Transcript of the beginning of the meeting: 

Vladimir Putin: Good afternoon, let us begin with Mr Kudrin. You have recently attended the Role of Siberia and the Far East in Global Development conference. Please report on what happened at the conference.

Alexei Kudrin: Mr Putin, the conference was held in Ulan-Ude in the framework of the Baikal Economic Forum.

There were 980 participants, including 39 representatives of various ministries and agencies. The conference was also attended by 49 representatives of foreign governments and companies, including Japan, Korea, and China, which sent prominent, high-ranking officials to the event. There were participants from Europe, as well. Germany, for example, was highly represented with their delegation.

During the conference, several round-tables were held, which focused on various issues related to the development of Siberia and the Far East.

Vladimir Putin: How many times has the conference been held before?

Alexei Kudrin: This is the sixth year that it has been held. It has become a regular event, dedicated to the development of the region.

Some time ago, in 2007, you approved the programme for a comprehensive development of the Trans-Baikal region. In the framework of this forum, contracts have been signed on implementing development projects in the region worth 30 billion roubles.

The conference discussed all kinds of topics, including environment, migration, territorial planning, legislation, and investment.

There were many members of the State Duma, the Federation Council, and representatives of the constituent entities of the Russian Federation in attendance.

Among the participants were 46 constituent entities of the Russian Federation, 45 municipalities, scholars from various institutes of Central and Eastern Siberia. The conference materials and propositions will be published as a booklet and submitted to the Government for consideration. Some proposals deserve our attention. The conference has raised many important issues and proposed ways of resolving them.

Vladimir Putin: You should use these materials in the framework of the Commission on the Far East.

Alexei Kudrin: We will do that. In addition, I have held the first meeting of the Organising Committee on Celebrating the 350th Anniversary of Buryatia's Incorporation into Russia. This is an important event for the region and many people are taking serious preparations for it.

The federal government contribution will be less than it usually is, due to the economic downturn that the country has been facing. Nevertheless, our ministries and agencies have identified and largely coordinated the key organisational issues for the event.

Now, we need to set up the funds allocation procedure and draw up the budget. Overall, however, we have identified all those activities that will require our attention.

Vladimir Putin: Mr Ivanov, several months ago I asked for proposals to be prepared for the support of businesses and organisations which provide air transport services in the Kaliningrad Region. The decision has been taken that this should take the form of subsidies to support the regional budget, but it is, in essence, targeted support for aviation businesses. I know that there are various approaches, but we need to come to a concrete decision.

Sergei Ivanov: Mr Putin, indeed, in accordance with the instruction you issued in April this year, the Finance Ministry of the Russian Federation was asked to consider the possibility of allocating resources, amounting to 4 billion roubles, through subsidies to the regional budget, in this case, of the Kaliningrad Region, to support the capitalisation of the airline company KD Avia.

I can say right now that this airline company is among the ten largest in the Russian Federation, and is developing dynamically, carrying an increasing number of passengers. And this is related to the fact that we are implementing the concept of the development of aviation links and reduction of the air transport burden on the Moscow transport hub.

As you are aware, unfortunately, a large proportion of our internal and international flights continue to occupy the Moscow aviation transport hub. Kaliningrad is a very convenient, successful location for its airport to be used as a hub.

During the last two to three years, major investments have been made towards developing Khrabrovo Airport: its runway has been extended and new aviation navigation equipment has been purchased. Thanks to this, the airport has begun to develop significantly.

But due to financial and economic difficulties, some problems have emerged in relation to paying back loans for the leasing of aeroplanes.

Vladimir Putin: At the company itself?

Sergei Ivanov: At the company itself. We also of course need to note that KD Avia is the only company in the country that comprises two business entities: the airport and the airline company itself.

Providing subsidies to the region means that it is able to acquire a share in the capital. In essence, the administration of the Kaliningrad Region will receive the main share package in this union. And one of the conditions on which this subsidy is offered, is that the two business entities are separated into the airport, which is currently making a good profit, and the aviation company itself, so as to enable it to offer regular routes.

