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Working meeting with Deputy Prime Minister Dmitry Chernyshenko

October 24, 2022, The Kremlin, Moscow

Dmitry Chernyshenko briefed the President on the implementation of presidential executive orders and instructions in the areas he supervises.

President of Russia Vladimir Putin: Good afternoon,

Mr Chernyshenko, please give me a rundown on the area, or rather areas, that you supervise. Please, you have the floor.

Deputy Prime Minister Dmitry Chernyshenko: Mr President,

Your instruction to reach technological sovereignty in science and technologies is probably the main vector in our work.

I will give you a brief account of the Mishustin Government’s 2.5 years of work in the sectors I have been given responsibility for.

I would like to begin with digital transformation. I must say that despite the geopolitical situation, the pandemic and other challenges, all the targets set for digital transformation have been surpassed. You can see this by looking at the graphs on the slides, it will be more convenient this way. The most important thing is that the number of essential services obtained online by people in this country has grown several times over. For this to happen, Internet access is needed, of course.

Vladimir Putin: Between 2019 and 2022, the share of essential services obtained online increased 16-fold, didn’t it?

Dmitry Chernyshenko: Yes, we are showing this specifically so that you can assess the progress made during the period that Mikhail Mishustin’s government has been in office. Russia ranks sixth in the world in terms of Internet availability. This is a very good result and it helps us to carry out your instructions on connecting socially significant facilities to the Internet.

Vladimir Putin: Yes. Internet access – plus 12.4. And the availability of essential services has grown 16 times over.

Dmitry Chernyshenko: That’s right.

Vladimir Putin: Impressive.

Dmitry Chernyshenko: The number of socially significant facilities with Internet access has increased nine times compared to last year. These include almost 86,000 paramedic centres, schools, hospitals, fire stations. We are continuing this work.

Importantly, we are also working with small localities, with populations ranging from 100 to 500 people, as you repeatedly instructed us to do at meetings. This is costly but extremely important for connectivity so that people can get online services.

If you look at part three, related to implementing your Executive Order, you will see that the number of user accounts has grown to 99 million. In effect, this is the entire adult able-bodied population of our country and, according to forecasts, they will receive almost over half a billion services in 2022. There are some interesting services among these. For example, over one-third of all applications to civil status registry offices are now submitted online. Of greater importance, perhaps, is the fact that, pursuant to your instruction, mothers have received 600,000 maternity capital payments proactively without having to perform any formalities or fill in any forms. This is very important.

Vladimir Putin: Yes, I know.

Dmitry Chernyshenko: Now, with the mobilisation in progress, four new services have been launched on the website, which will help address existing shortcomings.

We are that far along for a reason. You are providing support to this industry, and you can see the unprecedented support measures, as well as their effect, on slide 4. The profits tax is low at just 3 percent, and insurance premiums are 7.6 percent; software sales are now VAT-exempt, and mortgages are available at low rates as well.

This set of actions has led to a seven-fold increase in the number of accredited companies, 28,000 companies in 2022 as you can see. Clearly, many businesses have come out of the shadows, but many new companies have been created as well, because the number of IT specialists has increased to 1.7 million, which is still not enough since we need about a million more workers in these areas.

But it has already become a massive community of highly skilled specialists who are doing their job at the world level and who have been assigned an important task lately. Each year, our companies, such as Russian Railways, KAMAZ or Aeroflot, or the United Aircraft Corporation (they used foreign-made software, namely, a computer-integrated manufacturing system), were spending about 200 billion rubles a year to cover the license costs alone. They were giving this money to foreign companies.

Upon your instructions, Mikhail Mishustin personally got involved in getting this work underway, since he is very good at this. More than 40 industrial competence centres have been created that brought under one roof all manufacturing partners who picked a number of domestic solutions that can now be fine-tuned to not only function on a level with the foreign software that we are now using (licenses have been suspended), but even surpass it. The export potential is quite good. I will prepare a report for you about this, as we will have the first projects ready by 2024. This will be a serious step towards import substitution. The support measures were vastly instrumental in helping us build up the capacity that will take us there.

Of course, information security is at the top of our priorities, because the number of cyberattacks against Russia has increased by 80 percent this year. Also, compared to last year, when cyberattacks targeted mostly the financial sector, this year the public sector came under fire.

As many as 25,000-plus cyberattacks against government resources and 1,200 incidents on critical infrastructure have been successfully staved off. Clearly, the battle will continue forever, since we have cyber troops from all unfriendly countries fighting against us. However, your instruction to set up cyber-headquarters in all bodies of executive power and all critical infrastructure locations is critically important. We continue to push back the attacks effectively.

Several information systems that are of critical importance for our country have been created, and they will determine the future of our move towards digitalisation. For example, a single biometric system was created in accordance with your executive order. Prior to that, businesses were randomly collecting fingerprints, and the public was readily making them available in exchange for access to certain buildings or car rentals. Banks were collecting fingerprints in order to open accounts and the like. The prints were stored unprotected, often on servers located outside Russia. Now, all of them will be stored in a secure Russian cloud enhanced with an initialisation vector to provide an extra layer of protection against hacking.

