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TRANSCRIPT: Prime Minister Vladimir Putin delivers a report on the government's performance in 2010 in the State Duma [Q&A]

Vladimir PutinVladimir Putin answers questions of the representatives of the State Duma factions

Sergei Reshulsky (CPRF): Mr Putin, during a similar report two years ago, we asked you about the prospects for the development of Russian aviation. Unfortunately, since then, the situation has not improved, and on some scores ­ aircraft building and carriage, for instance ­ it has become even worse. We cited an example in our written questions to you. But you would agree that Russia cannot live without transport and communications. We have been receiving more and more complaints from the regions about the deteriorating situation in commuter train traffic: there are fewer trains, inconvenient changes in timetables, and, worst of all, the fares are rising.

We saw the same problems in last year's report. I would like to hear your assessment: what is the government doing about it, and what are the specific deadlines for addressing this vital issue?

Thank you.

Vladimir Putin: First of all, I fully agree with you that the development of aviation and the air transport system are very important for us. I apologise for a very long report that was perhaps oversaturated, but the government wanted to brief you on the key areas of our activities, and you understand that we have to do it together. I've been making cuts and crossing out what I thought was unimportant, but I agree with you that the development of aviation and of the network of airfields is of vital importance.

I have told you our plans for airfields and the amount of proposed funding. Unfortunately, in the aviation industry, owing to the complexities of asset consolidation, things are not moving ahead as swiftly as we would like. Though, the quantity of aircraft has doubled since 2005. The absolute figures are still modest, but, nonetheless, we have preserved the status quo. That is very important because we might have simply lost everything. We have instead preserved it, consolidated it, and are shedding unnecessary parts and concentrating our resources in promising areas. We have doubled the production of planes and more than doubled the production of helicopters. Retrofitting and technical modernisation are required. We will do so through the use of federal funds and attracting investors, but we will tread warily. There are some problems that are related to the interests of carriers, and therefore passengers, and we are under constant pressure to issue various permits for the acquisition of ever newer, imported aircraft, while at the same time, we have to safeguard the domestic market. We will move forward in this direction. I cannot see Russia's future without aviation. That was the first thing I wanted to say.

Now for commuter trains. The problem is real. I would like you to bear in mind that setting railway tariffs is within the jurisdiction of the regional authorities, but we understand that we cannot abandon them to face these problems alone. These are common problems. This year's budget allocates 25 billion roubles in subsidies to the regions in order to cope with the problem of growing rail fares.

If that is not enough, we will seek your counsel and perhaps add more money. But the regions must be responsible to their own spheres of authority. And we also have growing inflation. Growth should be economically justified and should not be excessive. I fully agree with you there. Let's monitor this together, and we can then respond by granting subsidies, but there are certain standards that have already been worked out at the federal level.

If you have additional proposals on how these standards can be modernised, you are welcome to submit them.

Sergei Ivanov (LDPR): Mr Putin, The LDPR is interested in rising energy tariffs. You have said in your report that power generation has increased by 3.2 gigawatts over the past year. This year, it will increase by 6.5 gigawatts. In all countries, the price goes down as the supply grows. But we see that in some regions, the tariffs went through the roof. So much for the successful reform of RAO UES and the energy sector.

The consumer loses money because of rising tariffs, and, to make matters worse, there is the notorious Government Resolution No. 7, which spells out the method for calculating utilities rates. It applies not only to power but also to water and central heating. Ordinary consumers who pay with individual meters have to compensate for those who do not pay, and for the cost of transmission. The water and gas supply situation is similar.

The LDPR in the Duma is petitioning you to revise this resolution. People should pay only for what they have consumed according to their meters. If shortfalls are revealed in payments, then increases can be made. But the way things stand now, this is just dishonest.

Vladimir Putin: Let us take another look at the matter. I promise you to issue instructions to this effect today.

There is one thing, though, that we must keep in mind. I think you will agree with me. Say there is a block of flats and there are owners of individual flats within it. But in addition to the flats, there are common spaces ­ say, basements, garrets, corridors, entrances, and the space around the house. They, too, consume energy for the benefit of the owners, the consumers. There is common equipment ­ for example, the lifts, boiler rooms, and so on. All that is common property. All these costs must, of course, be included in the tariff.

Everything unrelated to consumers themselves, and I agree with you there, must be separated and included in the losses of management companies if they have failed to organise their work properly; and, by the same token, the municipal authorities must pitch in where they have failed to create the proper conditions for such functional organisation.

Let us speak about it later, but consumption should be measured regardless. Otherwise, no one will save anything. We all understand that. Let us take another look at the methodology.

Nikolai Gerasimenko (United Russia): Mr Putin, I am a doctor, and before I was elected to the Duma, I rose from the level of an ordinary surgeon to the regional health supervisor. My colleagues and I see a dramatic increase in recent years ­ a qualitative leap ­ in state support for the healthcare system. This is not just our opinion; it is an objective assessment made by our colleagues at the National Medical Forum. Only a blind man does not see it. The modernisation of the healthcare system has begun, and 460 billion roubles have been allocated towards it. A further 800 billion roubles will be disbursed before 2013 under the national "Health" project.

