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Excerpts: Putin At Russian State Council Meeting

December 19, 2007,
The Kremlin, Moscow

Excerpts from Transcript of State Council Meeting on Implementation of the President's 2007 Address to the Russian Federation Federal Assembly

PRESIDENT VLADIMIR PUTIN: Good afternoon, colleagues,

This meeting, the State Council's last meeting for the year, is set to examine the implementation of the 2007 Federal Address's main provisions. We will be looking at the real results obtained so far and the methods and timeframe for reaching the objectives outlined.

As you know, important systemic objectives have been set for the coming years, and our economy's continued growth and increasing competitiveness depend on our ability to reach these objectives, as does the development of a strong social policy centred on the population's interests. This is all important for ensuring Russia's lasting status as a world leader. One of our objectives is demographic development, which includes strengthening the family and rearing a healthy and educated young generation.

The public considers these to be the big issues for our immediate future and the future of our country's people. The public sees in the Federal Address's provisions a working strategy that opens up long-term historical development prospects for our country. In the election to the State Duma on December 2, they gave their support to the political forces that are ready and able to implement this strategy.

We have discussed different provisions set out in the Address at past sessions of the State Council and its Presidium. The Government and the Federal Assembly have carried out a lot of legislative work. The regions, civil society organisations and the country's business community have also made their contribution.

I think that through our joint efforts we have made progress in a whole number of different areas. Living standards are rising, albeit gradually. New opportunities are opening up for people to develop their own potential and take part in resolving the most important issues facing the state today.

The Russian economy is growing fast. The year's results show that our GDP has grown by around 7.6 percent - a decent result. Our possibilities are increasing accordingly.

This year, a number of important institutional decisions have already been taken to implement the priorities set out in the Address. The Development Bank has been set up to finance projects directly linked to making our country more competitive. Modernisation is taking place in high-technology sectors. Overall, more than 600 billion roubles have been channelled into these areas. Technology parks and technology incubation zones are being established now, the modernisation and science priorities have been defined and a fundamental scientific research programme for which more than 255 billion roubles have been allocated, has been approved.

A law on support for small and medium businesses has been passed and we are already seeing the results: more than 700,000 new jobs have been created in the small business sector over the last year.

I would like to draw the attention of the regional leaders here today to the importance of continued serious support for this programme.

I would like to say a few words separately about strengthening the political system. As you know, our central objective was to ensure a democratic election to the State Duma. This task has now been completed. The election saw the highest voter turnout in recent years - more than 64 percent - and the parliament's current membership received the support of the overwhelming majority of voters - more than 91 percent. This means we can expect confident and effective work from the lawmakers.

The principles for the Federation Council's formation were revised during this last year, giving it stronger links with the country's regions. Only people who have lived in a given region for at least ten years will now be able to represent that region in the Federation Council.

Important steps have also been taken in national security and law enforcement, and most importantly, we have begun to resolve the social problems that have built up over decades and that our citizens have encountered in their daily lives.

The decision was made this year that the state would co-finance voluntary pension savings accounts. I note that it is a share of our oil and gas revenues that will go towards this. I think that we should continue to carry out systemic measures to improve pension legislation and I spoke just recently about this at the United Russia party congress.

Looking at our other social tasks, I note that we have established the Housing and Utilities Reform Facilitation Fund with charter capital of 240 billion roubles, 10 billion roubles of which we have already sent to the regions for the repair of old and unfit housing.

Work on the National Projects and demographic policy has been successful. One of the most visible results is the increase in the birth rate and decrease in the death rate. We hope that the organisation of the Year of the Family in 2008 will provide additional impetus for improving the demographic situation. The material and human resources situation is improving in the health sector and healthcare and education sector wages have increased. There is still much to be done to improve the situation for people working in these sectors, especially given the importance these sectors have not only for the national economy but for living standards in general and for the prosperity and quality of life of our citizens.

Work has begun on the Presidential Library and the Russian World Foundation has begun operation. But we still need to put in conscientious and coordinated effort to carry out the other important tasks outlined in the Address. This is all the more important as we need to ensure that housing construction, above all, goes ahead rapidly and is evenly spread throughout the regions. We need to ensure thorough implementation of the transport infrastructure development objectives, raise efficiency in the energy and natural resources sectors and provide incentives for developing high-technology industry and raw materials processing and the manufacturing of finished goods.

