13 january 2009

Vladimir Putin met with Kaluga Region Governor Anatoly Artamonov

During the meeting, Prime Minister Vladimir Putin and Kaluga Region Governor Anatoly Artamonov discussed the results of the year 2008, namely industrial production, car-making and aircraft building, construction, and agriculture.

Transcript of the start of the meeting:

Vladimir Putin: What is the situation in your region? How did you start the year? What problems are you facing?

Anatoly Artamonov: I think that the situation in the region remains stable at the moment.

Vladimir Putin: Could you please tell me in brief about the results of the past year?

Anatoly Artamonov: We did well in the past year, with tangible growth figures almost across the board. The growth rates of our industrial production have gone up by 35%. This figure is the best for Russia. We achieved success in agriculture as well.

Vladimir Putin: How have you achieved this growth?

Anatoly Artamonov: By developing industrial production. We have opened many production lines. As you know, last year we launched the first line of Volkswagen, which has already manufactured 60,000 cars. We also commissioned the lines of Samsung and Nesquik, to name but a few.

We have pursued active investment policy in the last few years. Last year, we set a record of more than one billion dollars in attracting foreign investment. In total, investment in the economy reached 46 billion roubles, including 28 billion roubles last year.

This allowed us to feel rather confident despite the negative trends in the world economy. Incidentally, our production continued growing in December. We registered a 14% increase. This year, we are planning bigger growth by commissioning new production lines. First and foremost, we concentrated on developing production. I'd like to admit that we have also been actively introducing new equipment and technologies at our traditional production lines.

We have considerably raised wages in the region. Today, our average wage is 14,460 roubles. Last year, we increased them by 28%.

Importantly, the number of people living below the poverty line has been steadily decreasing. It has gone down from 45% in 2000 to less than 20% today.

This year, we are planning to retain all of our achievements. We have created an emergency headquarters for the purpose of overcoming the obstacles created by the current negative trends.

Vladimir Putin: Are you heading the headquarters yourself?

Anatoly Artamonov: Yes, certainly. I have also insisted that the mayors of our cities do the same. This is how they are now operating.

At the headquarters, we are not merely discussing some negative examples (we obviously have plants that are reducing production and losing contracts), but are also trying to help them find a way out by learning from the experience of enterprises that are increasing production. We also have them, and in bigger numbers.

The head of Ruukki (a large Finnish company producing metal structures) said with good reason at the Government's meeting yesterday that we should not complain but rather make sure that top managers of different companies have done their best to find contracts. This is what we are doing now.

Vladimir Putin: What about car and aircraft manufacturing? How are the new enterprises doing?

Anatoly Artamonov: Luckily, all investors have confirmed their intention to stick to their investment projects. Volkswagen continues to work actively, and is commissioning another line in January. It will now have one more cycle of car-making, the car body production. Its production area is 150,000 square metres. It has been outfitted with the latest equipment. They maintain that not a single plant in the world today has such equipment. On January 19, Volvo will put a truck-producing plant into operation.

Vladimir Putin: You have raised the question about our decisions on the latter project. We have formulated them, as you know.

Anatoly Artamonov: Yes, I'm very grateful to you, Mr Putin. Your decisions allowed us to implement this project. On January 19, this plant will be commissioned. Needless to say, we would be happy if you could find the time to visit our region on that day, or send one of your deputies. This will be a good production line. We already have a thousand people there.

Vladimir Putin: Are they working there?

Anatoly Artamonov: They have been hired to work at the plant. You will understand that this is very important under the circumstances. The South Korean company Samsung Electronics has also built a rather large production line in the region, and is also expanding its capacities. Our domestic investors are also working, and we are happy about that. The situation in synthetics and metallurgy is complicated today, and I have discussed it with Vladimir Lisin (the owner of the Novolipetsk Metallurgical Group). He decided not to discontinue the construction of the electro-metallurgical plant. This work is in full swing, and we believe that the plant will start working when we plan new projects in this sphere.

Vladimir Putin: What about construction?

Anatoly Artamonov: Mr Putin, last year we built 35% more housing than in 2007, and in 2007 we had a 72% increase. Thus, we added 35% to 72%. We'd be ready, and we are planning to carry out your instruction on building one square metre per person this year. Last year, we commissioned a billion square metres of housing, an all-time record. In fact, we have never done this before, neither in Soviet times, nor in the last few years.