This is my question. The outlook for the next two years is clear. But what then? How do you see our strategy for the sector's development and in what ways can we enhance the prestige of medical professionals?

Vladimir Putin: Thank you very much. I have already mentioned that we have started elaborating a state programme for healthcare development, and some of its elements have already been formulated. We will adopt it and develop it further, and beginning in 2013, the law on mandatory health insurance will come into effect. It envisages the payment of the full tariff and one-channel funding systems.

I am convinced that if we manage to put these decisions into practice, the prestige of the medical profession will rise, salaries will be increased, and, most importantly, we will achieve qualitative improvement in the delivery of medical services.

Alexander Chetverikov (A Just Russia): What are your plans for improving the social sphere and rural living standards? The rapid globalisation of agrarian production in recent years and the budget system have practically deprived rural territories of much of their revenue.

We are also worried about growing food prices, which have risen 14% and are expected to rise further still. That hits hard at most Russians. What is going to be done to curb the growth of prices on foodstuffs? Their quality has also deteriorated sharply, which affects the health of the nation. The technical regulations are not being met. Is it not time to toughen state control over the quality of food products?

My last question is about the prospects of our accession to the WTO. To what extent are the interests of Russian farmers taken into account in the WTO negotiations?

Thank you.

Vladimir Putin: As for curbing price growth, as I have said, this is about support for the agro-industrial complex and eliminating imports on certain foodstuffs in order to keep the domestic market in balance.

But our top priority is the development of the real agro-industrial complex. The rest is derivative.

I have mentioned this before, but I will repeat that the funding will amount to some 270 to 280 billion roubles, 150 billion of which will come from the federal budget and 150 billion of which will come in loans from our leading financial institutions ­ 50 billion from Sberbank and 100 billion from Rosselkhozbank.

What else are we doing? Listen, today I asked you to adopt an amendment for an additional 9 billion in subsidies to the producers of poultry and pork. This year, we will help farmers save 10 billion roubles overall at the expense of keeping relatively low prices on fuel and lubricants. Last year, we helped them save 5.5 billion, and this year due to this measure the agricultural producers will save 10 billion roubles.

We have earmarked 5.5 billion roubles to subsidise the cost of chemical fertilisers and 1.5 billion to subsidise the spring sowing season. That adds up to an additional 7 billion roubles. We will help expedite the paperwork for acquiring plots of land. We have allocated a further 5 billion roubles in support of cattle farms. That is a whole range of measures in support of agricultural producers. We will see what else can be done.

As for the quality of foodstuffs, it should be constantly monitored. It is probably not quite correct to say that the quality of domestically produced food is deteriorating. Our producers deliver high quality products.

I don't mind disclosing a little secret. Viktor Zubkov regularly supplies me with dairy products from our domestic farms. Just yesterday he sent me some cream, yogurt, and cottage cheese. Wonderful stuff. And I must tell you that these are not some sort of luxury goods. Honestly, they are not exclusive products. I'm talking about serially produced foodstuffs that go right into the retail network.

Ask Viktor, and he will send you some for a very small remuneration.

Now for the WTO. It is a very important and sensitive issue. I understand your concern. The food market in the WTO countries, especially our European partners, is clearly oversaturated. Their subsidies per hectare of land and in certain sectors of agriculture are very large and incomparable to those we provide to Russian agriculture. All that is true.

So, in the course of our negotiations, we secured the terms and amounts of subsidies that we do not even apply today. That gives us colossal leeway. I don't know if we will ever manage to match the level of subsidies we negotiated during these talks with the WTO.

Secondly, we have agreed with our partners, and we told them directly that we will apply various restrictive measures only if we become full-fledged WTO members. In the meantime, the negotiations have been dragging on for 17 years, and nothing has happened. But we will not neglect agriculture. Don't worry.

Nikolai Kharitonov (Communist Party of Russia): Mr Putin, highly qualified professionals are necessary to resolve one of the most crucial issues for Russia ­ ensuring food security and independence from foreign markets. And this raises the question of where future highly qualified professionals are expected to get practical knowledge of the most advanced technology and where they will be learning how to operate the most effective equipment and infrastructure for agricultural work, including farming and animal husbandry, if the last 33 educational and experimental farms are soon to become private, i.e. they will no longer be overseen by the Ministry of Agriculture and thus will be sold out?

Regardless of your reply, Mr Putin, I would like to ask you to hold a meeting with me and Konstantin Pershilin, chairman of the board of directors of Russian educational farms and the director of the educational farm at the Novosibirsk State Agrarian University, on this issue. By the way, Mr Pershilin was awarded the Order of Merit to the Fatherland, three classes, two of which you awarded him personally when you were president.

Vladimir Putin: As far as I understand, it is the question that matters, not the answer. But I realise that you're not asking this question out of mere curiosity. Let's look into this, have a meeting with you and experts to see what plans are justified. You know, I don't want it to sound unsubstantiated, but we are monitoring the situations and see that sometimes somebody owns the land and other real estate and than starts using it for unrelated purposes or starts selling the land, cutting off a plot of land at a time and re-designating it, for example, to build a community of cottages. This is what it's all about.

