OREANDA-NEWS. October 30, 2009. Transcript of the meeting:  Vladimir Putin: Good afternoon, I would like to start today's meeting on a pleasant note: today is Elvira Nabiullina's birthday. Happy birthday!

Ms Nabiullina, I have just signed a resolution increasing federal support for small and medium-sized businesses by 7.5 billion roubles.

We will distribute these funds to regional governments, and I would like you to describe briefly how this programme works and how these funds will be used.

Elvira Nabiullina: The decision to allocate additional resources to increase the capitalisation of regional guarantee funds is something small businesses really needed.

We are not only providing additional support to small businesses, but also strengthening regional guarantee funds, a targeted support measure that has turned out to be especially important during the crisis. This will allow small and medium-sized businesses to have more access to credit.

As a matter of fact, when businesses lack the collateral to apply for a loan, the state will share the risks with banks, and thus assist in providing credit to small businesses.

In the last three years, 67 regional guarantee funds have been set up in Russia, 34 of them in 2009. These funds' total assets currently stand at nine billion roubles, including financial resources from regional governments, which co-finance these funds. 

A total of three billion roubles have been allocated for these funds this year.

Vladimir Putin: As far as I know, it is closer to 3.9 billion roubles.

Elvira Nabiullina: Correct, 3.9 billion - that is over three billion. Coupled with regional funds' resources, that makes some nine billion roubles. This has allowed us and the banks to issue loans worth eleven billion roubles. These funds are being used by businesses.

We estimate that this additional support will allow us to maintaining the current amount of credit extended to small and medium-sized companies at 100 billion roubles, including through the funds' revolving credit programmes.

One hundred and seventy six commercial banks are currently involved in this programme, including large banks such as Sberbank and the Russian Agricultural Bank, as well as regional banks that interact with small and medium-sized businesses directly, which is very important.

As soon as this resolution is adopted, we will hold a meeting with representatives of regional governments and small businesses to determine how these funds will be distributed among the regions. They will be allotted shortly.

Vladimir Putin: You raised this issue a while ago, and I would like to give you the signed resolution as a birthday present. Now a few words about special economic zones. You have just met with leaders of the regional governments where these zones are located.

Elvira Nabiullina: I met with regional representatives to discuss new approaches for managing special economic zones and the outlook for their development. The meeting was attended by governors, the heads of the 26 regions in which these zones are located, and the heads of the regions where we plan to establish special economic zones.

It must be noted that such zones are an effective tool for attracting investment and creating new, high-tech production facilities.

We also discussed the amendments to the legislation that are being drafted in the State Duma. Regional representatives brought up a vitally important issue, specifically to allow companies based in innovation zones to manufacture products developed in these zones, that is science and technology products.

This proposal was supported. It was also suggested that we lower the minimum threshold for investment in technology innovation zones from ten to three million euros.

As far as port zones are concerned, which we are going to create, there was a proposal to expand the list of businesses allowed to operate there to boost these zones' effectiveness. These were the most important issues discussed at the meeting.

In addition to establishing these zones through tenders, the government law envisions establishing such zones without competition in extraordinary cases, by decision of the Government. For example, we are discussing the possibility of establishing a special economic zone in Tolyatti in the Samara Region, as well as in other regions.

In our opinion, at the second stage it would be prudent to support the initiative of regional governments and grant them more powers and responsibilities in establishing such zones, while using criteria and requirements prescribed by the federal government.

In many regions, for example in Kaluga, industrial parks that manufacture a wider variety of goods have been set up, although these areas are not referred to as special economic zones. Leaders of these regions asked for support for their initiatives to set up such industrial parks within the framework of the special economic zone programme.

Also, we touched on issues of maximizing the effectiveness of management systems, including the issue of which powers the federal government should retain and which powers, such as construction licensing, should be devolved to regional governments. Devolution of some powers would help reduce the time necessary to process applications.

Next week we will hold a meeting with residents of technology innovation zones, since attracting investors and residents is certainly our top priority. These zones are a tool that allows us to meet the demands of investors and residents, thus increasing effectiveness of investment.

