President of Russia Dmitry Medvedev: I would like to talk with you today about an issue that concerns all of us. I am referring to the recent figures on the labour market and unemployment, their latest trends, whether or not there have been any changes for the better, whether we have overcome the worst of it or if we are on the threshold of more turbulence. That is the first issue that I would like to discuss.
The second issue I would like to talk about is the current situation with wage payments. Please brief me on these topics.
Deputy Prime Minister Alexander Zhukov: As you know, the labour market situation has been quite difficult since October of last year. From that point forward, we began to monitor the situation on a weekly basis. Every week, there was an increase in the number of people registered as unemployed, as well as unemployment overall. I would say that the peak was around January and February, when about one hundred thousand newly-unemployed individuals were registered every week. In March and April, however, the situation began to stabilise. Since the end of April, we have observed a slight decrease in the number of registered unemployed persons every week. The highest number of registered jobless individuals was 2.25 million. That is about one million more than we had last autumn, at the beginning of the crisis.
According to our data, the number of unemployed decreased by 22 thousand people during the last week.
Dmitry Medvedev: What influenced this outcome?
Alexander Zhukov: I think that there are several factors. The first is that at the end of May, we witnessed what I hope is a revival of industry and the economy overall. Figures showing a reduction in accrued back pay are also indicative of this. The second reason is seasonal in nature. After all, agricultural work in the spring and summer creates many new jobs, thereby reducing unemployment. Finally, the third reason, which I feel is a significant one, is the creation of regional programmes for stabilising the labour market. Today, such programmes have been developed in every territory within the Russian Federation. They have been approved, and a total of 25 billion rubles [over 800 million dollars] of budget funds have been allocated to finance these programmes. The programmes are already being actively implemented in 77 federal constituent entities, with 10 billion rubles already allotted. Tens of thousands of contracts have been signed to retrain workers, commence public works, and create small businesses.
Recently, we had a Russia wide teleconference with regional leaders on this issue. Some said that the number of small businesses in their regions had increased 1.5-fold or more. This is partially due to the implementation of the aforementioned programmes, but I think that it is also due to the fact that we have additional programmes to support small businesses and help them get loans, including 30 billion rubles coming through Vneshtorgbank [VTB or the Bank for Foreign Trade].
I think that these are the reasons behind this shift, although I have to say that the situation is still quite complex. We are tracking data not only on the number of registered unemployed persons, but on workers who are not fully employed or are on forced leave, as well.
Dmitry Medvedev: I want to make sure that Russian citizens understand the difference between these categories. We generally look at two figures. The first figure, which you just mentioned, is the number of registered unemployed individuals, and according to May data, this figure has decreased slightly. The second figure is the overall number of individuals who are unemployed or only partially employed; we get this figure using international methodology [ILO methods]. This figure is estimated to be six million people.
How do these figures compare? And can we exert an influence on the situation for other jobless individuals, who are not registered?
Alexander Zhukov: You are absolutely right. We are monitoring more than just the figures regarding those unemployed who register with employment services, since not everybody registers. This indicator shifts in correlation with the shift in the number of registered jobless individuals.
The unemployment rate, calculated using ILO [International Labour Organisation] methods, grew from 5.8 percent (of the total labour force) to 10.2 percent between October 2008 and May 2009. Thus, there was a similar increase, percentage-wise. Here, too, I believe that we witnessed a turning point, and the number of unemployed individuals is also slowly starting to decrease.
I would like to say that according to our data, we still have around two million people who are at risk of losing their jobs, are employed only part-time, are on forced leave, or are facing other problems of this sort. However, they are not included in the figures on registered unemployment.
Dmitry Medvedev: But we are closely monitoring this situation as well, and we are working with regional authorities and employers.
Alexander Zhukov: That’s right; we are carefully monitoring all figures regarding overall and registered unemployment.
Dmitry Medvedev: Please tell me about the situation regarding back pay, since this is one of the key topics that concerns our citizens.
Alexander Zhukov: Since last autumn, we have also witnessed a growth in the total amount of back pay, but for the second month in a row, we are seeing an improvement in this situation. Overall, in April, the total amount of wage arrears decreased by 829 million rubles, totalling 7.927 billion rubles as of May 1.
Dmitry Medvedev: What was the pre-crisis amount of back pay?
Alexander Zhukov: It fluctuated, sometimes coming up to three billion rubles, then decreasing.
Dmitry Medvedev: So it has increased about 2.5-fold.
