President of Russia Vladimir Putin: Good afternoon, colleagues, friends,
As per tradition, I am pleased to have this opportunity to meet with the participants of the congress of the Russian Union of Industrialists and Entrepreneurs (RSPP). The RSPP comprises the country's major, leading companies and manufacturers, and has for a long time been a reliable partner of the state in matters related to strengthening the economy, finances and expanding free enterprise.
It is crucial that the RSPP consistently maintains a clear and well-balanced position, along with specific proposals, on how to achieve sustainable and dynamic national development. This process should also be stable and lead to increased competitiveness of the Russian economy, improved quality of life for citizens, and higher family incomes. I hope that during our planned debate, we will discuss the tasks that require joint efforts from the state, society and businesses.
Firstly, before we start our conversation, I would like to highlight the following. Despite the unprecedented challenges we have faced in recent years, positive trends are growing in the Russian economy. Last year, Russia's GDP increased by 3.6 percent. The statistics for the first few months of this year indicate continued high growth rates, with a 4.6 percent year-on-year increase in January and a 7.7 percent year-on-year increase in February, resulting in a 6 percent average for the first two months [of this year].
In January and February, industrial production grew by 6.6 percent. This growth is supported by active domestic demand, driven by an increase in real wages and incomes. Retail trade in the first two months of this year was estimated to be 10.7 percent higher than in the same period last year. In January, average monthly earnings increased by 8.5 percent in real terms, and real disposable incomes in 2023 increased by 5.4 percent, as you may know.
I will not delve into the specific economic development indicators, but I want to emphasise once again that there is a generally positive and strong momentum, as evidenced by the state of the employment market, among other factors.
We are currently experiencing record-low unemployment rates in Russia, standing at less than three percent. Particularly noteworthy is the reduction in what we term as its structural component, which includes youth unemployment and regions and communities with historically high unemployment rates. In these areas, such as the North Caucasus, where unemployment rates were notably elevated, we have seen significant improvements. For instance, in the North Caucasus, unemployment previously stood at 13.9 percent, but has now dropped to 9.7 percent – a decline of almost four percentage points. Similarly, youth unemployment, which was at 10.7 percent, has decreased to 6.7 percent. While these regions still exhibit higher unemployment rates compared to the national average, the downward trend signifies progress.
I want to emphasise that the increase in employment and the positive momentum in our economy are also the result of the hard work of businesses and the entire entrepreneurial community. Colleagues, your commitment to achieving national development objectives alongside the state is commendable.
This constructive partnership and our experience of collective actions during these challenging, extraordinary times, allow for overcoming external challenges and realising the strategic plans outlined in the recent Address to the Federal Assembly. While we are aware of the various difficulties that both the economy and all of you face, it is evident that, despite these challenges, tangible results have been achieved. We will talk about these matters further in our discussion.
We acknowledge the threats before us, fully understanding their origins and the areas where they pose the greatest difficulty today. However, I am confident that by working together, we will successfully navigate through these challenges.
I want to emphasise once again: our focus is on the comprehensive development of the economy and social sector, including the establishment of entirely new sectors and industries, such as the service sector, and beyond. We will implement a large-scale infrastructure programme, involving the construction of roads, railways, bridges, and tunnels, alongside the expansion of seaports and airport networks, and the modernisation of the housing and utilities sector. Additionally, our environmental agenda is extensive, with businesses playing a crucial and influential role in its execution.
Certainly, these are not all of our plans. What is crucially important is that we possess ample state resources and the potential of our domestic businesses to realise these and other initiatives, paving the way for a new model of economic growth. Our domestic enterprises are displaying robust activity across various sectors, from manufacturing and the consumer market to the IT industry, tourism, and beyond, both on the domestic market and in collaboration with international partners.
The state remains committed to supporting businesses as they embark on promising projects, boost capital investments, and generate new employment opportunities. In essence, we encourage enterprises to pursue initiatives that serve their interests while contributing to the enhancement of citizens’ wellbeing and the wellbeing of Russian families.
What practical measures do I have in mind? First, we will create maximally predictable conditions for doing and developing business. I have no doubt that you have many questions regarding this, but we will move forward. For example, I have issued instructions to expand the planning horizon of public finances. It will not only cover the next three years but will also allow us to plan government expenditures for six years.
Therefore, the federal, regional and municipal authorities will be able to make plans for larger and more extensive projects with large investments and hence with more comprehensive benefits for the regions and economic sectors. Of course, the contractors, executors of such projects will be able to make long-term modernisation and capacity expansion plans and to hire and train professionals.
Another vital measure for improving the investment climate should be the adjustment of the tax system.
