First Deputy Prime Minister Sergei Ivanov on the results of the meeting of the Transport Ministry Collegium and on the upcoming meetings of the Victory Organising Committee and the Defence Industry Commission
Sergey Ivanov: Overall, the transport sector worked steadily last year and there was clear growth in both freight and passenger traffic. The highest growth was in cargo transport by air – up almost 20 percent in 2007.
This shows that as far as cargo transport by air goes, the market is still big and there is still a lot of room for development. We recognise that so far, development in this sector has used intensive methods, that is, we have made maximum use of the infrastructure that for the most part was built during the Soviet period.
In this respect, the first thing we now need to do is introduce new information and logistics technology and, secondly, increase investment in infrastructure development in all the different transport sectors: road, rail, air, sea and river transport. Over the coming month, in accordance with your instruction to the State Council in Krasnoyarsk last autumn, we should complete work on the federal targeted programme for developing Russia’s transport system over 2010–2015. This programme does indeed call for high expenditure, but unless we make the necessary investment in infrastructure it will continue to act as a brake on economic and social development, including in the Far East.
We also discussed the need to establish as soon as possible a concrete financial mechanism for subsidising passenger air transport between the Russian Far East and European Russia, because without subsidies people simply cannot afford the cost of plane tickets.
Russian President Vladimir Putin: Did you just discuss the issue or did you reach an actual agreement?
Sergei Ivanov: We have been saying for a long time now that we need to establish a specific financial mechanism that will work in practice, either subsidies to the regions or subsidies to the airlines. The main thing is that this mechanism needs to begin working this year already.
Aside from the federal targeted programme, the Transport Ministry is currently completing work on a development strategy for Russia’s transport system through to 2030. This is a long-term programme.
Tomorrow, on your instructions, I will hold a meeting of the Victory Organising Committee. Some regional legislative and executive authorities have put forward applications to have the title of ‘city of military glory’ conferred on a number of towns across the country. These include Luga in Leningrad Region, the town of Polyarny, which was our Northern Fleet’s main base during World War II, and Rostov-on-Don and Tuapse. We want to make a thorough and sensitive examination of all of these applications in terms of the historical justification and objective contribution made by these towns to our victory. Overall, we are at the preliminary stage of examination.
Tomorrow, I will also hold a meeting of the Defence Industry Commission, at which we will examine the development strategy for defence industry enterprises producing conventional weapons. This strategy sets the goal of a 1.3-fold increase in production at these enterprises by 2010, and a 2.2-fold increase by 2015. By 2010, high-technology civilian goods should account for 53 percent of these enterprises’ output, and this figure should rise to 59 percent by 2015. In other words, the share of high-technology civilian goods produced by these defence industry enterprises should increase steadily.
In addition, we will consider the first draft of the state defence order for 2009. And it is already time to work on defence orders for next year.
On developing Russia's banking system and support measures for Russian banks in response to the difficulties faced by the world economy, especially in the financial sector
Vladimir Putin: You will recall that we met recently with banking community representatives and talked about how to develop our banking sector in the difficult conditions the world economy has encountered today, above all in the financial sector. We talked about the need to draw up measures for supporting Russia’s banks if the need should arise. I asked you to continue this work and have these measures ready for presentation.
Deputy Prime Minister and Finance Minister Alexei Kudrin: We examined the issue together with the banking community and the Central Bank and have drafted essential measures that can be used this year to maintain the money supply and banks’ liquidity and ensure that they can continue to credit the Russian economy so that we can maintain the pace of economic growth.
We estimate that lending activity will increase by 35–40 percent this year, which is a little less than last year, taking into account the risks in the world financial system, but is still sufficient to maintain GDP growth of at least seven percent this year.
Furthermore, at the meeting with the Prime Minister today we decided to place the nanotechnology and housing and utilities reform corporations’ capital above all on the domestic market. This represents resources of 340 billion roubles that will be placed in long-term investment. These will be banks’ or the financial sector’s long-term liabilities that will be placed in bank deposits and in corporate securities. They will end up on the accounts of leading financial organisations whatever the case and will provide the necessary liquidity over the coming months and through to the end of the year.
We have thus drawn up a list of measures and decided the initial and more long-term steps that will require some legislative amendments to be made. We think that we can ensure that banking system continues to function without problem and will remain stable this year.
Vladimir Putin: Regarding the Treasury's surplus funds: what decision should be taken in order to put this money in the domestic market, into commercial banks?
Alexei Kudrin: The draft of the Government's decree that describes the mechanisms for for distributing the Treasury's available funds will be released this week, after which point the Ministry of Finance will require two days in order to declare regular auctions for distribution of the funds.
Let's start with small amounts and make sure this mechanism works. I am confident that we can then provide up to 600 billion rubles of liquidity in the required time frame.
Prime Minister Viktor Zubkov: In light of your order a decision has been taken on all issues that were raised by the banks. On Wednesday I will prepare a written report of that meeting and on the decisions taken today, so that you have will access to all necessary information.
Vladimir Putin: I hope that the Government's decree on the usage of the Treasury's surplus funds will be released this week.
Regional Development Minister Dmitry Kozak on the implementation of the Housing and Utilities Sector Reform
Dmitry Kozak: Implementation of the programme to reform the housing and utilities sector, carry out capital repairs of the housing stock and demolish housing no longer fit for use entered the active phase at the end of February. In the two regions alone – Kaluga Region and Kemerovo Region – more than 150,000 people will get better quality housing this year and more than 2,000 people will be resettled from old housing now unfit for use. Another 13 regions will have their applications ready by the end of March. Here, we are looking at a total of two million people in these 13 regions who will obtain better quality housing this year through capital repairs using money from the Housing and Utilities Sector Reform Fund and money from the regional budgets.
The subsidies allocated through this fund under the terms of the federal law are a good example for other sectors too: we are providing financial assistance to the country’s regions under specific terms, and in other sectors too the provision of subsidies should be tied to specific goals and objectives so that financial assistance is not just about ensuring a more equal distribution of budget resources at the different levels. Concrete conditions and concrete goals should be set for each sector – for road management, healthcare, education – for the whole variety of areas covered by these types of subsidies.
Vladimir Putin: The establishment of a fund of this kind is not just an original means of sterilising the money supply. We need to ensure that this money is put to work and that people see the results for themselves, see that their lives are improving. I want to be able to see this. I ask you to keep me updated regularly on what is happening in this area.
Foreign Minister Sergei Lavrov on the request from the Serbian government for humanitarian aid for Serbian enclaves in Kosovo
Sergei Lavrov: Around 30 countries have recognised Kosovo’s unilateral proclamation of independence, but a far greater number of countries have declared that they will not recognise this unlawful independence. Over the last weeks, the humanitarian situation in the Serbian enclaves in Kosovo has become more difficult.
The Serbian government turned to Russia a few days ago with a request for humanitarian assistance to help support the population in these enclaves. They are interested above all in receiving medicines and medical equipment, durable foodstuffs and hygiene products. We think it important to respond to this request.
Vladimir Putin: With any problem there is always the political aspect and also the humanitarian aspect. Looking at the issue from the humanitarian point of view, our position should be that the population in these enclaves should be able to live normal lives no matter what ethnic group they belong to, and if they need humanitarian assistance, then let us provide it, but without any political overtones.