http://premier.gov.ru
December 4, 2008
[partial transcript]
[Transcript of Putin Q&A Session]
Conversation with Vladimir Putin
http://premier.gov.ru/eng/events/1338.html
Prime Minister Vladimir Putin, the leader of the United Russia party, answered questions directed to his public reception officers or asked by telephone, in the form of text messages and through the website. The question and answer session was broadcast live by Rossiya and Vesti channels and the Mayak and Radio Russia stations.
Minutes of Prime Minister Vladimir Putin's Question and Answer Session
MARIA SITTEL: Good afternoon, I'm Maria Sittel.
Public reception offices of Prime Minister Vladimir Putin, the leader of the United Russia party, opened several months ago. In less than six months, they have received hundreds of thousands of letters from people around the country.
Those who work with these letters on a daily basis are in this room today. We have also invited the people who had personally brought their letters to Vladimir Putin's public reception offices.
ERNEST MACKEVICIUS: Welcome to Moscow, to Vladimir Putin's question and answer session. I'm Ernest Mackevicius. With us is Prime Minister Vladimir Putin, the leader of the United Russia party, live.
MARIA SITTEL: Each of you can address your questions to Vladimir Putin. Telephone calls will be forwarded here, to the information processing centre. Our number - you can see it on your screens - is 8-800-2004040. Calls are free. You can send your text messages to number 0-40-40, or ask your questions via www.moskva-putinu.ru.
During today's session, we will link up with some of Vladimir Putin's public reception offices in different parts of Russia. In this room, my colleague Ernest Mackevicius and I will work together with a group of assistants Anna Titova, Pyotr Rovnov and Dmitry Sedov.
ERNEST MACKEVICIUS: Good afternoon, Mr Prime Minister.
VLADIMIR PUTIN: Good afternoon.
ERNEST MACKEVICIUS: You were appointed Prime Minister over six months ago. How do you feel in that office? And could you tell us about some of your achievements?
VLADIMIR PUTIN: It is not the office that matters, but the responsibilities of a state post. This job is not new to me. I chaired the Government in 1999, and I maintained close ties with the Government when I was President. This is a very demanding job, especially in the current situation. But I am happy I got this chance to serve the people in this position.
ERNEST MACKEVICIUS: You have hinted when you assumed the post that the foreign economic situation was different.
VLADIMIR PUTIN: Yes, of course. In fact, the current events in the Russian economy are a result of the global financial crisis. Nobody needs to be told today - it is a fact - that the crisis began in the United States, whose financial and economic policy has resulted in the crisis, which has spread to nearly all the leading economies. It has also reached Russia, we can feel it, but on the whole, our economic results in 2008 are positive even despite the negative effects of the global financial crisis.
Let me just remind you of the figures. The economic growth target was above 7%, or more precisely 7.5%. The annual growth rate will be around 7%, possibly 6.8% or 6.9%. This is good.
What is particularly important for us is the results of our efforts in the social sphere. The increase in take-home wages will be approximately 12.6% and pensions slightly more than 12% - 25% in nominal figures. Industrial production growth will be nearly 5% (4.8%).
As for agriculture, it posted record-high growth over the past few years, 8.8%. We have gathered in a record-large harvest, including over 100 million metric tons of grain, which is the highest in many years.
It is true that we have problems with inflation. The target figure was slightly above 12%, but annual inflation is likely to be 13%, because of the global crisis and because the Central Bank and the Finance Ministry had to inject a huge amount of liquidity into the economy. It certainly spurred inflation.
But on the whole, I repeat, the annual results will be good despite the global financial crisis.
ERNEST MACKEVICIUS: Mr Putin, will you have to change plans for the future, and if so, to what extent?
VLADIMIR PUTIN: In principle, we have no intention to change any plans, which is very important. I am referring also to the investment plans of Russia's largest companies, and the planned reform of the housing and utilities sector, healthcare and compulsory health insurance, as well as the planned reform of education and the pension system.
In addition - I think we will discuss these issues in detail later, since there are bound to be questions - I want to say at the beginning of this session that we will fulfil all our plans in the social sphere, all decisions aimed at increasing social payments and pensions.
Everyone knows that some countries which have been hit by the crisis are planning to cut wages and people's incomes. We will not do this in the social sphere. On the contrary, we intend to implement all our plans aimed at increasing allocations.
