Taking part in the meeting were Prime Minister Mikhail Mishustin, Chief of Staff of the Presidential Executive Office Anton Vaino, First Deputy Prime Minister Andrei Belousov, deputy prime ministers Viktoria Abramchenko, Tatyana Golikova, Alexander Novak, Marat Khusnullin and Dmitry Chernyshenko, Deputy Prime Minister – Chief of the Government Staff Dmitry Grigorenko, Deputy Prime Minister – Minister of Industry and Trade Denis Manturov, Deputy Prime Minister – Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev, Presidential Aide Maxim Oreshkin, Minister of Economic Development Maxim Reshetnikov, and Minister of Finance Anton Siluanov. Presidential Aide Igor Levitin, Minister of Healthcare Mikhail Murashko, Central Bank Governor Elvira Nabiullina, Governor of the Chelyabinsk Region, Head of the State Council Commission on Economy and Finance Alexei Teksler, and Russian Railways CEO Oleg Belozerov were also invited to the meeting.
Deputy Prime Minister Tatyana Golikova’s speech focused on improving the well-being of Russian citizens as a strategic priority and a priority in the Government’s activities. She spoke about real wage growth, poverty reduction, the situation on the labour market, support for families with children, and increasing the life expectancy. She also spoke about the implementation of new approaches to the training of workers, the Professional Training project and the vocational skills championship movement.
First Deputy Prime Minister Andrei Belousov stressed in his report that the Russian financial market demonstrated strong resilience to external shocks and the ability to overcome sanctions, but nevertheless a number of problems arose. Mr Belousov said that the Government outlined the following five key areas to address them: increasing the supply of ‘long money’; strengthening investor confidence in the Russian financial market; expanding the range of investment instruments; integrating the Russian financial market and financial markets of friendly countries; and using digital financial assets and digital financial platforms.
Finance Minister Anton Siluanov focused on one of these areas related to investment. He noted that one of the main investors in the financial market are citizens, whose interest in financial investment should be stimulated. The Minister described a number of ways for citizens to securely invest their money and use additional opportunities to generate income.
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President of Russia Vladimir Putin: Colleagues, good afternoon.
As you know, at a recent meeting with major corporations we discussed a new economic growth model for our country and what needs to be done to support this growth. I suggest that today we continue this conversation with Government members and the Central Bank leadership so that we can once again go over the matters you and I discussed with the business community.
We all know that since July 2022, the Russian economy has been generating positive momentum, including by tapping the niches which were left vacant on the Russian market after Western companies left it, at the expense of those who left our market, as well as thanks to proactively expanding ties with the emerging countries in the East and South.
However, this growth trajectory must not lead to complacency. We need to support and reinforce the positive economic trends we have in Russia and to improve our economic performance, while also ensuring our sovereignty in terms of technology, human resources, and finance. And we need to be responsive and swift in these efforts, acting without excessive red tape or delays, since the illegitimate restrictions imposed on the Russian economy could produce a negative effect in the medium term.
In this context, we need to ensure a steady growth in domestic demand. In the current environment, it is domestic demand that operates as a leading economic growth factor and takes centre stage.
Let me note that domestic demand must be consistent with the Bank of Russia’s inflation targets. It is essential that we prevent the inflation rate from becoming too high, or excessively low. I will not quote the latest data since you know them all too well.
Next, we should gradually lift the structural limitations that are hindering business activity. I am referring to bottlenecks in logistics, finance, the training of personnel, and so on.
We are working in all these areas. One more cycle of the BAM modernisation project has recently been completed, which is a very positive result for all our colleagues. I would like to once again congratulate all those who were involved.
Of course, we should support the projects that are above all focused on Russia’s technological and infrastructural development and on strengthening its industrial potential and sovereignty. I spoke about this in detail during a meeting of the Council for Strategic Development and National Projects held last December, as you remember, and in my Address to the Federal Assembly. I also outlined the main strategic goals for the Government in 2023.
I proposed discussing the interim results achieved so far at our meeting today. There are certain issues we can discuss, positive issues and achievements.
Let us begin with foreign trade. Trade with our main partners is growing, thanks to changes in logistics, among other things.
As of the end of February, we have increased the volume of cargo transportation by rail. The preliminary data for March show that this trend has continued to improve, which is, as we know, a very good indicator of what is happening in reality.
We have settled the problem of excess stock in our Far Eastern ports. Today they are operating on a normal, scheduled basis, both as regards exports and the westward movement of containers entering the country. I would like to express gratitude for this to the Ministry of Transport and Russian Railways.
However, there is still much to do. This year, for example, we must finish the deepening of the Volga-Caspian Sea Canal. We will continue working to increase the capabilities of the Eastern Operating Domain of our railway system and the ports of the Azov-Black Sea basin and to modernise our border checkpoints. I expect everyone involved in these projects to work diligently.
I would like to add that Russia’s interaction with its main foreign partners is not limited to trade. For example, last week we mapped out eight priority areas of cooperation with our Chinese colleagues. They include the establishment of technological partnerships, the interconnected development of infrastructure, and cooperation in the financial and real economy sectors.
In this connection, let me say a few words about Russia’s technological sovereignty.
