President of Russia Vladimir Putin: Good afternoon, colleagues.
Today, at this meeting of the Council for Strategic Development and National Projects, we will discuss the current status of reaching our national development goals. We have our colleagues from the Government, the Russian regions and from public and business associations here with us. I would like to recall that these goals have been set for demography, the economy, the social area, infrastructure and many other key branches and spheres. They have been given specific figures and timeframes until 2030.
Why is our work today so important? I would like to make a special point of this. We need this monitoring, this auditing not just for a formal report or simply to compare positions between different departments, but to move forward: we must clearly understand where we are doing a good job and where we are lagging behind and piling up outstanding problems. Proceeding from this operational analysis, we should make managerial adjustments and allocate additional financial and other resources in various areas in order to fulfil our long-term plans that have been laid out, as I said, until 2030.
Such long-term planning is fundamentally important. Our colleagues in the regions say so, and of course, we have repeatedly discussed this at meetings with our industrialists and businesspeople. It is very important for the regions, for businesses and specific companies to know what tasks the state will be tackling tomorrow, and beyond tomorrow, and what technology will be needed, what capacities should be built up, how sustainable and stable orders for products and equipment will be etc., what social and infrastructure facilities will be built and where additional new housing will be needed.
I will start with the basics, the foundation for achieving our goals, notably from the situation in the national economy. Despite the pessimistic forecasts – let’s be honest – that were and are still being made by analysts, primarily in the West, despite all these forecasts, Russia was one of the world’s top five economies in 2022. According to the World Bank, the Russian Federation surpassed the Federal Republic of Germany in terms of purchasing power parity, in terms of economic volume. This is one of the main indicators.
Yes, several months in the middle of last year were extremely complicated for Russian businesspeople, for Russian companies. We know this, and we were overcoming these difficulties together. But economic growth started in the third quarter and the growth rates are quite stable now.
Thus, in the second quarter of this year, the GDP increased by 4.9 percent as compared to the corresponding period of last year. Importantly, higher growth rates were recorded in industries unrelated to the extraction of natural resources, including oil and gas.
In the second quarter, industrial production increased by 6.3 percent, whereas manufacturing industries grew by 11.3 percent.
It is very important to maintain these dynamics in industry, to support investment by companies in the opening of production lines, mastering of new technology and creation of jobs.
I would like to note that there is a target figure in this respect – by 2030 investment should increase in real terms by at least 70 percent compared to 2020. The dynamics here are good – the figures are ahead of the planned targets for a third year running.
Our producers are occupying new market niches, including those that Western companies vacated for us themselves. In turn, the state’s massive investment in infrastructure, in capital facilities and so on are encouraging the investment activity of private businesses.
I would like to note that we will continue working in this direction. This is what government finances allow us to do. The current budget situation is stable overall and poses no risks to macroeconomic stability.
In the second quarter, the federal budget deficit was almost eight times lower than in the first quarter and amounted to 264 billion rubles. In July, the budget balance was 458 billion rubles better than a year ago. We expect the budget for July-September to produce a surplus. For the entire year, spending will exceed revenue as planned – about 2 percent of GDP.
I will repeat that it is necessary to use all the resources of the state and ensure maximum return from all bodies and levels of authority. Their partnership with society and businesses is crucial for reaching national development goals, that is, for achieving real, tangible, visible changes for the better in vital areas of life.
At the previous meeting of our Council in December last year, we detailed the key tasks for the Government and the entire system of state administration for 2023. Let’s sum up some results at the current meeting.
The first task that was mentioned at that meeting was the expansion of Russia’s foreign economic ties with its partners among friendly nations.
For example – in the first half of 2023, our trade with the APEC countries grew by 10.2 percent. Trade with the EAEU countries went up 14.3 percent over the same period.
More and more of our foreign trade transactions are being made in rubles and friendly currencies or currencies of friendly countries. Thus, in eighteen months, the share of ruble in Russian export payments more than tripled – from 12 to 42 percent. Together with currencies of friendly countries, the share reaches 70 percent.
It is important to continue these major systemic efforts to strengthen the payment infrastructure. It should be reliable and comfortable for both our companies and their foreign partners.
Of course, to expand international trade it is important to develop logistics corridors, primarily, via the Azov and Black seas, and in the eastern and southern directions. Over the past year alone, export cargo traffic along these routes has dramatically increased, and all forecasts indicate that it will continue to increase.
