Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon. Let's discuss the social and economic situation in your republic. Please, go ahead.

Sholban Kara-ool: Mr Putin, in April of 2007 you put your trust in me by promoting me to the position of the Head of the Government. Allow me to report to you the results we have achieved and the problems we still have for both objective and subjective reasons.

Needless to say, I'd also like to tell you about the prospects we have, because I believe that the Republic's potential should at this time be used for the Russian economy.

What did we have? Regrettably, the Republic's own revenues at that time were a mere 23%. The average per capita income was 5,127 roubles. The poverty level stood at 50.8%. It goes without saying that an unemployment rate of 22.3% was one of our most serious problems.

What have we achieved in this year and a half? First of all, it was very important to concentrate on the worst problems, define priorities, and reveal the resources that could have been used. During this period, our revenues have gone up to 30%.

Vladimir Putin: They increased by almost 7 or 8%.

Sholban Kara-ool: Yes, by almost 8%. A 40% increase in the profit tax is the main sign of the start of economic recovery. The level of unemployment has dropped to 17%, and the average per capita income is 13,800 roubles.

Vladimir Putin: So, you have reduced unemployment despite the existing problems, haven't you?

Sholban Kara-ool: Yes, this is what the statistics tell us, and we are closely monitoring the situation. I'm pleased to say that the poverty level has been decreased from 50.8% to 33%.

Vladimir Putin: This is the number of people living below the poverty line, correct?

Sholban Kara-ool: Yes, to my great regret. The subsistence level in the Republic is about 4,560 roubles.

We have focused on the energy industry. For our Republic, it continues to be one of the problems. We are tangibly short on energy, and we believe it is the main obstacle to our economic development.

Vladimir Putin: You need infrastructure, and have to develop large-scale projects.

Sholban Kara-ool: Yes. Your resolution helped us attract investors, and we reported about the situation at a Government meeting. We received a Government protocol and are working on it now.

Needless to say, we understand that we should now concentrate on encouraging people to display initiative in stock breeding. We increased support for our agro-industrial complex from the republican budget five times, and received relatively promising results. In 2008, the index of physical volume grew by 113%, reaching 3.900 billion roubles in value terms.

Vladimir Putin: Do you have a normal relationship with the Ministry of Agriculture?

Sholban Kara-ool: Our relationship is rather pragmatic. We have good relations. My hope is that we'll commission a poultry farm in May, and this would be owing to our cooperation with the Ministry of Agriculture. We received a loan.

Vladimir Putin: What about investment?

Sholban Kara-ool: Of course, in comparison with the rest of Russia, it is small, but for us it is rather big.

Vladimir Putin: Where did you receive loans from?

Sholban Kara-ool: We spent 105 million roubles from the republican budget, and Rosselkhozbank is lending us 95 million roubles.

Vladimir Putin: What will the interest rate be?

Sholban Kara-ool: 17%. We think we'll be able to cope with it.