Also if you recall, there were some tense moments in spring when for several days the Federal Air Transport Agency even suspended the company's aviation activity. The Governor of the Kaliningrad Region, Georgy Boos, appealed to you and to the President several times requesting that the company's capitalisation be increased through subsidies.

I held a meeting about this, which involved the participation of all relevant ministries, and the provision of such subsidies to the region was accepted as viable. This has all been agreed in full with the administration of the Kaliningrad Region.

Vladimir Putin: (turning to Mr Kudrin) Mr Kudrin, do you have any objections?

Vladimir Putin: So, today we will adopt the decision to allocate this subsidy of 4 billion roubles to Kaliningrad, in effect, as targeted support for aviation. We are all agreed.

Mr Zhukov, you visited Vologda, and held a meeting there on the state of the labour market. Overall, what is the situation there like now?

Alexander Zhukov: Yes, Mr Putin, we regularly hold meetings in various regions, firstly in order to monitor the situation in the labour market. Secondly, we evaluate the progress of the regional programmes' implementation.

I was in Vologda, and held meetings there. Also, Ms Golikova visited Krasnoyarsk last week.

Vladimir Putin: (to Ms Golikova) When were you there?

Tatyana Golikova: I was there on Friday.

Alexander Zhukov: Overall, one can say that this programme is being implemented actively in many regions. Over the last two months, at first, there was a great deal that was not understood very well, such as how to organise temporary work and re-training. Now all the businesses and local authorities have recognised that these programmes can work effectively, and are actively moving to finance them, and starting work on them.

To date, nearly 60% of the resources that we allocated for this year have already been distributed to the regions and are being used in implementing these programmes. Many regions are already amending the programme. Some of these amendments have now been sent to the Government with the report on the experience in different areas, which helps the population to implement these programmes.

The overall situation, according to the most recent surveys, shows a decrease in the number of registered unemployed, which continues week on week. For the period from 1 to 8 July, layoffs continued - 0.3%. Today, the number of people registered unemployed stands at 2,145,000 people in total.

Incidentally, the latest information we received today is that in June the total wages arrears in the country, according to the cumulative total for July 1, stand at 7.9 billion roubles and decreased by more than 1.5 billion roubles in the last month. Here too there is a definite, positive dynamic.

Vladimir Putin: Two Government resolutions are ready, and I will sign them today. They deal with research universities, procedures for their selection and with the development of the National Research Nuclear University at the Moscow Engineering and Physics Institute (MIFI). Could you please comment on that?

Alexander Zhukov: Yes, Mr Putin. The programme for developing national research universities is a very important undertaking. Indeed, two draft resolutions of the Government have been prepared. One of them endorses a provision on the contest of programmes for the development of universities qualified under the new category of national research universities.

This selection will be based on the analysis of the activities of those universities taking part in the contest, in the last three years, and on their programmes for the contest.

Implementation of the programme for developing national research universities is designed for five years. It will be funded from the federal budget apart from some 20% that will come from other sources. This year, a total of 3 billion roubles has been allocated for this programme. These are the funds available for spending on the contests.

The Institute of Steel and Alloys (MISIS) and MIFI have been chosen without a contest as pilot projects for the programme. There is a proposal to endorse a concrete programme for establishing and developing a national university in MIFI from 2009 to 2017. This programme allocates 200 million roubles for this purpose this year and 400 million roubles a year from 2010 to 2013.

Naturally enough, under the programme the university is committed to deal both with personnel training and serious research in the nuclear power industry.

Overall, this university is the foremost institute in terms of high-tech research. It is serving a whole industry and is bound to occupy a leading place in the world by the end of the programme's implementation. We will continue working on that.

Vladimir Putin: Good.

Sergei Sobyanin: Nine universities in closed cities are being united into one association.

Alexander Zhukov: Not only universities, but also many technical vocational schools. We are creating an enormous conglomerate for research and personnel training all over the country.

Sergei Ivanov: It will also deal with nuclear defence.

Vladimir Putin: The important thing is not to lose control over this process and to make sure that the advantages we count on as a result of this association should work in full measure.

