Transcript of the beginning of the meeting:

Vladimir Putin: Mr Gayevsky, as I understand you are in a better position than many other regions. Your situation is stable, and you almost have a budget surplus.

Valery Gayevsky: Yes, but we also have problems.

Vladimir Putin: How are you resolving social issues?

Valery Gayevsky: I would like to remind you that when we met in February, I said that we had compiled an employment programme for 20,000 people. As of today, 16, 500 people have obtained permanent or temporary jobs. I think by the autumn we will have fulfilled all of our commitments on reducing tensions in the labour market.

This is a serious achievement. We have brought unemployment down from 3% to 2.4%, which is within normal limits.

As you rightly said, the current economic situation has allowed us to preserve practically all jobs, especially in agriculture. I have reported to you about that. The main news is that we have successfully completed our harvesting campaign. We did not expect to reach such results. We took in 6.7 million tons of grain, more than we thought we would.

Our resorts are also doing well. There is no decline or unemployment there. It helps people enhance their incomes.

Even in the first seven months of this year, we commissioned 5% more housing than in 2008, before the crisis.

However, we still have problems in industry. It has declined by 3%. The problems are worse at the companies that work with carmakers. In the Georgiyevsky Region we have ARZIL, a company which belongs to Viktor Makushin's Mair Group. Recently, we could have had the same situation as at Pikalyovo, when the owner tried to bankrupt this plant because he had used it as collateral for a project in the Rostov Region. We did not allow him to do this. I invited him for a meeting. We talked and signed a protocol. I told him straight: "Sell the airplane that brought you here and pay the workers' salaries and the taxes." He is thinking about this but I have already turned to the law-enforcement agencies.

This is an obvious case of self-bankruptcy. I think we should do all we can to preserve this plant, which is a major contributor to the budget in the Georgiyevsky Region.

Investment has grown by 20% as compared to last year. Debts on salaries are not high, about 20 million roubles, which is a fraction of a percentage point. We are working to resolve this problem but, regrettably, new companies get into a predicament all the time. We have established tough control over this situation, and we intend to keep it that way.

The demographic situation is positive. Compared to the first six months of 2008, 546 more babies have been born this year. The death rate is falling, whereas the birth rate is going up. Real salaries and wages have grown by 7%. This is not much, but still an increase. Overall incomes have risen by 20%. Some of it is eaten by inflation, and for this reason overall incomes are at last year's level, while salaries have increased by about 7%-8% in real terms.

That is what the situation is like.

Vladimir Putin: What about the occupancy rate at your health spas? Are they are working at full capacity?

Valery Gayevsky: Yes, they are. One of the owners of the Plaza health spa reported that its occupancy rate is 106%. Usually, the occupancy rate is above 100% from June to September. They vacate other premises and put in more beds to host more people. We are very happy about that. In this difficult economic situation, we try to use every opportunity to attract holidaymakers to our spas.