Prime Minister Vladimir Putin chairs a meeting of the Government Presidium


"We would like to develop fair and mutually beneficial trade relations with all countries, rooted in pragmatism and free of political bias, discrimination and double standards. These are the principles on which we seek to expand cooperation in international business."

Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, ladies and gentlemen,

Let's share the latest information first. Mr Kudrin will report on the progress made on the consolidated budgets of the Russian regions as of March 1.

Mr Kudrin, please begin.

Alexei Kudrin: Mr Prime Minister, ladies and gentlemen,

In January and February both tax and non-tax revenues remained at last year's levels. Our projection has been correct so far: the revenue base in the Russian regions is holding steady from last year.

Profit tax revenues fell by 2%, while income tax revenues went up 3% in this period. Revenue from all other taxes increased by 16%, while non-tax revenue fell 16%. On the whole, revenues have remained at last year's levels, which means that the situation is stable.

Spending rose 9% during this period. Contracts were concluded and auctions were organised much more quickly, including at the federal level. Wages account for 37% of the overall spending. Investment expenditure remains at the same level. Regional governments invested a total of 37 billion roubles in construction and infrastructure in the first two months of 2010, which is slightly less, a 9% decline from the same period last year.

In total, regional budgets produced a 126 billion rouble surplus for these two months, which is even more than last year, when the surplus was 91 billion roubles.

Only six regions ran a budget deficit in this period, as opposed to ten regions last year. So, the number of regions with budgets in deficit fell during the first two months of this year.

Vladimir Putin: It fell by nearly half, right?

Alexei Kudrin: Yes, from ten to six. We will certainly continue to monitor the situation throughout the year. Current figures show that the situation is stable, and budgets are in surplus. We are supporting this trend through transfers and subsidies from the federal budget. Regional governments have been coping with most of their tasks.

Vladimir Putin: Good, thank you. I introduced to the State Duma the draft law On the Russian Federation's Policy on Compatriots Living Abroad, which was prepared by the government. Mr Lavrov, could you please tell our colleagues more about this draft law and share your comments.

Sergei Lavrov: The Government Commission on Compatriots Living Abroad, which I chair, reviewed the current law. It was passed in 1999, when our capabilities and other factors limited our focus to providing humanitarian aid to our compatriots who found themselves in a difficult situation.

This law has not kept up with the changes of the past 10 years, the more dynamic modern system and Russia's policy with respect to our compatriots abroad. A number of the provisions of the older law are obsolete and need to be updated.

Essentially, the new law seeks to deepen interactions and equal partnership between Russians abroad and Russia. At the same time, we will continue to provide humanitarian aid when necessary. The law is aimed at consolidating Russian communities abroad, protecting their rights and legitimate interests in compliance with the norms of international law, as approved by the United Nations, the Council of Europe, the OSCE and other organisations.

This law also emphasises the preservation of the Russian ethnic and cultural landscape, including the Russian language. To this end, the law suggests enlisting the support of the federal government, regional governments and Russian non-government alliances.

The draft law has been approved by all the necessary bodies. Now that we have signed the relevant documents and the draft law has been introduced in the State Duma, we will request that parliament consider it a priority.

Vladimir Putin: Good. A government executive order has been signed to distribute Government Awards in Science and Technology. There are 40 awards, each worth one million roubles. Mr Zhukov, what more can tell us about this issue?

Alexander Zhukov: Correct, there are 40 awards, including 10 awards in the fields of defence and security. These awards were initiated by the Interdepartmental Council on Presenting Government Awards. A total of 292 people will receive awards for 2009, including 19 full members and 12 associate members of the Russian Academy of Sciences, the Academy of Medical Sciences and other academies.

I would like to emphasise that these awards are given for accomplishments in R&D projects that have resulted in the creation and large-scale application of new-generation technology, devices, equipment and materials. Naturally, these achievements have already been put into practice.

I would like to highlight some of them, for example, innovative solutions in healthcare, the research project to develop a unique spherical thermonuclear unit, and technologies to make textile production more competitive.

Vladimir Putin: And let's add that the recipients of these awards live in different regions, not only in Moscow and St Petersburg.

