Vladimir Putin: Good afternoon, Mr Shaimiev. How are you? What is the situation in Tatarstan?

Mintimer Shaimiev: We are handling it, and there are some improvements. Regrettably, the crisis is the hardest on people who were doing the best before it.

Vladimir Putin: You are right.

Mintimer Shaimiev: Almost 60% of Tatarstan's production is export-oriented, so we cannot hope for the domestic market to give it  any sizable impetus, and we are waiting for global economic improvements.

However, domestic demand is growing, so a part of our commodities find their customer.

We are working on an ambitious project for a petrochemical industrial complex. We have spent 50 billion roubles on it, and commissioning works will start next year. The oil-processing plant will open the first, with 7 million tonne output. As you might know, Russia is improving petroleum cleaning from sulphur. We have decided to launch another, similar project, also for 7 million tonnes.

Russian oil exporters will feel it several years later with an improvement of oil quality.

Construction industry has avoided a bad decline, too. The republic has joined hands with the Ministry of Regional Development for an unprecedented project. Tatarstan will put an end to a funding arrangement on which regional allocations account for only 12.5% of big housing repair costs, the rest coming from the federal purse. Now, our project envisages a fifty-fifty arrangement, the republican and the federal budgets funding a half each. We advanced a proviso as we met with top ministry officials.

Vladimir Putin: I know-the ministry has reported it to the Government.

Mintimer Shaimiev: Our venture concerns housing repair targets for two years, to total 10 billion roubles. Repairs are underway already, and have given Tatarstan a huge number of jobs, so our construction industry is afloat. It is doing all the better with preparations for the World Student Games, which we will host. Thank you for this decision.

Games-oriented construction will start since the second half-year. Besides, we have commissioned close on a million square metres of housing since the start of the year. So, you see, the crisis has not hit the construction industry. On the contrary, I expect an output increase for the whole year.

Vladimir Putin: What about prices?

Mintimer Shaimiev: Our real estate purchases differ from the whole of Russia, to an extent. Mortgaged flats for government-paid employees and young families make 800,000 sq m out of the total 2.2 million sq m of new housing planned for the year.

Government-paid employees and young families are purchasing flats at the fixed price of 22,000 roubles a square metre. That is affordable.

Vladimir Putin: Not bad.

Mintimer Shaimiev: The rest goes on unregulated mortgages or for market prices. They depend on the class of housing, and revolve round 32,000 roubles a square metre.

Housing construction rates have been set by a special programme.

Vladimir Putin: The Ministry of Regional Development and the Defence Ministry have set housing price limits for military officers and social groups entitled to benefits. Is Tatarstan keeping within the limits?

Mintimer Shaimiev: We have even reduced the price by 800 roubles a square metre. As for agriculture, we have not given up any project launched for now. Work on them is going on. We have problems with weather, however. About 40% of our farmland needs rain. I cannot say there is a downright drought-but we would do good with a rain.

Let us go over to the engineering industry now. The KAMAZ Automotive works, which you saw during your latest visit to Tatarstan, has shifted to part-time work. It is not a drastic cut but, anyway, the company sets the number of extra days-off for every month. 

The company has problems with sales. Things are not so bad, however-more than 30,000 lorries will be sold, I expect. I think we will cope with the programme we discussed during your visit.

As for aircraft building, two of the presidential-class liners in the making have been dispatched to the client.

Vladimir Putin: What about radio relay aircraft?

Mintimer Shaimiev: We really did not manage to meet the contract deadline-but then, even suppliers are behind the schedule occasionally, in these hard times.

Vladimir Putin: Was it a bad lag?

Mintimer Shaimiev: Yes, it was bad.

Vladimir Putin: Almost a year.

Mintimer Shaimiev: Yes.

However, oil industry presents the greatest problems for today, though things look a bit brighter now with the world pricing trends and with our ambitions petrochemical projects, as you know.

Vladimir Putin: Is there any progress in negotiations with your Ukrainian partners on the oil-processing plant in Ukraine?

Mintimer Shaimiev: Not yet. Be that as it may, Tatarstan is expanding its oil processing industry, as you know. We have used up 50 billion roubles of oil-processing plant construction allocations, and we will begin start-up works next year. Tatarstan will process 14 million tones of oil then. We have decided to launch another, similar project for 7 million tonnes to get the overall capacity to 21 million tones-so we will hit the target you have posed: oil mined in Tatarstan will be entirely processed in Tatarstan.   

At present, we are processing approximately 40%, and we have good prospects for the future due to your support. There were disputes whether Urals should be exported raw or not. Despite clashing opinions, we are extending the project while we afford it-oil industry is trusted, and gets necessary loans.

Petrochemical industry is really in dire straits despite the interest you have been taking in it, and the spectacular progress we have made. Today, the best, the most technically advanced and the most competitive companies are hit the hardest by the crisis-mainly because their products are going for a song in the market, and because of small demand. Many promising projects have stuck at the start-up stage.

We had been never expected to take such a powerful start in petrochemistry-hence its current problems. But the, it will give us the chance of rapid recovery when the global crisis is over.

Vladimir Putin: What is the situation in social welfare-education, health services and other fields?

Mintimer Shaimiev: The crisis has not affected it in Tatarstan even though average wages have shrunken, many people are working part-time, and 62,000 have lost jobs. Unemployment is subsiding gradually but there are only 30.000 vacancies-not that everyone jumps at them. Personnel retraining is underway. I do not think unemployment will grow now that employers are coming to their senses after they were all adrift when the crisis broke out.

Vladimir Putin: They have found their bearings.

Mintimer Shaimiev: Yes, they have now. Be that as it may, interest rates are getting affordable more or less.