But I understand your concern and I don't want to turn my back on your question. Let's look into this issue, let's meet and analyse the process. If necessary, we will make certain adjustments.

Igor Lebedev (Liberal Democratic Party of Russia): Mr Putin, my question is about the internet. Recent political events in this country and abroad have confirmed that the internet plays a significant role in mobilising people. The internet provides an opportunity for informal at yet free communication. Until recently, users could feel absolutely free to say what they thought. However, screws may be tightened in the run-up to the parliamentary and presidential elections. And a recent statement by Russian security services about the possibility that access to certain web pages may be blocked is more evidence of that.

The Liberal Democratic Party of Russia believes that such measures are unacceptable. We do not want to travel back in time to 1937, and we are convinced that such measures will only fan discontent on the internet and agitate the situation in the country as a whole. As a result, this measure will only provoke what it is meant to counteract.

In this respect, I would like to ask you to state the government's and, if possible, your personal opinion on introducing censorship on the internet. Thank you.

Vladimir Putin: I can't recall the internet existing in 1937.

You know, there was a joke that the difference between the Communist Party Central Committee, or Tseka, and the much-feared secret police, the Cheka, was that the former can only hush at you, or 'tsykat' in Russian, while the latter can slash you, or 'chikat'.

So, we are not going to slash anything. The internet is only a tool in addressing topical economic and social issues. It provides the opportunity for people to communicate and express themselves. It is a tool to improve people's living standards and society's access to information.

Indeed, many major resources are located abroad rather than in this country, to be more exact, they are overseas. And this fact causes concern of some Russian security services because these web resources can be used for purposes that run counter to the interests of our society and government. But I would like to emphasise that these are only the security services' concerns.

As for my personal opinion, which you asked for, I don't consider such restrictions necessary.

Andrei Isaev (United Russia): Mr Putin, in the State Duma I represent not only the interests of the voters of my region but also the interests of trade unions. The cooperation agreement between the United Russia parliamentary party, the majority party, and the Federation of Independent Trade Unions of Russia has been in effect for two convocations. Issues of social protection for citizens are extremely important to us. We are grateful to the government for its latest, honest social policy. We are grateful that the government, on your initiative, valorised pensions in 2010 despite the economic downturn, that pensions for most of our pensioners were raised by more than 45%, and that you held fast against increasing the retirement age in Russia for the foreseeable future.

Labour relations are a major subject of public discussions today. Some members of the business community propose that we emerge from the crisis and go over to modernisation by ­ let's be honest ­ exploiting workers more and reducing the size of their social guarantees, including those stipulated by labour legislation. Unfortunately, we hear very few proposals from them about strengthening labour safety, reducing the number of hazardous and dangerous types of production, and improving workforce's skills, which, in our view, is both a way to modernise and a catalyst of modernisation.

Vladimir Putin: You know, the issues you are working on are exactly what the main state and public structures ­ the government, employers and trade unions ­ are working on. I don't know of any striking examples of employers proposing to increase spending on, for example, labour safety and so forth. Again, I don't want to offend anybody, but there haven't been many such examples in practice. In international practice, yes, not only in Russia. And this is the task of trade unions, with the government acting as intermediary.

And when we encounter terrible and tragic events, like what happened at the Raspadskaya coal mine, then it's the government's direct duty to put things in order when it comes to safety, in this case jointly with the trade unions.

Of course, I have always been against and I will always be against extending the working week and other absolutely groundless methods of generating profit now or during the modernisation of the economy. This is absolutely inadmissible, and it can have the opposite effect of what was intended.

We ­ I don't remember whether I raised this or not, yes, I think I did ­ together with you have adopted a number of laws. We have adopted a law on coal and amended the insurance legislation. Next we shall amend ­ I don't remember whether we already amended Article 246 of the labour legislation, which deals with ensuring safe working conditions, but if we didn't, we will amend it in the immediate future. We will also make additional amendments to the insurance legislation. We will by all means do all of this.

You know, when I was president, I knew that there was a Trilateral Commission, but, to be honest, I didn't know that it did so much work. Not only does this commission gather every month in a large format, the representatives of the government, employers and trade unions examine decisions that we propose at the government or legislative level every week and sometimes every day. A good working relationship has been established with trade unions. And they work hard, indeed, discussing things, quarrelling, unable to come to terms sometimes. Then they meet again and try to reach a compromise because of the great sense of responsibility they feel.

I hope that this form, this method and this style of work will continue in the future, including here in the State Duma.

Oleg Shein (A Just Russia): Mr Putin, the Audit Chamber has uncovered the unlawful diversion of billions of roubles allocated to the Federal Agency for Fishery for the construction of special vessels. It concluded contracts with companies that lacked any production capacity, labour resources, or work experience. As a result, no vessels have been built, and the money has been rotating through banks. But the agency has been more successful in commercial fishing bids. Fishermen say that 60% of Tatarstan's water area was leased for two million roubles, as was the entire Kola Peninsular for the sum of 124,000 roubles and for a term of 25 years.

