Transcript of the start of the meeting:

Vladimir Putin: Good afternoon,

First, a few current questions. Let's start with economic issues. The price of oil was about $41 per barrel last week. Oil is one of our major export commodities, and a great deal depends on it. I am talking about our macro-economic policy; budget revenues and expenditure directly depend on it.

We have already sent a draft budget to Parliament, which approved it. The budget was drafted last August, before the crisis. We calculated all parameters proceeding from the price of oil at $95 per barrel. I repeat, now it stands at $41. Moreover, we proceeded from the growth of the world's economy by four percent. Russian economy is part of the global economy, and all the processes taking place in it have a direct effect on us. Therefore, we need to adjust the budget and macroeconomic figures proceeding from the current realities of the world economy and market as regards prices on major commodities.

Ms Nabiullina, what considerations and proposals do you have on this issue?

Elvira Nabiullina: Indeed, the law on the budget was adopted on the basis of the forecasts made before the crisis. However, the situation in the world economy is rather complicated, is likely to remain so in the long term and tends to deteriorate. Both Russian and foreign analysts are lowering the forecasts for the economic growth. The World Bank's most recent estimate is 0.9 percent instead of four for the end of the last year.

Vladimir Putin: More than half of our trade is with Europe. What are the forecasts for the future development of European economy in this respect?

Elvira Nabiullina: Forecasts are very different, ranging from zero to negative figures. We propose to adjust the world economic growth outlook, and to take the pessimistic scenario, that is, minus 0.3% as a point of departure. This is a decline of the world economy based on the new assessments of the recession in the US economy. Our estimates are - minus 2.6% for the world economy, including minus 2.2% for Europe. We are forecasting a negative growth of the US and European economies, and believe that this should be a point of departure for our calculations on the budget.

Now about oil prices. Last year, the average price was $94.4 per barrel, but that was because of the high prices in the first half of the year. During the first 16 days of January the average price was $42.9 per barrel. Now prices are fluctuating, and therefore, we think we should take $41 per barrel as the basic price, although analysts are quoting very different figures ranging from $30 to $70, and even $80 per barrel. This reflects the uncertainty in the oil market, but the forecasts of oil consumption are going down.

On January 16, the International Energy Agency gave its forecasts, including a reduction in the world's oil consumption in 2009. The OPEC also predicts lower oil consumption.

We propose to adjust the forecast proceeding from the declining economic rates of -0.3%, and oil price of $41 per barrel. We'll arrive at certain parameters, including the inflation rate of about 13%. We are fully aware that no efforts should be spared to fight inflation.

The currency exchange rate, with the oil price of $41 and certain prerequisites of the US dollar-Euro rate at 1.4, may be 35.1 roubles per dollar.

These are our estimates under the circumstances. Needless to say, the rate is being regulated by the Central Bank, and much will depend on the price of oil, our main export commodity, and on the balance of payments.

We propose to specify the budget's revenues and expenditures on the basis of these major parameters.

Vladimir Putin: All right. As I understand, if the price of oil rises, these basic parameters will also change, including the exchange rate.

Elvira Nabiullina: And the rouble may become stronger.

Vladimir Putin: All right. Then your ministry will have to adjust the main parameters for the socio-economic development in 2009, and the Finance Ministry will have to amend the federal budget parameters for this year, proceeding from the oil price of $41 per barrel.

Mr Gordeyev, what could you say about the commercial results of the agricultural exhibition in Berlin? It was attended by representatives of many Russian regions.

Alexei Gordeyev: Thank you, Mr Putin. First of all, I'd like to tell you that the Prime Minister's visit of the Russian pavilion at the exhibition evoked a very positive response, and not only among the German colleagues and the Russian delegation, but also among the representatives of the agro-industrial complex of other countries. All in all, delegations from 60 countries of the world participated.

Our section was the biggest at the exhibition, with a total area of 6,000 square metres. We had a whole pavilion there. Twenty-five regions had joint sections; many delegations were headed by Governors. The exhibition will be open until January 25. We are hoping to conclude major contracts with Germany and other EU countries.

I'd like to draw your attention to a historic event in agribusiness. For the first time, a summit of Agriculture Ministers was held at Russian initiative in Berlin on the subject of food safety. A wide range of issues was discussed in this context. The need to increase agricultural production in those countries that do not use their bioclimatic potential in full sounded topical for Russia. This applies to Russia in the first place, especially as regards grain production. We have a great potential there that is the backbone of a relevant five-year programme.

Our proposal on drafting a coordinated global agrarian policy was also approved. We suggested that it should be centred on the World Food and Agriculture Organisation. As you may know, our political leaders have repeatedly made this proposal because agriculture is a comprehensive issue, which also covers social problems.

