children. As a rule, such tragedies occur because the requirements on the adoptive parents are low and because relevant bodies are not authorised to interfere in the fates of adopted children.

Foreign organisations dealing with adoptions must inform the Russian authorities on the fates of adopted children and their adaptation to their new life. But, alas, such agencies are reluctant to cooperate more often than not.

The most effective way to resolve this problem is to conclude legally binding interstate agreements. The first treaty of this kind was signed with Italy and came into effect in November 2009. Today, we will discuss a similar agreement on cooperation with the United States. The agreement provides for a clear-cut adoption procedure – it can only be carried out with the assistance of authorised organisations. Importantly, the child will remain a Russian citizen.

In addition, would-be adoptive parents have to undergo social and psychological training and receive a relevant certificate. The living conditions in a new family will be strictly monitored. Adoptive parents will have to regularly report on the well-being and education of the adopted child.

If problems arise, authorised Russian and American bodies will have the right for prompt interference, up to and including the transfer of the child in question to another family or to return him or her home. I will add that now we are drafting similar agreements with other countries, but let me repeat that we should strive to help most children find new families in Russia. Foreign adoption should become a rare case, an exception driven by necessity.

The next issue on the agenda is linked with the resolution of a systemic problem. We must make more open and effective state and municipal purchases in such a sensitive sphere as pharmaceuticals. We are spending huge funds on discounting medicines and on their purchase for outpatient clinics and hospitals. We must use these funds the best we can. It is important to encourage competition in the Russian pharmaceutical market, all the more so since we have launched a large-scale programme to upgrade our pharmaceutical and medical industry.

Ms Golikova, I think in the first case, the figure is 150 billion roubles and the other one is about 180 billion, correct?

Apparently, the current procedures of state and municipal orders for the delivery of medicines require adjustment. The existing rules allow contractors to resort to all kinds of tricks, artificially restrict the range of suppliers, play up to monopolists and shut the door to independent producers.

There are also high corruption risks in this business. As a result, sometimes contractors buy inferior medicines at excessive prices.

The proposed changes establish a more precise procedure and clearer requirements on the placement of orders.

Let's get to work.