The “Conversation with Vladimir Putin” was live-broadcasted by TV channels Russia and Vesti, radio stations Radio of Russia, Mayak, Vesti FM, and website Vesti. During the 3-hour live broadcasting the Russian Prime Minister answered 72 questions.
Main statements made by the Russian Prime Minister during the Conversation with Vladimir Putin are posted in our website.
Financial and Economic Crisis
Putin forecasts a rather complicated period in the economy, and the country should be ready for it morally, organizationally and politically. “Russia experienced much more serious problems in the past. We have good chances to overcome this complicated period with minimum losses for the economy and our citizens”, he reminded.
The negative processes observed in the Russian economy are caused by the world financial crisis, said the Premier. But in general, despite the negative impact of the world crisis the results of this year are rather good – the economy growth rate is about 7%, actual pension growth rate is 12% while the nominal one is 25%. Putin predicts that the industrial production growth rate will be 4.5% and agriculture production growth rate will be 8.8%. Putin also pointed out that Russia has a record harvest this year. However the Premier said that there is an inflation problem, which annual average rate this year will be about 13%.
Putin recommended closing several enterprises in Russia, in particular metal works. He said it replying the question of a Russian man who lost his job due to enterprise closure. Putin pointed out that as the metal market grew the enterprises increased their assets and employed additional labor. Today as the worldwide metal consumption decreased, our export decreased too (the Russian companies exported 50 % of their products). “It is an objective problem, but I am sure that the market will change and skilled labor will be in demand again”, believes Putin.
"For already unemployed we are going to radically increase the monthly allowance up to 4,900 Rubles. We will take a series of measures to save the jobs”, said the Premier.
The head of government expressed a hope that Russia will manage to avoid mass unemployment, yet its rate will increase, recognized Putin. According to him, as of today there are about 1.6 million of registered unemployed. “We will have a little bit more than 2 million. And we have to respond to it”, he believes.
Aid to Large Banks
"Is it necessary to help large banks?” somebody asked the Premier. An argument of the asking man was the following: “The banks borrow money from the state at 6% annual and lend at 25% including loans to small and medium enterprises! May be it is better to directly help to the real sector? Also by and large, is it enough money in the contingency fund to survive the crisis?”
"Banks are the blood vessel system of any economy”, said Putin. “We cannon afford collapse of the banking system. There are millions of depositors behind them. Therefore we canalize 5 trillion Rubles to the banking sector. First of all, we work with the banks that will not blow off the money of depositors; they include Sberbank, VTB and Gazprombank”.
Earlier the world economy never faced such a wide-scale crisis, reminded Putin. Therefore we made a decision to support the real sector via the banking one. “We have provided 175 billion Rubles to support real sector enterprises via the banking sector. It is long-term loans, which should be forwarded to the real sector enterprises. In so doing we will demand from banks to provide us with accounting information per three sectors: what amounts they are going to lend to these sectors. The three sectors include the agriculture, military-industrial complex and SME. There is also a long list of industries recommended for funding. But I proceed from an assumption that this amount would not be enough too. In this case we will use the capitals of large companies where it will be to the advantage of the state”.
As for the reserves accumulated by Russia, the Premier said that Russia is the third largest state worldwide in terms of gold and hard currency reserves. “For the first time in last weeks we observe growth of the Russian gold and currency reserves. We accumulated money and we will continue to do but prudently”, added Putin.
Gas for Ukraine
The Russian Prime Minister was asked about the situation associated with repayment of gas debts by Ukraine. “We are conducting a hard dialogue”, said Putin. “The Ukrainian partners have not repaid their gas debt yet. The debt totals about 2.5 billion Dollars. The Ukrainian economy faces much graver problems than the Russian one. But there are no free goods, they have to pay. We cannot supply marketable goods free or at a half-price. Of course, our approach will be partner-like, and the transition will be soft. We have arrangements regarding the transition to new prices. We are in transit to the market pricing. I hope that the transit arrangements will be properly observed. It they fail, we will have to reduce our supplies”.
"All reformed that are planned and will be implemented will have a positive impact on our defense capabilities”, the Prime Minister reasoned the fear away speaking about the military reform. No mass retirement is planed, he said. In 2002, only those officers will retire who finished their term of service and those who were contracted for 2 years. We will not train warrant officers any longer, however those who want to finish their term in this rank will be entitled to do it. They will be entitled to transfer to the civil service too. If we observe any misconduct, we will respond adequately”, promised Putin.
Putin also made a commentary on rumors that the term of conscription would be increased up to 2 years and 8 months. "The decision has been taken – the term of conscription is 12 months. We are not going to change anything”, said the Premier.
Dwelling for Militaries
During 2010, all officers are to be provided with permanent dwelling, said Putin. In 2012, all militaries will be provided with service residential spaces. “We appropriate 21 billion Rubles to procure resident spaces for militaries. The Ministry of Defense will be in position to procure 10,000 flats. We are sure that the problem of permanent dwelling will be solved.”, emphasized the head of government.