However, it is difficult to say now how this year will turn out, although we are taking measures to make it good, and orient ourselves primarily to the construction of low-rise housing. Last year, we built an experimental village in which young families received dwellings at affordable prices, 18,600 roubles per square metre. This village consists of 200 houses. We have decided to build at least a thousand dwellings under this programme.

Vladimir Putin: Are you helping with housing subsidies?

Anatoly Artamonov: We have signed agreements with contractors that are in charge of the overall construction on these territories. We are offering to do part of the work, for instance, to build engineering networks and communications. In this way, we are providing the builders...

Vladimir Putin: ...with furnished sites.

Anatoly Artamonov: That is their gain. In turn, we demand that they sell between 25% and 35% of housing to young families at the prices fixed for our region by the federal government.

We have established a special non-profit partnership Molodezhnoye run by young people. We do not interfere in their affairs. They decide themselves at their meetings who will be the first in line, and are very enthusiastic about this initiative. At first we were concerned if they would understand us, because we were going to build small dwellings. We then asked young families what payments they would be able to make per month on mortgages or loans received from banks for the construction of housing. When we talked with them (now the wages are higher), they promised that a family would pay between six and eight thousand roubles. Proceeding from this figure, we calculated what house we could build for them. It appeared that it would occupy a mere 36 square metres.

We built a house near a nine-storey dormitory, and gave full families (husband, wife, and child) the opportunity to take turns living there for a week. All those who lived there supported us. They said that living in their own house was certainly better than on nine square metres in the dormitory. We have started building dwellings with an area of 42 and 72 square metres. Some are bigger - 100 square metres. Those who increase their incomes should have an opportunity to move to better dwellings.

Vladimir Putin: This is a very good experience. How is agriculture doing?

Anatoly Artamonov: Our agriculture has been on the rise for the second year now, and we are very happy about this. Participation in the relevant national project was particularly helpful. In the last two years we have built 63,000 ox stalls.

Now we are actively buying cattle for both milk and meat in Europe and America. We have received the Angus cattle from America, which is new for Russia. The cattle are great, and gain a lot of weight. We are planning to continue doing this.

It goes without saying that agricultural production in our region is more complicated than in the black-soil zone, and this is why Moscow companies, for example, did not rush to us. We contacted our own industrial plants and had a friendly talk with them, saying: we helped you get out of the crisis in the 1990s and now you are strong, so please help our farmers. They started buying bankrupt farms. We turned over 180 bankrupt firms to investors, and most of them are now doing fine.

Vladimir Putin: Are you primarily talking about cattle breeding?

Anatoly Artamonov: Yes, in our zone we deal with milk and meat. We wouldn't be able to compete with the Kursk Region in grain production.

Vladimir Putin: What about the labour market? What do you expect in the future?

Anatoly Artamonov: Unemployment is holding steady at 0.6%. This is not much. There are 3,500 registered unemployed. We think that this figure will grow even though we plan to organise barter. The situation in the region is uneven. We have a shortage of workforce in some districts and layoffs in others. One city only has machine building plants and they are not doing well at all. We'd like to offer them work in the construction industry in Kaluga.

Anyway, we expect 2,000 layoffs in industry and construction. The light industry will be the hardest hit.

According to the most pessimistic estimate, 10,000 people may lose their jobs this year, and we've been looking hard for ways to find employment for them.

Vladimir Putin: I understand. This is why you've set up the headquarters you head.

Anatoly Artamonov: Your decision to earmark 47 billion roubles for retraining was very helpful.

Vladimir Putin: 47.3 billion roubles, to be exact.

Anatoly Artamonov: I'm sorry -- 47.3 billion roubles will be spent on retraining the unemployed and helping them receive jobs. We have already submitted a relevant programme to the Ministry of Health and Social Development, and hope for its support. Earlier, we set up retraining centres for car-makers and radio-electronics, and now we should increase their number to help people receive new jobs faster.

Vladimir Putin: We will review your programme as soon as possible, and we'll certainly help you.

Anatoly Artamonov: Thank you, Mr Putin.


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