Under your instruction, we are working on reunited territories.

Primarily, of course, we focus on rebuilding communication networks. We are working almost to the same standard as in the rest of the country to make multiplexes and radio channels readily available. We have allocated capacities for the +7 number for phone numbers. VGTRK is opening its branches there.

Most importantly, we are transferring ready-to-go IT solutions and IT technology, so that the new territories can be connected to the public services website and state information systems.

Russia ranking ninth in the international rankings highlights the achievements of our scientists.

Until now, the budget was the main source of funding for domestic research and development in the amount of almost 1.4 trillion rubles. However, we see that extra-budgetary funds are also increasing. The extra-budgetary co-financing is probably the most important variable of the logic that I am going to discuss now, because it shows the link between training, research and technology-based entrepreneurship that we need. It so happened that our entrepreneurs used to opt for the technology that is not Russian-made. They had little interest in placing technology orders with our researchers, as they could buy cheap Western-made technology and implement it.

We are now making full use of this potential. The Year of Science and Technology, which was held upon your initiative, played an important role in this regard, and let our people discover through important events – we held over 6,000 events – our key achievements in modern science. As a result, we saw that 82 percent of our people trust Russian research, and, importantly, 78 percent of respondents would like their children to engage in research and technology as they grow older. This is a very good result, with 56 percent being proud of Russian research. We are very grateful to you for extending it to become a Decade of Science and Technology, which focuses mostly on involving young people in scientific research.

Your decision to create a new state scientific and technological development programme was probably the most important “backbone” to lay a foundation for our science. The programme brought together 34 fragmented state programmes run by 54 entities, including federal executive bodies and various state-owned companies, for an enormous sum of money, about 1.2 trillion rubles, which we have consolidated. We have prioritised this state assignment money under the single set of rules that apply to both import substitution and proactive import substitution.

Earlier, they were working on a variety of disconnected assignments that were part of the state order, whereas now they are targeting the imports that we need to replace now. The Academy of Sciences and the newly elected President of the Academy of Sciences, Gennady Krasnikov, are helping us get there. We have strong hopes that we will be able to boost cooperation between the Russian Academy of Sciences and the Government.

As you mentioned at the most recently held meeting of the Council for Strategic Development, the availability of higher education is critical. Upon your instructions, we increase the targeted enrolment numbers for full-time students every year with the regions accounting for 75 percent of new enrolees. The availability index is above 56 percent.

Everyone is accusing me of lobbying publicly-funded spots in the digital economy. Indeed, we see an increase of 203 percent. But this is just market demand, the demand of the time. No doubt, engineering and technological training is critical to us as well.

There are many tools that have proven effective and have become operational under your instruction, including the Priority 2030 programme and advanced engineering schools. You had the chance to see how this school works when you visited Yaroslav the Wise University in Novgorod.

I would like to bring the extrabudgetary component to your attention as it applies to world-class campuses and world-class national scientific education centres. I find the confirmed volume of co-financing for high-tech companies the most important indicator. It shows that they are counting on our universities and research organisations and, in fact, are voting with the ruble, as the saying goes. You can see that the advanced engineering schools account for 12.7 billion.

Of the 25 world-class campuses that you directed us to build by 2030, eight are about to open and a second selection wave for opening the remaining ones is coming soon. We have received 39 applications from 34 regions. The amount of co-financing there is staggering. More than half of it comes from extrabudgetary funds. This means that businesses are making informed investment in training and in creating a proper environment and are looking forward to our science coming up with technology and scientific discoveries. So, we are positive that the researchers will not let us down.

Vladimir Putin: Are we talking billions?

Dmitry Chernyshenko: Billions, yes.

Vladimir Putin: I see good growth as well. It used to be 5.3, and now it is 106.4.

Dmitry Chernyshenko: Yes, that’s right. They are ahead of their own plans and, you know, interestingly, we chose five research and education centres for rotation, which has now become an elimination race. We have a very deep bench, and every two years we run a check and replace the worst performer with someone sitting on the bench. This kind of competition is working very well for us.

Tourism, of course. You have set the task to expedite infrastructure development and increase accessibility. We have a young national project, launched in May last year, less than 18 months ago, with highly ambitious objectives. What’s interesting is that we will boost funding by almost 20 times. The industry will receive a considerable investment not only from the federal budget but also from regional budgets. In fact, about one trillion rubles in investment is planned until 2024. This will allow us to create infrastructure – the most important thing, that all services can align to.

There are many interesting figures, if you look at the domestic tourist flow, which we have practically…

Vladimir Putin: I was just going to say, it is growing strongly, in actual fact.