Alexander Zhukov: That is about right. By May 11, it had decreased by another 810 million rubles, which means that we are seeing a positive trend in this area, as well. Overall, I think that the seasonal factor is also relevant here, but is very important to maintain this recent positive trend. We will also continue to closely monitor the labour market to keep track of the regional programmes implementation. Even now, we can see that we have not spent all of our funds. We have set aside 45 billion rubles, but so far, we have spent only 25 million on the programmes. It is clear that we should intensify some of the programmes. For example, one of our biggest problems right now is the employment of high school and college graduates. We are working with the regions to ensure that every university graduate has a clear direction for seeking work. We are currently expanding opportunities to obtain practical training and the like.
Dmitry Medvedev: By the way, we were planning to urgently pass a law on creating small businesses within universities. Did the law get passed?
Alexander Zhukov: The law is currently in the State Duma. We gave it our approval, although some ministers still have doubts regarding the legal framework for creating these businesses. Still, I hope that we will be able to overcome these issues.
Dmitry Medvedev: We need to do more than overcome them; we need to pass this document. We discussed its expedience with the Cabinet some time ago, and nobody had any doubts that it must be passed. As far as the legal framework is concerned, that is why we have lawyers – to think about how it can be implemented well, without contradicting any of the fundamental legislation. Please give instructions to speed up this process.
Alexander Zhukov: I think that we will pass this law in June.
Dmitry Medvedev: Very well.
Alexander Zhukov: We have the latest data regarding the implementation of the demographic project.
Dmitry Medvedev: That is also very important.
Alexander Zhukov: Naturally, it is directly linked to the implementation of the National Project on Health. We have some positive information, as you know, since I spoke about it yesterday. In the last four months, we have had 564 thousand births – that’s 17.5 thousand more than during the same period last year. We also have positive data regarding the mortality rate: the number of deaths between January and April of this year decreased by nearly 30 thousand people.
Dmitry Medvedev: How does that translate percentage-wise, and what is the natural population decline? After all, we worked on this together in the Cabinet, and several years ago, we were already seeing some positive trends. What is happening this year? What percent is it?
Alexander Zhukov: Compared to last year figures, birth rates have increased by 3.2 percent, mortality has fallen by 4 percent. Overall, the natural population decline in the first four months of this year is 131.5 thousand people, which is 26.1 percent less than a year ago.
Dmitry Medvedev: That truly is a positive figure.
Alexander Zhukov: This is a fairly relevant trend, and if we examine the causes of this reduction in mortality, we can see that the greatest reduction occurred in deaths from cardiovascular diseases.
Dmitry Medvedev: That reflects the work we have been doing to fight cardiovascular diseases.
Alexander Zhukov: Hi-tech medical centres have been opened, and more surgeries are being performed.
Dmitry Medvedev: We now have medical centres, we are now able to detect pathological cardiovascular system changes at an early stage, and as a result, to conduct different kinds of surgeries. We have specifically worked to provide access not only to the traditional open heart surgeries, which we have been doing for many years, but also the so-called minimally invasive techniques, which are much faster and easier. The very next day, a patient can leave his or her hospital bed.
Alexander Zhukov: The number of people dying has gone down by 21 thousand. We have begun to implement programmes to treat victims of road accidents, including on a national project level. There has been a significant reduction in the number of car accident victims, and victims from all traffic accidents overall. There have also been significant reductions in cases of accidental alcohol poisoning and deaths from accidental alcohol poisoning. Overall, this has set a positive trend in decreasing mortality from external causes, as well as diseases. Equally important is the fact that infant mortality continues to decline. I believe that this, too, is directly linked to our efforts within the framework of birth certificates, construction of perinatal centres, as well as maternal capital.
Dmitry Medvedev: We need to work to ensure that our short-term difficulties in financing do not affect this positive trend, because we have invested a great deal of money and energy to achieve these results. It would be an inexcusable mistake to let everything fall by the wayside, to succumb to the temptation to put these programmes on hold. In this regard, we must maintain the same positions as before. I have discussed this earlier with you, and I have discussed it on multiple occasions with the Cabinet, giving specific instructions. It is also mentioned in the budget address, which states that this trend of social support will continue, particularly for fulfilling social obligations in the formats that we are discussing today.
Alexander Zhukov: We proceed from the assumption that in planning the budget for 2010 and subsequent years, we will put priority emphasis on national projects and areas, particularly those that have worked well (such as the Public Health), as well as several new ones (we are starting a new programme to reduce smoking and alcohol consumption). These projects will retain priority status, and will not undergo any budget cuts.
Dmitry Medvedev: Very well.