On examination of the draft federal budget for 2007
Finance Minister Alexei Kudrin: Now that the draft budgets have been presented, the parliament and the leading international experts have given their assessment. I can report that, based on the draft budget and the tax and fiscal policies that we have presented, leading international agency Standard & Poor’s raised Russia’s rating once again last week. Standard & Poor’s has always been more conservative than the other ratings agencies.
In its conclusions on its decision to raise Russia’s rating, the agency notes that the country is following a balanced tax and fiscal macroeconomic policy that will maintain economic stability. The conclusions note in particular that the reduction in Russia’s foreign debt as a state is compensated by greater possibilities for the private sector to increase its debt in order to make investments, and that in this way by the end of the decade we will have a balanced foreign debt situation, which is a positive forecast.
The agency also notes that although state spending is set to rise somewhat next year, this can most likely be put down to preparation for elections. But it points out that, so long as the Government does not allow any further relaxation of tax and fiscal policy, we will be on target to meet our planned macroeconomic objectives, including our inflation target, and will be able to maintain economic stability and current growth rates. Overall, one of the leading international agencies has given an assessment that has a positive impact on the general economic and investment climate in Russia.
President Vladimir Putin: I hope that the Government and parliamentary deputies will take a responsible approach and not start piling up ineffective spending. We most certainly do not need such spending. We do not need spending that is motivated by political interests. Both budget revenue and all the more so budget expenditure should be based on economic calculations and the need to resolve pressing social problems.
The main social policy outlines were formulated by the Government, and by myself in the Annual Federal Address. Substantial spending is proposed, spending that is absolutely necessary for our country, spending on healthcare, education, science, security and resolving the demographic problem. Taking a responsible approach means keeping in mind people’s needs and making balanced decisions that meet these needs, not dispersing state resources and fuelling inflation. I count on the Finance Ministry taking a principled stand on this issue because ultimately, if these processes are left to get out of hand, they will hit the poorer groups of the population hardest and will negatively affect national economic and industrial growth.
On rebuilding damaged infrastructure in Lebanon
Vladimir Putin (Addressing Foreign Minister Sergei Lavrov): Sergei Viktorovich, I asked you to hold consultations with the Lebanese government on rebuilding damaged infrastructure there. We said that we would be ready to do this on a bilateral basis if the Lebanese government was interested.
What are the results of your talks with our partners in Lebanon?
Sergei Lavrov: These consultations took place during my visit to the Middle East. The Lebanese government asked me to pass on its sincere gratitude for the solidarity and for the concrete assistance that I offered on your instructions. They are interested in our offer to help with the reconstruction of bridges, because the bridges and roads have been destroyed and work is needed to rebuild them as parts of the country are currently cut off from each other. They are ready for us to send our engineering battalion that would be able to build pontoon bridges there.
Vladimir Putin (Addressing Deputy Prime Minister and Defence Minister Sergei Ivanov): Sergei Borisovich, is the Defence Ministry prepared to organise this volume and this kind of work?
Sergei Ivanov: Yes, we are ready, Vladimir Vladimirovich. We have a special reconnaissance group ready to leave for Lebanon this week. The group includes the necessary specialists, engineers and sappers, because there are still a lot of unexploded bombs. They will examine the roads leading to the sites where the bridges are to be built. We are taking in part in this work together with the Foreign Ministry, and the actual engineering and sapper battalion will be ready to leave for Lebanon by civilian sea transport at the end of the month.
Vladimir Putin: Please prepare a request on my part to the Federation Council to send the servicemen who will make up this battalion to carry out needed reconstruction work in Lebanon.
Chief of Staff of the Presidential Executive office Sergei Sobyanin: Yes, Vladimir Vladimirovich.
Sergei Ivanov: Vladimir Vladimirovich, I also want to report that as the situation seems to be shaping up, the engineering battalion will be working outside the zone of the peacekeeping operation in Lebanon. This is at the request of the Lebanese government. We will not be taking part in the peacekeeping operation, but will be carrying out infrastructure reconstruction on a bilateral basis in the districts outside the UN peacekeeping mission’s zone.
Vladimir Putin: The request to the Federation Council should be drawn up after we receive the official request from the Lebanese government.