Transcript of the beginning of the meeting:

Vladimir Putin: Let us begin with the effectiveness of state property management.

Yury Petrov: Our main objective is to improve the effectiveness of state property management. But the trouble is that we have to work on this objective while adjusting to the conditions of a global financial crisis.

Vladimir Putin: But proper asset management is important exactly because of the global financial crisis, and because we are actively drafting a budget for 2010 and the subsequent two years of the planning period. This is why enhancing state property management is so important. I would like to hear what you have to say on this issue.

Yury Petrov: The gauge of efficiency is the profits the state receives from the use of its property or the decisions taken as regards it. In this light, we are spotlighting all actions that can benefit the state, such as our dividend policy and revenues from the lease and privatisation of state property.

Vladimir Putin: How much are you to contribute to the budget this year?

Yury Petrov: We have already contributed around 12 billion roubles.

Vladimir Putin: And how much do you plan to contribute by the end of the year?

Yury Petrov: Around 20 billion roubles.

Vladimir Putin: Did you say you have contributed 20 billion roubles in the first six months of the year?

Yury Petrov: As far as I know, we have contributed some 12 billion.

Vladimir Putin: In other words, you are working ahead of plan, no?

Yury Petrov: Yes, slightly, because this is the seventh month.

Vladimir Putin: But still, you have contributed above the target figure. How do you plan to work next year? What do you expect to achieve?

Yury Petrov: Next year everything will depend on the situation in the financial market.

Vladimir Putin: Good, but I still want to hear your forecast.

Yury Petrov: Well, I think we will contribute at least as much next year as we will have contributed this year.

Vladimir Putin: Are there any ways to enhance the efficiency of your work?

Yury Petrov: Speaking about the lease of state property, we are carefully checking the lease terms to ensure that the price of the leased property is not understated. We expose violations. If property is leased illegally or not at market prices, we withdraw it and lease it to those who promise to provide good revenue.

Vladimir Putin: This is one of the ways to enhance efficiency. Are there others?

Yury Petrov: Efficiency can be enhanced by a more competent management of those companies where the state holds a stake. Much here depends on the state representatives on these companies' boards of directors. We carefully select candidates and are creating a database of candidates for the boards of directors of joint stock companies where the state holds stakes. We are now introducing the practice of independent directors, who act as experts analysing property management by the given joint stock company, including its management of the government's stake.

Vladimir Putin: What relations do you have with branch ministries and departments?

Yury Petrov: Our relations with branch departments depend on their assets - in the case of strategic enterprises - and also on the size of the government's stake in them... All these factors influence our relations. We work hand in glove with some of them, taking their opinions into account - sometimes their opinions prove dominant. And in other cases we take whatever decisions we deem necessary. For example, when considering privatisation of non-strategic enterprises where the government holds a considerable stake, we select our representatives with a great deal of forethought and monitor these enterprises very closely.

Vladimir Putin: How effectively are the branch ministries and departments managing their property? Do they act in harmony (with you), and do they invest sufficient funds in the development of enterprises within their sphere of responsibility? Do you control their efforts?

Yury Petrov: Yes, we do, and I can assure you that the answer cannot always be the same, because some ministries and departments are working well, while others do not give proper attention to these issues.

Vladimir Putin: All these enterprises - federal state unitary enterprises and other such enterprises - have been issued state property for management, but they are commercial enterprises and their goal as such is to derive profits. Isn't there a contradiction between the task of maximally effective management of state property and the objectives of a commercial organisation?

Yury Petrov: Yes, there is a contradiction, and our policy in this case should have the following goals: get rid of ineffective federal state unitary enterprises, which are focused on commercial operation in disregard of state interests. We seek to transform these enterprises into joint stock companies or incorporate them into vertically integrated structures.

Vladimir Putin: We should thoroughly analyse events in the sphere of state property management, using the assistance of not only your Agency, but also of the branch ministries and departments. It should be done, with the results summed up and reported to me. How soon can you do it?

Yury Petrov: Within two months.

Vladimir Putin: Good, it means that by October you will analyse the situation and submit proposals on ways to enhance the effectiveness of (state property) management.

My next question concerns the fulfilment of decisions on assistance to small and medium-sized businesses, specifically on the lease of premises to them. The decision was made at the federal level. How are you fulfilling it?

Yury Petrov: We conduct inspections of the use of (state) property. If we see that property is not used for the designated purpose, we confiscate it and turn it over to those small and medium-sized enterprises that require it.

Vladimir Putin: Are there many or few such cases?

Yury Petrov: No, there are few such cases. We have not yet created a streamlined system.

Vladimir Putin: You must do this, because decisions are not made to declare our intentions, but to organise practical work.

I urge you to analyse the situation as soon as possible, and to report to me on possible moves so that people - small and medium-sized businesses and their employees - see that this is not a mere declaration but a real economic policy.