Dmitry Chernyshenko: Yes, notice the source of this growth. Previously, business trips were twice as frequent as holiday trips. Today, it’s the other way around. Holiday trips have doubled and business trips have declined for obvious reasons. People, including foreign tourists, travelled a lot to the big cities like Moscow, Kazan, St Petersburg, etc. To be sure, this will be revived, but the most important thing is that we have built up tourist volumes at rest and recreation destinations.

We continue building up categorised hotel room capacity through different methods. Since last year, we have seen an increase of 20,000 of them.

Infrastructure is being developed, because the Government has been implementing powerful support measures including subsidised loans, shared capital holding, and most importantly, the construction of support infrastructure. These are the state’s most irrevocable and difficult investments.

But all of this has brought the industry together, more than 200,000 different companies. Today they account for about 3 percent of the GDP. We believe that the forecast for this indicator could reach 10 percent, but in any case, we should try to achieve this. In countries with tourism-based economies, tourism accounts for approximately 10 percent or so of the GDP.

It is extremely important that this development institution, the Tourism.RF Corporation, has been established, which has signed agreements with the majority of regions – 51 in all – who have good tourism potential. We have selected 75 out of 600 projects, with the total sum of attracted private investment amounting to almost 500 billion rubles. This will make it possible to get about 25,000 new hotel rooms in this first group of projects alone, mostly 3- and 4-star hotels.

Vladimir Putin: Which are in the highest demand…

Dmitry Chernyshenko: Yes. This is the main criterion for selecting the projects.

And finally, sports.

Thanks to the national goal to promote the health and wellbeing of our citizens, where your goal is to increase the proportion of those who get regular exercise to 70 percent…

Vladimir Putin: This is the most important goal.

Dmitry Chernyshenko: You know, it is; and it probably has a greater impact on the economy than anything else because when people live a long time without getting ill, this is the most important thing.

As you can see, our goals have been exceeded in every area. We have 65 million people doing sports in the first half of 2022, which is 53 percent, and there is no doubt that we will meet our goal of 51.3 percent. So, it will be as you instructed; we are moving ahead.

The number of sports schools is increasing, as is the number of people engaging in sports activities at school. This is a qualitative indicator. They see our stars, those who achieve the best results in international competitions, as an example to follow. You gave us instructions to be in the top three. As you can see, at the Summer Games we were in third place, and second place at the Winter Games. Generally speaking, these are the results of our work.

In the fourth block, if you look at it, you can see the construction of sports infrastructure facilities. Mr Mishustin ordered us, despite all the difficulties, to complete all the facilities that have already been started, especially the ones that are within walking distance. Another 70 facilities will be opened by the end of the year with federal funding.

All of this allows us to keep the competitions going because we need the infrastructure to make this possible. Despite the fact that the pandemic put us back in 2020, you can see we had certain objectives in the single calendar plan, but the pandemic cut them back. But now we're getting back to them, despite the fact that many international competitions have essentially been reduced for us and have prevented us from participating in them. In doing this they have really reduced their competitions and punished themselves.

Vladimir Putin: That's for sure. But you are good at organising competitions within the country and, of course, with our partners.

Dmitry Chernyshenko: Thank you very much.

It's true that if you look at it, we have created a good equivalent to the Soviet Spartakiade, which was a strong alternative to the Olympic Games until 1991.

Vladimir Putin: Yes.

Dmitry Chernyshenko: We have held the All-Russian Spartakiade with the most talented athletes. Most importantly, thanks to Mr Mishustin, we have managed to provide them with the same prize money as for Olympic and world championship medallists because this is important to them.

I will report separately on the new formats for international sports competitions, but the first one is the Games of the Future, a new project, scheduled to take place in Kazan in March 2024. This will be an unprecedented world-class youth cybersport and technical sport tournament.

As per your proposal, we are set to establish an association of SCO sports organisations. You can see the number of participants and a potential audience of about 4 billion people. This is our future rather than a segment that serves the International Olympic Committee, about 1 billion. Of course, this is unfortunate, but I believe that everything will return to normal.

The development of physical fitness and sport in the reintegrated territories is the most important aspect. We are working on this; we have helped almost 800 athletes continue their competitions. We are now restoring the sports infrastructure in Mariupol, including the Ilyichevets and Azovmash facilities, and the Neptune swimming pool. We are also restoring the Druzhba (Friendship) Sports Palace in Donetsk. We have reached agreement with the Russian Football Union on including the new territories in our regular football championships. We are therefore doing our best to make sure that the regions become full participants in Russian sports events.

Vladimir Putin: Is the sports infrastructure in these regions in a deplorable state?

Dmitry Chernyshenko: Yes, for the most part. Unfortunately, it has been destroyed by the ongoing war and Ukrainian strikes.

Vladimir Putin: How long will it take to properly restore these facilities?

Dmitry Chernyshenko: Deputy Prime Minister Marat Khusnullin is addressing this issue; he oversees these construction projects. I am sure he will accomplish this as soon as possible. We have seen that local reconstruction is being mobilised at a breath-taking pace.

Vladimir Putin: Good.


October 24, 2022, The Kremlin, Moscow