18 march 2013

Meeting with deputy prime ministers

Transcript of the beginning of the meeting:

Dmitry Medvedev: Let’s begin our meeting with an important and sensitive issue. It concerns pensions and pension insurance. The Government has adopted a strategy for the long-term development of the pension system (to 2030). It outlines the directions of government policy on pensions, and considers the experience of pension reforms in this country and abroad. We understand that pension funds are a source of so-called long term money that is usually in short supply and is vital for infrastructure projects. The Government’s priority is to guarantee the preservation of pension funds and create reliable and efficient tools for using them. It is necessary to start by taking several legal measures. Mr Shuvalov (addressing Igor Shuvalov), I know you have dealt with this issue. Could you please tell us about these measures and what we should do with these documents?

Igor Shuvalov: Mr Mededev, my colleagues in the Government and me are working at several draft laws. I’m involved in fiscal drafts while Ms Golodets is working on others. We are cooperating and exchanging information with her. At this point we have developed a draft law that will ensure the preservation of money in non-government pension funds. The following mechanism is suggested – if money is sent to the insured person, the non-government fund will create a reserve independently; at the same time non-government pension funds will transfer money to the Deposit Insurance Agency as it is done in banks. We want to use the model of the banking sector with non-government pension funds. If there is not enough money to pay pensions, it will come from the Reserve Fund, a kind of a non-government fund, and if that does not have enough money, the necessary funds will be provided by the Deposit Insurance Agency.

So, no matter what difficulties may be faced by the financial markets, pensioners are insured against risk. They will receive their pensions from non-government funds in any event. Experts say the stock exchanges experience substantial growth in five year cycles. If difficulties occur, they will be temporary and they will be dealt with by the financial mechanisms that are being created. We want to subject this draft to broad public discussion because the operation of all non-government pension funds will affect what you have just mentioned -- the availability of long term money and our ability to spend it on various infrastructure projects.

Dmitry Medvedev: In this case, Mr Shuvalov, we can continue the work on this draft. We can also discuss it in the Open Government.

Igor Shuvalov: Okay. We’ll do this.

Dmitry Medvedev: Once this is done the draft can be submitted to the Governnment.

Igor Shuvalov: We’ll do this.

Dmitry Medvedev: Last week we met with members of the Eurasian Economic Commission. We discussed integration with them. This was a useful conversation – we have cleared up some positions. This is a real priority for us. If you have anything to add to this, then please go ahead.

Igor Shuvalov: Mr Medvedev, we are very busy now, because we need to submit a portion of the agreement on creating the Eurasian Economic Union to the Supreme Economic Council by May 29.

As we reported to you at a Thursday meeting, this work is underway. I cannot say that it's easy, sometimes it is difficult, because it must be based on several blocks of issues. The first and most important one is codifying in law everything that is part of the Customs Union and the Common Economic Space. That’s a lot of regulations. We have worked on this block of documents for several years now and it's time to update them. However, we need to finalise this main codification block and iron out all the differences by May 2014. This is difficult work for each national government in particular. for all three governments, since they will need to reach an agreement on everything.

The articles of association is a separate part of the document, which will regulate membership issues. Currently, the common economic space comprises three members: Russia, Kazakhstan, and Belarus. As you are aware, Kyrgyzstan has publicly announced that it also wishes to become a Customs Union member. The agreement will set forth various stages and options for those who seek to join our integration union. Clearly, full membership will be a gradual process. We are drawing on the experience of the European Union. We will provide our partners – Kyrgyzstan, Tajikistan, and other countries  that so desire – an opportunity to work with us as they seek membership or simply based on a particular status. Together with experts, we will report on this document to heads of states in Astana. We will follow up with fairly complicated work at the level of national governments, since almost every Government member has a stake in these relations, which deal with many social and economic issues. Overall, this agreement will ensure all four freedoms that have classically formed the basis of our Eurasian Economic Union.

We have made good progress in many areas. We have created a common customs area. The Eurasian Economic Commission, our supranational body, has been working for a year now. But we have several unresolved issues with regard to the Customs Union and the Common Economic Space. We will need to resolve these issues in 2013. They are fairly complex, such as the registration of medicines, antitrust regulations and response, as well as visa support issues raised by the Ministry of the Interior. So, this work is underway, and the Government will hold regular hearing on its progress, and we will submit controversial issues to you for consideration.

Dmitry Medvedev: All right. There will be plenty of complicated issues to address. We are discussing this, because such integration unions aren’t easy to form. We have already created the Customs Union, now we are creating a Eurasian Economic Union. There’s much work to do, but I hope that we will be able to draft this document on time.

As for various membership statuses, be it full membership or observer status, these issues should be thoroughly written out in the agreement, all the more so since we know what this distinction is all about. Obviously, the adoption and ratification of all documents of the Customs Union and the Eurasian Economic Union should be a prerequisite for membership in the Customs Union and a future Eurasian Economic Union. Anything less than that is not membership. It could be observer status, or something else. I’m saying this because our Ukrainian friends love to speculate on the 3+1 arrangement, and so on. Three Plus One will never happen. It’s all or nothing. To be a full member you have to ratify and sign all documents.

I have signed a resolution on state support for leading Russian universities. They are quite different in nature. Some are leaders, others are led. Nevertheless, we are allocating 9 billion roubles to these universities. Subsidies will be allocated on the basis of university programmes to enhance their competitiveness. These programmes need to be mobile, modern and effective. It is necessary to attract experts, including, of course, foreign faculty. Of course, we want young university professors engaging in scientific research and research projects stay with these universities. One of our tasks is to ensure that more foreign students are enrolling at our universities, because this is a sign of quality. The Council for Improving the Competitiveness of Leading Russian Universities will be put in charge of this task. Ms Golodets (Deputy Prime Minister Olga Golodets), how do you plan on working on this council?

Olga Golodets: I’d like to say that the resolution which you have signed has a story behind it. The thing is that Russia is quite competitive according to all ratings of the standards of school education. For example, our PIRLS scores (Progress in International Reading Literacy Study) are among the highest in the world. But internationally recognised ratings of university education show that we are not using our traditional competitive advantages to the fullest. Only the Shanghai academic ranking of world universities includes one Russian school – Moscow State University, which ranks 77th. As for the other leading rankings, we are not even among the top 100 universities, which is a shame because Russia used to receive high scores in university education.

We have analysed this situation and have developed measures aimed at helping universities that have the potential to become leaders in the global market of higher education to fortify their positions.

The council that you have mentioned, Mr Medvedev, will act freely, so that any university will be able to formulate its development strategy in accordance with the agenda for joining the global ranking of leading universities.

The council will consist of leading experts from various spheres. The universities that are shortlisted will receive government assistance, above all for the development of their research and technological sectors and laboratories, as well as for inviting foreign lecturers, supporting students and conducting R&D projects. It will provide targeted assistance designed to achieve the first results within the next three years. Our goal is to ensure that at least five Russian universities make it onto all international rankings. It is very important for Russian universities to hold stable leading positions in these rankings. The Russian standards of education must regain leading positions in the world.

Dmitry Medvedev: Alright. Rankings are an important thing even though we know that they are always subjective and that standards of assessment differ. However, we must monitor the global trends. Unfortunately, the fact that our universities are not among the world’s hundred best schools is evidence of problems in the sphere of our university education. We must work to improve this situation.

Olga Golodets: We will.

Dmitry Medvedev: Thank you.