ERNEST MACKEVICIUS: The people's reaction in this room speaks louder than words. Mr Putin, when we were preparing for this session you selected the most frequently asked questions, issues that are of greatest concern to the people. And the biggest question is, will we survive the crisis?
VLADIMIR PUTIN: To be honest, it is going to be a difficult period in the global economy, including Russia. And we must be prepared for it morally, administratively, financially and even politically. But as you know, Russia has survived bigger troubles in over a thousand years of its history.
Not very long ago, in the early 1990s, we faced the problem of territorial integrity, and industrial and social disintegration.
Today the situation in the country is totally different. We have a good chance of getting through this difficult time - and I repeat, it will be a difficult time - with minimal losses for the economy and the people.
ERNEST MACKEVICIUS: I want to remind you that you can ask the Prime Minister questions over the telephone, using text messages and also online. The questions are forwarded to the information centre where my colleague, Maria Sittel, is now working. Masha, we are waiting for your information.
MARIA SITTEL: Yes, Ernest, the number of telephone calls has peaked in the first few minutes of our live broadcast. Text-message users, which include senior citizens, are very active, as can be seen by their serious and socially oriented questions. Here are just a few remarks highlighting various issues of interest to Russians.
"Mr Vladimir Putin, please save the Fatherland! When will you close all gambling houses nationwide? I want my husband to bring his money home, not waste it at a casino," says a woman from Dimitrograd in the Ulyanovsk Region.
Here is another remark, which sounds more like a proposal: "I don't remember a single case when a civil servant resigned voluntarily for bad work. Why is this so?"
Naturally, most remarks deal with the crisis, loans, mortgages and employment.
I am putting through a telephone call from Bashkortostan. Hello, what's your name?
DMITRY SALNIKOV: Good afternoon, Mr Vladimir Putin. This is Dmitry Salnikov from the village of Tirlyansky.
We would like to ask you this question. We are a young and currently jobless family because our company could be shut down anytime due to the global crisis. Most locals are also unemployed because they used to work for the metallurgical sector. What are we supposed to do in this situation?
VLADIMIR PUTIN: I have mentioned these difficulties from the very outset. To be frank, we started our conversation with this.
Companies used to expand and hired the required number of workers during the economic development period and in conditions of soaring global demand for some of our traditional products, including those in the metals industry.
I have already told the United Russia congress in this same hall that worldwide metals consumption plunged after the automotive industry curtailed production. The main US, Japanese and European consumers have decreased production by over 30%, 15% and 20%, respectively.
Russia has also cut exports. Our steel mills used to export almost 50% of their products elsewhere. Naturally, we cannot directly influence this objective problem.
At the same time, I am absolutely convinced that the global market will change, and that this country will need more metals and other traditional products. Naturally, human resources, especially skilled workers, will be in great demand.
But what can and must be done today?
As I have already said, we are raising unemployment benefits for jobless people to 4,900 roubles ($175) per month. This is the first thing.
Moreover, I believe that private and public authorities will have to draft an entire range of measures in an effort to preserve jobs wherever possible and to start implementing them in the near future, I mean within the next few days. On Tuesday, I discussed this problem with a large group of regional governors.
The relevant allocations must be used to finance retraining courses for the workers of affected businesses. We must provide additional regional migration opportunities and redirect human resources to regions requiring such resources. We could pay relocation allowances to such people.
We must implement public works and infrastructure construction projects. We have the required funding for accomplishing this objective and have also accumulated resources at the Road Fund, transport monopoly Russian Railways and some other major companies.
We will implement this entire range of measures.
Also, I consider it necessary that employment services accumulate the required funding for reacting promptly to these most pressing problems.
ERNEST MACKEVICIUS: Mr Putin, you mentioned the aid being rendered by the state to some other areas of the economy. But as I looked through the questions that arrived at our website, I see that not everybody understands these measures. People are under the impression that large banks mainly receive the money.
Here is one question on the subject: "Are the big banks worth helping? The banks take money from the state at 6% per annum, but lend at 25%, including to small and medium-sized businesses. Perhaps, it would be better to help the industry?"
And in general people want to know if the Reserve Fund has enough cash to live through the crisis.
