OREANDA-NEWS. December 16, 2010. The Prime Minister answered numerous questions on pressing social and political issues raised by people during the programme.

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Transcript of the “A Conversation with Vladimir Putin, Continued”:

Maria Sittel: Good afternoon. I am Maria Sittel. We are live on air with the special programme A Conversation with Vladimir Putin: Continued.

I would like to start by thanking all our viewers and people across Russia for calling in and putting their questions to the prime minister. We have received a great many of them, and it's clear that Russians want to hear first-hand about what the government is doing and about its plans.

Today's conversation will look back over 2010. Each of us will also do the same. Some will never be able to forget the wildfires that raged throughout Central Russia or the unprecedented drought that struck the Volga and Urals federal districts. Others will remember this year as the year their child was born, as the time when housing conditions improved thanks to maternity capital payments, when they bought a car under the car scrappage programme or for many other reasons.

As this year recedes into history, we remember the bitterness of defeat at the 2010 Winter Olympics in Vancouver, the Paralympic athletes who gave us so much to cheer about and our jubilation after Russia won the bid to host the 2018 FIFA World Cup.

Ernest Mackevicius: That's why we have invited fire-fighters, rescue workers, academics and people who worked to rebuild burnt-out villages here today. Doctors, students, industrial workers, farmers, representatives of public organisations and many others are also here with us. Every single one of them will have their own impressions of the outgoing year.

I am Ernest Mackevicius. My colleagues, Maria Morgun, Tatiana Remezova and Maria Kitayeva are all working with Maria Sittel and me to bring this programme to you.

Maria Sittel: Mobile television stations will be broadcasting live today, linking us live with various Russian regions. We will have live broadcasts from Astrakhan, Novokuznetsk and Cheboksary. We will also be in touch with our crews on location.

Ernest Mackevicius: So here at Channel Russia we are now going live to Prime Minister Vladimir Putin. (Applause).

Maria Sittel: And I'll be here, at the call centre throughout the programme. These operators have already been working round the clock for over three days. You can continue to call in with your questions for the duration of broadcast.

Ernest Mackevicius: Good afternoon, Mr Putin.

Vladimir Putin: Good afternoon everybody.

Ernest Mackevicius: This is the third time we've been forced to start this conversation with the word "crisis." Yes we're starting to see some evidence of recovery. On the one hand, our industry, including the automotive sector, is on the rise. Crude oil now costs almost USD 90 a barrel. The rouble is strong and stable. At the same time, the budget deficit remains, prices are rising, medicine and food are becoming more expensive, and utilities bills are increasing. When will the fact that the worst is over be felt by ordinary people, not just the economy?

Vladimir Putin: So the suggestion is that we sum up the results of the outgoing year?

Ernest Mackevicius: Yes, that too.

Vladimir Putin: And we should certainly do it according to tradition. I have the very latest information here. Talking with my colleagues yesterday evening, I mentioned that point, the statistics indicate it's the case and the ministries have confirmed it.

Last year it was rather difficult to talk about results. The main indicator of a country's economic effectiveness is growth or decline in the gross domestic product, which indicates the scale of our entire economy. We have seen solid growth of 5%, 6% or even 7% on average over the past decade. This has been very good, stable growth.

But last year our economy shrank dramatically because of the global financial and economic crisis; it shrank even more than that of some other countries, by 7.9%. This year we saw a positive trend: the economy grew by about 4%, or to be precise, by about 3.8%. This is less than China, but more than Europe or the United States. This is the main, the fundamental indicator, and it is positive.

Second, industrial production decreased considerably last year, by over 9%, by 9.8%. This year it rose by over 8%. This does not make up for last year's fall, but is moving in that direction, with industrial growth in the region of 8.6% or 8.5%.

Agriculture also saw a minor increase last year, by about 1.4%. But this year, as we are all well aware, because of the drought, we will see a fall of 9.9%. Because the harvest failed. We harvested 108 million tons of grain in 2008, 98 million last year and 60.5 million tons this year and this is a considerable decrease. This is all down to the drought.

However, and this is something we'll touch on later, we are working intensively to support agriculture and to preserve this trend of positive development. I am confident that we will succeed.

On the negative side, nothing was invested in fixed assets last year, but this year such investment has been growing.

What effect has all this had on social issues?

Although real wages (minus inflation) fell by 3.5% last year, people's real incomes grew a little, by slightly over 2%. Where did that come from? It resulted from the decision we took regarding public sector wages in December 2008, when we increased the wage fund and also raised pensions by over 24%. People's real incomes increased by a little over 2%. But this year we saw real wage growth. They fell by 3.5% last year but grew by 4.2% this year.