It is important that the throughput capacity of infrastructure increases ahead of schedule. Only then, as they become aware of these plans and production capacities, will businesses launch new projects, and our regions and territories will get a boost for the development. The Government has already approved the relevant road maps. It only remains to put them into practice.
Again, it is important to constantly keep an eye on the situation with logistics and move quickly to resolve any problems arising in this area.
Here is a recent example: early this year, the number of import containers waiting to be unloaded in our Far Eastern ports has soared. However, the joint effort of the Government and Russian Railways helped increase the shipment of containers to the European part of Russia, which considerably simplified and expedited the delivery of goods; this helped resolve the problem.
Next, the second objective we talked about was strengthening the technological sovereignty of our country.
To achieve this as soon as possible, several additional mechanisms have been introduced, including the preferential status of industrial clusters, industrial mortgages and a cluster investment platform. Of course, this is a very complicated goal for our economy. We are aware of the tasks that need solutions and we are aware of the areas where we are even lagging behind in some respect. We agreed then that this year, based on this platform, at least 2 trillion rubles would be invested in projects to manufacture priority products in the manufacturing industry. Of course, I would like to hear today how this tool is working and what results it has yielded.
An important issue in this context is ensuring the country’s sovereignty in terms of human resources and training specialists, including in blue-collar professions that are most in demand.
The key mechanism to facilitate this work is the Professionalitet federal project. It covers about 1,000 backbone companies in 24 industries in the real economy and hundreds of colleges across the country. In five years, this project is expected to help at least one million people master modern and much-needed technical professions. At the same time, it is very important to further maintain a close connection between the education system, the industrial sectors and employers.
In addition to that, we have special programmes to improve labour productivity in the economy which is unquestionably one of our key goals. By all means, it is an ambitious goal and the activities under this programme cover about 5,000 enterprises. This is just the beginning, but we are talking about 100,000 specialists who have been trained in what is known as lean production.
Our colleagues note that the programme participants have achieved actual results in terms of increased added value at production sites. Without a doubt, such practices must be expanded and scaled up with the help of the Federal Centre for Competences, among others.
I would like to remind you of the instructions to make this federal centre part of the efforts to implement AI technology and the latest management systems, as well as to use lean production methods at a number of defence industry enterprises. I would like the Minister of Economic Development to deliver a detailed report on this matter.
The third task went beyond the real sector of the economy to include other areas of life. I am referring to ensuring our country’s financial sovereignty.
As you may know, in conjunction with the Government, the Bank of Russia has drafted a programme that stimulates the funding of technological sovereignty projects and projects for structural adaptation of the Russian economy, including such industries and sectors as mechanical engineering, microelectronics, the medical and pharmaceutical industries, to name a few. To reiterate, these initiatives should enjoy additional support from the banking sector and the development institutions.
Creating “long money” in the economy and the banking system is a separate issue. We have been discussing this for many years now. The issue is about creating a resource for financing ambitious, complex projects with an extended payoff period that can guarantee good return on invested funds and revenue that will last a long time.
In order to support such investment and to attract additional funds for the development of the economy, a programme of voluntary long-term private savings will be launched on January 1, 2024, where funds of up to 2.8 million rubles will be insured by the state for each programme depositor, and a tax deduction will be available if savings are replenished by up to 400,000 rubles annually.
This tool will allow citizens to receive additional income in the future or create a rainy day fund. I would like our colleagues from the Government and the Bank of Russia too, of course, to make the new mechanism as user-friendly and reliable for the public as possible, and I would also like the Government to identify specific key indicators for next year.
To wrap this subject up, I would like to discuss several other issues.
We have repeatedly discussed the importance of developing the stock market and the need to create additional opportunities for attracting share capital inside the country, including for rapidly growing high-tech companies. Importantly, we need to do this regardless of what’s happening on foreign platforms.
I must note that Russian companies are not currently listing on the domestic stock exchange. There have only been two IPOs since the start of the year. Incidentally, they were a success. I know that the Central Bank and the Government are working on this, but much still has to be done. I would like to draw my colleagues’ attention to the need to substantially enhance their efforts here and to achieve specific, tangible results.
One more point: volatility has grown considerably in the financial markets in recent months. We are well aware of this. Obviously, these fluctuations make it more difficult for businesses, companies and individuals to make investment decisions. The Government and the Bank of Russia should step up their use of the available instruments and adjust them with this objective situation in mind. It is also necessary to work on limiting the unproductive, speculative demand in the economy, control capital outflow and monitor the actions of the main participants in the financial market. We recently discussed this. We talked to our colleagues about this.