A Just Russia was the only party in the Duma to vote against commercial fishing. In March, protests took place all over the country, but, regrettably, the decisions made on commercial fishing have not been rescinded, and people are compelled to pay.

Here are my questions. Do people in Russia have a chance to see fish on their own tables? Will they be able to fish for free in Russian rivers, lakes, and seas? Second, will these bids be repealed? And, third, what responsibility will be borne by those leaders in the agency who stand behind these decisions? Thank you.

Vladimir Putin: As for responsibility, don't worry. After completing any undertaking, those who have stood aside and done nothing are usually rewarded here, while those who are innocent are punished.

As for the Federal Agency for Fishery and the contracts for the construction of vessels, we must look into this matter attentively. It goes without saying that if there are elements of manipulation, those responsible will be identified and taken to task. But it is important to approach this with caution after a serious review of the facts.

Indeed, we must see who ordered the vessels and when and why these deals led to such consequences. Let me repeat that we will find out. We have no reason to cover up for anyone. They will be held accountable in full measure.

Now I'll turn to commercial fishing. I've already expressed my opinion on this matter. I fully share your concern. There probably are people who'd like to receive an exclusive service, go to some lake and fish at a price with all the amenities. But the overwhelming majority of people ­ almost 100% of amateur fishermen ­ want to come to their traditional fishing holes and fish for free as they did for decades. They do not want to pay a thousand or fifteen hundred roubles for some voucher or license. As I've said before, they will be better off if they bring along some beer for 200-300 roubles and have a relaxing day.

Therefore, I suggested ­ and we must all think about this ­ giving permits for commercial fishing on two, three, four, or five percent of the water area, or even less. Traditional fishing holes must be left alone once and for all, and people should be allowed to fish where they want without any problems. It goes without saying we will revise all this.

Anatoly Lokot (Communist Party): Mr Putin, you've said with good reason that well orchestrated and state-guaranteed defence orders are a mainstay of the domestic production of modern military hardware. This requires a coordinated effort of the Defence Ministry and our military industrial sector, but regrettably, this is not the case.

For instance, the second quarter will soon be over, but many of our enterprises, indeed the majority of enterprises, have not yet received an order from the government for 2011. Last year, the Defence Ministry eliminated six ordering departments and a number of other units. As a result, the old procedure for the formation of defence orders was dismantled and a new one has not been drafted. As a result, directors or representatives of plants have to go personally to army units to form this defence order.

I'm sorry, but this has nothing to do with high technology. It is like regressing by centuries. In this context, I'd like to ask for your help in receiving a state defence order this year. Second, it is obvious that we must have a mediator between the Defence Ministry and the defence industry. Regrettably, the commission of the military industrial sector, though it has enough power...

And, Mr Putin, since the press is criticising our domestic equipment...

Vladimir Putin: Do you want me to drive a T-90? Why doesn't the Kalina suit you? It is a mass-produced car. I'm glad I drove it. I've tried many things, including submarines and aircraft ­ not for fun but to demonstrate that we have effective and reliable equipment for modern combat. I drove tanks as well. I was inside a tank.

You've raised a very important issue. Indeed, we must modernise the formation of state-guaranteed defence orders. This is true. It is also true that last year we paid special attention to it. I personally held meetings on all branches of the military-industrial sector. There were no exceptions. We had good, comprehensive discussions. We analysed all branches of the defence industry: missile construction, air defence, artillery, small arms, communications and intelligence, aviation, space, and the navy. We reviewed practically all available options and, on this basis, we discussed the formation of a new state-guaranteed defence order for several years to come ­ up to 2020 ­ with a huge budget of 20 trillion roubles.

As for the current state of affairs, we have an apparatus in place. You've mentioned the commission of the military-industrial sector. The Defence Ministry sends its applications to this commission; it reviews them and distributes contracts among different industries based on their potential and capability.

I agree that there must be some mishaps in this procedure, and we are ready to look at it again. Where do we stand today? This year, we have transferred 570 billion roubles to the state-guaranteed defence order, or to be more precise, 571.5 billion roubles. This is the state-guaranteed defence order for this year.

Contracts worth 300 billion roubles have been already signed as of today and the relevant enterprises have received 170 billion roubles. All contracts must be signed by the end of May and the government must pay off about 80% of this year's state defence order. The Defence Ministry has deliberately left 20% for the latter half of the year as an incentive for contracted enterprises.

There are some problems, of course. By the way, some enterprises will receive 100% of the funds up front. There are some problems linked with the continuous dispute between the enterprises of the military-industrial sector and the Defence Ministry on what to buy and in what amount. We understand that their main task is to ensure Russia's defence capability. In order to do so, we must have state-of-the-art technological equipment.

I'll make it simple ­ our weapons must be superior to the world's best in their range of fire and precision. I'd like you to listen to what I've just said ­ in range of fire, precision, and combat power.