Mortgage Credits and Problems of Their Repayment
Another question was about possible assistance to the people who have borrowed mortgage credits and now face problems with their repayment (somebody lost the job, for the others bank interest became higher). The state should help the people who lost their job or those whose income became lower. “We are going to issue government guarantees to banks”, said Putin. “Bank interest rates are becoming higher and it is associated with the world crisis. Bank demands to accelerate credit repayment comply with the civil law. I believe it possible to issue government guarantees through the Agency for Housing Mortgage Crediting, which may be used by the bank to settle its financial difficulties relying on the support of the Bank of Russia, but not “terrifying” its clients. I think that this option will advantageous to everybody”, explained Putin.
In recent days people permanently ask questions about too high gas prices. The Russian people are surprised why radical decrease of oil price in the world market has not resulted in any decrease of gasoline prices in the domestic market. According to Putin, oil companies are striving to maintain their incomes at the expense of the domestic consumer. Even in the period of high oil prices we withdrew to the state budget a significant part of their super profits: up to 90%. It is due to these withdrawals we have built large gold and currency reserves. Today we slightly reduced the burden on the oil/gas sector but it is still rather high. Oil companies suffer losses both due to the fall in prices, and due to taxes, therefore they try to maintain their profits at the expense of the domestic consumer”, explained the Premier. He confirmed that as from January 1 the severance tax will be reduced. Putin predicts that it will lead to the decrease of gasoline prices.
International Economic Cooperation
Russia implements real economic integration with many European countries, said Putin. The country pursues “multi-vector foreign policy”, he said. “We cooperate with the countries of the Asian Pacific region, Latin America and the USA, which is one of the largest our economic partners, and I hope it will remain the same in future”, Putin pointed out.
According to the head of government the largest world trade partner of Russia is Europe – more that a half of our commodity turnover falls on this region. “We do not just trade with the European Union, we implement real integration in key branches of the economy”, Putin added. “One of these branches is the energy industry. We let many European companies operate in our energy sector. They procured large blocks of shares, invested billions of Euros, and we welcome these activities”.
According to the Premier our European partners together with Russia are involved in the construction of new energy supply routes, in particular, Nord Stream and South Stream, as well as certain other projects. The Premier is confident: “Such work contributes to sustainablity and stability of both the Russian and the European economies”.
At the same time Putin pointed out that relations with certain states are still “very much polluted with the remains of the past”. “But I believe that the leadership of these states will understand that it is necessary to look forward to the future but not remain a slave of the past”, emphasized Putin.
New Option to Use Mother’s Capital
As from 2009, it will be allowed to use the Mother’s Capital also to redeem mortgage credits. As from 2007, every family, which produces the second child and further children, has a right to receive the Mother’s Capital. In 2009, the amount of this capital is almost 300,000 Rubles, and the family may receive it as soon as the child is three years old. Until now the Mother’s Capital might be used to improve family dwelling conditions, educate one of the children or finance the cumulative part of mother’s pension.
"It would be possible shift the use of the Mother’s Capital to early 2009 due to the occurred financial problems both overseas and in our country, and to allow the families, mothers to use this money to repay mortgage credits”, said the head of government. Putin promised that he will give instructions to the cabinet of ministers to adjust the law and budget respectively.
Answering the question why the Mother’s Capital is not provided to women who gave birth to twins and trines, Putin pointed out that when the decision on the Mother’s Capital was taken it was necessary to support those families and those mothers who gave birth to the second child after a while. “We may look into this problem and try to expand its solution. But we need to calculate the growth rate of our social commitments and see if we will be able to fulfill them”, said the Prime Minister.
Lack of Kindergartens
Putin promised that the Federal Government will be ready to assist to regional authorities in solution of a problem relating to the deficiency of kindergartens. At the same time he reminded that this problem is primarily in the capacity of regions and municipal authorities.
A student from Khabarovsk complained to Putin about “super long queues” to kindergartens, and said that a kindergarten which he went to in his time, today became “a hotel for Chinese people”. In the opinion of the Premier the deficiency of kindergartens not least of all is caused by a baby boom. This year its rate is the biggest in the passed 15 years (about 7%). According to the statistics provided by Putin, in 2008 the deficiency of kindergartens will reduce by 30%. “It’s a pity that there is a disorder in this sphere in Khabarovsk”, he said and asked Governor Victor Ishayev and his team to sort out this problem.
Ruble Exchange Rate
The Ruble exchange rate will be adjusted based on the prices of the goods exported by Russia, but the Government will not let any abrupt jump of the exchange rate, promised Putin. “Proper gold and currency reserves make it possible for us to avoid abrupt changes of the national currency exchange rate, and I believe that we will not admit them. There will be no abrupt changes in the exchange rate. Of course the rate will be adjusted depending on the prices on our traditionally exported goods in the world markets - energy, metals, and fertilizers”, said the Premier.
