24 december 2009

Prime Minister Vladimir Putin meets with Chairman of Independent Trade Unions of Russia Mikhail Shmakov

The two leaders focused on the situation in the labour market, specifically the activities of trade unions and regional employment programmes.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Shmakov, you and I meet regularly, and in my opinion these contacts are useful. I would like to thank you and your colleagues for your hard work this year, primarily for your efforts to put our labour market policies in order.

It has been a very challenging year that has brought about layoffs of a considerable number of people. But what is important is that trade unions, the government and regional authorities prepared programmes together - and you have played a direct role in preparing all these programmes, both in the capital and in the regions. I think such teamwork had the most positive effect one could expect in this situation.

Mikhail Shmakov: Mr Putin, I would like to remind you that during the very challenging times at the beginning this year, when the crisis was developing and unemployment was at its peak, the monitoring measures we proposed and implemented within the framework of the Russian tripartite commission produced very good results in the most critical areas.

The programmes you mentioned, which were drawn up in the regions and were to be jointly funded, mainly by the federal budget, proved very effective.

Yesterday we held the final meeting of the tripartite commission for this year. All three parties, namely the government, trade unions and employers, praised these programmes highly. We have concluded new agreements, adopted new, necessary regulations in every region and outlined specific programmes. All of this has been effective in decreasing the strain on the labour market. And now we suggest continuing these programmes.

From our perspective, our main goal during this year's downturn has been to mitigate the crisis's negative effects on working people and union members.

Unfortunately, the forecast for the labour market in 2010 is not positive. Despite certain positive trends in the financial market and the somewhat revitalised industrial production, growth in employment will fall behind economic growth.

Next year is going to be very demanding. We are preparing programmes that will allow us to work effectively in 2010 as well.

In this regard, there is an issue we haven't yet agreed upon with the other commission members, and unions believe that this issue requires further discussion.

I am referring to the problem of foreign workforce quotas in the Russian Federation. A relevant resolution has been recently adopted setting an immigrant quota of two million people.

In our view, this quota must be temporarily halved. The second half should not be abolished altogether, but rather, put on hold until the labour market revitalises and new jobs are created. Otherwise, we insist that regional programmes should primarily address the employment problems of the people - in every town, every region and in Russia in general - who were dismissed because their company closed, because there were marketing difficulties, because production fell, and so on.

We are facing a "scissors" problem, for example in the Volgograd Region (I have data on all regions). There they requested a quota of 31,000 people for their programme to employ foreigners. Today there are 32,000 people unemployed people officially registered there, while the total unemployment in the Volgograd Region is 110,000.

From our perspective, the authorities haven't done enough to employ people who have lost their jobs in this region. However, they are requesting this quota. I think that if we change our approach, they will think twice before making such requests; after all these applications were drafted in early 2009, when some people thought that the crisis would soon be over. Unfortunately, the end is not as near as we want, and therefore the applications must be reviewed.

All regions, including the Volgograd Region I mentioned as an example, will also demand funding for this new retraining programme in 2010, in order to organise public works and so on. But we simply cannot understand why they cannot retrain unemployed people for the jobs currently intended for foreign workers.

Therefore I believe that this issue requires more thorough consideration.

Vladimir Putin: Good. You know that we reduced the number of foreigners employed in Russia by half from 2008 to 2009?

Mikhail Shmakov: Yes, I know that. The results were positive.

Vladimir Putin: True, but there are at least two problems here.

The first one is the visa-free entrance to Russia for people from CIS countries. We understand that some people come to visit their relatives, some come for cultural reasons, and others want to work in Russia. This situation is very difficult to administer and control. Nevertheless, we have streamlined this process on the whole. It is the first issue.

The second is the employers' position, which you are aware of. They claim that Russians, even if they temporarily lose their jobs, are often reluctant to take the jobs that are eagerly taken by foreign workers. Russians just refuse to do those jobs. I understand that to a large extent it may...

Mikhail Shmakov: It all depends on the cost of labour.

Vladimir Putin: It may be a self-interested position, and everything depends on the cost of labour. This is why I agree with you on the whole.

During this protracted global economic and financial crisis we must once again look closely at the foreign workforce employment quotas for 2010. In my opinion, we will have to continue reducing them, unfortunately. We need to find optimal parameters.

Let us discuss it in more detail.