As you know, the Government is working on these important issues jointly with the business and public communities, entities of the Federation and the Parliament, discussing the parameters of these changes and preparing relevant proposals.
As I said, the updated tax conditions should be secured for a long period. Fiscal modernisation must ensure a fairer distribution of the tax burden while stimulating business development and investment, including in infrastructure, social and personnel projects. In other words, we must create stable and predictable conditions for a reliable and steady operation of businesses. I recently discussed this key issue many times with Mr Shokhin and many others present here.
In this connection, I would like to say a few works about an extremely delicate matter. We raised this issue at a meeting of the Prosecutor General’s Office Board in March. Our law enforcement authorities have recently opened a number of cases on de-privatising certain assets. I would like to emphasise that we are not proposing a revision of privatisation results, which we pointed out at our previous meeting. The matter concerns the cases when the actions or inaction of the owners of enterprises and other assets directly damage national security and national interests.
I would like our colleagues in this room and in the law enforcement agencies to know that the expropriation of assets is only justified in the situations I have mentioned just now. I would like to add that no formal pretexts and excuses must be used when explaining our complaints to the owners, like asset privatisation in the early 1990s with the approval of regional but not federal authorities. The federal Government overlooked such transactions at that time. I will not say if it was done deliberately or not, which does not matter now, but it is a fact that the Government did not control such deals, it did not do what it was supposed to do in accordance with legislation, and hence it would be inappropriate to present claims to the current asset owners, especially those who are working properly and effectively and who address social issues and help ensure national security.
Second, the Russian Union of Industrialists and Entrepreneurs, as well as other business associations, are doing a lot to de-bureaucratise the business environment. They are helping to simplify or digitalise administrative procedures and coordination work, and they are also helping the Government to improve legislation and control-and-oversight activities. Through our joint efforts, we have already made considerable headway in this complicated and painstaking work. I would like to thank everyone contributing to this work.
Nevertheless, entrepreneurs and business people, I mean you, esteemed colleagues, still face many hindrances and bottlenecks. We realise this, and we will consistently address these issues in order to create a more favourable, safe and more profitable nationwide environment for working, building and manufacturing, so that our national jurisdiction would become globally competitive in the true sense of the word.
For example, we need a clear, understandable and sufficient regulatory framework that would not weigh down on businesses. At the same time, this framework should guarantee the protection of the consumers’ interests and the protection of our citizens’ rights.
I would like to mention in this context the so-called “regulatory guillotine”. Instead of hundreds and even thousands of archaic and outdated regulatory acts, we have already approved a sufficiently compact list of documents with more modern and understandable requirements. They will certainly be updated. Moreover, the Government is preparing to launch an upgraded “regulatory guillotine” mechanism. In effect, another stage of clearing up the regulatory framework will get underway.
I would like to add that, in the past three years, we have been introducing a regional investment standard in line with the business community’s requests and recommendations. This standard aims to facilitate common principles and mechanisms for attracting investors in all regions of the Russian Federation. We will do this using the best practices that have won a reputation for themselves in real life.
This year, we will assess the progress our regions made while introducing the investment standard. We will do this using the National Investment Climate Ranking Survey. As usual, we will present its results at the St Petersburg International Economic Forum. Colleagues, of course, I would like to use this opportunity to invite all of you to our traditional event in St Petersburg.
Third, we will have to expand industrial production considerably, by dozens of percent, over the next six years. New enterprises, including high-tech and critically important companies, should appear just about everywhere.
Companies implementing individual projects, regardless of the region they are located, can already take advantage of special support measures, the so-called “industrial menu.” They can choose agreements on protecting and encouraging investment, special investment contracts, the cluster investment platform and so on.
We will expand these opportunities for businesses, including by allocating additional resources on developing the industrial mortgages programme and additional capitalisation of such a significant and highly sought mechanism as the Industrial Development Fund. Its capital will nearly double, increasing by 300 billion rubles. I know that some people sitting in this hall believe that this is not enough, but we will keep an eye on the situation as it develops. This resource will aim to support high-tech projects, in the first place.
Of course, we need to monitor the efficiency of these and other tools online, fine-tune them and make them more flexible and convenient, relying on feedback from businesses and regional leaders.
Colleagues, Russia’s strategic task is to increase the production of goods and services, using its own technology base. I have already said this many times, and I would like to repeat this again: we are not going to produce absolutely everything in Russia – it is senseless and not needed, so we are not going to do this. However, we have to develop our own original solutions, services, and software, as well as introduce them, especially in the most important spheres and technologies.
This is today’s challenge, and in order to meet it, it is necessary to ensure an influx of qualified personnel into our economy, those who are ready to master new production and management technologies. We need to unlock this colossal potential of Russia, and give our talented scientists, engineers, entrepreneurs, and workers the opportunity to fully reveal their potential.