People's real incomes have grown accordingly, also because pensions were raised substantially, by 24% last year, which is considerable growth, and by 44.9% this year. Pensions have grown by nearly 45%, from 5,333 roubles to 7,800 roubles and higher. This may not be anything to write home about, it's no great windfall but still, it's something. We no longer have pensioners living in poverty on incomes are below the poverty line.

A few words about the poverty line. The proportion of Russians living below the poverty line has decreased from 13.1% last year to 12.5% this year. Is that a lot? I would say that this is a positive change.

I'd like to remind you that 29% of people in Russia, or about 45 million, were living below the poverty line in the year 2000. How does this compare to Europe? We have grown used to comparing everything to Europe. It's more than in Europe. But this is very strange approach to statistics, as the average data for Europe is not available even to me, and the data for developed market economies differs from information about East European countries. The situation in Russia is not all that different from that in, say, Romania or Latvia, and it may be even better, given the drastic consequences of the crisis in some East European countries.

Overall, we are finishing this year in a quite satisfactory manner.

Ernest Mackevicius: When will we see a return to the pre-crisis standard or quality of life?

Vladimir Putin: You mean when will the general public feel that the situation is indeed improving? I think a positive trend is underway and that people should be able to feel that.

You see, last year we had 6.2 million unemployed people, but this year we have cut unemployment by 1.2 million people by creating new or restoring old jobs. Believe me, this is a very good indication, rather more than merely satisfactory.

I hope that people have least sensed that changes are underway.

As for the country as a whole, I started with the most important indicator, GDP, gross domestic product growth, as it gives a clear indication of the size of our economy, when the economy surges back to pre-crisis levels, the levels that existed before 2008, then we will be able to talk about people feeling this change in their salaries and in the reviving jobs market.

A variety of experts hold that we are set to regain our pre-crisis GDP level in late 2012, although some believe it will happen by late 2011. I think the truth lies somewhere in-between: we should be back at pre-crisis levels by mid 2012.

Ernest Mackevicius: So, it would be premature to expect to see the turning point in 2011?

Vladimir Putin: As I see it, we are already at that turning point. Look, our GDP fell by 7.9%, but this year it has grown by 3.4%. So, overall, the trend can be described as a watershed and our task now is to keep it up.

Ernest Mackevicius: Mr Putin, this year was a trying period not only for the economy, this year will be over in two weeks’ time, but also because of the natural and man-made disasters. Which would you class as the difficult?

Vladimir Putin: The wildfires, of course. I felt terribly sorry for people, for all those for whom this really was a major catastrophe. People in those small villages, who lived as they always have, quite modestly. They lost even that little that they owned, and this really was a great trial both for those people and for the country, for all our regional and federal authorities. On the whole, we dealt with these problems.

And of course it goes without saying that the drought was a heavy blow to the economy.

Ernest Mackevicius: Our call centre is now taking the first live calls, and we have also been getting a lot of text messages. Over now to Maria Sittel, who is in our call centre monitoring the calls and messages that are coming in.

Maria Sittel: Thank you, Ernest.

Mr Putin, the country has been stirred by the recent unrest in Moscow and St Petersburg. Thousands of people wreaked havoc, beat up passers-by and chanted nationalist slogans practically next to the Kremlin walls (in Moscow) and the Winter Palace (in St Petersburg).

We have received thousands of messages on this question. Some say that the violence perpetrated by people from the North Caucasus must be stopped, while others – these are people of a wide range of different nationalities and ethnicities – demand that a definite end be put to the actions of those nationalist groups.

Here is a message from Erach Makhmadilayev, who lives in Orekhovo-Zuyevo in Moscow’s suburbs: “As a result of this unrest, people of my nationality cannot leave their homes to go to work. The police are not doing anything. I am asking the authorities to intervene.”

And here is another message on the same issue, from Andrei in Krasnoyarsk: “Do you think it was the government’s leniency regarding people from the North Caucasus that sparked this aggression in Russians?”

Vladimir Putin: Actually, we must cut short extremist actions on all sides, no matter where their origins lie. And we must not tar everyone from the North Caucasus or indeed any other nationalities, in fact anyone at all, with the same brush. But we must be ruthless in cracking down on all extremist actions.

The general public, including the liberal section of society, has to understand this, and I think that everyone would agree that we need law and order and that it must be upheld. One of the government’s functions is to guarantee the interests of the majority. This is the first point.

Second, we often, justifiably, criticise our law-enforcement agencies. It’s no accident that we have major reform plans in this sphere.