VLADIMIR PUTIN: First about the banks. Banks are the circulation system of any economy. We should remember the negative consequences of previous years or the negative results of meltdowns in previous years, for example in 1998, when the whole banking system collapsed. We cannot, of course, allow this to happen again, because behind the banks are not only industrial businesses, behind them are millions of savers - the ordinary people of Russia, who want banking institutions to function properly and have enough cash to meet people's interests. This is why we are channelling vast resources into the banking sector. We have already reported this figure - about 5 trillion roubles. The Central Bank is allocating all kinds of resources. Long-term resources are already on the way, as are medium-term resources (although long-term resources are in short supply, and we will discuss that later) and short-term resources. These resources are all available and are being injected into the banking system.
Of course, we worked above all with banks that would not squander state money, or rather your money, citizens of Russia, the money contributed by taxpayers. What are these banks? We call them "system-forming" banks. These are banks with state ownership: Sberbank, VTB (Vneshtorgbank), and Gazprombank. Partly, it is VEB (bank for foreign economic relations): but properly speaking, it is a separate institution, one through which we carry out a number of other functions. But of course what we see now is that these efforts to support only the banking sector are not enough, because today's crisis is largely unique. The global economy has not met with a crisis of this size before.
So today we decided to support the industry directly through the banking system, and directly through the banking sector. I will tell you now what I mean by directly. To support the industry we allocated 175 billion roubles. These are long-term loans which must be directed to production or service-based businesses. At the same time, we will demand from the banks that they report to us on three sectors to which they are going to lend money. What are these sectors? These are farming, the defence industry and small and medium-sized businesses, as well as a long list of enterprises which we recommend.
My starting point is that this might not be enough. Currently, we are taking a close look at how the banking system operates. Their problem today is not that of liquidity, it is one of trust - between the banks themselves and the banks and the production and service-based businesses. Of course, we will be insisting that state money reaches the end user. But this too might not be enough, and then we will need to use other tools. What tools? For example, joining directly the capital of large companies where the state and the taxpayer will ultimately benefit; capital of enterprises that are the core of the Russian economy. We are not ruling out that such tools could be applied on a wide scale.
As for the banking sector, this form of state participation is already stipulated through the Deposit Insurance Agency, which has been allocated the necessary resources totalling 200 billion roubles and which has the right to join the capital of problem banks.
If necessary, we also consider it possible to spread the practice to the industry in the near future.
ERNEST MACKEVICIUS: The second part of my question is about the Reserve Fund.
VLADIMIR PUTIN: When a TV viewer asks a question about the Reserve Fund, he probably means all the state reserves in general. Because we have the Reserve Fund, the National Welfare Fund and the gold and currency reserves of the Central Bank. I won't dwell on how each of these funds works, but I can say that, of course, we have these reserves, and they are large. Russia has the third biggest gold and currency reserves in the world.
In fact, I have just received updated information from the Central Bank, and for the first time in recent weeks we see a growth of the gold and currency reserves of the Central Bank of the Russian Federation.
We have been saving these assets to use them in case of crises in the world economy and, as a consequence, in the Russian economy. That is what we are doing. But we will do it carefully.
What does "carefully" mean?
We should have a clear idea of how much currency flows into the country and because of the falling world prices for our main commodities - energy, oil, gas, petroleum products, metals, fertiliser and some other products ¬- because of the falling prices for all these goods in the world markets and because we continue spending significant amounts of currency on imports, the inflow and outflow is regulated by instruments that are well known in the economic and financial sphere, and we will use these instruments.
But we will not allow leaps in the economy and sudden changes in the exchange rate of the national currency. To secure the interests of both the citizens and the economy we will, if necessary - and we have done so before - we will carefully use the gold and currency reserves and the other funds at the Government's disposal. If we pursue a balanced, meaningful and responsible economic policy, these assets will be sufficient.
ERNEST MACKEVICIUS: Some people in the room would also like to ask a question.
Pyotr, I am addressing Pyotr Rovnov, give them a chance to ask a question.
PYOTR ROVNOV: Yes, Ernest. Who would like to ask Vladimir Putin a question? Ask your question, and please introduce yourself.
ALEXEI LISHENIN: Alexei Lishenin, Volgograd. Good afternoon, Mr Putin. On the eve of the New Year holiday Russian people have two problems: where to buy a Christmas tree and will Ukraine pay up for the gas we have supplied?