The third question is the need to maintain the deserving level of investment in agriculture and food production. This primarily applies to international financial institutions, first of all, the Development Bank. We have agreed to make a summit an annual event, and to hold it in Berlin. We think this is the best venue. This meeting was attended by Agriculture Ministers and department heads. All in all, they represent more than a half of the world's population. So, this was a very representative forum.

As I said, the exhibition is sill open, and we receive information every day. It has attracted a lot of expert attention, as well as people from Berlin and all over Germany, and this is important for us. Thank you.

Vladimir Putin: Have you signed any contracts?

Alexei Gordeyev: We'll sum up the results on the 25th or 26th, but at previous exhibitions we signed at least 300,000 roubles worth of contracts...

Vladimir Putin: I think, the figure was half a billion.

Alexei Gordeyev: Yes, up to $500 million.

Vladimir Putin: Good. Mr Ivanov, what could you say about the meeting of the Government Commission on High Technologies and Innovations, and on the meeting of the intergovernmental commission with our Uzbek partners? Are you going to visit Astrakhan again?

Sergei Ivanov: Yes, we met twice with the chairman of the Russian-Uzbek commission on trade and economic cooperation. This took place in the run-up to the President's visit to Tashkent.

We have analysed the development of our trade and economic cooperation with Uzbekistan for the upcoming years. It is going as planned, and we have made good progress in the fuel and energy complex, machine building and transportation. We are planning to promote humanitarian cooperation, which includes the study of the Russian language in Uzbekistan on a broad scale.

As for the Commission on High Technologies and Innovations, we have discussed two major issues. First, the introduction of nanotechnolgies in the production of arms and special military equipment. Second, we have looked at the list of state research centres to establish whether they justify their purpose, both as regards funding, and the introduction of the results yielded by research in specific industries. Two centres were crossed out from the list for failure to conform to the required parameters.

As for my trip to Astrahkan, I'm going there on Wednesday for one day. We are going to hold a meeting there of the Military Industrial Commission on the basis of the Defence Ministry's Chkalov Flying Testing Centre to test the readiness of our grounds for testing new front aviation, or fifth generation aircraft. We are planning to start these tests next year.

I'm also planning to meet with Astrakhan Region's Governor Alexander Zhilkin, and to commission the New Generation sports grounds. Regrettably, there are no sports grounds in the region. It has only 20% of what is required by federal regulations. I hope that these sports grounds will allow children and teenagers of the region to start training seriously.

Vladimir Putin: Ms Golikova, child benefits have been increased on January 1. Are they being paid in full?

Tatyana Golikova: Mr Putin, child benefits are being paid in conformity with the parameters of the approved laws on the federal budget and off-budget sources of financing. They have been adjusted for inflation by 8.5%. The one-time payment on childbirth has been increased by almost a thousand roubles to reach 9,592 roubles. Working women that are taking care of children up to the age of 1.5 years get 7,194 roubles, and those who do not work, receive the benefit which we introduced in the period when we adopted measures to...

Vladimir Putin: Do you mean women who didn't work before childbirth?

Tatyana Golikova: Yes, I mean jobless women. They will receive an allowance of 1,798 roubles for the first child up to the age of 1.5 years, and 3,597 roubles for the second, third, and subsequent children. All in all, 3,024,000 working and jobless women will receive this allowance starting January 1 of this year. They are all covered by Government support.

Vladimir Putin: All right. Would you suggest any changes to the law on state pensions?

Tatyana Golikova: Yes, these changes should tailor the basic law on state pensions to the law on civil service. We should bring all basic provisions of the law on pensions in conformity with the law on Government civil service, improve the relevant legal guarantees, and upgrade the level of pensions for civil servants. We are adopting these measures in conformity with the recently approved anti-corruption package. We are bringing all norms in conformity with it.

We have harmonised the bill with all federal bodies concerned. The relevant funding has been set aside in the federal budget and the Pension Fund. The additional funds amount to about 750 million roubles.

Vladimir Putin: We have some more items on the agenda. We need to submit an agreement with the Government of Belarus on the transit of goods to Parliament for ratification. This document provides for much easier customs and control procedures. Mr Belyaninov (head of the Federal Customs Service) will tell us about it later. New rules will help us increase trade and enhance our economic integration with Belarus.

Also, we need to make a decision on issuing a Government loan to Cuba of up to $20 million. I'd like to note that this money will go to our businesses, because it will be spent to purchase Russian goods for Cuba. I think in the current difficult situation, this will help our real economy.

Finally, we should decide on helping those territories that have been afflicted with natural disasters. I won't list them now. This applies to the Amur Region, the Stavropol Territory, and several others.

Ms Golikova has already reported to us on the first item. Are there any questions, proposals? No? Let's consider this item discussed, and go over to the second one.