Further, the fourth goal we discussed is the priority development of the transport, utility and social infrastructure in cities and towns, as well as the construction and repair of roads, schools, kindergartens, outpatient clinics and hospitals, cultural centres, public space and so on.
This is a key element, an essential area of work for improving the living standards of our people, upgrading residential spaces and increasing the scale of housing construction.
Recently, we reviewed the results in this area with our colleagues from the construction industry. The construction sector has achieved a good, even a very good pace. This year, some 3.7 million Russian families are expected to improve their housing conditions, while the volumes of residential housing commissioned will set a new record again. We had a good pace – 92.6 million square metres of housing were finished in 2021 and 102.7 million in 2022. I believe that this year we will also exceed the figure of 102 million square metres.
Yes, of course, there are questions here as well, and we discussed the issues that require special attention. Nevertheless, considering the objective factors, it is important and quite possible to keep up the pace, including, in part, by increasing the urban planning capacity of our residential areas, carrying out comprehensive development of districts and introducing new construction sites and networks – I am referring to the priority development of transport and utility infrastructure for electricity, gas and water supply.
We have the tools and resources for this as well. Thus, the National Welfare Fund will provide funding for 239 utility projects in 73 regions of the Russian Federation. This year, the regions also received special treasury loans worth 110 billion rubles for these purposes.
Work is also underway as part of the infrastructure budget loans. This year, 347 actions will be taken with their help, and next year, another 250 billion rubles will be sent to the regions under the already approved programme worth one trillion rubles.
The repair of roads in the largest urban agglomerations, as well as the core road network, is gaining momentum. Let me remind you that at least 85 percent of such roads must meet modern regulatory requirements by 2030. At the same time, by the end of July, the indicator in agglomerations had already exceeded 80 percent.
The construction of hospitals, polyclinics, first aid centres is also ahead of schedule. As part of the Healthcare national project, 3,600 capital facilities have been put into operation since 2019, of which 3,500 are in primary healthcare.
At the same time, an even greater reserve has been formed. Thanks to the so-called shifting of budget expenditures to the left, to earlier periods, we will quadruple the opening of healthcare facilities next year, with 6,500 of them to be put into operation throughout the country.
As for general education, we also have ambitious plans here. By the beginning of the new academic year – and it starts next week – almost 1,300 schools will be overhauled. Nearly 500 more schools will complete repairs before the end of the calendar year.
And one more thing. By 2030, 25 modern university campuses will be created, should be created in Russia. These campuses will house new dormitories, equipped laboratories, technology parks, spaces for recreation and sports, and so on.
The first 17 such projects have already been selected and have already started in Moscow, Nizhny Novgorod, Ufa, Kaliningrad, Yekaterinburg, Novosibirsk, Chelyabinsk and Sakhalin.
I am sure that the advanced comfortable conditions for study and research on the campuses will make it possible to qualitatively improve the training of personnel in the most in-demand specialties for our economy, which means that graduates will find interesting, well-paid employment, and have opportunities to reach their potential.
And in this regard, the fifth task is to increase the income of our citizens, the well-being of Russian families.
Last year, real wages, unfortunately, fell one percent, while in the first half of this year they have already gone up 4.7 percent – again, I want to emphasise this, in real terms, that is, taking into account inflation. Of course, these are average data, I always emphasise this. But it is still an indicator.
The average salaries in the economy increased by comparable rates of 4.2 percent. I would like to draw the attention of my colleagues in the regions, on sites to the following – dynamics of salaries in the economy of a region of the Russian Federation is one of the main indicators of the efficiency of managerial teams. It is an integral, fundamental result of the entire complex of efforts to attract investment, create new jobs and build up infrastructure. You should always remember about this and should always make it your priority.
Now should you weaken attention to the need to increase salaries for the so-called “decreed” categories of specialists – public sector employees. Their salaries must also grow as they do in the economy in general. We agreed at one time that they should be comparable with these figures. It is necessary to observe the ratio of salaries of public sector employees to the economic regional average, in part, by the results of this year.
We continue adjusting the minimum wage for inflation to increase its gap from the subsistence level. On January 1, the minimum wage was increased by 6.3 percent to reach 16,242 rubles per month. We plan to increase it by 18.5 percent in one go on January 1 of the next year. This will make it much higher than both the rates of inflation and salary growth in the country as a whole. Naturally, this decision is bound to enhance revenues of about 4.8 million workers.
