President of Russia Dmitry Medvedev: Good day!
Exactly a week ago today we agreed to meet and discuss how we can minimise the effects of the global financial crisis on the real sector and on certain individual sectors of our economy.
A number of steps to stabilise financial markets have already been taken. We worked quite quickly and laws to support the financial system have entered into force.
We have allocated subordinated loans of up to 950 billion roubles for 10 years to strengthen the banks. Banks' capital will increase because of this.
The Bank of Russia has been granted the right to make collateral-free loans to commercial banks for up to 6 months.
At the same time we developed additional measures to stimulate lending between banks. This is one of the most important issues today.
We have also taken effective steps to protect the interests of depositors. The level of insurance that citizens benefit from has been increased to 700,000 roubles. Up to this amount deposits will be fully repaid. Of course, the most important thing is that these measures reached those they are designed for, as we say, and help defuse tensions not only in the financial sector — because there really are problems there – but also allow us to maintain full-value, normal economic development. In other words our task today is to do everything we can to ensure the stable development of all the sectors of our economy; I am referring to industry, agriculture, transportation, construction and trade.
Effective enterprises and private businesses should not be starved for finances. And we must also make all necessary efforts in this regard. Today we need perhaps more than ever to restore trust between lenders and borrowers. This is true everywhere in the world. And we must take all necessary steps to resolve this problem on our domestic market, including measures that reduce excessive risk.
This is what I would propose to talk about now. The outcome of our discussion should be a number of proposals on how to stabilise the situation in different sectors of our economy.
Let us begin our discussion. I would like Deputy Prime Minister and Minister of Finance Alexei Leonidovich Kudrin to first outline the general situation and then Economic Development Minister Elvira Sakhipzadovna Nabiullina to speak.
Please go ahead.
Finance Minister and Deputy Prime Minister Alexei Kudrin: Dmitry Anatolyevich, laws have indeed come into force and acts of the government cabinet, of Ministry of Finance and Central Bank have been adopted. And in the first few days of next week funds will be available and we will therefore finally solve the problem of compensating for the liquidity flowing out of our markets in connection with the global financial crisis. And we will have enough money in the system to lend to and support the real sector of the economy.
Last week Russia's deputy prime ministers held meetings on certain industries they are responsible for, including construction, trade, the automotive industry, metallurgy, the defence industry and others, to identify in a timely fashion issues which affect businesses in certain sectors, negotiate or harmonise actions with leading financial institutions and the Central Bank, and ensure the effective redirection of resources to support the real sector.
I can report that the staff of the Ministry of Finance is involved in all these meetings. The Ministry of Finance together with the Industry and Trade Ministry and Economic Development Ministry also oversees the defence industry and those industries that implement state orders. And in the coming days and weeks we are going to address the issues raised by the businesses in the defence industry and also resolve issues concerning guarantees for the capitalisation of certain companies so that in these circumstances those companies feel absolutely safe – this latter issue is also connected with the general liquidity in the market.
Other ministers are carrying out similar work in their own fields.
Dmitry Medvedev: Thank you Alexei Leonidovich.
As to the defence industry, it is good that you have specifically focused on this because this industry is one that we do not have the right to lose for a variety of reasons. Therefore please report to me personally on support for the defence industry.
Alexei Kudrin: I will do so.
Dmitry Medvedev: Elvira Sakhipzadovna, please go ahead.
Economic Development Minister Elvira Nabiullina: Dear Dmitry Anatolyevich!
We analysed the situation in various sectors of the economy and together with representatives of businesses and banks have elaborated concrete measures for each sector which would allow companies, including those who encountered difficulties borrowing foreign funds in a timely manner, to fund their current production activities and effective investment programmes. Measures taken also provide for directing additional financial resources into the banking system. Specific arrangements to make lending operational are now being introduced.
We paid particular attention to the following sectors: construction, trade, agriculture and machine building. And I would especially like to emphasise the problems faced by small businesses. Here we would also suggest that we consider increasing credit programmes. We also consider it appropriate to accelerate the implementation of several programmes that are critical for economic development and are funded by the federal budget and those of the regions, programmes in infrastructure, transport infrastructure and housing. Specific proposals have also been prepared.
Dmitry Medvedev: Regarding small businesses we recently made various efforts to support small business. Unfortunately, the global financial crisis is not helping this process. What do you think should be done in this area in particular?
Elvira Nabiullina: First of all, you can increase the size of credit programmes for Vnesheconombank — we have a special programme for this – increase funding for programmes to support small business which are being implemented by the regions, through regional funds and guarantee funds. There are quite effective tools available. We can support them. In addition we will now have to carefully consider the issues that concern additional financial payments, including rent. We must look at the options and try to make sure that rents on federal property and assets of the regions of the Russian Federation do not go up if they are being leased to small businesses; this will help the businesses reduce financial costs. I think the basic thing we must do is to help small businesses obtain additional financial and credit resources.
Dmitry Medvedev: Thank you.