OREANDA-NEWS. December 27, 2012. Vladimir Putin chaired a meeting of the State Council Presidium on improving the investment attractiveness of Russian regions and creating a positive environment for business development.

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PRESIDENT OF RUSSIA VLADIMIR PUTIN: Good afternoon, colleagues, friends,

Today we are going to talk about a key objective of the regional government: the creation of a good environment for entrepreneurship. The national business initiative is currently being implemented at the federal level. Its aim is to remove administrative barriers in collaboration with the business community and improve legislation and administrative institutions.

All of us understand that when an investor comes to a particular region, he faces certain challenges, solves his problems with certain people who can find a thousand explanations for their inaction and underhanded dealings.

For instance, the money and time it takes to complete similar administrative procedures varies significantly from region to region. For example, if you want to register property, you will need 19 days in Kaluga and 60 days in Yakutsk; getting connected to the power grid takes 123 days in Saratov and 360 days in Yekaterinburg; getting a construction permit (by the way, we are far behind all OECD countries in this area) takes 150 days in Surgut and 448 days in Tver.

It boggles the mind. What this means in practice is that in some regions the authorities are doing nothing for the development of business, or worse – they are destroying the business environment, whereas other regions are taking steps to create good conditions for business.

I want to emphasise that the choice always lies with the region’s head, whose role, without any exaggeration, is decisive.

The governor’s integrity is a vital component of the regional investment climate, as well as the governor’s ability to get his subordinates to foster fair competition.

The governor must find the time for personal interaction with investors, and if necessary assign a deputy who will be responsible for support of specific projects. This practice is effective. I know that you have been to Kaluga, where you had a look at how the local authorities work.

In just a short time, this subsidised region that has no energy resources of its own, has managed to become a leader in economic growth and in terms of attracting foreign investment.

The experience of the Kaluga Region, as well as some other successful regions, of which there are many – Belgorod, Lipetsk, Tomsk – has been used to form the basis for a regional standard of improving the investment climate [Standard of The Executive Authorities of the Russian Federation to Promote a Favourable Investment Climate in the Region]. It has been tested in several regions and from January 2013 the Standard will become a blueprint for all Russian regions.

Certainly, regions require some methodological assistance. I ask the Government and the Agency for Strategic Initiatives to get involved in this work.

Colleagues, it is clear that the Standard specifies only the basic, the minimum requirements. The regions must be motivated to do more. We have already taken steps to improve intergovernmental relations. However, problems still remain.

According to regional officials, a significant portion of revenues from the operation of new businesses does not reach their budgets. At the same time, the subsidies from the federal budget are reduced. This is a wrong practice.

This means that it continues to be more productive to go to the Finance Ministry and beg for subsidies from the federal budget than to work on attracting investors. This situation must be reversed. I ask the Finance Ministry, together with members of the State Council to discuss the issue once again and submit concrete proposals.

Let me emphasise that both the regions and municipalities must be self-sufficient. We have talked about this on many occasions and in different formats. If local authorities are encouraged to support business, everyone stands to benefit, the entire region. Therefore, as we agreed, we should transfer the revenues from the special tax regime for small and medium businesses to the municipal level.

Naturally, regions and municipalities must use all of the additional revenues first of all for development, creation of infrastructure, improving amenities, investing in human resources, healthcare and education. If a region has a high standard of living, if it attracts the best professionals, the most talented and best-trained people, the investors will go there too.

By the way, human potential is developed in schools, and we are devoting special attention to this level of education, upgrading the resource base and raising teachers’ salaries.

Undoubtedly, it is essential to restore the best school traditions, including the role schools play in teaching moral values. I have repeatedly spoken about the proposal to return to school uniforms. It should not be the same everywhere, but we must make sure that all the children feel comfortable at school, regardless of their ethnic background and religion, or their parents’ income. I ask you to think about it again.

As for teachers’ salaries, as you know I held a big news conference recently, and the journalists pointed out that things don’t always look the same in real life as they do in reports. I would like to ask the relevant agencies, including the Education Ministry, to pay special attention to this issue and to investigate what actually happens in practice.