Transcript of the beginning of the meeting:

Dmitry Medvedev: Mr Gordeyev, hello again. How’s it going?

Alexei Gordeyev: Mr Medvedev, I’d like to report on the socio-economic situation in the region. You already know the main figures.

Dmitry Medvedev: I spoke with you in the helicopter and you told me some things, but still go ahead please.

Alexei Gordeyev: Our industrial growth index is fairly high.

Dmitry Medvedev: You said it’s the highest in the country.

Alexei Gordeyev: One of the highest – 134%.

Dmitry Medvedev: That is actually very high.

Alexei Gordeyev: The national average is under 103%…

Dmitry Medvedev: Our average GDP growth is 3-3.5%. This is not industrial growth but the average for the GDP growth.

Alexei Gordeyev: They are related. We are making good headway in agriculture as well and will carry out the national project you launched.

Dmitry Medvedev: We launched it together.

Alexei Gordeyev: Yes. We will take the index over 104%. Our retail sales are higher than the national average. This also reflects purchasing power.

Dmitry Medvedev: Your agricultural production has also increased despite bad weather.

Alexei Gordeyev: Yes, we have launched all investment projects. I will make a brief slide show to illustrate that industrial production as the Government keeps saying… It is important to develop the processing industry and ours has grown by more than 30%. Contributions from different industries and equipment…

Dmitry Medvedev: Including the nuclear power industry. I’m referring to the nuclear power station where we are now.

Alexei Gordeyev: Yes, our nuclear power industry became a leader аfter we upgraded the fifth energy unit.

We have about 70 investment projects in agriculture. We are placing emphasis on livestock breeding – the investment is about 100 billion roubles.

Dmitry Medvedev: I see Angus… Are you producing beef?

Alexei Gordeyev: Yes. Our herd should grow to about 70,000 heads by the end of the year. We plan to open a new meat-packing plant with European and American equipment in March 2013, and we will then be able to pack marbled meat...

Dmitry Medvedev: Livestock production and beef in particular are fairly new to our agriculture, and as a former minister you are well aware of this. I just wanted to find out how much cattle you think you can produce in the Voronezh Region with its high-quality black soil and well-developed agriculture?

Alexei Gordeyev: We plan to have about 350,000 heads by 2020 that will be raised on lands that are ill-suited for agriculture, usually in the open air. We will have enough food for them, corn in particular. Today, the Voronezh Region exports about 2 million tonnes of feed.

Dmitry Medvedev: Well, a 350,000-strong herd is about one-eighth of what we need for Russia in terms of livestock production.

Alexei Gordeyev: Yes, but we aim at becoming region number one in this respect. Bryansk is our top competitor.

Dmitry Medvedev: Bryansk? Right, they are doing pretty well in this area.

Alexei Gordeyev: I hope we will be able to outproduce them.

Dmitry Medvedev: I believe they already have about 200,000 heads.

Alexei Gordeyev: But we have the entire chain in place in our region, including a cattle-breeding centre. We have bought from the most advanced US ranch in Montana and flew 1,500 heads into the Voronezh Region. They are on a herd book in the United States, so this is the best herd we could get.

Dmitry Medvedev: This beef must be worth its weight in gold if you brought it in by air.

Alexei Gordeyev: The system is already working.

In terms of salaries, we are doing quite well as compared with the rest of Russia. Importantly, we have a structural capability to resolve salary issues in the public sector. I can show you the numbers, especially since it was your directive to increase salaries for teachers and doctors. The 2012 numbers are as follows: school teachers’ salaries increased by 55% on average, doctors’ salaries went up by more than 28% and social services workers’ salaries are up 22.5%.

Dmitry Medvedev: Will you manage to achieve the target numbers?

Alexei Gordeyev: Yes, we honoured our commitment to the federal Government with regard to teachers, and their average salary will be over 19,000 roubles including...

Dmitry Medvedev: In other words, you are planning to reach 19,000 by the end of 2012?

Alexei Gordeyev: Yes. In 2012, taking into account projections for the average salary in Russia, we should go for 20,000 roubles. At the same time, we will increase salaries for preschool teachers and start paying them 14,500 roubles in late December. In general, we are making headway, though, of course, we have to mobilise all our resources for this. I must inform you that next year we will have to come up with another 4.5 billion roubles to fund all these budget areas in order to able to implement the relevant presidential executive orders.

Dmitry Medvedev: I’m aware of that. In fact, it's not just the Voronezh Region. We need to think about how to support other regions, because each of them is facing its own unique set of circumstances.. Frankly, you are doing better than other regions. Perhaps not ideal, but better. Some regions truly have it hard, because considerable portions of the budget are used to honour relevant commitments. We still need to develop our economy, not just be able to pay salaries. All right, this is not what we are discussing today anyway. Please keep going.

Alexei Gordeyev: The consolidated budget of the Voronezh Region is on the rise in direct proportion to growing output. The region now has its own financial capabilities.

Our labour market, too, is fairly stable with about 12,000 unemployed.

Dmitry Medvedev: That’s even fewer than before the crisis.

Alexei Gordeyev: Yes, that’s correct. We have 15,000 job openings. We are mainly confronted with structural demand problems where we need skilled specialists in particular areas. In accordance with your directive, we are now working on the availability of preschool educational institutions. Simply put, it’s about building and renovating kindergartens. We have 4,500 children aged three to seven on the waiting list. Our goal is to take everybody off this list by renovating existing kindergartens and building new ones. However, we would like the federal Government to support us. We know that the Ministry of Education and Science is in a position to do so. I have drafted a request in your name to that effect.

Dmitry Medvedev: Mr Gordeyev, as you are aware, the availability of places at kindergartens is our top priority. Tomorrow, I'll have a teleconference on this subject with all Russian regions, and we will return to discussing this issue. I may even come up with specific proposals then. As for your ideas, please let me have your papers, I’ll look into them.

Alexei Gordeyev: Thank you.

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