These are our three main parameters, and we must make sure that our industry is producing such equipment. Needless to say, the Defence Ministry demands this quality of equipment and the dialogue is often severe. We must consider how we can support some enterprises ­ for instance, those producing small arms. The Defence Ministry has several times more small arms than it needs. As for explosives, they must be discarded in droves ­ several dozen of them. At the same time, we must support the manufacturing enterprises and consider what they can do. This is a very involved question. We are thinking it over, and we will help them. We will certainly review the procedure for state-guaranteed defence orders. I understand that this is a problem.

Maxim Rokhmistrov (Liberal Democratic Party): Mr Putin, the recent wave of revolutions, unrest and riots that have rocked the Arab world ­ the Muslim world ­ has surely affected the global economy. The question is how the government has adjusted to this situation. It is no secret that we have signed important contracts with these countries and that our major companies were doing businesses there.

Also, the ongoing changes in the migration pattern and the direction of migration routes to the European Union are threatening its very existence, while parties on the far right are gaining political power in many countries and there are plans to re-establish borders between EU member countries. What measures is the government taking to ease the impact on Russia of the changes resulting from the current revolutions or those that will happen in the near future?

Vladimir Putin: The main safeguard against various social disturbances is a social and economic policy that is in the interests of the Russian people. The results of our joint efforts must be positive. If people see that we are working to defend their interests and we achieve positive results ­ their living standards and well-being are improving ­ then I can assure you that there will be no problems with maintaining civic peace and public order in this country.

Of course, there will always be certain elements that seek to destabilise the situation. This is similar to an outwardly healthy human body, which is nevertheless always inhabited by some harmful bacteria; however, if the immune system is strong, they remain in check. Should the immune system weaken, we would immediately catch the flu. If we maintain the country's high level of social and economic immunity, no quasi-political flu is going to make itself felt.

As for our economic losses in the course of the turbulent processes in North Africa and other countries, I admit, this is a problem. Our multi-billion contracts in the military-industrial sphere as well as in the transport and energy sectors have been suspended, of course.

Work that has already been done and services rendered in some countries remain uncompensated. All of this, of course, is up in the air. As for our major projects to supply armaments to certain regions, we shall have to address these specific issues together.

Let's say that plants have manufactured armaments for export under contract, but now nobody can accept the goods. What can the plants do? What will they do with this military hardware which our army does not need, as it did not place orders for it? What shall we do with it? Resources were used and the hardware was manufactured ­ now we'll have to address this issue and, most likely, provide support to these plants. No doubt, we will think of something to do with it, but this will require additional funds from the budget. This is not a pleasant thing to do, but it is not lethal for us. We will cope with these problems.

Irina Yarovaya (United Russia member): Mr Prime Minister, to be honest, unlike the sceptics and theorists, we fully support the government's efforts. We appreciate that Russia was one of the first countries to offer help to Japan shortly after the accident at the Fukushima nuclear power plant. We also believe the government is doing the right thing on monitoring radiation in the Far East.

But as a representative of the Kamchatka Territory, I would like to report to you that our fishermen are concerned over rumours circulating about the imminent contamination of our offshore waters and biological resources, which clearly could affect the economy of the Far East. It is very important that radiation monitoring reports include evaluations of the safety of marine resources and that they be made available to the general public in Russia and abroad.

Mr Prime Minister, how would you assess the radiation and economic safety of the Far East in connection with the recent developments in Japan?

Vladimir Putin: As a resident of the Far East, you should know that in 2010 the federal and regional governments set up 50 new earthquake and tsunami warning stations, and this system proved very effective during the recent disaster in Japan. I am glad that this money was not spent in vain. The system performed very well and promptly, distributing alerts within 10 minutes. Thanks to this, people relocated from dangerous areas on the coast in a timely manner.

Over the next three years, the Federal Service for Hydrometeorology will be implementing a programme to repair and upgrade 1,300 monitoring stations, and to build another 300. We have budgeted 14 billion roubles for these purposes; the programme is already well underway.

As for radiation monitoring, all the stations, of which there are 1,300 as well, work around the clock. Radiation is measured every hour across every part of Russia, from the northwest to the Far East. The entire territory, every hour... Reports are submitted from all over the country. Radiation levels in Russia, including in Kamchatka and the Far East, are four to six times lower than the normal safe level.

In addition, the Russian Geographic Society is sending an expedition to the Sea of Japan. To my knowledge, Mr Artur Chilingarov is going on this expedition. So he will report to you directly. There he is, by the way, sitting over there. I'm sure he'll tell you that everything is fine. But should a threat arise, we will respond immediately, and will make all the information publicly available.

As you know, I recently toured the Far East and Sakhalin to see for myself how the system operates. You know, I liked it. I liked how the Hydrometeorology Service, the Emergencies Ministry, the border troops, and the navy coordinate their activities in real time, and keep the situation under control.

We are proceeding from the assumption that Rosatom's prognosis is correct and we are not facing any threats, at least for now. We expect radiation levels to remain stable.

Alexander Lomakin-Rumyantsev (Just Russia member): Mr Prime Minister, as we know, the government pays a lot of attention to the problems faced by people with disabilities. We hope many critical issues will be resolved through the Friendly Environment programme. But it will take time. Right now, people with disabilities are facing several urgent problems. I will mention just two of them.

