Beginning of Meeting with President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin 2009-04-13 21:11:08 Gorki, Moscow Region President of Russia Dmitry Medvedev: You head one of Russia’s biggest business associations, and of course your organisation cannot ignore any of the various problems we face today. You meet regularly and discuss various issues. And I have also had a number of meetings with your organisation, during which we have discussed many different initiatives aimed at overcoming the financial and economic crisis. Some of these initiatives have already led to new laws being passed, while others have yet to be implemented. Today, I simply want to hear from you whether or not your organisation is happy with the way its proposals are being implemented. In your view, from the business community’s point of view, how well are the proposals that have already been enacted as laws working, and what still needs to be done to take into account business community interests in drafting laws to keep the economy functioning normally, and to protect workers, who are also part of all the processes in which you as the employers and entrepreneurs are involved. So, let’s look at perhaps the most relevant proposals at the current moment, and we could build on our discussions today through a collective meeting and through the recommendations that I make regularly to the Government. President of the Russian Union of Industrialists and Entrpreneurs [RSPP] Alexander Shokhin: First of all, thank you for finding the time to meet with me, as president of the RSPP, on the first day of the Russian Business Week forum’s work. At the moment, at least two events are underway in parallel – our annual taxation conference, and a big round table on corporate governance. We are meeting not just within our own circle. Senior officials from the Government, Presidential Executive Office and the higher courts are taking part in all of our discussions, conferences and working sessions. At least 12 members of the Government are expected to take part in discussions at various events, and the main sense of the Russian Business Week, which I recall you opened last year as a candidate in the presidential election… Dmitry Medvedev: In Krasnodar. Alexander Shokhin: Yes, in Krasnodar. And in many respects, your speech on that occasion marked the start of forming the economic policy currently being implemented, and we are particularly pleased to note this. Anyway, what we want is to report to you and the Government, following this week of discussions, on our main proposals, our views on last year’s results, on implementation of the anti-crisis programme (we can already make an evaluation now) and, most importantly, on what we think should be on our common agenda. That we need to have a common agenda is beyond any doubt. What we are happiest to see is that we have this dialogue going now between the business community and the authorities, and we have the mechanisms, forms and instruments for discussing all the issues of concern to business. To give just one example, over these last months we have talked on a number of occasions about the wisdom of not taking hasty steps to increase the consolidated social tax rate. In his speech in the Duma on April 6, the Prime Minister publicly made this concession to us, and the increase in the tax rate has been deferred for a year, which does not mean that pension and insurance system reform as a whole will be postponed. We hope to take an active part in discussions on pension reform and work to shift the social security system to an insurance-based model. This is a matter of crucial importance for us, and we want to be seen not just as businesspeople, saying that you should not do this or that, raise taxes and so on, but as a constructive partner. In my view, we have demonstrated at our previous meetings that we are interested in constructive dialogue. You asked about our priorities. Social programmes are as much of concern to the business community as they are to the Government. Pension reform is therefore our number one priority. We want to be involved not just in discussions on the overall strategy for pension reform, but also in discussing the details that could conceal problems for business. We would also like to give employers’ associations greater responsibility and greater rights, perhaps by law, to decide a number of issues. We, as an employer’s organisation working at federal level, have already drawn up proposals in this area. We seek not just greater rights, but also greater responsibility. Unlike many business associations, the RSPP works also as an employers’ association. By law, this places certain responsibilities upon us. We see these responsibilities taking new directions, including greater involvement in labour market policy, in the professional education system, in particular drawing up new professional standards, and in drawing up technical regulations and standards. In other words, the state authorities could give employers’ associations certain powers, but these organisations would have to prove, of course, their ability to deal with the tasks. Of course, it would be strange if I did not name tax policy as one of our priorities. I think that the anti-crisis programme has already done and is doing quite a lot to take our views into consideration. But there is one circumstance that worries us. The anti-crisis programme is discussed widely at many different forums, and my colleagues and I have been invited to discussions by the Government, the various commissions, and the Public Chamber, and various ministers have taken part in our discussions in the RSPP. But at the same time, economic actors’ behaviour this year, especially in the second half of the year, will depend to a large extent on the tax decisions being made right now. Taxes are a part of budget revenue. The budgeting process, in the Government at least, begins in April and ends in August, and we would like to be involved in these discussions. Overall, we are happy with our dialogue with the authorities and the results it has produced, but we cannot just mark time, we need to quicken the pace and move ahead. So, we maybe tire you out, you and the Government, with our proposals and our outlines, arguments and conclusions on subjects that everyone has become weary of, but we think this is essential. If we do not hone our arguments and demonstrate the effectiveness of the solutions we propose, our efforts would amount to no more than primitive lobbying, and we do not want this. Dmitry Medvedev: I think that in these rather difficult circumstances, we of course will give consideration to your proposals on improving the tax system, and this will most definitely be a subject for discussions in the Government, and, probably, at my meeting with the business community. We will also examine the pension reform issue, which is one of the subjects at the centre of the Government’s attention right now. The meeting on economic issues that I will be holding very soon will be devoted precisely to this question of the pension reforms we plan to carry out. Other issues will also of course be on the agenda for our dialogue. I have said on a number of occasions that many of our corporate institutions involved in insolvency and crisis management, for example, in recovery from this or that economic phenomenon, were designed for a much quieter pace of economic life. But today’s circumstances are different. It is therefore my view that we need to work together with the business community, with professional associations and with everyone interested in improving our social security legislation, to draw up a whole range of proposals on perhaps transforming a number of the important institutions in this sector, corporate institutions, procedures related to crisis management, insolvency, bankruptcy, not to mention the important issues that you spoke of. These are all things we need to work on then, and I think we will discuss all of these issues at the upcoming meeting with the members of the RSPP and with those usually present at these sorts of events. Alexander Shokhin: Thank you.