But while fighting negative elements in our law-enforcement agencies, including the police, we must not tar everyone with the same brush. We need to understand that these agencies are entrusted with a vital state function and we must not treat them like dirt; otherwise our liberal intelligentsia will have to shave off their beards, don their helmets and go out onto the streets and squares to fight the radicals.

I think this would be the absolute worst-case scenario, because everyone has their role to play, their job to do: for some this is operating TV cameras, for others it’s holding the microphone, while others go out onto the streets to fight the radicals. However, the state must certainly fulfil its functions in strict compliance with the laws that are in force.

Maria Sittel: Mr Putin we have received another related question by SMS: What about the Russians living in the North Caucasus? What will happen to them after the events in Moscow?

Vladimir Putin: I think we should cast away all fears. People from any Russian region, be it the Caucasus, the Far East, Siberia or Central Russia, should feel at home in their country wherever they live. Regional authorities must play a key role here, and public organisations, too.

What’s important is that all Russian people, all Russian citizens of any ethnicity or religion identify themselves as part of a single nation.

To make sure people feel at home everywhere in Russia, we must all behave appropriately, so that a person from the Caucasus feels safe walking around Moscow, and Russians of Slavic ethnicity feel safe living in the North Caucasus. People of all ages must have a shared awareness that they have one homeland. One of our main objectives here is to ensure that all people can live and feel safe and comfortable everywhere in the country.

I must reiterate what I have said on multiple occasions: Russia has originated as a multi-ethnic and multi-confessional country.

Our religion is Eastern Christianity, or Orthodox Christianity. Some theorists argue that it is in fact even closer to the principles of Islam than to Catholicism. I would not like to assess how close this statement is to reality, but it is certainly true that these religions have coexisted for centuries. They have developed a communication culture over these centuries – not over the past few decades. We must look back to those centuries.

Ernest Mackevicius: Mr Putin, you must have seen our previews of today’s Q&A sessions, in which we showed the footage of yourself visiting the villages devastated by last summer’s wildfires, in Altai and Central Russia. You said new houses will be in place by winter. You have made good on your promise, and all the fire victims have moved into their new homes and have thrown housewarming parties.

We would like to ask those people and our correspondent, Dmitry Kaistro, how things are going for them now.

We link up to Ivatino, in the Vladimir Region. Hello Dmitry, what does the village look like today, and who have you met there?

Dmitry Kaistro: Good afternoon, Mr Putin. Ernest, Maria, hello.

We are here in the village of Ivatino, where 68 modern comfortable houses have been built literally from the ground up in almost no time. This is essentially a new village constructed for the local residents who lost their homes to the wildfires last summer.

These new houses have all the modern amenities, such as household gas, satellite TV, the Internet and so on. The local residents remember your visit with deep appreciation, Mr Putin. You were here in autumn, when the construction was still underway, and it was due to the decisions you made that the people were able to move into their new homes before the cold weather and snow have set in.

These people are preparing for the holiday season. They have met me today to tell you about the changes in their lives over this time and to ask you questions.

Who wants to go first? Who has a question? Go ahead.

V.Yuzhakov: Mr Putin, here is my question. It’s been five months since the fires. Will any amendments be made to the Forest Code? Will anything change? I mean, four years ago, woodlands were leased out to businesses and all forest keepers and wardens were made redundant. Will they be reinstituted? The situation with the forests is completely out of control.

Vladimir Putin: We have indeed decided to make changes to the Forest Code and toughen the tenants’ responsibility for the areas they lease. But that is not all. This is only part of a bigger problem, which mainly stems from the fact that fire services are very poorly equipped. We must also make amendments to legislation to expand safety areas in forests, especially around villages and strategic facilities. The State Duma is currently debating a bill  on volunteer firefighting brigades, which existed in the Soviet era. We are planning to reinstitute them.

As for the fire services, we are planning to retool them: to provide them with aircraft, which currently belongs to the Emergencies Ministry as well as the Defence Ministry and the Interior Ministry, and with other fire-fighting equipment.

The government plans to allocate 43 billion roubles to purchase the equipment over the next few years. New aircraft will be acquired, eight Be-200 jets as far as I know.

All that, taken together, will hopefully enable us to deal more confidently and efficiently with challenges on this scale.

Ernest Mackevicius: Dmitry, let’s have another question from Ivatino. Please go ahead.

Dmitry Kaistro: Does anyone have another question?

Yelena Kulakova: I’m a paramedic and work closely with the population. Elderly women say that where they used to live their utilities bills were not as high as they are now. Are any changes in utilities bills planned for next year? Will they increase or stay the same?