First, a really acute and painful issue, the provision of discounted drugs for people with disabilities, notably those with diabetes and cancer... How will the government address this critical problem?

And the second question, Federal Law No. 122 revoked their right to free accessible vehicles. But such vehicles are essential for many people with disabilities since they help them be integrated into society. As we know, the government is implementing a support programme for the auto industry. Perhaps it could address this critical social problem through this programme and restore the right of people with disabilities to free vehicles?

Thank you.

Vladimir Putin: As far as the first question goes, we will certainly review this issue thoroughly to find current shortcomings, and will do everything in our power to eliminate them. First and foremost, this applies to the provision of drugs for people with disabilities. Today I will give a directive to the Ministry of Healthcare and Social Development to check which regions are facing shortages, and in what drugs. I would like to reassure you that we will continue to address this problem.

We have just discussed the possibility of purchasing vehicles for people with disabilities. The government will soon introduce a programme to meet the need in special vehicles for people in wheelchairs. We'll also see what we can do through the support programme for the auto industry. I don't think this will require major funding. But I don't want to talk about something that hasn't been decided yet. We need to calculate it first. But in any case, you will be the first to learn about our decision.


Vladimir Putin answers journalists' questions following his report to the State Duma on the government's performance in 2010

Q: Mr. Putin, I have two questions. First, what are your general impressions of today's meeting with the deputies, which was the longest ever? Second, you focused a great deal on energy issues today. Will the government help sort out the issues between Rosneft and TNK-BP? Thank you.

Vladimir Putin: Let's start with the specific question. The government does not interfere in the business of commercial entities. When I spoke with our British colleagues about future cooperation with Rosneft, I told them that we will support it. However, no one has ever told me, or Rosneft for that matter, about any mutual obligations existing between TNK and BP. We were unaware of them. If there are indeed certain unresolved issues involving mutual obligations, they should be settled in court. It's as simple as that. As for the opportunity to work with such a respectable company as BP, we welcome it, and would like not only TNK, but also Rosneft and other major Russian companies to work together with BP. That's my first point.

Now, about today's discussion. I believe that the government's report to the parliament is more than just fulfilling a constitutional requirement; it's a tool for managing the democratic beginnings of the Russian political system. The dialogue between the government and the parliament is necessary not only as a way for the government to report its results for the year, but also as a way to make sure that we are on the same page with the deputies regarding the priorities of the national economy and social sphere.

Today, we had a detailed and positive discussion. Although certain deputies from opposition factions were critical in their speeches, I believe that overall we had a meaningful and, I'll repeat, a positive exchange of opinions. We listened to each other and will continue to do so, and we will adjust our positions. I believe the opposition parties will do the same. I think there is a great deal of consensus on key areas of the country's development. This is very important. Our approaches and our proposals for achieving our goals may differ, but all the Duma factions are working to ensure the development of Russia's economy and social sphere. Let me use this opportunity to once again thank all the deputies for this joint effort. Thank you very much.


Vladimir Putin's final remarks:

Ladies and gentlemen,

I would like to make a brief response to the group leaders' addresses, and then say a few words in conclusion.

I will reply to each speaker successively, starting with Mr Zyuganov.

I certainly will not be able to comment on every point ­ and I don't think it is necessary, for that matter. I do not think the speakers expected a response to everything they said. However, I would like to talk about some of the issues raised that I consider most important.

Mr Zyuganov mentioned problems in education, healthcare and social issues in various fields. These are the areas we are tackling together as our top priorities. That was why we earmarked 460 billion roubles to modernise healthcare. Considering other allocations, it makes a total trillion roubles.

This is just why we talk about the vital importance of introducing innovation in university education and adopting new educational standards both for at schools and universities. We are setting new objectives for schools, which I spoke about earlier today.

Let us go on to vocational training now.

Esteemed colleagues, Mr Zyuganov, no one intends to destroy the vocational training system established in the Soviet years. At that time, it met the demands of the employment market, though it was far from perfect. It does not meet them any longer. To fund it further the way it is means to squander money because there is no demand for workers trained in this outdated system. What we need is training that will meet the current demands of the employment market. Tuition should go hand in hand with practical work at manufacturing companies. Plants should be closely involved in the vocational training system and have an impact on the curricula for present and future industries to really need its students.

Vocational training is among the critical sectors of our education. It should be improved, and its prestige bolstered. That is the objective of introducing the applied baccalaureate I spoke about. We should also affiliate vocational and technical schools to universities, wherever possible.

Such work is underway already. We have been conducting an experiment that has proven to be very effective. It raises the prestige of vocational training very quickly. Say a young man enters not a vocational school, with all its negative connotations, but a university. Yes, he follows a different curriculum but he is taught by university professors on a par with teachers who were on the vocational school staff before. So tuition improves dramatically. Professionals from manufacturing industries will certainly teach on these programmes, too.