Vladimir Putin: Good. A resolution was signed allocating an extra 4.3 billion roubles to RusHydro to accelerate the construction of a coast spillway at the Sayano-Shushenskaya Hydroelectric Power Plant. Mr Kudrin, you are welcome to speak on this issue.

Alexei Kudrin: Mr Prime Minister, in light of the recommendations of the task force charged with addressing disaster relief issues at the Sayano-Shushenskaya Hydroelectric Power Plant, and taking into account measures to ensure a stable supply of energy in Siberia while speeding up the construction of a coast spillway at the Sayano-Shushenskaya Hydroelectric Power Plant, a suggestion was made that RusHydro allocate financial resources for the construction of the spillway, and that additional funds come from the federal budget.

The cost of this coast spillway will reach 13, 238 million roubles, including the 8,908 million roubles that will be provided by RusHydro. The larger share of these funds will be allotted this year so that construction can continue.

The remaining 4,300 million roubles will be allocated next year. These expenses will be taken into account while issuing RusHydro shares. On June 1, 2010, the first penstock replacing the hydroelectric power station's blocked penstocks will be put into operation.

Following your directives, corresponding measures have been planned, and efforts to implement them are under way. The number of workers employed at the construction site will be increased from 600 to 1,400.

Vladimir Putin: The Energy Ministry must oversee these efforts. And of course I ask that you provide timely funding for everything that is necessary and for everything that we have agreed upon.

Mr Fursenko (addressing Andrei Fursenko), you have prepared a report entitled "The Russian National Innovation System." Please tell us a bit about it. Please inform your colleagues.

Andrei Fursenko: Mr Putin, in accordance with a government resolution, we have signed an agreement with the Organisation for Economic Cooperation and Development (OECD) to prepare a report describing the international status of the Russian national system and Russian developments in innovation and innovation policy.

The first stage of this work was preparing a basic report describing the Russian national innovation system. This basic report was prepared, and work started in early 2008. A consortium of Russian scientists and expert organizations was formed. The report presents a systematic assessment of the strengths and weaknesses of our national innovation system and policies.

Vladimir Putin: Were OECD experts a part of this work?

Andrei Fursenko: This report was prepared by Russian experts. Based on this report, OECD experts will interview men and women involved in the development of the Russian innovation system since November. These interviews will take place not only in Moscow and St. Petersburg, but also in various regions of Russia. After this, OECD experts will share their findings. And by the summer of 2010, we will receive the final report, which will be an important component of Russia's accession to the OECD. I want to say that this is the first such report in 16 years; a similar report giving a detailed account of the state of Russian innovation was last prepared in 1993.

Vladimir Putin: We need to think about how we can use this report not only for accession to the OECD, which is a respected organisation, but also in order to assess the effectiveness and results of our efforts to bring more innovation into the economy, and then adjust our course of action accordingly.

Andrei Fursenko: First we plan to post the report on the Ministry's website, and then distribute it to all of our colleagues in the ministries. Firstly so that they can analyse it, and secondly, because OECD experts plan to meet with representatives of business and industry as well as scientists, of course. The report should serve as the basis for these meetings.

In addition, we are counting on the community, including both the scientific and business community, to participate in this report as well. This is so we can establish a far-reaching and harmonized policy and assess the current situation by the start of the next stage, in the spring of 2010.

Vladimir Putin: All right. Mr Ivanov (addressing Sergei Ivanov), in November there will be a session of the Government Commission on Transport and Communications. Please tell us what you plan to discuss?

Sergei Ivanov: Mr Putin, distinguished colleagues, tomorrow, on October 30, there will be a regular session of the Government Commission on Transport and Communications.

The agenda will include two items, and both of these are connected with maritime issues. The first item involves government regulation of the hiring and employment of Russian sailors on foreign vessels. This subject has become quite relevant as of late, and frankly the situation here is unfortunate.