We can handle the first problem, but as for the second one, I would like to hear your competent opinion. Thank you.
VLADIMIR PUTIN: As for the Christmas tree, I think every family that wants to have one will be able to buy it, a real or a synthetic one (people use synthetic ones more and more often nowadays). It creates a certain atmosphere in communities and in homes. In general, it is a very joyful and beautiful holiday. In spite of all the problems, I think people will enjoy seeing the New Year in.
I would like to take this opportunity to wish all of you a very happy New Year.
As regards Ukraine, we have a complex ongoing dialogue. It is true that our Ukrainian partners have outstanding debts, over $2.5 billion, which is quite a big amount for Gazprom and for the country as a whole.
We are aware that the Ukrainian economy is having even bigger problems than Russia: the metallurgical industry there, as far as I know, has dropped not by 50%, like here, but by 70%, and that is very serious. Nevertheless, commodities cannot be free, everyone has to pay for them.
Our partners tell us: keep the prices of the current year. How can we leave the prices of the current year if even today our Ukrainian partners get our gas at almost half the price of what we get from Europe. We have an understanding to work towards market prices. We cannot sell liquid commodities at half the price or provide them for free; we need money ourselves, we have our own social problems to solve. A friend of mine used to say whenever I asked him a tricky question like this, "Are you off your rocker?"
It's the same situation. Go to Germany, enter any store and say: I want a Mercedes for free or at half a price. Who would give it to you? Why should we sell gas at half a price?
But of course we will treat each other as partners. We are negotiating for a smooth transition. In principle, we have agreed on price formation and these are not just agreements of an administrative nature.
The whole point of our agreements with our Ukrainian partners is that we pass on to market pricing. The price of gas is linked to world oil prices, and if the oil price goes up, the gas price goes up to, if oil goes down, the gas price goes down and we will then lose some of our earnings. But that is fair, we do not control these prices.
We hope to be able to reach mutual understanding with our partners, and we assume that we will not have any problems with the transit of our energy resources to the main consumers in Western Europe. We had reached such agreements with Ukraine in earlier years and I hope that they will duly abide by these agreements.
But if our partners fail to honour these agreements or, as it has happened in the past, siphon off our resources from the transit pipeline illegally, we will have to reduce the feeding of gas. What else can we do? We have no other option.
We are going to brief our European partners on that in the near future.
ERNEST MACKEVICIUS: The directors are telling me that our colleagues in other Russian cities are already on line. But I see some raised hands in the hall. So, Anna, let us have some questions from the studio.
ANNA TITOVA: The audience is ready to join in the conversation. There are questions in the front row.
OLEG BELAN: Good afternoon, Mr Putin. Nenets Autonomous Area. I am Oleg Belan and I am a deputy of the regional assembly.
Do you think our relations with the United States will change after the election of Barack Obama as President? Will they become more pragmatic and constructive? Thank you.
VLADIMIR PUTIN: The question should be directed first and foremost to the new US Administration. Usually, when there is a change of power in any country, especially such a superpower as the United States, such changes do take place. We very much hope that the changes will be positive.
We see these positive signals. What are they? Look at the meeting of NATO foreign ministers: both Ukraine and Georgia have been denied a Membership Action Plan. We already hear at the level of experts, the people who are close to the President elect and the people around him, his aides, that there should be no hurry, that relations with Russia should not be jeopardised. We already hear that the practicability of deploying the third position of missile defence in Poland and a radar in the Czech Republic should be considered once again.
We hear that the relations with Russia should be built with respect for our interests. If these are not just words, and if they are translated into practical policies, then of course we will react in kind and our American partners will immediately feel it.
ERNEST MACKEVICIUS: Thank you, Mr Prime Minister. We have a question from Severodvinsk, where my colleague Dmitry Petrov is working now. Go ahead, Dmitry.
DMITRY PETROV: Good afternoon, Mr Prime Minister, colleagues, Severodvinsk here. This is the Zvezdochka plant, a leading defence enterprise producing cutting-edge equipment for developing offshore Arctic resources. But it specialises in repairing submarines. This beauty here is the Karelia strategic submarine. It has just been repaired and will now be prepared for returning to combat duty.
We have here the plant's workers, engineers and designers as well as sailors. All of them are directly contributing to the country's defence capability, and they have questions for Mr Putin.