Now, as for alleged demands of the World Trade Organisation not to fund research, not to fund agriculture and to increase fuel prices. It seems Mr Zyuganov got somewhat carried away by the argument. In fact, there have been no such demands from anyone. But then, I agree with Mr Zyuganov that there is a potential trap somewhere here. We should be on our guard during the process of joining the WTO. Mr Zyuganov is right here. And that is just what we are doing, I assure you. Every point is thoroughly debated. It is not for nothing that the talks have been on for 17 years.

If we had made concessions like some of our neighbouring countries and, say, slashed to zero our positions in aircraft and aviation equipment imports, it would have been impossible to talk about the revival of our aircraft industry today. Same about the automobile industry ­ if we had zeroed the lorry manufacturing, for example, there would have been no hope of reviving the automobile industry now. If we had retreated in agriculture, there would have been no farmers to support today.

But we did not do so. Our customs protection is double that of Ukraine's, for example. Customs protection of the Customs Union countries is 10.5% against 5.5% in Ukraine. That is the result of our efforts in this field, Mr Zyuganov.

As for oil and petrochemical products, which are several times cheaper in some oil and gas producing countries [than in Russia], Mr Zyuganov is right here. That much is true. I wonder whether it benefits the oil and gas industry in Iran and other countries mentioned here.

We have the greatest possible respect for our Iranian colleagues, friends and partners. It would not be appropriate to issue criticism from this rostrum, but it is true that Iranians maintain low prices. However, they were recently forced to raise them, as I am sure you know because it was becoming impossible to keep one of their essential industries afloat ­ it was dying with no money for development and new production. Our policy, on the contrary, is far more reasonable.

Moreover, I would like to draw your attention to the fact that it is downright dangerous to keep the price of gas or any other utility below threshold prices because in this situation there would be no incentive to switch to alternative fuels. If gas always remains the cheapest utility, we will never make anyone switch to coal to the detriment of our coal industry, which employs many thousands. Besides, we should not make the entire national economy depend on gas alone. It would also be wrong from the security perspective because gas facilities are extremely vulnerable to terrorist attacks. A single click ­ and a huge region is left without gas. What we need is an energy balance both from the economic and security perspectives.

As for our colleagues in the United States who are doing so well, we all realise that this is not so ­ look at their trade balance, budget deficit and national debt. Things are quite different in Russia, and I hope they will remain so. The Americans have a simple way out, through emission and government bond purchases. Now, what are government bonds about? It is a way to finance the government by printing more money. Then this money spreads throughout the dollar zone, that is, the whole world.

We have no opportunity to take such shortcuts, and will have none in the near future. But I hope we will strengthen our national currency and the rouble will become the reserve currency for our region. At any rate, the rouble is steadily getting stronger and evolving into the reserve currency throughout the post-Soviet area. Our Ukrainian partners have asked us to switch to the rouble in energy transactions, and close on 90% of our settlements with Belarus are made in roubles. That is how Russia is becoming a financial centre, of which the government and the president are talking. This is not just wishful thinking ­ we are making progress and achieving practical results. Please mark that our progress may be slow but it is steady.

Let us now talk about GLONASS and have a hard look at the issues Mr Zyuganov raised. They deserve our attention. Certainly, we should use sensitive technology of Russian design and manufacture as much as possible. This is especially true of dual-purpose technology. Mr Zyuganov is right here, and I fully agree with him. But there are industries in which we cannot withstand competition, and in which we are forced to cooperate with other states, where this is our conscious choice. This refers to GLONASS, as well.

I am pleased to say that we take great pride in it. There is a number of problems, especially where the ground-based infrastructure is concerned. About five years ago, I called on our European colleagues to join this space programme, but nothing came of this initiative in the end.

At present, they have two satellites, if I am not mistaken, while we have 23 ­ a satellite fleet. Another six will be orbited this year. We are clearly in the lead. This is one of the few high-tech industries that Russia is leading after a simultaneous start.

Europe has certain competitive advantages, mainly its ground-based infrastructure, research and cutting-edge technology. They will catch up and compete with us unless we build up our space effort. But then, we also have our competitive edge because we are the first. We were the first after the United States with a satellite navigation system. Usually China starts something and Europe tries to catch up. Here, it was different: we immediately followed America. No other country has anything like that. We can take pride in it. The system will be sustainable with a good margin if we launch another six satellites this year.

I will now turn to Mr Zhirinovsky's remarks. Housing is certainly a critical field, Mr Zhirinovsky. You and I discussed it in great detail during consultations preceding my report. Our talk went on for a long time and continued even after the media left. I remember you raised the issue then. But please bear in mind how much we have done to support the construction industry. We will have another series of meetings quite soon to see what else we can do for it.

More than that, it is no exaggeration to say that the construction industry, just as the automotive industry, survived solely due to government contracts, with the mammoth scope of housing construction for the military, veterans and other population groups. Ambitious projects for the APEC summit, the Sochi Olympics and the Student Games in Kazan also help the industry to keep afloat. Our investments have rescued it. We will certainly build up our efforts, but now we will support market-oriented projects instead of making allocations from the budget.