Ms Golikova, what could you say about the use of maternity capital, that is, both lump sum payments of 12,000 roubles and mortgage payments?

Tatyana Golikova: Mr Putin, in late June you signed a resolution on allocating 18 billion roubles to the Pension Fund for lump sum compensations of 12,000 roubles.

As of July 10, we can already sum up the first results. Today, 1,374,500 maternity capital certificates have been issued. Out of this number, 306,000 families have applied for 12,000 roubles, and a total of 48,500 applications have been approved. Now that all normative acts have been prepared, we can start making payments on the first applications.

As for the use of maternity capital for mortgage and interest payments, let me remind you that we have expected 88,000 families to use this right. This will amount to 26.3 billion roubles, and this sum is part of the budget for this year.

As of today, 61,900 families have applied for this use of maternity capital. Applications of 55,200 families have been endorsed, while 48,400 families have already been paid.

As of today, these payments amount to half of the total, or 13 billion roubles. I must say that this programme has proved its worth, and has been progressing intensively.

Vladimir Putin: Mr Kozak, today in the morning, the Regional Development Minister reported to me on the resettlement of citizens from hazardous dwellings, and mentioned the Samara Region among others.

Its administration has bought a considerable number of flats on the market. Regrettably, as it often happens today, not all of these flats fit by size the standards approved by our decisions. They have decided to resettle people from hazardous dwellings into these rather good flats, but by putting several families into one flat. This should not be done. We do not want to return to communal apartments.

Under the programmes of resettlement from hazardous dwellings, we must give people only separate apartments. Needless to say, we have definite standards, and they should be observed.

However, as I have already said, it would be wrong to sell the purchased flats in order to abide by these standards or create new communal apartments. I have already spoken with the Governor on this, and would like you to explain this position to other regional governors.

Dmitry Kozak: All right, Mr Putin, this will be done. However, when there are small deviations, by one or two metres, for instance...

Vladimir Putin: Yes, I think that the law enforcement bodies and we should adopt an informal attitude to this issue. It goes without saying that it is necessary to monitor these standards, but adjustments are quite possible, considering the situation on the housing market. This is the first point.

Now the second point: while federal or regional structures are doing this either with our direct support or with indirect support of the federal budget, we have sent the same Samara hundreds of millions for the transfer of the social block from the VAZ plants and supplied them with more money directly. This allowed them to purchase these flats with their own funds.

When we are doing this we should primarily consider that the main priority is to purchase housing for people. This is overriding support for the construction companies, important as it is. But this is a less important priority. And it is necessary to buy those flats which fit in with our programmes. Agreed?

Dmitry Kozak: Yes, fine, of course.

Vladimir Putin: Ms Skrynnik, please tell us about the current harvest.

Yelena Skrynnik: Mr Putin, 11 million tonnes of grain have been harvested as of today-4 million of this in the Krasnodar Territory, 3.5 million in the Stavropol Territory, and 2.5 million in the Rostov Region.

The average yield is 3.27 tonnes per hectare. The total is expected to exceed last year's harvest by 7% due to improvements in fuel, fertiliser, farm equipment, timely loans and government troubleshooting in the form of subsidised loan interest, and reduced fuel and mineral fertiliser prices.

The Agriculture Ministry estimates an 85 million tonne harvest-a volume sufficient to supply both domestic and export demand.

Vladimir Putin: Ms Skrynnik, we agreed at a previous meeting that your Ministry will ensure timely grain market intervention. Please don't forget it.

The 25th Summer Universiade finished in Belgrade. The Russian participants have done well, ranking first as a team. Congratulations!

Mr Shuvalov, how are preparations for the Kazan Universiade going?

Igor Shuvalov: Mr Putin, the Organising Committee of the 27th Universiade has met on your instruction, and visited the construction projects.

The list approved for today includes 29 sport facilities and the village-all under construction.

Tatarstan's government received a federal targeted allocation of 7 billion roubles in June, so that all related contracts could be concluded as soon as possible. The government officers showed us electronic tenders. An online format was chosen not only to offer general project contracts for bid but for small jobs as well. The arrangement cuts expenses by 30-40%.