There have been accounts of our sailors, Russian citizens, shipping out on foreign vessels and ending up in disastrous situations where they are abandoned in foreign ports, with ship owners making no efforts to return them to Russia or pay them. Such cases are very well known.

The Transport Ministry has analysed this situation. Generally, such incidences occur with ships sailing under the so-called flags of convenience of "great sea powers" such as Antigua, Barbuda, the Antilles, Cambodia, Liberia and Malta. Unlike Russia, these countries are not signatories to international conventions protecting the labour and social rights of our citizens.

In addition, there have been cases where the owners of such vessels sailing under a foreign flag are really Russian citizens living in Russia.

Accordingly, we have prepared a separate proposal. In particular, we must consider the possibility of introducing mandatory insurance for so-called staffing companies. These are companies that hire Russian sailors for work on vessels that sail under a foreign flag. This would make it so that these staffing companies would be required to have insurance, including to compensate for unpaid salaries or, in the worst-case scenario, repatriate Russian citizens, which means returning our citizens who have fallen on hard times to the homeland.

In addition, we want to assess the viability of having federal authorities, primarily the Transport Ministry and the Federal Migration Services, monitor the employment contracts that our citizens sign and draw up sailors' identity papers or certificate of identification.

This would simply be assistance for our people who get hired for work in this manner. And at the same time, I think that the authorities must be more helpful, and clarify and explain the dangers and risks our citizens face when they accept such employment.

The other item on the agenda is examining the proposal to construct a marine terminal in the town of Pionersk, in the Kaliningrad Region. There are investors who are ready to help build this marine terminal, which would be located right on the Baltic Sea coast. We could build a marina for yachts there and use it for recreation and tourism, but at the same time we should coordinate this issue with the interests of our fisheries in the Baltic.

During your official visit to Kaliningrad this week, this issue was raised during the meeting of the Council to Develop Local Government, and we will consider the Kaliningrad Region's proposals to build a marine terminal specifically geared towards tourism, recreation, and the normal development of this Baltic terminal.

Vladimir Putin: Ms Golikova, a conference of oncologists began in Moscow today, with 1,500 Russian and foreign participants. What can you say about our ongoing anti-cancer programme?

Tatyana Golikova: Mr Putin, ladies and gentlemen, I attended the opening of the 7th Conference of Oncologists just before this meeting. The conference is devoted to the improvement of cancer treatments, including relevant problems of child haematology and oncology.

We never expected the conference to be so popular. We thought it would attract 1,500 visitors, but 1,700 have been registered today, because the problem is really of general concern.

In 2008 we decided to grant oncological programmes autonomy within the National Health Project, due to high cancer morbidity and mortality in Russia.

Cancer accounts for 285,000 deaths a year-14% of all deaths in Russia, and 200,000 cancer patients a year are granted disability status, 40% of them of working age.

All preparatory measures scheduled for this year, in eleven regions and two federal agencies, have met the deadline, and cancer centres will gradually open-in November, December and early January-in the regions. One federal district centre will also open in the Chelyabinsk Region.

It has been chosen as the location of the centre due to a high local prevalence of cancer rooted in the events of 1957 (a major nuclear industrial accident - Tr.).

Ten regions have been selected to join the programme next year.

We have recently returned from the Khabarovsk Territory. Its regional cancer centre has taken part in the programme this year. The visit has convinced us to establish, based on its model, a larger cancer centre for the entire Far Eastern Federal District, because we saw an adequately equipped centre with excellent personnel eager to work.

I want to call your attention to something else. Professor Peter Boyle, the Director of the International Agency for Research on Cancer (IARC), has come to Moscow for additional reasons besides the conference.

We signed a Memorandum of Understanding between the Russian Health Ministry and IARC last night to expand plans for each of the four fields of work it deals with-in particular, cooperation in establishing and maintaining a reliable register of all cancer patients.

The three other fields are no less essential-joint cancer screening and prevention, including the practical implementation of fundamental research by both partners, joint research on cancerogenesis and, last but not least, the improvement of young oncologists' postgraduate education, based on the model of the IARC and the World Health Organisation.