Concerning birth and mortality rates, I think Mr Zhirinovsky is mistaken: mortality is decreasing in all critical fields. There is a large decrease for cardiovascular diseases, though it is smaller for cancer, slightly over 4%, if I am not mistaken. The rate of fatal traffic accidents fell by 25%. We are implementing wide range of methods to reduce mortality, and will continue to implement them. That is why life expectancy is growing in Russia.

As for unemployment, we have not merely reduced it but created new jobs and restored lost ones to a total exceeding two million, according to statistics. I'll look up the figures once again. I assure you, they concern not only a fall in unemployment but also the increasing rates of creating new jobs.

Concerning retail chains, I cannot but agree with Mr Zhirinovsky. It is a critical issue, and he is right a thousand times over however much he may enjoy shocking his audiences. The issue demands the utmost attention.

The law on trade we have adopted cuts fees for starting new retail businesses, prohibits the removal of commodities from the shelves to make customers' access to them more difficult, bans shouldering the expenses for unsold goods onto farmers, etc. Most importantly, we have undertaken steps to demonopolise retail chains through imposing a barrier which they cannot overstep in a given region. When they want to expand, they can go to other regions. It might not be enough but, at any rate, we must guarantee retailers' preference for Russian-manufactured goods. We are ready to join hands in this effort with Liberal Democratic and other members of parliament, as well as United Russia.

Concerning May Day, it is certainly celebrated as the Labour and Solidarity Day. If we represent labour, we could also get together somewhere and celebrate.

Mr Gryzlov raised the issue of shipments from and to the Far East. I would like to remind you what we have done in this area. The result was interesting. Just recently we witnessed public dissatisfaction over our decision to cut the imports of used cars. As far as I know, out of 400,000 such cars brought to the Russian Far East, only 15% stayed there while the rest were sold to other parts of the country.

The decision was made in the middle of the global economic crisis and an acute crisis in the auto industry. We had no choice but to limit the number of used car imports, which gave a new lease of life to an industry that employed 600,000 people plus three million in related companies, as I said in my address.

It was not our objective to ruin second-hand car importers, and I apoligise if we damaged their businesses but we really had no choice because we had to support our car manufacturers. Many warned then that the people of the Far East would not buy Russian-manufactured cars because they had developed certain market preferences.

What did we do then? First, we helped to establish new auto plants in the Russian Far East. The initial steps to this goal have been made already. I hope that further, and more ambitious, steps will be made for local car manufacturing.

Though we are subsidising shipments from the European part of Russia to the Far East, manufacturers who took root there complain that the market is too small, and if they develop production, they will have to transport their cars for sale to European Russia. So we did what no one expected us to do: we introduced subsidised shipments from the Far East to the European part of the country to allow manufacturers sell cars at normal prices without limiting their market to the Far East. What do you think happened? Russian-manufactured vehicles now lead public demand in the Far East, which was an unprecedented trend. Such vehicles deserve to be popular. These are very high quality cars ­ just think how many foreign manufacturing companies are working there. We will follow this policy consistently.

Mr Gryzlov also proposed to improve firefighting services and upgrade their equipment. I think he is right. Judging by the present situation in the Far East, we should review relevant decisions.

I would also like to say a few words about Mr Nikolai Levichev's address. As far as I understand, many of today's addresses were made in the context of the nearest State Duma election, due in December. However, if we leave out this political component, I would like to respond to what he said about experts, whom he compared to a set of well-used playing cards though he amply complimented some of our researchers and professors. But then, they are all here, in the same deck of cards.

However, Mr Levichev was right in something that demands our attention. We will not argue now who was the first and the most active in promoting, say, the ideas of the school reform. Indicatively, the president said the same in his State of the Nation Address.

We will not say now who was the first, second or tenth. This is a critical issue. We all took notice of it, and we will address it all together. Mr Levichev was right to say that we must guarantee that the funding is not squandered and reaches the end receiver.

That was why I asked you to pay the utmost attention to this issue when I informed you about our plans today. I also called on you to closely monitor all our projects in your constituencies.

As for the terminology, I don't think it is the most important matter. As far as student grants are concerned, advisers are advisers, and it is their job to give advice, say, on abolishing such grants. But even here, I don't think we should consider any issues out of context. They should be analysed as part of all proposals. In practice, we are not proposing to abolish anything. On the contrary, we intend to increase student grants. A 6.5% increase was proposed and I said that we would raise them by 9% or more, and even double them for interns. We will do it in June, without waiting for September.

Colleagues, I would like to say the following in conclusion. We have come through a difficult time, as I said in my report. The fact that we came through it with relative ease ­­ relative ease, I stress ­ is mainly the merit of our people, who accepted all our steps with patience and trust.

That is also the result of our teamwork, and largely the merit of parliament because their prompt efforts enabled us to propose and implement relevant decisions to ensure relative stability and efficiency during the crisis.

There were many dangers and challenges that demanded prompt decision-making. We were successful, and I want to thank you for it.

We heard many criticisms here today. That is normal ­ this is the way it should be in parliament. Despite all those criticisms, I want to wish you all success at the State Duma elections in December.

Thank you very much.

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