We also have the important task of reducing the social and economic development differences between the regions and ensuring a sufficient financial resources base for local self-government. I think that the authorities at all levels must focus their attention on these tasks. We all need to have a clear understanding of exactly what means and methods we will use to carry out these tasks.

Finally, I particularly want to emphasise that the programmes and projects developed to address the tasks set out in the Address should be linked together as single whole. This calls for coordination between the different federal agencies and between the federal and regional authorities.

In conclusion, I would like to remind you that when the State Council was established in 2000, at its first session it examined a genuinely important issue for the country's future, that of defining a state development strategy for the next ten years. Despite the serious difficulties the country faced at that time, we were already thinking deeply about Russia's future development. Today we have all of the political, legal, and economic conditions we need to successfully carry out our strategic plans.

As you know, the Government is in the process of drafting a national social and economic development strategy for the period through to 2020. This document will provide the main guidelines for work by the authorities at every level and will be based on the tasks outlined in the Federal Address.

I am sure that we can and must make effective use of the development targets the state has set and make use of the possibilities we have today to fulfil all of our commitments and promises. Together, we can take new strides forward in making Russia more prosperous and raising the living standards of our people.

I am not going to mention now what we have not yet managed to achieve. We are all well aware of the tasks still before us. Macroeconomic issues continue to be of great importance today. All of us, the government, the governors, the regional leaders, all of us want the country to develop faster, and we are all working to ensure that living standards rise more rapidly, but we need to act wisely. If we trigger a rise in inflation then all of our efforts will have been in vain. We must therefore take a sober and responsible approach to the tasks at hand and stay away from populism. Responsibility towards our citizens is not the same thing as what happened some years back when we all made promises, tried to act when the budget was not in balance, ended up driving entire economic sectors into a dead end and then did not know how to extricate ourselves from this situation. Responsibility towards our citizens requires us to carry on an honest dialogue with the public and take an honest and professional approach to resolving the economic and social issues before us.

Let us then discuss all of these matters today.


I would like to give the floor to Dmitry Anatolyevich [Medvedev] so that he can outline his vision of how he thinks this all fits in with the economy in general.

FIRST DEPUTY PRIME MINISTER DMITRY MEDVEDEV: Vladimir Vladimirovich [Putin], members of the State Council,

The national projects were conceived and have been implemented from the outset as investment in people, but they have also created effective incentives for development in entire sectors of the Russian economy. This positive effect, the multiplication effect, as the economists like to call it, of the national projects is evident. I will cite just a few examples to illustrate it.

Not so long ago, our country produced virtually no latest-generation medical equipment and we had little to choose from when we began upgrading and modernising equipment in our network of medical centres. Today, federal budget investment in the healthcare sector has given medical equipment manufacturers the boost they needed to get on their feet and develop.

In the automobile industry we have a state procurement order, the biggest state procurement order of recent times, for the school buses and ambulances that you just mentioned, Vladimir Vladimirovich. Perhaps the quality of the products is not always ideal as yet, but this is an incentive for the automobile industry's development. The same is true for agricultural machinery manufacturing.

The agriculture national project has without doubt given a boost to agriculture production and, strange though it might seem at first glance, has also given a boost to the banking sector, because when we first began work on the project we discovered to our amazement that the old banking network in the rural areas had all but disintegrated. As a result of the measures we have taken, Rosselkhozbank and other banks now have branches operating in practically all district centres, and this creates the opportunity not only to develop banking services but also to help citizens resolve their day-to-day problems.

In the construction sector we see clearly that the construction materials production industry is undergoing a real boom of late, as the Economic Development Minister just reported. The sector is growing at an unprecedented rate of 15-25 percent a year, and this growth covers both new materials and new technology being used today in the construction industry.

Finally, in education, schools are now connected to the Internet and this means that not only are they part of the international exchange of information, but they have also helped to develop telecommunications in our country. The grants that we accorded to leading universities have encouraged development not only in fields of study that are currently popular but have also brought a new inflow of students into areas such as shipbuilding, energy and information technology. These grants have been used to re-equip lecture theatres and classrooms in the universities.

My conclusion therefore is that investment in the social sphere has had real benefits for the economy as a whole, and I think it would be right for us to continue making this kind of investment.



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