The topics on the congress’ agenda include de-offshorisation of the economy, making business more transparent, enhancing labour productivity, improving labour legislation, and creating a better investment climate.
During the congress, representatives from the Agency for Strategic Initiative, Delovaya Rossiya (Business Russia), OPORA Russia, RSPP and Chamber of Commerce and Industry signed a cooperation agreement in the President’s presence on organising and conducting a national rating of the investment climate in the Russian Federation constituent entities.
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Excerpts from transcript of the RSPP Congress
President of Russia Vladimir Putin: Colleagues, friends,
First, I would like to thank you for inviting me to the congress of the Russian Union of Industrialists and Entrepreneurs.
The RSPP unites leading Russian companies that determine to a large degree the industrial and economic potential of Russia. You are responsible for thousands of employees and for large production facilities. You resolve major tasks and implement complicated projects.
I would also like to note the high authority of the RSPP as a leading business union and its impressive expert capabilities, which we in the Government and the Presidential Executive Office often turn to. We jointly discuss many issues pertaining not only to the economy, but also to social and other aspects of our nation’s development.
You take an active part in drafting legal and regulatory acts, in implementing the national business initiative. Its most important element will be the investment climate rating to be compiled by the National Rating Committee, which will also feature representatives of RSPP.
We can see that you are interested in and support the efforts to promote integration on the post-Soviet space, and we view you as reliable partners. Actually, partners are what we really are.
Representatives of the Russian business community together with their colleagues from Kazakhstan and Belarus have been actively involved in the development of the Customs Union and the Common Economic Space, in resolving practical issues of customs administration, technical regulation and trade facilitation. This was a rather complicated joint effort and we are very grateful to the RSPP for its active involvement in this dialogue, which we will definitely continue within the framework of the Eurasian Economic Union that is now being created.
I would also like to mention the success of the RSPP as the chair of the Business 20. Global leaders were offered the most comprehensive package of proposals ever in the history of the G20, and most of these proposals became part of the final documents of the St Petersburg summit.
Our common goal is to ensure a new quality of our economy, to develop national industry. This is the driving force of long-term economic growth, scientific progress and resolution of social issues. This means new jobs, in other words – a chance for millions of our citizens to use their potential and have a decent income. This also means creating new centres of advanced growth and achieving the overall development of the regions on the huge expanses of our country.
Russia should be competitive in terms of all the key parameters of the business environment. Therefore, we will continue creating the most favourable conditions for investment, for the establishment of new production facilities and for training skilled personnel.
We will provide the necessary support to our companies, including in terms of entering global markets; we will defend their interests using the mechanisms of the WTO and other legal procedures. We proceed from the notion that the competitiveness of domestic business is the cornerstone of the nation’s competitiveness in general.
However, as we have often discussed, entrepreneurs need to understand their responsibility. Our priority stance is that Russian companies have to be registered here, in their home country and have a transparent ownership structure. I am certain that this is in your interests too. This is why we set the task of de-offshoring the national economy and are drafting necessary amendments to the regulatory framework. I believe that we will return to this subject today both in this broad group and in more private discussions after this meeting.
There is one thing, however, that I would like to note. Our goal is not merely to limit the possibilities of using offshore schemes. We know that we will not get anywhere by simply banning things. Our efforts are mainly directed at making Russian jurisdiction more attractive, at improving business climate, strengthening legal guarantees of property protection, and improving the judiciary, including courts of arbitration. We will work on all these issues consistently and I expect to be working in close contact with you as well.
Naturally, once national companies start paying taxes in Russia, once they stop evading any responsibility for this country, this would lead to the growth of overall trust in business in general (I am sure you understand this too), trust in private property and values of economic and business freedom. This is key to the progressive development of our nation.
Thank you for your attention.
Regarding the new mechanisms for releasing employees. You know, I fully understand the logic, especially the logic related to the complicated situation in the economy, both global and domestic. Of course, the labour market has to show flexibility here. However, you also know what a sensitive area this is. Our labour legislation is already much more liberal than in most European countries. Look, for instance, at the labour legislation of the European Union, look at the labour legislation of specific countries, like Italy, for instance. Ours is much more liberal. Such issues need to be resolved primarily by a tripartite commission involving the trade unions, whose main task is to protect the vital interests of the employees. I am aware of the numerous discussions around working hours, and I know that in some industries employees, for instance miners, often ask for more freedom in this area. We have to be very careful here, maintaining a constant dialogue with representatives of the trade unions, directly with those, who represent the employees.
We will, of course, react positively to this. However, we always have to take into consideration the social aspects of this rather complicated issue, and we will do so. I would like you to understand me correctly.
Regarding the creation of the necessary business climate. We have done a lot in this regard, I believe, and what is important – there are results. We have done this together with the RSPP, with the ASI (Agency for Strategic Initiative) and with other business associations. I will repeat: there is progress, there are some positive results.
Naturally, a lot remains to be done. We will work together, because without your direct involvement, without feedback from you on the results of what is going on we cannot be efficient. We can only do this together. We are just as interested in achieving this as you are and we will work together. However, we expect this joint effort to continue.
Now regarding the issue of providing preferential treatment to our producers in the course of state purchasing, purchasing by state companies and so on. As you may know, back in the years of the sharp crisis of 2008, 2009–2010 I actively supported the idea of creating such preferences for our producers. Naturally, we need to introduce the rule that was mentioned here: even Western companies, foreign companies that come to our market have to be localised. This is true.
A procedure is already in effect whereby the price of our producers may be 15% higher and their bids still win at tenders or competitions. I would have made it even higher, but we have our beloved liberal economists (they are widely represented here, among you), and they say: where is the competition? Won’t this influence quality? We need to bear in mind not only the producers, but also the consumers of goods, and this is right. I believe that rather than increase this price hike of 15%, we should think of what you yourself proposed, namely of localisation. We should only let those companies on our market that agree to such localisation. Although, here we could consider some other instruments as well that would help our local companies win the bidding for state procurement and procurement by our state monopolies, infrastructure monopolies. Overall, I believe this is the right approach. We only need to fine-tune our instruments to make sure we do not harm the consumers. We need to think about it.
As for the national rating of our regions’ economic attractiveness, I hope we will continue this effort. I repeat, just as in our other efforts we can only make this work if we do it together.
Thank you very much.