President of Russia Dmitry Medvedev: Colleagues!
I would like to welcome you and say that our meeting today opens a series of consultations that I would like to have with our parliamentary parties. Naturally, I am beginning with United Russia, since it is our largest and most powerful party.
We have had meetings before, but not in this format. And in order not to waste time, I will not make any long speeches, you have already heard many of them. Instead, I would like to listen to you. Therefore, I will define the topics of our conversation very broadly.
I think that we must first and foremost talk about the current situation, share our views on how things stand in the economic and social spheres, especially since, just recently, you listened to a government report in this format for the first time at a session of the State Duma. In my view, it was successful and valuable. In any case, there was a satisfactory exchange of questions and answers.
In addition to the socio-economic situation, I am ready to tell you about the results of my trip to London; I suppose it is always better to hear such an account first-hand, because otherwise, they may lose something when retold.
We must talk about the development of our society and our country in all directions. I think that we could also talk about the political initiatives that, with your support, already turned into effective laws. I am referring first and foremost to the political initiatives that I presented in my Address to the Federal Assembly. I would like to thank you for this separately, because if it were not for the support of our leading party and its members in the State Duma, then those political initiatives would not have been made into laws. And I feel that we need them for the development of our country and the development of our society; that is exactly what we are ready for today.
Here is a list of questions. If you have any other ideas, I would be glad to respond to them. So, let us begin working.
We understand the role that the president plays in the modern Russian political system. Currently, the Russian president functions as a supra party institution, although that is not an everlasting function, since there can be other types of work. But at the moment, he represents a supra party institution. Nonetheless, I would like to directly say that the president cannot be outside of politics, although he is a guarantor of the Constitution, and each president has his own election history. At a certain point, perhaps at the most important point – I am talking about my election campaign, I got the support of United Russia. And I am not only meeting with you out of a sense of gratitude for the support you offered me, but simply because I support many of the projects and programs that you suggest. I feel that it is imperative to hold these kinds of consultations at the widest level.
That does not mean that I will not meet with other parties. Naturally, I will do that as well: I will certainly meet with the Communists, with the Just Russia Party, and the Liberal Democratic Party. But naturally, I have a special relation in regard to speaking with members of United Russia, because many of the ideas that you support are the ones that I support as well, despite the nature of the presidency in our country.
Now, in regard to party projects: some of them have already become an organic part of our lives, and perhaps do not require any special commentary; some are absolutely pressing issues, related to our current crisis situation; so I am interested to hear what you have to say.
In regard to new laws and political initiatives: I want to say once again that I am grateful for your support. Indeed, some of them will evidently receive more active support from the other parties as well, including the ones regarding equal access to media and opportunities to enlarge representation by individual parties. But there is one other highly important law that is nearly ready – the law regarding the new procedure for vesting more authority in the heads of the Federation’s constituent entities. This is a very important document. Naturally, it is not being passed on a whim; it is the result of a great deal of serious reflection, including reflection on my part.
And I just wanted to say here that your party must be ready to fulfil this law specifically because of the party’s special position and role in the current party system, because you have the majority in the legislative bodies of the Federation’s constituent subjects. You will be the ones who will need to act in accordance with this procedure, at least while your party has this kind of influence. And if that is the case, then naturally, it creates the need for great responsibility in making these kinds of decisions.
A political party is a living organism, and I think that all of you understand that political parties also have faults; there may be personal problems, or there may be forces that try to get involved in certain processes, trying to make money off of them. That is why I would just like to draw attention to the fact that this kind of resolution will create unique new opportunities for the party, but also, unique responsibility. You must understand this and be ready for it. But it is also true that the final decision on these issues will be made by the President of the Russian Federation, not the political party, and there should not be any illusions on this issue. But we will act consistently and in whatever way is necessary, depending on the circumstances. I say this because we must all prepare for the new procedure of vesting authority in the heads of the Federation’s constituent entities. This is an important topic.
And in regard to anti-crisis measures: I do not know how much of an opportunity we really have right now to talk about freezing any kind of processes, but it is certain that we can significantly decrease the cost of housing and public utilities services. In some places, this figure may be bigger, and in other places, it may be smaller; in some places, it may be run more successfully, and in other places, less so; however, this is a topic that we can certainly discuss, since the reserves there are by no means small. So I support this topic for discussion as well.
For now, we have been unable to implement active labour market policies. That is related to the fact that unfortunately, we were essentially unable to work on that market, especially during the pre-crisis period, when everything was going smoothly and calmly. Of course, there were some nuances, but nevertheless, we did not undertake any active approaches. And now, without a doubt, this problem is growing worse, it is exacerbating the current situation, and creates additional difficulties for us. In this regard, we must think up new regulatory mechanisms. I will not specify them now, especially since this is always a very sensitive topic, but nevertheless, they absolutely must be prepared.
You know how much is currently being done in terms of supporting the economy and in terms of social support. Naturally, these kinds of efforts are never enough. But in terms of social support, our country is actually very much at the forefront. I am not just saying this to make us all feel good. This is a fair view, because after talking with my colleagues at the G20 summit in London, I can say that we spend enormous sums to support our economy and our social sector, in relation to our gross domestic product. Of course, everyone has their own methods for measurement, perhaps our opportunities in that respect are more modest than those of a number of other states, but the fact that we are spending 10 percent (or even more – some estimates put it at 12 percent) of our gross domestic product on supporting the economy and the social sector is absolutely certain. Other governments are spending 2 to 3 percent. That can be explained in different ways. It may be said that we have a less developed economy and that the social sector was in a pretty problematic state. Nonetheless, I feel that these figures are currently necessary and objective. That is exactly how we should proceed in the future.