What should I add in this regard? Of course, we will continue adjusting for inflation the minimum wage, social payments, allowances, and pensions and develop measures for supporting families and low-income people. However, the situation in the economy and the labour market and, of course, the inflation rates are the fundamental factors that affect real incomes, level of salaries and the reduction of poverty.
Objective facts show that inflation risks are still growing. I would like to draw your attention to this. My colleagues and I have been continuously talking about this lately. These risks are rising and our priority goal is to curb soaring prices.
I would like to ask colleagues from the Government and the Central Bank to permanently monitor the situation and build economic policy accordingly. I know that there are many disagreements on this but we have always managed to find consensus and will find it this time, too.
Finally, the sixth objective includes the fundamental benchmark for all our steps in the economy and the social sphere, as well as all other areas without exception. It is about saving the nation, protecting motherhood and childhood, and increasing life expectancy.
Notably, this year life expectancy in Russia exceeded the pre-pandemic level at slightly over 73 years. As we know, life expectancy in Russia sagged a bit during the pandemic, but has now returned to pre-pandemic levels.
There is a whole range of factors behind this figure, including the level of medical care, the quality of housing, income size, the state of the environment, and an array of other things. The positive dynamics of this indicator show that we are headed in the right direction.
At the same time, the birth rate situation remains challenging. In some months of 2023, rates were higher − which is true, and we know this − than last year, but overall the trend needs to be better, as long as fewer children are born in Russia than a year ago.
We have discussed this and formulated special instructions to propose additional measures to improve the demographic situation. To date, regional programmes to increase the birth rate have been launched across the regions. I would like the federal government to provide the necessary assistance to our colleagues in order for them to be able to successfully implement these programmes. The objective is to provide additional support for families and expectant mothers, to shore up our traditional values, to unite the forces of the state, society, and religions, and to turn the situation around together. To reiterate, the situation is difficult, since we are once again confronted with the consequences of the demographic troughs of past decades.
Here is what I would like to note in this regard. As you may be aware, we are extending childcare benefits for mothers who are rejoining workforce before the child turns 18 months old. This decision has already been made, and another pilot project will be launched on September 1 with an eye to creating a single social and medical assistance system for women raising children on their own, as well as for two-parent families. These mechanisms must be worked out thoroughly as well. It is necessary to act in ways that are efficient and convenient for the public.
Colleagues, the scale and complexity of the tasks that we continue to address are indeed exceptional. We have ambitious plans that require the utmost responsibility and concentration on the part of each official, professional and employee in the capital, in regional administrative centres, and elsewhere in the regions. In some areas we are delivering at an accelerated pace, as I said, while there are areas where we are failing, to some extent, to adhere to the schedule or meet production targets. Overall, despite the many external and internal challenges, the situation is stable and allows us to proceed with our work. It needs to be carefully monitored to make, I repeat, clear and, most importantly, timely managerial decisions.
Of course, a robust and sustainable economy can make our work in all areas successful. I already said this before and all of us are well aware of it. In this connection I will repeat what I said at the recent St Petersburg Economic Forum: “We need a proactive supply-side economics policy aimed at creating a sovereign economy that not only responds to market conditions and changes in demand, but forms it. This means a large-scale build-up of production and the service sector, and the creation of new, modern industrial capacities and entire industries, including those based on advanced technologies that we have, and that, I am sure, will continue to appear thanks to the rich scientific and creative potential of Russia. To build a supply-side economy, we need to be in close coordination with representatives of the business community, with our entrepreneurs.” In this context, of course, I ask Mr Mishustin to give more details in his report on this managerial structure that is planned to be used in the course of this work.
Please, let’s begin.
Mr Mishustin, please go ahead.
Prime Minister Mikhail Mishustin: Mr President, colleagues.
During the St Petersburg International Economic Forum, you set the goal to implement the policy of developing supply-side economics. The policy focuses on building modern manufacturing capabilities and entire industries while balancing out the labour market, expanding construction, upgrading infrastructure and, as you said, increasing effectiveness in terms of performance and the operation of the economy in general.
I will speak in more detail about the areas you mentioned and the instruments we are using.
First, investment. It is important to achieve expedited growth in capital-intensive sectors that require using and maintaining complex equipment, adopting new technologies and high-grade raw materials, as well as comprehensive support from researchers and engineers. These industries include machine building, the chemical industry, transport and energy machine building, engine manufacturing, radio electronics, aircraft engineering and shipbuilding, car manufacturing, pharmaceutical production and production of medical devices.
