30 september 2008

Prime Minister Vladimir Putin chaired a meeting with the chairman of the Federation of Independent Trade Unions, Mikhail Shmakov

The key areas of the interaction between Independent Trade Unions and the Government, the problems of the development of the pension system and the new wage system in the budget sector were under discussion.
Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, Mr Shmakov.

Mikhail Shmakov: Good afternoon, Mr Prime Minister. It is my pleasure to greet you.

Vladimir Putin: Mr Shmakov, how far has your dialogue with the Government on the key areas of your interaction progressed?

Mikhail Shmakov: The dialogue with the Government has developed rather actively. But it is natural that we should not be completely satisfied with its dynamics. Dialogue is dialogue, but you need to arrive at a decision, after all. Before this meeting I spoke with several ministers about pensions. Even here, in the reception room, we reached agreement on some issues, because the basic parameters of the pension reform have been laid out.

Vladimir Putin: So, you should come here more often.

Mikhail Shmakov: Well, maybe. I will take your remark into consideration.

Vladimir Putin: The colleagues might have told you that we are going to discuss these problems today - namely the development of the pension system to make it stable in the long run.

Mikhail Shmakov: Mr Putin, apart from this, we have fostered the adopted programme of a policy for the labour market. In fact, pensions are one of the aspects of this programme. It gives a fresh impetus to a sound approach to the problems Russia has in the labour market.

But today I would like to report to you on our plans for the near future. We have scheduled a national rally "For Decent Labour", which is part of an international action, on October 7. I would like to tell you about it as well. All these demands are based on those we have already put forward: remember May Day or the action in early September against surging fuel prices. It affects all social groups and commodities prices since transportation accounts for quite a large share in the cost of any commodity. As for civil aviation, many businesses are facing problems. Aircraft fuel prices have skyrocketed 70%, and obviously the pilots and the staff of these companies as well as the passengers suffer.

In truth, many Russian regions have become less accessible; that is why we believe our action - when we sent letters to you and the President - shows that it is high time we took effective measures. It is not enough to simply state that economic regulation of fuel prices will be developed. It is important that it should solve problems. We have lower revenues than Europe and the United States. However, Russian fuel prices have almost exceeded those in America, approaching motor fuel prices in Europe. At the same time the fuel markets do not reflect true oil price dynamics. I mean that when oil prices fall, Russian home fuel prices, unfortunately, stay at the same level. They seem to take their time to surge, but when the cost of oil in external markets soars, home fuel prices rise even higher. All in all, it makes Russians nervous.

Vladimir Putin: They don't just take their time. After an increase, we take taxes that will go to the budget. After a price increase on global markets our budget receives considerable income from the oil sector, but only after some time. Maybe it causes some of this volatility. But I agree - we have to pay special attention to this issue.

Mikhail Shmakov: Of course. And, from our point of view, the state has to control it more, because the oil companies have been increasing dividend payments to their shareholders, while salaries in these companies are quite low. And for some they are lower than in other sectors, which we have not seen in previous years.

Thus, there are many issues that we have to implement using the economic models endorsed by the Economic Development Ministry, especially when German Gref was the ministry's head and when he promised to work out and propose such regulatory measures. And at this point, the Antimonopoly Service also has to pay more attention to possible oil market collusion.

Vladimir Putin: I absolutely agree with you on this issue. You know, we are preparing a package of antimonopoly measures. By the way, it would be good if the trade unions also took part in discussing them.

Mikhail Shmakov: Yes, we are ready to be a part of this process. I hope that after today's meeting, or maybe after a session of meetings on pension reforms, it will be brought up for discussion in the trilateral commission.

Vladimir Putin: Of course it will be. We talked about it yesterday, and we will attend to these issues today.

What do trade unions think about the new wage system?

Mikhail Shmakov: The new wage system in the budget sector has long been discussed by trade unions. They agreed on its main parameters and now it is being implemented.

This, of course, demands the reorganisation of the administration of all institutions, including the introduction of local regulations on wage system at every educational institution, every university, school and so on. We are working together to make the transition to the new system more effective.

Vladimir Putin: Anyway, the issues related to the new wage system - in industry and in institutions - need to be discussed with the trade unions. I ask you to work seriously on this.

Mikhail Shmakov: We will do that. I think the system lacks some common federal objectives.

Vladimir Putin: I want to emphasise that these plans have to be discussed with the trade unions, and to be implemented in real life.

Mikhail Shmakov: I think the reforms will be a universal base allowing every budgeted institution to make amendments or develop these basic procedures. I absolutely agree with you about this.