Dmitry Medvedev’s introductory remarks:

Good afternoon. Esteemed colleagues, today we have gathered for the first official meeting of the new government. As has been said, the Cabinet of Ministers has been renewed to a considerable extent, basically three-quarters of it. New people, who were appointed fairly recently or shortly before the government’s formation, are present. But regardless of your level of experience as government members, everyone here has won a reputation as a professional and as a capable manager. I expect this team to work closely and efficiently. Most importantly, I hope the team will not work with long deliberations because the government is the country’s top executive/managerial body and simply has no right to waste time.

I would especially like to note that the new government will be guided in its work by the principles of openness and transparency, and that it will have to cooperate closely with the public as well as rely on expert assessment. All of us work in the interests of the people, and I hope that their constructive proposals will help us in the decision-making process – for this reason the Open Government system is being created.

And now here is my last introductory remark. The government assumes ultimate responsibility for the country’s socio-economic development. This is our common responsibility, and I hope that everyone here has a well considered opinion about it. There is no other agency that can adopt decisions in line with the prerogatives that the government has. I would like you to be guided by precisely this, while making the necessary decisions.

Let’s start discussing the agenda. Today, we will talk about the results of implementing federal budget and extra-budgetary funds in 2011, as well as specific amendments which must be made to numerous legislative acts. I believe that various objectives listed in the 2011 annual budget speech have been accomplished. The budget system is called on to achieve specific results. The 2011 budget was implemented in a well-balanced manner. We eliminated the 2009-2010 budget deficit caused by the financial crisis and attained a budget surplus. This made it possible to preserve macroeconomic stability, to continue the implementation of our development projects, to develop and introduce innovation instruments, to boost the economy’s energy efficiency and labour productivity. This also facilitated some growth in the high-tech sectors, although not the way we wanted it to happen.

What’s especially important is that all our social commitments to the people were fulfilled. This is a key issue. Notably, we provided selective social assistance and specific benefits. All benefits and compensations were paid in line with the established procedure, including pensions, military pay for service members of the Armed Forces, etc.

In 2011, federal budget revenues totaled 11 trillion and 368 billion roubles, which was 2%, or rather 2.2%, higher than expected. More than half of that figure came from sectors other than oil and gas. 

At the same time, budget expenditures amounted to about 10,925 billion, which meant we had a budget surplus of about 0.8% of GDP, which is quite impressive.   

I would like to remind you that in 2009, we had a budget deficit of 6% and in 2010 it was 4%. Last year, about 22% of federal budget expenditures were accounted for by transfers into the Pension Fund. This allowed the government to increase pensions at a rate higher than inflation. Currently, the average annual retirement pension is about 70% higher than the minimum subsistence level for pensioners.     

In addition, approximately 500 billion roubles were allocated from the federal budget to fund priority national programmes, including 208 billion roubles for the Affordable Housing programme, 130 billion for the Healthcare programme, and 120 billion to fund the Defence Industry Development programme.

We also continued implementing 56 federal targeted programmes in key sectors of the Russian economy and in the social sphere. In 2011, 879 billion roubles were allocated from the federal budget to fund these programmes.

However, there are still many problems remaining that need to be addressed. Unfortunately, the level of cash execution of federal budget spending on some targeted programmes is quite low. This is our persisting problem that we have yet to resolve. There have been delays in signing government contracts and agreements with the regions on implementing specific projects envisaged by the federal targeted programmes. There have been violations of the approval procedures on a variety of construction projects. 

We need to establish effective working relations with the regions and all recipients of federal funding. This applies not only to government measures to support the economy and build major infrastructure and social facilities, but also to traditional areas of government expenditure such as public sector salaries and the development of education, healthcare, national defence and security.   

I expect all ministries and government agencies to act in an effective and coordinated manner in dealing with these issues. This applies to all levels of government: federal, regional, and municipal.   

Today we also need to discuss the amendments to the federal laws on non-profit organisations and on the procedures for establishing and using endowment funds of non-profit organisations. These amendments are needed to prepare the appropriate legislative framework for the creation of public television. Public television should become a platform for open discussions on the most pressing issues facing the country and serve as a feedback mechanism between the government and the public.

The other issue that we will discuss today is amendments to the labour legislation. I am referring to the Labour Code and Article 1 of the federal law On Electronic Digital Signatures. It is an innovative draft aimed at simplifying employment relations and extending opportunities for remote employment, which is especially important for people with special needs. It is also one of the government’s priorities, and I would like everyone to remember this.

Next, we will discuss the draft federal law on the ratification of visa facilitation agreements with the United States. This document includes several important innovations aimed at facilitating the issue of visas and extending the duration of stay in the country. I’m sure that this will help improve US-Russian economic, cultural and scientific relations. Ultimately, we expect such draft laws to create the foundation for introducing visa-free travel for our people, visa-free exchanges between people in Russia and other countries.

Today we are also to form the Government Presidium, which will address a wide range of issues. The text of the draft resolution on the composition of the presidium has been given to you.

Let’s get started.