Alexander Zhukov: Yes, there are recipients from 21 different regions.

Vladimir Putin: Those 21 regions include Udmurtia, the Krasnoyarsk Territory, the Kemerovo Region, the Kaluga Region, the Tula Region, the Tyumen Region and others. Alright.

We also approved a resolution on federal funding, on budget financing for the design and construction of another state-of-the-art medical centre in the city of Dimitrovgrad in the Ulyanovsk Region. Total funding is 13.9 billion roubles, with half a billion for the design alone. Please comment on this resolution, Mrs Golikova.

Tatiana Golikova: Mr Putin, colleagues, these are fundamentally new technologies. This is a state-of-the-art radiology centre. We made an agreement last year with the Ministry of Economic Development. It will be a pilot centre of sorts, and it meets all the criteria for the most modern medical technology. And having completed the design work in 2009, we can now start to build in 2010.

This year, 1.5 billion roubles have been allocated through the federal investment programme, and by 2013 (2012 is the last year of the project) we plan to open this centre.

We're entering a completely new stage, which is based on the fact that we are basically the leader in nuclear medicine now and we have the know-how to effectively treat oncological diseases with the aid of nuclear technology.

A proton centre designated for proton radiation therapy is planned for the centre. This technique allows us to treat tumours in the most difficult-to-reach places without damaging other tissues and organs that are damaged using conventional chemotherapy.

These technologies are only used sporadically in oncological centres, and if we are talking about radionuclide therapy, it is used sporadically in Obninsk and helps just 3% of those currently in need of such medical services.

As for Dimitrovgrad, the choice of this venue was no accident. As you know, it is not far from the Rosatom facility - the Nuclear Reactors Research Institute (NIIAR), which produces all known radioisotopes, which are the basis for all radiopharmaceutical tracers. And last year, when we were designing this centre, we established the necessary cooperation with NIIAR, from the point of view of producing these radioisotopes and processing the corresponding radiopharmaceutical tracers in this newly created medical centre for treatment not only in the centre itself but in nearby clinics that have nuclear medicine departments.

The centre can hold 460 beds. Treatment time ranges from 7 to 10 days, and this is directly associated with the technology being used, which I mentioned. And after applying these technologies, particularly if the illness is in its early stages, those receiving medical care will be able to return to work in about a week and return to a normal life.

The annual volume of medical care provided in this centre will be around 40,000 patients in need of such care. And of course, this will considerably reduce the incidence of oncological diseases, the mortality rate and, most importantly, neglect of this type of illness.

Of course, one centre is not enough for the entire Russian Federation. There is, of course, your directive to open centres in Obninsk and Tomsk. But considering that they are rather expensive, we are engaged in a constructive discussion with the Ministry of Finance and the Ministry of Economic Development regarding a possible construction timeframe for these centres. And, as I already mentioned, we need three of these centres in order to fully meet the demand of the population of the Russian Federation for this modern, state-of-the-art technology.

Vladimir Putin: We allocated money last year for the same centre, did we not?

Tatiana Golikova: We did indeed allocate money for Dimitrovgrad and the design work.

Vladimir Putin: In 2009?

Tatiana Golikova: Yes.

Vladimir Putin: Good. And it was selected specifically because there is a good technological base there?

Tatiana Golikova: Yes. There is a very good technological base there. The NIIAR is right next door. And it is very important that the Ulyanovsk Region itself is encouraged to establish a university town around this centre because this technology will require training for specialists - nuclear physicists and chemists.

We opened two university departments - one in Ulyanovsk and the other at the Obninsk Medical Institute - in order to train the necessary specialists, and by the time the centre opens, these specialists will be ready to begin work there.

Vladimir Putin: I understand, thank you.

Sports fans know that the day before yesterday CSKA pleased football fans with a good game and a win in the Champions League. This is an occasion for us to remember Russia's bid to host the World Cup in 2018.

A bid book must be put together before May 14 of this year. The relevant commission from FIFA plans to come to Moscow in August, and the decision itself will be made in December of this year in Zurich. How is the work coming along?

Igor Shuvalov: Mr Putin, last March Russia made an official request to FIFA to be considered to host the World Cup either in 2018 or 2022. The bidding process is different now, as FIFA decided to accept bids for both championship matches at once, so bidder countries can form coalitions.