QUESTION: My name is Pavel Pershin, I am an engineer at the Zvezdochka plant. The Government's attention is now focused on the defence sector. We have almost no problems with allocations or state contracts. We hope this situation will persist despite the financial crisis, but it will not solve the plant's other problems.
The main problem is the depreciation of fixed assets. Government allocations to shipbuilding are now mostly invested in research.
The second problem is personnel. In Soviet times, people went to work in the north of the country because the jobs paid well, but now I earn as much as engineers working in central Russia.
My question is what will the Government do to modernise defence enterprises and to reinstitute full-scale salary increases for personnel working in northern regions?
Thank you.
VLADIMIR PUTIN: I know the Zvezdochka plant very well; I have visited it more than once. In fact, I even know the submarine I can see in the background. I have been on board of that submarine as President when I visited the Northern Fleet; I even went to sea in it. My best regards to its crew.
As for the plant, I'm sure you definitely know about its financial problems. We are dealing with them, and we will not leave the plant to struggle with them on its own. We have taken measures to improve the financial situation, and we will continue to help the plant.
As for the salaries, they should largely and primarily depend on the plant's economic efficiency and work orders. This is why we plan to place state contracts at the Zvezdochka plant and also to help it to get other, civilian contracts. As you know, the plant is already working on such contracts.
As for pay increases for working in rigorous northern conditions, the system is still in place. But since there are certain problems with it, we have been looking at ways to improve it. The same goes for the people who are planning to move to other regions after retiring. I'm sure people know about the problems I am talking about, and we have been tackling these problems regularly. We will continue to work on them.
As for the main question, I want to repeat that we will send more contracts to Zvezdochka and help to resolve its financial problems.
ERNEST MACKEVICIUS: I see people in this room want to comment. Dmitry, let people ask their questions.
PYOTR ROVNOV: Many people have questions for Mr Putin, but I think we should give the floor to the man in the uniform. Please, introduce yourself.
QUESTION: Lieutenant General Albert Slyusar, from Ryazan, representing the International Union of Veterans of the Airborne Force, the Airmobile Force and the Special Operations Forces.
Mr Prime Minister, the army reform provides for dismissing over 200,000 officers and liquidating the institute of warrant officers. This makes many of them wonder what they would do in the future, if they would have housing and get jobs, pensions, health and other insurance.
My second question is if the army reform will have a negative effect on the country's defence capability.
Thank you.
VLADIMIR PUTIN: I expect the reforms that have been planned and are being implemented in the armed forces will certainly influence our defence capability - for the better, by improving it. This is why we are doing it.
As for the dismissals you mentioned, we are not planning mass layoffs. Moreover, only the officers who are slated for retirement - the first category - will be dismissed in 2009. The second category includes officers conscripted for two years after finishing military training at civilian higher schools, whose conscription period is ending.
As for warrant officers, we will stop training them, but those who wish to continue serving in that rank will be able to do so. Those who wish to fulfil the same duties as civilian personnel, which implies higher pay, can make their choice. I repeat, the warrant officers will not be dismissed only because they hold this rank. Their fears are ungrounded.
If some officials go too far, if we expose unplanned problems, we will react immediately. I have no doubt about this.
Now to the housing problem. In 2010 all officers are to be provided with permanent housing, and all servicemen will receive service housing in 2012.
Our speed in tackling this problem is high enough to ensure that we reach these targets.
ERNEST MACKEVICIUS: Thank you, Mr Prime Minister.
I suggest that we keep the linkup to Severodvinsk, but ask what questions have been addressed to the information processing centre where my colleague Maria Sittel is working.
Maria, what questions do TV viewers have for the Prime Minister?
MARIA SITTEL: They concern many issues, but I suggest we keep to the military aspect for the moment.
Mr Prime Minister, a huge number of young mothers and young people are sending text messages and phoning to ask if it is true the Government plans to extend the term of military service to 32 months instead of one year?
VLADIMIR PUTIN: Absolutely not; it is just an ungrounded rumour.
The decision has been taken to cut military service to 12 months, and we are not going to change it. I am referring to service by conscription, of course.
ERNEST MACKEVICIUS: I can see on the monitor that there are not only civilians but also navy officers in Severodvinsk. Let's give them a chance to ask their questions.
VLADIMIR PUTIN: Yes, let's.