Prime Minister Vladimir Putin chaired a cabinet meeting
22 december 2008
Vladimir Putin's opening remarks:
Good afternoon, colleagues,
As you all must know, we have made a series of decisions to support Russia's banking sector, as well as small and medium-sized businesses affected by the repercussions of the global financial crisis. Let me remind you that the Bank for Development (Vnesheconombank) has allocated 30 billion roubles and provided another 10.5 billion from the federal budget as guarantee funds and micro-credits.
We have vastly supported agricultural engineering by changing our tariffs and customs policies to protect domestic manufacturers. We have allocated an additional 25 billion roubles to Rosagroleasing, the state agricultural leasing company, and implemented a set of measures to support domestic agriculture. The most important decision was without a doubt subsidising between 60% and 80% of agribusinesses' loan interest, and even up to 100% for specific times of investment loans.
We have also made tariffs and customs regulatory changes to protect domestic producers, supported Rosagrobank's capitalisation with 35 billion roubles in mid-2008, and approved the additional allocation of 45 billion roubles for purchasing grain, making interventions, and other operations.
We are currently working on a list of the largest Russian companies, and plan to complete it in the next two days. We'll list around 300-400 companies. Overall, government assistance will be provided to 1,500 companies across Russian regions - including loans, state guarantees, and other formats of support for leading companies, often strategic for their sectors and for the country's economy as a whole.
Finally, we have recently provided extensive support to the national automotive industry. The support included a 60 billion rouble bond issue and loans to leasing companies worth 43 billion roubles at the Central Bank refinancing rate. We plan to set up, or assign to the Transportation Ministry, an existing leasing construction machinery company, where the ministry will have to concentrate at least 40 billion roubles. We also plan to increase vehicle purchases for state needs by 12.5 billion roubles.
There is a new programme that I expect to have a tangible social effect. Of course, everything that we are doing will have a social effect, but the next proposal will have a direct effect; I am referring to our plan to renew municipal vehicle fleets. We will allocate 20 billion roubles from the federal budget for this purpose, and expect regional and municipal governments to provide an additional 10 billion, as has been agreed.
I hope people will see how municipal fleets of passenger transport vehicles and special machinery will be replenished with new cutting edge equipment.
Finally, in 2009 we plan to support Russians who buy cars worth up to 350,000 roubles by co-financing their loans. We'll help them repay two-thirds of the Central Bank's refinance rate.
The current rate is 13%, which means that the government will provide slightly over 8% of the interest rate of a car loan, provided the car costs below 350,000 roubles.
It is certainly important that these measures really work. Let me remind you that we have increased monthly unemployment benefits to 4,900 roubles, channelled additional 50 billion roubles into the employment service to provide volunteer public works for the unemployed if necessary. The list of such works could be extended, too, but it is extremely important that the schemes really reach the target companies and people - in short, that they work.
I have described some of our projects to you, but this clearly isn't all we need to do now. I have listed some of the non-financial sectors. Now we will discuss plans for the defence industry.
Let us look at the draft state defence order for 2009-2011. It is in fact the financial basis for the development of the country's defences that should ensure the combat readiness of the army and navy.
The document we are discussing has been drafted by the Military-Industrial Commission. We need to make final decisions.
In the past few years, we have significantly improved supplies to our armed forces, including components, fuels and lubricants, and other important combat materials and equipment. We have made major plans to equip the army with advanced weapons and hardware, and have set a goal of ordering bulk deliveries rather than unique samples.
As a result, the troops have gained an opportunity to engage in fully-fledged combat training, become more mobile, and better prepared to repel potential threats. These gains should be preserved in the future.
There is one more fact that I'd like to draw your attention to. In the last few years, defence companies often had to co-finance the state defence order either with export revenues or from sales of civilian produce. However, the world economic and financial crisis is fundamentally changing this situation.
Today, the state defence order is a major source of funding for these companies, allowing them to maintain production at a proper level, keep manpower, and continue technical re-equipment.
The Government has drafted the state defence order based on these prerequisites. The funds should be transferred to manufacturing companies as soon as possible, while the Military-Industrial Commission should strictly monitor compliance with deadlines and quality of work. This is the first subject on today's agenda that I'd like to emphasise.
Allow me to now turn to the second subject. We have repeatedly discussed the questions of promoting competition, and today we must decide on submitting relevant drafts to the State Duma.
In the last few months, the Government has been taking systematic anti-crisis measures to support credit institutions and the real economy. I have just enumerated them. However, if our actions are not accompanied by stronger competition, we run the risk of creating the reverse effect - being stuck with ineffective production lines - which would seriously complicate the advance of our economy after the crisis.
The drafted amendments specify the applications, key notions, and procedure of the law on the protection of competition, which will rid business of excessive control on the one hand, and eliminate the loopholes that allow some companies to engage in dishonest competition while not formally breaking the law.
We must also enhance the responsibility of bodies of authority for their actions contradicting honest competition and for giving illegal preferences to "pocket" companies. Those guilty of such transgressions will not only be fined but also disqualified, that is, deprived of the right to occupy government or municipal jobs.
The Government will reserve the right to endorse the rules of discrimination-free access to the services of the natural monopolies, thereby making it possible to establish more just "rules of the game," and prevent abuses in the relevant markets.
I'd like to ask Duma deputies to review these bills as a priority, as soon as possible, to look over them again, together with the Government if need be, and to adopt them.
Let's start the discussion.