Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon. Mr Basargin, during yesterday's discussion in the State Duma of the anti-crisis measures, many questions were asked regarding the economic and social outlook in the regions. The following issues arose from the discussion: the resolution of regional-based social problems, salary payments and the level of wages paid to different categories of the employed, our efforts in resolving regional-based labour market difficulties, among other issues. Let's talk about these questions today.

Viktor Basargin: Mr Putin, we have prepared a routine report on the economic and social outlook in the regions. As you are aware of, we assess the regions on a number of definite indicators, linked with economic development, the public sector and budgetary matters.
The situation in the regions is not straightforward. Speaking in general terms, unfortunately, there are divergent levels of performance among the regions. There are regions where the economic and social indicators have clearly fallen. And there are those where these indicators are, fortunately, still stable.
In particular, we consider residential construction to be a key indicator. As it happens, you mentioned the increase in the volume of residential construction during your speech to the State Duma. I would say that the market has reacted in an immediate manner. It is very important to us that the market engenders trust and supports stability.

Yesterday we had a meeting with our association of regional Russian banks. They said that they would today be ready to suggest a scheme for the further development of the market.

I would say that, in terms of the housing market, the volume of residential construction in approximately 35 regions is growing, while in 49, it is falling. In fact, if we take the 11 regions with the largest deposits, only two regions of them, the Moscow Region and Tatarstan, have shown some significant growth. The rest of the regions are either experiencing stagnation or decline.

Overall we have had, in two months, little over 101% growth in residential construction, which is comforting news. Given the limited resources mentioned in the State Duma, we are generating a state order of something in the region of 20% of demand. We count on the support of the population, and also of private investors, and we will achieve more than 50 million square metres of housing in 2009.
There are similarly erratic indicators in other areas, such as energy and transport, for example. One possible area of concern could be the serious decline in regional revenue sources, especially tax revenue. Above all, here we are talking about those high earners, those we call budgetary donors. Thus, there is a degree of concern that regions will not have enough money to cover their expenditure, although so far we have not experienced this particular problem. That means the regions are fulfilling all their social duties. There is also concern about wage arrears. In March there was a slight increase here. I know that the regions are taking very serious measures to deal with this.

Vladimir Putin: Do you mean in terms of the economy, or in general?

Viktor Basargin: Both in terms of the economy, and in general. From several hundred for one resident, to several thousand roubles, depending on what they start on. In several regions, which had no such arrears before, we are now beginning to see signs of arrears emerge. This is indeed a worrying sign.
What's more, we also have an increase in the number of workers who are being laid off. Programmes are being developed in the regions, and we are analysing those governmental measures which are currently being taken to stabilise the situation. In general, I believe that all these measures are having a positive effect in the regions. The regional administrations that are, on your orders, now headed by governors, have also developed a plan of action. In this regard, we are also referring to those systematic measures now in effect, which include support for manufacturing, and for credit development. All matters concerning social issues on a regional level are being resolved.

Vladimir Putin: In which regions are the regional staff offices not headed by the governors?

Viktor Basargin: Here the question refers to whether or not the governor formally takes charge of the regional administration. According to our reports and documents, the appointed governor supervises every relevant regional administration, however...

Vladimir Putin: You should verify this, please.