You know that I am also interested in the Internet. I can tell you one simple thing: although you cannot really be “dominant” on the Internet, those who are nevertheless able to become online “trend setters”, and here I mean a particular political force, will have a political future. If a political force is unable to learn to navigate the Internet, it will die. I have no doubts here. This will not happen now. Right now, it is still possible to rely on other technologies. But considering what is happening, it is clear that other technologies are becoming increasingly less interesting. You need to know how to use it, especially since it may not only be creative, but destructive as well. We are well aware of the potential that the Internet holds, in the sense of supporting a particular constructive initiative, and in the sense of increasing tensions, if necessary.
In general, the development of the Internet in our country is absolutely unique, because it depends not only on the interest of the users themselves, but also the government, to a greater extent than in other countries. This is because of the size of our country. I will flatly say that if we had not begun to address this quite actively, and I would even say that if I had not begun to promote this topic more actively at a certain point, then it is true that everything would still develop, but the rate of development would be somewhat slower.
There are certain countries that are no less technologically advanced than ourselves, or are sometimes even more advanced, but their Internet use is growing less rapidly. Why? Because their government pays less attention to it, or because they do not develop the networks at all, or because it is entirely leased out to the market. But at a certain point, we were forced to implement non-market technology. An example of this is Internet in schools. When we launched this project, the internet audience was somewhere around 20–25 million. That was quite recently. But now, the estimate is closer to 50 million. That already accounts for over one third of our country, including all those who do not yet know anything about the Internet.
That is why the government absolutely must pay attention to these technologies. This is particularly true because Russia is a special country that requires complex technological solutions. And the fact that, for example, we have brought the Internet to schools has allowed us to create a microenvironment around these schools, and bring in other technologies. Of course, in some places, this happens more quickly, and in some places, it happens more slowly, but overall, the process is going quite well.
And in regard to investments, I feel that, of course, investments must absolutely be made in this sector. Some time ago, internet assets began to grow greatly in prices. Just a few years ago, our business community assessed the value of the entire Russian Internet at 200 million dollars. Then, the age of very rapid, dynamic development arrived, bringing exaggerated expectations, and before the crisis, the value of assets was estimated at around 5 billion, or perhaps even more. Now, of course, everything has dropped again, but that does not mean that this process is not worth paying attention to. Moreover, we know that the entire internet is very international, so having international investors come to search engines or appear within large social networks is inevitable. But at the same time, and I hope that what I say will not be considered too conservative, we need to keep an eye on it, since it is also an issue of security.
I cannot but agree regarding traffic. Perhaps, this is the most glaring problem in Russia, because the quality and cost of internet traffic in Moscow and, for example, in some place in the Far East, are fundamentally different things. Moreover, we must get ready for a transition to the fourth communication standard (4G), when WiMAX will be actively developed (and this has already begun), when the volumes of information transferred will be very significant.
I must also agree that issues regarding the internet and copyright are very complicated. United Russia, as the leading political party in the State Duma, should also pay attention to this, because really, if we are being honest, copyright and the internet are, at the moment, completely incompatible. The internet is the enemy of copyright, it is better to speak plainly. But we must act in such a way so that future international agreements and our national legislation on the most important issues regarding copyright would hold true on the internet, as well. Because otherwise, the fundamental principles of copyright protection around the world will be destroyed. Still, this is not just our problem; it is a global problem. But we cannot fall back on this issue, it is a very important topic.
Unemployment and the ability to retain jobs are very important concerns for all countries, including ours. Today I talked about the G20. Of course you know about the decisions that we made there. When we were working on the wording of the communique, we talked about the number of jobs that have to be created if the world is to avoid a total collapse. In the end, this did not make it into the communique, but I want to tell you what we discussed. If the global economy is to avoid a depression and get on with new stages in its development, we need to create some 20 million jobs. We can make the relevant projections for our economy, how many jobs we need to retain and how many we need to create so that our economy does not become part of the depression scenario, and how to ensure that it becomes a successful player in the international economic system.
As far as migration is concerned, this is a difficult issue. We really need to look at why the decline in the quotas is working against the regions. But something that cannot fail to be disquieting is that a very large number of people are [in Russia] without proper authorisation and trying to find work. In this regard, I believe that law enforcement agencies need to work more closely with regional authorities to prevent an upsurge of crime. Of course this is the task of law enforcement agencies generally. But in a crisis situation, we need to act more efficiently and sometimes more rigorously if we want to avoid a crime wave.
The last issue on which I would like to comment, or rather the penultimate issue, is the refinancing rates, the interest rates on loans, the overall position of the banks and the ratio between the number of jobs available and normal cash flow, the money a company needs to function, the liquidity it requires. There are two approaches to these questions.
The first approach, one supported by many of our colleagues including some of those in the government cabinet, is that we do not need to get involved, that everything will assume its rightful place according to the normal workings of economic life, the ordinary functioning of objective economic laws. You can watch these laws in action: today we have 13 percent inflation and tomorrow, as in other countries, we’ll be looking at deflation. A deflationary cycle is also dangerous, because it means that loans can be granted at significantly lower interest rates, and that refinancing rates will change as well. This is one way to approach things.
But there is another approach. This involves an attempt to manage these processes by providing the necessary combination of grants, co-financing, government regulation, and in some cases the use of preferential lending rates. In my view, the second approach is better. This is not always the case, but in times of crisis it can be effective in the short run. With luck we won’t have to control interest rates. But in a difficult situation – six months or a year — these processes might have to be implemented under different scenarios as a subject of a separate discussion.
I cannot but respond to the question about the bureaucracy. Everybody really is sick of bureaucrats, but I would like to point out that everyone needs to begin with themselves. So when we decide, for example, to reduce the number of procedures, we need to reduce them at both the federal and the regional levels. Only then can there be some concrete results.