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Meeting with representatives of major Russian businesses

December 21, 2017, The Kremlin, Moscow

Vladimir Putin met in the Kremlin with representatives of Russian business circles and associations. The participants discussed issues of concern to the business community.

Over 60 business people, heads of public and private companies, banks and public organisations took part in the meeting.

* * *

President of Russia Vladimir Putin: Good afternoon, friends,

First of all, I would like to wish you a happy New Year. I want to wish success to you and your loved ones in your undertakings, not just business, but everything that you may be doing. I wish you success and prosperity.

We meet not just to wish each other a happy holiday, of course, but also to sum up the results of the outgoing year, and to discuss matters that are important for both the state and business.

A few words about the situation in our economy. The recession is clearly over, and you and I can see it. According to the Ministry of Economic Development, GDP grew by 1.4 percent in January-November.

Although the 4th quarter showed some slowdown in growth, the trend is clearly up. You and I know that this slight decrease is due to a decline in industrial output.

However, in general, the trend is encouraging, and it relies on a number of factors. I recently spoke about it, and you yourselves know everything about it. However, I will still go over certain things. This includes the growth of trade and consumer demand, which, starting September, has been growing by about three percent compared to 2016.

This also includes steady increases in rail freight, which has recently amounted to about 6 percent, as well as an increase in demand for labour and a reduction in unemployment. All of this clearly indicates that the economy has overcome the recession. With regard to unemployment, it was back to 5.1 percent as of November 2017.

As I have already mentioned, in order to ensure sustainable growth, we need to increase productivity and engage structural factors. This is the most important task for the medium term. Of course, it is important to continue the systematic work to improve the business and investment climate, and to promote competition.

I would like to inform you that – as a matter of fact, you may know it already from television – I have signed the Executive Order On Basic State Policy Guidelines to Promote Competition. It focuses on major reductions in the state-owned portion of the domestic economy across all competitive spheres, and the creation of a level playing field and freedom of economic activity throughout Russia.

This refers to restricting the creation of unitary enterprises and increasing the share of high-quality Russian products in the domestic market, including such sectors as information technology and agriculture.

We intend to severely curb violations of antimonopoly legislation and improve the mechanisms of tariff regulation. By 2020, we plan to double the share of purchases of small and medium-sized businesses and NGOs in the state and municipal order.

In this regard, I would like to note that starting in 2019, state and municipal authorities and institutions will be obligated to conduct their procurements in electronic form only. At the same time, suppliers can submit applications remotely.

This will shorten the time it takes to execute contracts and will expand the opportunities of domestic companies from Russian regions. And of course, such a mechanism will reduce corruption risks, and, I hope, increase competition.

I would like to address one more topic, directly related to the development of competition and the purchase of more goods and services from small and medium-sized businesses.

As a result of the interaction between the Government, the Corporation for Small and Medium Business Development and state-owned companies, the volume of purchases from small and medium-sized enterprises in 2017 grew by one-third , or by half a trillion rubles, and amounted to two trillion rubles. There is every reason to bring this figure to three trillion rubles in 2018. This was largely due to the increase in the share and expansion of the range of high-tech products.

The main thing is that experience shows that cooperation between state-owned companies and small and medium-sized businesses is profitable and effective, as it also increases the competitiveness of large businesses. I expect that not only state-owned companies but also large private businesses will benefit from such opportunities and advantages of working with small enterprises.

Friends, let me tell you about a number of other resolutions designed to make Russian jurisdiction and the domestic market more competitive.

First, we intend to expand the array of financial tools for long-term major investments in the domestic economy. A law on syndicated loans will take effect as of next February. Its mechanisms make it possible to significantly increase lending volumes and improve the access of the real sector of the economy to resources, while considerably reducing risks for lenders.

We also need to introduce amendments to the laws that enable banks and other professional market participants to issue structured bonds. We have repeatedly talked about that. This is a new type of debt security with partial coverage of their nominal value. In other words, these are bonds with higher risks, but also higher yield, compared to traditional bonds. Incidentally, a corresponding draft law is currently being prepared for its second reading in the State Duma and will be passed early next year.

During our previous meeting, you asked that suitable mechanisms be created for the return of capital to Russian jurisdiction. You suggested using external government bonds denominated in foreign currency as a tool.

The Government and the Central Bank have thought out this matter. I instructed them to determine the necessary conditions and parameters for issuing these bonds to Russian investors and to get them into circulation already next year.

In September, we discussed this matter at the Russian Union of Industrialists and Entrepreneurs (RUIE). Actually, it was your proposal. It was considered by the Ministry of Finance, the Ministry of Economic Development and the Bank of Russia –the proposal raised no objections.

We also agreed to improve the legal status of controlled foreign companies, given the existing practice of how this institution functions and in keeping with your proposals. Corresponding amendments have been prepared.

This is what I wanted to start with. I think we will exchange some ideas along the way.


December 21, 2017, The Kremlin, Moscow