22 march 2012

Prime Minister Vladimir Putin holds government meeting

Vladimir Putin

At a government meeting

“On the backdrop of rather complicated global economic and financial processes, Russia confidently started 2012. The first two months of the year saw positive dynamics in practically all of the key areas and indicators.”

Introductory Speech by Vladimir Putin:

Good afternoon, colleagues. Before starting our work according to the agenda, I would like to focus on some statistical data concerning the present state of the Russian economy. We have just compared the figures with the economic development minister (Elvira Nabiullina, Minister of Economic Development). I must note the positive character of these figures. On the backdrop of rather complicated global economic and financial processes, Russia confidently started 2012. The first two months of the year saw positive dynamics in practically all of the key areas and indicators. Industrial production grew by 4.9% compared to the same period last year, and this February growth accelerated to 6.5%.

An important economic growth indicator is the dynamics of transport haulage. It grew by 6.2% between January and February. Based on a preliminary assessment, investments in the capital assets of domestic enterprises and organisations grew by 15.4% and exceeded one trillion roubles in these two months. To compare, this indicator was minus 2.1% in January 2011 and minus 5% in February 2011. This is the preliminary data for the first two months, seasonal variation inclusive. However, this data is positive.

Construction work is growing as well. Generally, it grew by 9.2% in this area in the first two months of the year. Last year, we had minus 0.3% between January and February. Between January and February 5.9 million square metres of residential housing were commissioned. This is 13% more than in the same period last year.

Inflation is an important indicator of a healthy economy. In recent years, we have done a lot to minimise this indicator. Last year, we achieved the best 6% inflation indicator in the past 20 years.

We decided this year to contain inflation to transfer the tariff hike at the infrastructure monopolies from January to the middle of the year, and also indexed it to the annual inflation rate. Overall, these efforts seem to be producing the desired effect, because inflation since the beginning of the year stands at 1.2%. At 3.6%, it was three times higher in the same period last year, which means that the systemic measures we have taken to restrain the growth of tariffs have helped us to prevent the traditional surge in inflation at the beginning of the year.

There has been positive change on the labour market: unemployment has fallen from 5.7 million people in February 2011 to 4.8 million in February this year. Our goal is to continue this positive downward trend.

A few words on the issues on today’s agenda: we will be discussing the strengthening of the research, technological and innovative potential of Russia’s science cities. There are 13 such cities in Russia with the leading research and production centres aimed at implementing large projects in the priority spheres of scientific and technological development. It should be said that the current procedure for granting state assistance to science cities, as our colleagues often  point out, does not always correspond to modern standards. For example, allocations within the framework of inter-budget transfers are designed exclusively for developing the infrastructure and their size depends on the size of the population in a given science city. Therefore, inter-budget transfers hardly ever take into consideration the distinctive features of science cities and their research development goals. We should convert to a modern logic of state allocations for the development of science cities, replacing per capita funding with project collaboration. I believe that budget allocations should be granted to projects that win tenders, and to practical programmes for the comprehensive development of the research and production centres and infrastructure of science cities. These programmes are to be drafted by the municipalities with the assistance of leading academic specialists and businessmen.

I would like to stress that the crucial task of these projects should be the commercial application of research results and the production of goods based on modern Russian technology. Only in this way can the investment by the government and business be fully justified. Moreover, the status of science cities should be reaffirmed on a regular basis, say every 10 years. Such regular audits would allow us to objectively assess the development standards and prospects of the science cities, thereby creating an incentive for their further development. We will discuss the appropriate amendments to the legislation today. By the way, our practical efforts should not divert us from developing the infrastructure of the science cities, because research projects cannot proceed properly if there are problems with sewage, electricity or roads. We will discuss this issue – the application of the law – later today.

There is one more issue related to the country’s research and technological development: today we will be discussing the establishment of the organising committee of the Moscow International Innovative Development Forum, which will be held later this year. The responsibility for this mission lies with the Moscow City Hall, business associations and the Russian Chamber of Commerce and Industry. This is a good initiative and one we can support. Let’s get down to work.