In this context, the fourth point. In order to increase the effectiveness of training for both youth and specialists, we will improve all levels of education, from schools to universities. We will do this together with businesses, like it is already being done within the career guidance system, the Professionalism federal programme and the Priority 2030 programme. All of them will be further developed.
I would like to thank you because you are taking an active part in this effort. Certainly, this is a mutual interest of both the state and businesses. I know that there is a lack of personnel, and we, of course, must work together in this area. (Addressing Alexander Shokhin.) Mr Shokhin, it seems to be working out in general. We must move forward in this direction, and even more actively than we have done so far.
We will launch a programme to repair and equip secondary vocational education institutions, put their educational facilities and infrastructure in order, including sports facilities and college dormitories. Everything is important in this respect; we need to attract young people to this sphere, and interest them in improving their skills and obtaining the necessary professions.
As for higher education, 40 university campuses will appear in Russia in the next ten years, with everything necessary for students to study, work, and live. These should be up-to-date community spaces not only for universities, but also for the surrounding areas and people living there.
Let me repeat, the goal of the professional education system is to train modern and much-in-demand specialists, giving them the skills and qualifications that guarantee an interesting, reliable, well-paid job. Of course, I count on the mutual interest of the state and the business community in this respect.
That said, I will emphasise again – experts predict that in the next few years Russia will be objectively short of specialists and skills. Obviously, it will be impossible to resolve this problem automatically, at the expense of labour migration, by bringing low-skilled workers from abroad. We will have to adopt different approaches. I will not talk at this point about the domestic political, social and other components of the problem I have just mentioned.
We will have to substantially enhance labour productivity in all economic branches and the social sphere. We will also have to develop digital platforms, data-based management models and carry out crosscutting modernisation of industrial facilities based on extensive automation. The goal has already been set – by 2030, Russia should be among the world’s top 25 countries in the number of industrial robots. It does not seem to be a too ambitious goal but it is feasible, it can be reached. We will move gradually. If we manage to do more, this would be wonderful.
I know that for many of our colleagues in this hall, the owners and heads of large companies, this goal is not a look into some distant future but a specific plan of action that is already being carried out in practice.
As you know, I regularly visit enterprises in different regions, including new shops, production lines and plants. I certainly see how their heads and workers talk enthusiastically about their upgraded enterprises that are now operating on a completely different, modern foundation. New technology is being introduced even in inadequate premises and this is surprisingly simple how young people develop and put into service such things. This is great!
Obviously, such investment helps enhance the competitive ability of companies, strengthen their market positions and, most important, improve the working conditions of specialists and increase their incomes.
I would like to say the following in this context. Regardless of the scope of business, success is on the side of those – and you know thus better than anyone else – who can understand correctly the dynamic market conditions and are ready to adapt to them and invest in scientific developments and their own technological solutions.
I will remind you of the set goal – to bring domestic expenses on R&D to no less than 2 percent of the GDP by 2030. Importantly, private business investment is called upon to be the main driver in this respect. It should at least double. I discussed this issue in detail yesterday with one of the persons present here now.
And one more point. Only those businesses that care for their employees, their work teams and help them upgrade their professional skills can guarantee success and development for years to come. These businesses pay their employees decent salaries and give them a social package because they know that welfare of people and their families and children and the future of the country depend on these things. Eventually, this attitude produces positive economic results for specific businesses.
Responsibility of businesses and their strategic vision are also manifest in their work for the social benefit when corporate policy includes educational, healthcare, infrastructure and charity projects. Programmes for environmental wellbeing of cities and villages, regions and territories are also at the top of priorities.
At the RSPP Congress last year, I suggested instituting a special prize for such companies. It was called Leaders of Responsible Business. As far as I know, the first winners received this prize today. I would like to congratulate the winners and thank the owners and heads of relevant companies. I am sure their positive experience and social projects will become an example for all Russian businesses. Hence, businesses are bound to produce even more initiatives of this kind – that people and the whole country need.
Allow me to finish my remarks at this point. I would like to thank you for your patience and attention.
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Vladimir Putin: Mr Shokhin, I would like to thank you for organising this work and for organising the work of the RSPP in general.
You know, we are following very closely – at the level of the Government and the Presidential Executive Office – what you are doing and we understand what difficulties you are facing. We do not get angry when you are scolding us for not finishing something or not doing it as it could have been done in the current conditions but like you, we are also having a hard time.
But we will resolve all the problems if we listen to each other and work together. We have succeeded in doing it so far. I do not doubt for a second that we will reach all the goals that we set for ourselves.
Thank you very much. Thanks you!