We submitted the necessary papers to FIFA in March 2009. In October, you established the organising committee. The bid committee and its oversight council were also established.

Headed by Sport and Tourism Minister Vitaly Mutko, the oversight council includes business tycoons who promote our bid both as sponsors and as football fans.

They are all active in international events. In fact, they have taken all the preparations upon themselves to support our bid later.

As we have said, we are preparing the bid book, which FIFA must receive by May 14. It takes a large team of experts to handle this big job, which consists of a thousand pages spread out over three volumes.

The evaluation committee will start work in August to check every part of Russia. We are ready to receive the committee in all bidder regions. At present, we are working with thirteen cities that want to host the World Cup and are prepared to develop their sport facilities. The committee will either visit all of them or certain ones at their discretion. The success of our work largely depends on how well cities and regions do their work.

We are coordinating work with regions now. And I'd like to emphasise that the responsibility is not only national but also municipal, meaning the cities that want to host the Wold Cup. Regional governors also share this responsibility.

We will have time to prepare the bid presentation after the evaluation committee finishes its work. We need to be ready to give the presentation in Zurich on December 2. High officials from bidder countries usually take part in the presentations.

Mr Putin, you have received a personal invitation to participate. Everyone remembers your work on behalf of our Olympic bid for Sochi 2014. FIFA representatives mentioned it when I met with them, and they hope you will attend.

Work is going according to schedule, and we are complying with FIFA's requirements. There is a problem, however: Russia's sports infrastructure is not on a par with other bidders, and it is standard practice for a bidder country to offer eight standard guarantees regarding infrastructure.

But since Russia doesn't have stadiums of the appropriate class, FIFA insists on an additional government guarantee in case Russian entrepreneurs and regions are unable to create the necessary infrastructure.

We are discussing the matter with the Ministry of Finance now. When ready, we intend to add it to the agenda of a government meeting or a presidium meeting. Mr Kudrin [finance minister], Ms Nabiullina of the Ministry of Economic Development, and I will complete this work in the next ten days.

We will not start our work with the evaluation commission until we obtain government guarantees and settle all the formalities.

Vladimir Putin: It would be better to start working with the commission right away, without waiting for papers to be drawn up. At any rate, you are on schedule?

Igor Shuvalov: Yes.

Vladimir Putin: Good. Now, let us turn to our agenda.

Today we will evaluate the prospects of Russian economic relations with its key partners, meaning the 38 countries that account for 80% of our foreign trade. We are interested in closer trade and investment ties and greater cooperation with these countries.

These countries include such time-tested partners as the CIS countries, Germany, Egypt, India, Italy, the Netherlands, China, the United States, Turkey, Finland, France and Japan, as well as Brazil, Venezuela and other countries with which we have recently begun to expand our business partnership.

Let me emphasise that we have a solid foundation for successful teamwork with each of these countries. This foundation includes bilateral agreements on taxation and investment protection. More importantly, we have mutual confidence and respect for each other's interests.

I believe this approach will yield significant results, as evidenced by our relations with India.

As you know, during the recent visit to New Delhi we, along with our Indian colleagues, noted the unprecedented level of economic cooperation and integration between our countries. From simple trade, India and Russia have moved on to joint projects and a deep partnership even in such sensitive sectors as nuclear energy and defence.

Our relations with Finland, our northern neighbour, provide another example. A case in point: the Russian government takes current global economic problems into consideration and so has shelved the plan to introduce prohibitive rough timber export duties. And we are grateful to our Finnish partners for meeting us halfway on a range of issues.

Our primary goal is to integrate Russia into the global economic system in a way that makes sense and to create the conditions necessary to benefit from our competitive advantages.

We would like to develop fair and mutually beneficial trade relations with all countries, rooted in pragmatism and free of political bias, discrimination and double standards. These are the principles on which we seek to expand cooperation in international business.

Our agenda for today also includes a review of the results of last year's federal target programmes.

This review is necessary to make government investments more effective in the future and so that we can make deliberate and informed decisions on next year's budget priorities.

Let's begin our discussion.

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