This year's measures have involved 20.349 million Russians, and they will go on next year to affect approximately the same number, so 41 million cancer patients will receive cutting-edge treatment by the end of 2010.

If support for the programme continues, we will complete it by 2015 and give the entire country a modern cancer treatment network.

Vladimir Putin: How is the construction of the child haematology centre proceeding?

Tatyana Golikova: Strictly on schedule, and it would be even quicker if we had more money.

Vladimir Putin: What do you mean by "quicker"? Is the job going at the planned pace?

Tatyana Golikova: Yes, absolutely.

Vladimir Putin: And they are ready to work even ahead of schedule, aren't they?

Tatyana Golikova: Yes. However, we don't give them a kopeck above the planned allocations, and for the time being we have not ordered the construction to proceed ahead of schedule.

Vladimir Putin: At any rate, we have not cut their funding, which matters most.

Tatyana Golikova: We have not cut it in the least, so the construction is not dropping pace.

Vladimir Putin: Fine. The job is going on strictly according to schedule. When will it be finished?

Tatyana Golikova: The centre is to receive its first patients on June 1, 2011. To meet this deadline, they need priority funding-or it will open later, not on June 1, 2011, but ...
Vladimir Putin: Toward year's end, right?

Tatyana Golikova: Yes.

Vladimir Putin: The job is going on schedule, at any rate. All right, let us return to our agenda.

You might remember our emergency meeting in July to discuss the situation in the alcoholic beverage market. We all see the essential social and economic effect of this problem. The national budget is deprived of major revenues from the sales of large amounts of unreported alcoholic products-revenues that could be spent on pensions, welfare, and health services. There is a far more alarming problem, however-the incurable damage done by counterfeit vodka to public health.

That is why we have launched a healthy living campaign to promote fitness and improve health services.

Huge sums circulate in the underground alcoholic beverage market, which nurtures crime and corruption.

To settle the problem, we have decided to establish a government commission regulating the alcoholic beverage market, which will make relevant decisions and monitor their effect. Mr Viktor Zubkov will head the commission.

The next question on our agenda concerns anti-crisis support for banks. By promoting their stability and reliability, we protect depositors, ensure the steady performance of the settlement system, and help solve another burning problem-that of bad debts caused by the economic depression.

Let us discuss the draft of our decision to issue federal bonds to be exchanged for banking debenture stock.

Such transactions will give banks extra capital to grant loans to industries and improve their services to private depositors.

Bankers will receive a government loan with interest and a 150-billion-rouble ceiling for this purpose. They are certain to pay it back.

We will also discuss several draft laws today.

I particularly want to emphasise amendments to the Criminal Code that would reform our incarceration practices.

Here are some eloquent statistics. Roughly 300,000 people are convicted in Russia every year-not only inveterate criminals but also people without previous criminal records who are guilty of minor misdemeanours.

Prison exposes them to the destructive influence of the criminal world. Many cannot return to normal, law-abiding life, if they survive at all.

So we should encourage punishments that do not imply confinement-fines or corrective labour or, again, compulsory community service.

Practice has shown that such punishments are the most effective corrective measures, so we have every reason to continue to humanise our justice system. This certainly does not concern persons guilty of heavy and especially grave crimes.

Another draft law on our agenda concerns orphans' rights, due to frequent controversies surrounding their trips abroad for medical treatment or recreation.

To prevent any threats to children's safety, the draft law will require that foreign travel by organised groups of orphans be monitored by the appropriate agencies with guardianship rights.

We will also hear information about progress in launching an integrated Internet portal of public services.

At the initial stage, it will offer as much information as possible about procedures for drawing up passport, car, and other property registration certificates, and receiving pensions. And so, as you can see, it will concern matters indispensable in business and everyday life.

This is only the start. Other fields of information will follow, eventually to achieve complete coverage of public services.

I ask ministers and heads of federal agencies to monitor the creation of this portal.

We have a big job ahead. Let us get down to business.