It is no secret that before the external restrictions were imposed, the share of imports in these particular segments had been significant. We have sufficient domestic resources for developing these industries. Flexible support instruments are available, including funding from the National Wealth Fund, special support mechanisms under major industrial projects, the agreement on protecting and encouraging capital investment, reverse engineering, a cluster investment platform, industrial mortgage and many others. We are also working on adjusting the legislation on technological policy. The Government is currently discussing a bill to this effect.
As concerns developing the processing industries and increasing their share in the GDP, the Government continues to provide support to investment projects and automation solutions as part of the corresponding state programmes.
The labour market forms the second track in terms of promoting supply-side economics. The unemployment rate in the country is at an all-time low, but some sectors already face skills shortages. This issue deserves our special attention, since in the long run, with the economy picking up steam, this can become and in fact has already become a major challenge. We need to train people and offer them opportunities to upgrade their skills, primarily to anticipate demand for these competences in the key sectors.
We have embarked on an effort to upgrade vocational training programmes and bring them up to date. Mr President, you talked at length about the Professionalitet initiative. On the matter of adjusting its key performance indicators for enrolment and targets for training specialists in the most sought-after professions, including in manufacturing. We need to draft proposals on scaling up and restructuring these efforts in the near future taking into consideration what our economy needs. What matters here is to improve education quality as well as enact structural changes in view of our present-day and future objectives. Ms Golikova is in charge of an inter-agency working group to revive the labour market. We will present a detailed report on the way we resolved these matters at the State Council meeting in late September.
Improving efficiencies across the Russian economy as a whole is another major priority. We still have a lot of potential when it comes to improving labour efficiency, getting rid of underperforming and low-paying jobs, digitising processes, setting better priorities and, consequently, improving budget efficiency, paving the way to lower administrative costs for businesses down the road.
The next goal is to prioritise efforts to develop transport, utilities and social infrastructure. Capital-intensive sectors and high-skill workers want the services they get to match their expectations. Therefore, in keeping with the supply-side economics logic, we need to be more responsive and prompt in our efforts to create this infrastructure.
It is necessary to improve the infrastructure in cities and industrial areas and enhance traffic capacities of roads and railways on routes that are part of international transport corridors. It is also necessary to ensure the production of Russian aircraft, helicopters, railroad engines, and ships, and expand the capacity of the tourism industry, which has a high potential. Among other things, new year-round seaside resorts will be created. Since the start of 2023, we have been implementing a five-year state construction programme and a plan of road building and maintenance. A new utilities upgrade project has been launched in the regions.
What is important in the changing geopolitical environment is to redirect commodity flows from the unfriendly states to new promising markets, including via the international transport corridors. This is also one of the goals in the updated foreign economic activity strategy that the Government is working on.
The Government Coordination Centre holds strategic sessions in close cooperation with the Presidential Executive Office, the Bank of Russia, both chambers of Parliament, private businesses, and the expert community. I regularly report to you on this, Mr President. Soon, we will consider a management model for the tourism industry, as well as strategies to develop infrastructure, artificial intelligence, and the Data Economy national project.
We are also implementing a special project on risk models of socioeconomic development and a price monitoring project. This is necessary in order to detect deviations from plans in time and promptly adjust the situation, or to develop extra solutions where needed. We have been working on a project of this kind in a 24/7 mode with mandatory regard for feedback from people and businesses.
This concludes my report. My colleagues from the Government will take over where I have left off.
Vladimir Putin: Good.
Thank you, Mr Mishustin. We will get back to certain matters during the discussion.
Vladimir Putin: Thank you very much. I would like to thank all of you. We have many participants, but nevertheless I called for an expanded format meeting because the issues we discussed are of great importance for all of us without exception. I am referring to public organisations, the business community, the regions, the Government, the Central Bank, and others. All of them are taking part in one way or another in this immense and large-scale endeavour.
Our aim today is to sum up some results and analyse them. In fact, we focused on an analysis while preparing for today’s meeting, as is evident from the materials that have been prepared. But this is only the first part of our work.
The second part, one based on this analysis, implies that we should draw certain conclusions and make adjustments to our work so as to achieve the development goals we have set for ourselves.
We will put this on paper as usual so that nothing is forgotten. I ask the Presidential Executive Office and the Government to work together and draft instructions so that we make a plan of necessary near- and mid-term steps.
Thank you, everyone. All the best!