Vladimir Putin: Ms Kulakova, my understanding is that those communities used to have only low-capacity power-transmission lines. They are now connected to the gas system, benefit from decent power supply, water and sewage systems, as well as TV networks boasting over 100 channels. Virtually every single house has broadband internet access. The upkeep and maintenance of all this infrastructure, of course, requires additional resources.

At the same time, and I think this is something you can confirm, I would like to note that the homes were all built using new technology. They are energy-saving in the direct sense of the word, which helps keep the cost of electricity and heating down. This is the first point.

Second, most importantly, this concerns not only rebuilt communities but the entire country’s utilities infrastructure. Naturally, people are not satisfied with what is happening here, and I’m sure we will return to this issue during our discussion today. In 2008, utilities prices rose by about 20%. Despite an uptick in early 2010, we succeeded in restraining the price rise to about 15% nationwide. Next year, we do not expect these prices to rise by anything over 13%. I repeat this is the projected nationwide average.

And if you economise, you can make savings. Of course you now benefit from the added convenience and comfort provided by this new infrastructure, and that has to be paid for.

True, I don’t know, it’s one thing to use coal and firewood, and natural gas is something else. I’m not convinced that gas is always more expensive. For example it’s much cheaper than diesel fuel. People in areas which previously had diesel-fuel boilers will be able to spend less.

Ernest Mackevicius: Mr Putin, let’s get some thoughts from our studio audience on this.

Tatiana Remezova, please go ahead.

Tatiana Remezova: Thank you, Ernest.

There are people from the Tambov Region here in this studio. That region was also hit by this summer’s wildfires. It would be interesting to get a reaction from people there to our report from Ivatino.

A. Lapin: Good afternoon, Mr Putin.

Russia was hit by an abnormal heat wave this summer. Forests and villages burnt. Surely, it is very good that you built homes for wildfire survivors so quickly and that you personally supervised housing construction on all these sites. But what can we do about those “dying” villages which lack adequate living and working conditions?

Ernest Mackevicius: And running on from that, Mr Putin, can we add the following “awkward” question which really is on everyone’s mind? It was sent in by Lyudmila Mikheyeva from the Kemerovo Region.

Vladimir Putin: As if we haven’t already had some “awkward” questions.

Ernest Mackevicius: Yes. Don’t you think that villages all over Russia will burst into flames next summer, just to get the Government to address their problems?

Vladimir Putin: Let’s start with the first part of this question. Of course, we still face a lot of problems related to housing sector development. We have a lot of dilapidated housing and people in numerous barracks need to be resettled. The state has a lot to do in this respect.

As for what we did to help people who lost their homes in the fire, our actions were a prompt and highly targeted response to a massive problem, the disaster that these people experienced. I repeat, this was a highly targeted reaction.

So what am I getting at?  The houses that were burnt down, and those being restored housing were and still are considered private property. How are similar issues tackled elsewhere in the world? I would like to stress that, as a rule, virtually all this property is insured, and people are given compensation following accidents, after their homes burn down.

Unfortunately, this concept is not widespread in Russia due to our relatively low income levels and underdeveloped insurance system. Of course we can not abandon people in their time of need. But we are simply unable to rebuild and replace all homes nationwide at federal expense, even if we wanted to. If we were to do that, we would have to mothball all our other projects, including raising the pension, healthcare reform, in addition to cutting defense spending several times over. So that is simply not workable.

So, realistically, what can we do? First, we can continue to roll out our housing programmes for those social strata directly covered by federal commitments,  including the resettlement of people from the far north, providing housing for combat veterans, military personnel, Chernobyl clean-up workers and so on. I would like to say that there is a great deal of work for the construction sector to do. Moreover, we supported the housing sector with the help of state contracts in 2009, which was a rather difficult and problem-ridden year. True, the volume of housing commissioned declined, but only slightly. Last year, we commissioned about 45 million-plus square metres of housing. A total of 43 million square metres were commissioned in 2010. Although the sector has experienced a slight slump, overall construction volumes have been conserved.

But these problems require systemic and drastic solutions.

First, we need to raise incomes. This is the most important thing. Second, the cost of buying a house must be brought down. The construction materials industry and the entire construction sector has to expand. Financial services such as for example mortgage costs have to come down. There are also some other aspects.

If we tackle this objective in a systemic way, then we will undoubtedly succeed. Honestly, I don’t doubt this because the Russian Housing Development Foundation will continue to rehouse tenants from dilapidated housing. This is the government’s direct responsibility.

Ernest Mackevicius: And what about the second part of the question suggesting that houses could just burst into flames.

Vladimir Putin: That second part actually implies that some people might set their homes alight simply in order to claim this compensation.

Ernest Mackevicius: This is not a baseless fear.