Transcript of the Start of the Meeting:

Vladimir Putin: Good afternoon, Mr Betin. Let's start with the socio-economic situation, the labour market, construction, other economic sectors, and some other issues.

Oleg Betin: All right, Mr Putin. I would like to say that we have carried out your instruction on resettling our compatriots, the Dukhobors, from Georgia. We have built a village for them. Here are some photos (showing photos). We have mixed marriages there already.

Vladimir Putin: How many people live there?

Oleg Betin: Two hundred and thirty people. We have built 98 flats with complete engineering infrastructure for them.

Vladimir Putin: Is it far?

Oleg Betin: This is the First of May Region on the road to Moscow. There is a garden farm there. They have jobs and land - each received four thousand square metres.

Vladimir Putin: How many houses have you built?

Oleg Betin: There are 98 flats in 72 houses. I went there with Georgy Poltavchenko. You made a special instruction for our region. We had addressed you more than once.

We raised money for Tskhinval and decided not to wire it but to build similar houses for them, six all in all.

Vladimir Putin: Have they been built yet?

Oleg Betin: Yes, they have. We have commissioned them. We used local labour to build them.

Now I'd like to say a few words about macro-economic parameters. The crisis affected us at the end of the year but not as much as the rest of Russia. Here are our results in the last two years - the Gross Regional Product (GRP) and agriculture. Industry has been affected. Other figures and investment activity are rather high.

In the last nine years, we have doubled the GRP. When you set us this aim, we didn't think we would be able to reach it, but then we made a serious effort, gradually built up the potential and made it.

To double the gross product in agriculture, we need to achieve its annual average growth of 7.2%.

Last year, we reached the pre-reform level in the scale of agricultural production, the 1991 level. We had the highest results in 1988. The growth of gross production this year was mostly achieved by plant cultivation. Our priority is to develop the agro-industrial complex, processing and cattle breeding. Mr Zubkov and the Ministry of Agriculture are helping us very much.

Our second priority is to build housing. Construction reached its peak in 1989, when we built 500,000 square metres of housing. This year we have built 560,000 square metres and are planning to build even more. We have concrete proposals on this score.

Vladimir Putin: You have a relatively big amount of social housing.

Oleg Betin: That's absolutely right. We have private, commercial, social and economy-class housing.

Vladimir Putin: Are you planning to build more this year?

Oleg Betin: Yes, we are.

Vladimir Putin: How are you going to do this?

Oleg Betin: I'll tell you. We have a special programme for this.

Gasification is another priority for us. We had a programme that you supported. We have gasified 80% of housing in cities, and 57% in the countryside.

Vladimir Putin: Your gasification level is much higher than the national average.

Oleg Betin: We are getting a lot of help. We used to lag behind. Our figure for rural areas was 19%. We systematically worked on this problem according to plans. Gazprom and the Government's programmes have worked well.

Now about the consequences of the crisis. We planned to achieve a 105% industry growth, but reached 101%. The reduction occurred in the last two months. The economic indicators dropped in January but began to grow in February. Growth is predicted for March.

Last year, unemployment went down, but now it is going up. However, the current unemployment level is even below what it was a year ago. A seasonal factor produced an impact on it; tensions grew, and people lost jobs locally, at their companies.

What happened? This black curve (showing a slide) reflects applications for layoffs of workers from enterprises. Its intensity was reduced...

Vladimir Putin: Have you alleviated the problem? I mean considerably...

Oleg Betin: We managed to get rid of January's panic. We made it less intense.

Vladimir Putin: I see.

Oleg Betin: If we hadn't taken measures, panic would have spread spontaneously, and we would have had 4.2%, but we don't.

Vladimir Putin: I see.

Oleg Betin: We have insisted on the transfer of some companies into our ownership. Now we own some companies that employ from 600 to 700 people. A local horse farm, for instance, is our property.

Vladimir Putin: What have you done with the horses?

Oleg Betin: We'll continue to hold horse races in August. We have taken the controlling interest and want to issue shares. We'll keep the interest and give part of shares to the public as charity.

Vladimir Putin: You are not going to send them to a meat factory, are you?

Oleg Betin: There is no need at present, but we'll see later.

Vladimir Putin: You shouldn't do this later, either. Have you established ownership of the farm to turn the horses into sausage?

Oleg Betin: Here you can see the structure of unemployment (showing a slide) as a result of the liquidation of companies and layoffs? Here are voluntary resignations. As you see, the structure and scale have remained practically unchanged. Here are the programmes we are carrying out now. We are planning to create about 8,000 jobs to resolve the problem. First, we will launch the plants that have come to a halt. Second, we'll create new jobs. If the number of vacancies we create exceeds the number of unemployed, the problem will be solved.

Vladimir Putin: Do you have a plan?

Oleg Betin: Yes, of course. It has got underway.

Vladimir Putin: Have you received the funding?

Oleg Betin: Yes, we have received everything.

Vladimir Putin: Good.