So far, the dynamics of our manufacturing industry remain weak; regrettably, they are lower than last year’s level. Please pay attention to this fact, because it is very important. Our priority is to revive the industries that have been hit the hardest, such as auto-making and the timber industry.
At the same time, it is necessary to launch new projects in the manufacturing sectors as soon as possible, especially in the output of high-technology products. The decisions to support these projects have been approved. Among other things, I am referring to the cluster investment platform and the industrial mortgage system. We have talked about this many times. The Government has developed these new tools in a timely manner, and these tools, in my view, are quite good. Please do not drag your feet on their introduction, do not delay. You should use these mechanisms in practice on as wide a scale as possible, and use them right now.
We talked about this with Minister of Industry and Trade and Deputy Prime Minister Denis Manturov, among others. He promised that all fine-tuning operations would be over shortly and the process would be launched. I hope this is what is happening.
We will also return to this topic with our colleagues from the regions at the next meeting of the State Council Presidium.
Of course, financing by both the banking sector and the stock market is of key importance for launching business ideas. I am primarily referring to shareholder and so-called mezzanine financing.
Today, these tools are being underutilised. Banks and the entire financial system should contribute more resources to development projects and particularly to the initiatives advanced by fast-growing technological companies.
Let me add that our financial system should play a greater role in meeting exporters’ needs. It is necessary to replace the Western institutions that have left this country, the ones that used to fill this niche. We discussed this with you many times, of course.
The next point is infrastructure. Infrastructure comes next in importance, or perhaps not in importance but in what I would like to say.
In the construction sector, last year’s results speak for themselves. We achieved records in terms of the amount of housing that was built, as well as in road repairs. The mission for the Government and our colleagues in the regions is to keep this momentum going.
Deputy Prime Minister Marat Khusnullin and I discussed this topic. There are certain challenges. We know of them, and they are quite clear to us. Still, I hope that we will be able to maintain this pace.
Decisions to this effect have been adopted, including those on issuing additional budget loans on infrastructure development projects for a supplementary amount of 315 billion rubles in 2023.
(To Mikhail Mishustin) Mr Mishustin, you and I discussed this just a few moments ago: is this what we meant when we discussed implementing our plans ahead of schedule? Is this what we meant?
Prime Minister Mikhail Mishustin: Indeed, we spoke about opportunities for implementing these plans ahead of schedule. We will discuss this.
Vladimir Putin: Of course.
We provided for regional projects to receive funding ahead of schedule using, as I have already said, federal budget funds earmarked for 2024. In any case, we will discuss this today.
I am asking Mr Khusnullin and Mr Teksler to brief us on whether the regions are ready to engage in these efforts and whether they have all the tools they need at their disposal. I expect speakers at this meeting to also submit proposals on ways to fund not only regional, but also federal projects ahead of schedule. This is also critical. Let us not forget, we must remain focused on fulfilling federal projects at all times.
Moving on, household incomes are the key indicator as far as economic performance and the effectiveness of economic policy are concerned. At the end of the day, our mission is to make life better for the people. Let me note that wages and real disposable income have started to improve in real terms, if we look at the national average. It is true that these figures have been quite modest so far, and I will not elaborate on them right now. However, they are real, and you know this. Well, anyway, since October 2022, real wages have increased by 0.3 percent, 0.4 percent, and then 0.6 percent. In the fourth quarter, real disposable household incomes were up by 0.9 percent compared to the same period in 2021. Of course, this was a very slight increase, nevertheless it was still a step in the right direction.
End-of-March inflation will fall below four percent. According to some estimates, it will continue to subside, and real popular incomes should therefore increase more quickly. I hope that the decision to raise the subsistence minimum by 18.5 percent in early 2024 will also play its part.
I would also like to note that nationwide unemployment remains unprecedentedly low. However, even in this case, this does not mean that all labour market problems have already been resolved. On the whole, we have some issues regarding the quality of jobs. Certain regions and localities are posting much higher unemployment on our average nationwide levels. Employees of enterprises that have cut back production are working part-time and incomplete shifts. Understandably, this also impacts wages. As I have already said, average real incomes continue to increase; however, this is not happening in certain regions and certain areas.
I am expecting our colleagues to work more actively in this sphere. I would like to ask you to ensure the large-scale introduction of lean manufacturing principles in economic sectors and the social sphere, and to expand the national project on labour productivity.
Moreover, it is necessary to create additional opportunities for the professional improvement of specialists and for training young people, so that they acquire modern, in-demand skills, and so that they can expect higher incomes to better support their families. In this connection, I am drawing your attention to a joint public-private project to modernise the intermediate vocational education system. I discussed this in my Address.
And last but not least for now, in my opening remarks: according to Rosstat, the average nationwide life expectancy increased by 2.7 years in 2022 and now totals 72.8 years. Mortality rates continue to decrease. It is highly important that we support these trends in the field of demographics. I repeat, this is an integral and highly important task for all levels of government.
I know that the Government is drafting additional proposals at strategic sessions in line with the objective situation. I am confident that new draft measures in the six development areas I discussed at a meeting of the Council for National Projects will become the result of this work. I am asking you to submit their specific parameters in May 2023.
This is what I wanted to say at the beginning.
Let us hear the reports.
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