Vladimir Putin: Good day dear colleagues!
Your assembly convened at the initiative of the united all-Russia association, namely the National Congress of Municipalities. This association includes representatives from virtually all regional councils of the municipalities of almost all the regions of the Russian Federation.
Your Congress was, in practice, the first to create a system of public representation in the interests of local self-government. In doing so, it helped establish intermunicipal cooperation and promote closer cooperation with public authorities. As a result, a unified platform for direct, interested dialogue between the representatives of the various Russian municipalities was created.
As you know, the 2003 federal law “On the General Principles of Local Self-Government in the Russian Federation” and a number of other federal and regional acts have allowed us to significantly increase the role that local self-government plays in the lives of Russian citizens and the state. And today the municipalities are participating alongside public authorities as they accomplish national goals.
It is precisely in the regions and in the municipalities that priority national projects are being implemented. Significant public funds are being invested in improving the municipal health and education systems, into expanding the possibilities in housing construction, in the development of the agroindustrial complex, as well as with a view to developing peoples’ entrepreneurial and creative initiatives. Now, as we are significantly expanding these programmes at the federal level, we need to provide a clear and convenient structure so that they can be implemented at the local level. And we can only do so if we benefit from your direct and responsible participation.
After having gone through a rather difficult consolidation phase, local self-government has already established itself as a serious resource for the country's future development. And this is compelling evidence in favour of the policy to increase the self-reliance and powers of the local authorities. As you know, this policy rests on traditions that were in place long before, prior to the revolution in October 1917. And this is what our public figures say – they might say it differently but the meaning is the same – that we need to develop this level of government. And you are certainly familiar with the ideas of Aleksandr Isaevich Solzhenitsyn: he has said a great deal about how to strengthen this branch of the Russian state so that the country's entire system of governance can be much more effective.
A great responsibility lies with local self-government structures today, as we enter the pre-election period – first the State Duma elections and then the presidential elections. Following these elections new legislative and executive bodies will be formed. And in this situation it is crucially important to ensure the continuity of government policy and, I would like to place special emphasis on this, in light of the government's obligations to Russian citizens. This is our shared commitment, and neither I nor the State Duma nor the government thought it up – it is our shared obligation to Russian citizens.
Given the importance of the forthcoming parliamentary elections it is necessary to create all necessary conditions to enable more Russians to participate in them. The heads of local self-government must play an active role in this regard. They know the voters’ specific problems and, as the leaders of their respective regions, are able to allow each Russian citizen to feel his or her political significance by participating in the elections.
Together we have to accomplish tasks designed to further strengthen the legal and economic foundations of local self-government. There are many outstanding questions here. The recent televised Hot Line with Russian citizens demonstrated that. People continue to be worried about the lack of and weakness of social infrastructure; this is the case in a large, a substantial number of places. They are also worried about the poor quality of communal services, municipal health care and education. And in connection with this, the issue of providing the municipalities with an adequate financial and material foundation remains crucial. It is no secret that the incomes of a significant number of municipalities are simply not sufficient. This is a real problem and the government will allocate a great deal of financial resources to resolve it. You can talk about what is necessary (and if its necessary) to reconfigure after the break, but the fact remains that federal authorities are paying an increasing amount of attention to this issue. A lot of financial resources have been allocated to resolve this. And in this regard last year the amount of funds allocated to this issue from the budget amounted to 255 billion rubles. Another 437 billion rubles were allocated with a view to facilitating the execution of delegated powers. In 2006 the local governments’ budget amounted to 16% of the country’s entire budget and 41% of the regions’ budget. And we must also say that both the municipal part and the regional part of the Russian budget are growing. And already in the first half of 2007 transfers rose by more than 60%.
As you can see, the government is actively helping establish an efficient, adequate and self-sufficient system of local self-government. I also believe that the Russian government should think about making additional decisions concerning the sphere of inter-budgetary relations.
At the same time, municipal authorities must look for ways to increase the revenues of local budgets and to improve the quality of the services the population receives. Because local revenues also depend on this.
The necessary preconditions for this have been established and are being consolidated. I would repeat that if something is missing, let’s talk about it. As you know, we have basically completed the process of delineating the powers between different levels of government, and introduced the principle of matching revenues with expenses. A new federal law on municipal service has been adopted. Based on these decisions, we need to consistently strengthen the material, financial, and personnel foundations of local self-government. Of course, we need to do this with active assistance from regional and federal authorities.
However, I would like to draw your attention to a number of priority issues that we are already familiar with.
So, it is necessary to expand the possibilities available to private initiatives in municipalities. The monopolisation of local markets, red tape and bribes paid to local officials for each authorization and signature have become insurmountable barriers to the development of entrepreneurship. As before, these conditions prevent local budgets from receiving necessary revenues and, in turn, prevent us from creating decent living conditions for our citizens.
Just recently – going back to the Hot Line again – during the Hot Line farmers said that intermediaries take most of the profits in the agricultural business. And the bodies of local-self government are not only allowed, but rather obliged to help resolve this problem. We need to get rid of these monopolies.
In addition, in accordance with the requirements of the Urban Planning and Land Codes we need to develop the necessary documents for territorial planning. And this includes finding the necessary financial resources for this. The poor quality of master plans and outlines or, sometimes, the complete lack of such plans has already become a major obstacle for some municipalities who want to implement a programme of housing construction. And both the government and the Minister of Regional Development have to think about this.
Further. One of the most problematic issues – utilities – is in the sphere of responsibilities of the municipalities. Along with this, this sector continues to be the most problematic, ineffective and not yielding to reforms. I know that every person sitting in this room will say: we don’t have enough money. And it is true, I agree with what you say because it was true that at the beginning of the 1990s there was no financing available for health care or education, and I remember this. And we are taking this into account and for that reason tens of billions of rubles have been allocated from the federal budget to support this system. But nevertheless, what I just said remains: it is largely your responsibility. Nothing is being reformed, almost nothing. There are very few regions in which reforms are taking place. Local municipal enterprises remain dominant and for the most part they are all making losses, unprofitable; they are only interested in increasing tariffs and have direct connections with local bureaucracy. This is a major problem. And, as before, the actors are very reluctant to allow small and medium-sized businesses into the market. They do not transfer concessions on infrastructure (I understand that this is a controversial issue, but where it is done and done properly it has a positive effect).
One more issue. The state has created a system for training and re-training municipal employees. Now the regional authorities must ensure that the municipalities can take full advantage of these educational resources.
And finally, all levels of authorities need to learn to cooperate more closely. You share many common and promising issues. Along with this, the responsibility to the Russian citizens is something we share. It is for precisely that reason that we made changes to the 131st federal law that provide for the formation of a system of indicators to measure the effectiveness of the bodies of local self-government. I want to draw your attention to the fact that I am not only referring to the effectiveness of the local self-government, but also the effectiveness of the activities of the regional authorities, of federal government. We all need to establish clear criteria that will allow us to determine who is working and how they are working, independently of their place in government.
I think that the efforts of the National Congress of Municipalities should be aimed at resolving these problems.
In conclusion, I have talked a lot about the problems you are facing and must try to resolve. And I have spoken quite frankly and critically. But I know that the most difficult work in the country is down here, it’s the work you’re doing. This is the level at which the countries’ authorities come directly face-to-face with the people. We – by which I mean you – must solve the problems of the country with our own hands. This is such an important, such a critical task, and a very complex one. I wish you every success. Thank you for your attention.