What currency is it wise to make savings in? In the opinion of Putin, those who frequently make overseas trips would better have a part of their savings in foreign currency. But for those who live in Russia it is preferable to have Ruble savings, said the Premier.
Prices of Housing and Public Utilities
Putin believes that in the current conditions we need to demand from monopolists in the sphere of housing and public utilities to reduce the rate of their price rise. He reminded that the monopolists in this sphere increase their prices due to the need to fulfill their investment programs aimed at the branch reforming. Nevertheless Putin believes that in the current economic conditions the prices of construction materials decrease therefore the cost of reconstruction should decrease too.
"However the question is not only in the prices. The utilities have worn out by 80%. And if the branch remains underfunded in future it will ruin finally”, added the Prime Minister.
Assistance to South Ossetia and Abkhazia
Russia will render necessary assistance to South Ossetia and Abkhazia. The mutual assistance treaties with these countries are the best guarantee that Russia will not leave this region, said Putin. According to him, if citizens of these states wish it, Russia will be ready “to render any reasonable assistance even in the today’s complicated conditions of the world financial crisis”.
"As for the restoration of South Ossetia, we have large financial appropriations in our state budget for this purpose. The money is appropriated and will be used to this end”, promised Putin.
Regime of Mikhail Saakashvili
Putin said in his live conversation with Russian citizens on Thursday that if Georgia hadn’t unleashed the aggression against South Ossetia, “Russia most probably would have continued its efforts aimed at creation of conditions for reunification of Georgia”. “After this aggression it became obvious that t is impossible, and it is necessary to take such steps that would prevent future bloodshed in the region”, he added.
Answering the question if he promised to hang Georgian President Saakashvili “by one thing”, Putin replied: “Why by one thing only?”
"If we speak seriously, we know about tragic events in other world region, in Iraq, which was invaded by American troops under the pretence of looking for weapons of mass destruction. They failed to find the weapons but hanged the head of state on absolutely different grounds: for massacre in several Shiite villages”, reminded the Prime Minister. “The today’s Georgian leadership made bloodshed and massacred civilians in South Ossetia, they whipped off 10 Ossetian villages from the face of the earth and attacked peacekeepers killing many of them. After all Iraq never attacked America! Meanwhile in the Georgian case our militaries fulfilling there international obligations were attacked. Many of them were killed, and somebody of course should bear liability for it”.
Trade unions in Russia started fulfilling their natural and important function: protect the interests of working people. They stopped being an appendix of a party and started fulfilling an independent function, noted Vladimir Putin. According to him, trade unions should sensitively respond to any changes in the labor market and should refrain from any political games.
In terms of the world financial crisis Putin proposed to decrease a quota for attracted foreign labor by 50%. “Taking into account rather complicated conditions in the labor market I guess it would be reasonable to cut the submitted requests at least by 50%”, he said replying to the words of a Russian woman that foreign workers take jobs from Russians.
"The problem is associated with the fact that we actually have no state borders with the CIS countries, we have a free-travel regime, and it is easy to migrate. Quotes you have mentioned are prepared by regions including Moscow and submitted to the federal services. The amount of the request is more than 3 million people. In fact the number of foreign workers is more, about 10 million”, explained Putin.
Salaries of Public Sector Employees
The Premier is sure that there will be no arbitrary behavior of bosses in the light of transition to a new system of public sector employee payment from December 1. From now on the salary of public sector employees will depend on appraisal of their labor by their bosses; therefore many Russian people asked the question about possible arbitrary behavior of bosses in their “Conversation with Vladimir Putin”. “There will be dependence but I don’t think that there will be any arbitrary behavior because we established interdependency – firstly, we forwarded and formulated rules to determine the salary of substantive staff, and secondly, we made the boss’ salary dependent upon the average salary of the substantive staff”, explained the Prime Minister. “We have cases and not individual ones when directors of enterprises set an average salary of their staff but later understood that their own salary will depend on this average salary, and come to the government twice and thrice to request to increase this average salary of their substantive staff “, Putin pointed out. According to him, “it proved to be a very efficient mechanism to regulate the increase of the salary and appraise justly the input of each individual in aggregated labor activities of the whole personnel”.
Amount of Pensions and Price of Cord Wood
Next year the amount of pension will be increased at least three-fold, and in aggregate will rise approximately by 34%, said Putin. “The basis amount will be increased two times, and the insurance component will be increased one time. In case of upturn in inflation, the amount of pension will be increased not three-fold but four-fold”, said the Premier and added that he has “no doubts that we will provide adequate level of pensions”.
The amount of pensions was raised many times. For example, a pensioner-woman living in the countryside complained to Putin that her pension is three times less than the cord wood. Putin believes that this problem may be solved by abandoning the centralized wood purchases by municipal authorities. “Centralized purchases may cost 10,000 and 20,000 Rubles, and if the money is given to the people they may find the cord wood at cheaper prices”, believes Putin.