Three large projects will be ready in October-the Tennis Academy, a stadium and the Wrestling Palace, unprecedented in Europe, as its designers say.

All projects must be ready by 2012 for test games.

Athletic training was also on the agenda of the Organising Committee meeting. Mr Vitaly Mutko, the Minister of Sport, Tourism and Youth Policy, said that the Universiade attracted much better teams and individual athletes than before.

China will host the next Universiade. Many experts think they will gather Olympic-level contestants. The Organising Committee must work with the Olympic Committee and my Ministry to arrange Russian student team training at a sufficiently high level by 2013.

We all regard the 27th Universiade in Kazan as a dress rehearsal for the Sochi Olympics in 2014.

We have selected 150 volunteers for the Kazan games. They worked at the latest games in Belgrade, and put on a great show. They will make up the basis of the complete volunteer teams, which have yet to be manned.

We think preparations for the games will meet the deadline however complicated construction might be, if the Sport and Finance ministries work together. The regional authorities will also support, we hope.

Vladimir Putin: Good. Let us turn to today's agenda now.

It includes several essential items.

First, three weeks ago I ordered a bill be drafted on commercial regulation urgently.

Clearly, this law alone will not provide an economically sound and socially just price structure, but it will be a first step in the right direction.

We have consulted, as agreed, members of the State Duma, the Federation Council and professional guilds for the task. Today we should finalise the document. We need to organise civilised, balanced relations along the entire chain from manufacturer to retailer, paying special attention to food distribution, a very sensitive area.

It is necessary to stop discriminating against manufacturers, put an end to belated payments to suppliers, and root out bribery, which the market people politely call "bonuses," and without which even high quality goods in demand have little chance of reaching major retail chains.

On the other hand, manufacturers should learn to comply with the highest standards, to reduce production costs and to increase labour efficiency. For that, new directly applicable legislative norms will be introduced to set deadlines to regulate food delivery payment and ban discrimination against manufacturers. Antimonopoly regulation also needs to be more concise.

I am aware of recent discussions in the Government. If this new law does not provide the tools for antimonopoly enforcement, another new law on competition should. Such tools are a must.

The new laws should also provide self-regulation tools that would allow manufacturers and retail chains to work according to the same rules. The new legislation should also precisely define the competences of the power levels in distribution, and remove redundant administrative obstacles.

We do not expect the bill to solve every problem once it is passed-that would be wishful thinking. But we must take the first step.

Fittingly, the Federal Antimonopoly Service has submitted its annual report on competition in Russia, summarising last year's efforts.

Here are some statistics: 7,247 incidents of unfair competition, abuse of market domination and other misdemeanours were reported in 2008. So, you see, things are far from ideal, and the Antimonopoly Service should not only stop violations of the law but should also promote practical ideas to sustain competition-in particular, through the law discussed today.

The report also shows that there are problems in trade, as well. I mean market domination. We will discuss this issue later.

There is another issue on our agenda, the adjusted Gazprom investment programme for this year.

All our major companies are in decline with falling demand and prices. Gazprom, an independent manufacturer, is no exception. Gas production decreased by 20.8% in the first half of the year.

We are confident, however, that gas purchases will grow in Russia and abroad even in the few next months as the economy improves. As for the long-term prospects, demand for fuel will even surpass pre-crisis levels-and gas is the most important of all fuels. The figures for the opening days of July confirm this forecast, and we should be prepared for an increase.

So we should not give up on our previous plans to develop the gas industry. The Gazprom investment programme should retain such priority projects as developing new fields in Yamal and Kamchatka, diversifying pipeline routes, and increasing the output of liquefied gas.

Gasification of Russian regions will continue. This involves 68 regions, and will require 18.5 billion roubles in allocations. All told, the specified Gazprom investment programme will need 775 billion roubles.

The programme envisages gas conversion in 421 towns and villages.

We will also discuss today one of the key budget planning documents-Guidelines for the Forecast of National Social and Economic Development for 2010-2012. After the Presidium finishes its meeting, we will have another conference on budget drafting.