Transcript of the beginning of the meeting:

Vladimir Putin: Mr Zhukov, how are labour market programmes being implemented?

Alexander Zhukov: Mr Prime Minister, first of all, I want to say that we have received an update on the labour market and employment situation. As of February 11, 1,807,000 unemployed have registered with local employment agencies. Unemployment levels have increased by 72,000 in the last seven days.

We estimated nationwide unemployment at 1.6 million, while planning the 2009 federal budget and calculating unemployment benefits. However, current unemployment levels have already exceeded our estimate by 200,000. We are now making the required budgetary amendments in order to pay additional unemployment benefits. Nationwide unemployment may reach an estimated 2.2 million.

Vladimir Putin: We must disburse the required allocations in full. These budget items must be protected completely.

Alexander Zhukov: Yes, that is what we are planning to do. We will make the necessary amendments in this sphere. The employment agencies in the Chelyabinsk, Nizhny Novgorod, Tver, Vologda, Sverdlovsk and Vladimir regions are registering the greatest unemployment increment.

Vladimir Putin: In what sectors?

Alexander Zhukov: Mostly in the iron-and-steel and engineering sectors. This past January, the engineering sector has posted the greatest recession. Demand has mostly plunged inside the chemical, defence and automotive industries and some other sectors.

We recently started monitoring about 2,000 companies and are now looking after 20,000 companies. Over 1,000 companies being monitored by us have either sent their employees on leave or offered them to stay with reduced working hours. As of February 11, 920,000 workers were sent on leave. Their number has swelled by 100,000 in the last seven days. Although these workers have not lost their jobs, we are paying particular attention to them. The programmes mentioned by you include this category of people and part-time workers.

Vladimir Putin: This is fair, and this must be done because these people may face even more serious problems as they are unable to receive unemployment benefits.

Alexander Zhukov: That's the problem. Part-time employment under public-works programmes will provide them with additional earnings that will bolster their wages.

Vladimir Putin: Let's discuss public works separately because what we need is to draft the most attractive proposals in this sphere.

Alexander Zhukov: Yes, we are monitoring this issue, while examining regional public-works programmes, which must stipulate real and worthy jobs. At present, 78 constituent entities of the Russian Federation have submitted programmes worth 23.1 billion roubles. In effect, we have a certain reserve. We have set aside a total of ...

Vladimir Putin: Almost 50%.

Alexander Zhukov: Yes, almost 50%. But we think that these programmes will, doubtless, be expanded because we are not always very happy about their quality. Incidentally, all these programmes taken together will help train or retrain 165,000 people and will create over 900,000 part-time jobs in the public-works sphere. They will provide advanced training for over 10,000 people, university graduates, and will help another 55,000 individuals to start or expand their own businesses. Under these programmes, there are plans to finance the resettlement of 15,000 people. Thirty-eight programmes have been approved to date.

Vladimir Putin: You must expedite their implementation because the labour market situation is changing quickly. People must not face these problems alone. All these decisions must not become entangled in red tape. Is that clear?

Alexander Zhukov: Yes, Mr Prime Minister. The Russian Federation's constituent entities must take part in such programmes, 95% of which must be financed out of the federal budget. Nevertheless, constituent entities must co-finance the rest. Regional budgets must be amended in order to accomplish this objective. However, far from all constituent entities have done this. May I ask you to expedite this process?

Vladimir Putin: This is not a request but a demand. We must do this immediately. Let's start working more intensively in this area.

Alexander Zhukov: So much for the overall labour market situation. I can also say that I have attended a meeting of the Federal Migration Service's Board. Foreign workers and the national labour market are interlinked. Many migrants work here. However, some migrant workers have been leaving Russia in December and January. This is probably a seasonal factor. The number of migrant workers is dwindling.

We have reduced migrant-worker quotas by 50% because many Russians are now facing problems and losing their jobs, and because local companies are also experiencing serious problems.

Although unemployment is rife in some constituent entities, they are requesting additional foreign workers. Naturally, we do not approve of such programmes. In our opinion, it is inadmissible to lay off Russians and to replace them with foreigners. We are monitoring employment programmes in order to prevent such incidents. Of course, we disapprove of such programmes.

Vladimir Putin: Good. Let's go out soon and see how employment agencies are coping.

Alexander Zhukov: Certainly.

Vladimir Putin: Good.