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Opening remarks at a meeting on state employment policy

March 1, 2011, Elista

President of Russia Dmitry Medvedev: Good afternoon,

I have a feeling that we never even parted with the majority of those present here. I believe that we have had a productive month for two reasons: I have had a chance to see for myself how measures to support employment in our country are being implemented. I must admit that the result was better than I expected. At any rate, we can say that a number of programmes do not just exist on paper; they are actually working. That is what has prompted the decisions I have prepared for today's meeting. 

Our efforts over the past month have been focused on a number of areas. Today we will sum up the results and decide on the measures that I hope will improve the effectiveness of state policy in this field and expand the projects that are currently being implemented. 

Another subject I would like to touch on right at the start has to do with a practical issue. My impression from the contacts I’ve had with the heads of local employment centres, as well as the people who are currently seeking employment and are ready to receive the relevant state support or those who have already received those benefits, is that most of the people who have received the subsidies have managed to keep their businesses afloat. That is a real achievement. However, state regulation of the labour market cannot be limited to the measures I have named. I would like to highlight several key areas. 

First. We should not forget that the transition to innovation-based economy will transform the labour market. Like in other countries, inefficient and low-paid jobs will be replaced with new ones that meet modern standards. That is an objective reality. Thus, ultimately, we will see a redistribution of jobs throughout the economy. 

In this context, the task of the business community, of regional authorities and the Russian Government is to create such hi-tech modern jobs and move towards a modern employment structure in a systematic way and without any sudden shocks or jumps. That is in everyone’s interest. It is in the interest of the business community, which wants to improve its efficiency; it is in the interest of the state, which plans the future employment market and allocation of labour resources; and ultimately, it is in the interest of the people themselves who want to have good jobs and earn a good living.

Second. The state employment policy must become more flexible and measures to support the unemployed more targeted. Everyone is talking about it, and it is absolutely correct. You cannot just distribute funds to unknown destinations, fully aware that it is not certain whether they will reach the people they are intended for. Therefore, I draw particular attention to the individuals whose position on the labour market is particularly difficult: women with young children, parents who have many children, older people, people with disabilities and those who care for them. Finally, this group includes young people who have just graduated and are looking for their first jobs or are at the start of their adult lives. Employment opportunities should be expanded, including through vocational education and further training schemes. 

Women make up the largest share of long-term unemployed (over one year): 56%. All of us must bear this in mind, including the Government members who are responsible for this and other related issues, such as funding for these programmes. There can be no abstract approach here. We must think about the people and not just about macroeconomic indicators. 

Residents of rural areas are in second place with 55%. This meeting is being held in Kalmykia. The overwhelming majority of population here live in rural areas and work in agribusiness. Incidentally, the government support programmes for the unemployed in rural areas have had some good results here. The figures that were presented to me today seemed to be quite high for Kalmykia, which is not very large republic. Thousands of new jobs have been created. That's a good result. 

Young people aged between 16 and 29 make up almost a quarter of long-term unemployed, people with disabilities account for 9%, and residents of single-industry towns, the so-called one-company towns, make up about 5%. 

Another group of people in difficult circumstances are the professionals who are discharged in the course of the reforming our Armed Forces and law enforcement agencies. I am aware that there are some proposals about how to use their experience in civilian jobs, for example in schools. We discussed that at our previous meeting on this issue. Therefore, I am instructing the Government together with the regional authorities to draft a package of measures to promote employment for this group of people. 

Furthermore, it is worth thinking about expanding employment opportunities for the spouses of military personnel. I met with servicemen just before February 23, and I had specifically invited them together with their wives. In general, the situation is fairly typical. The wives of servicemen usually have a good education, a university degree as a rule, but at the same time, if they follow their husbands to the remote areas where they are posted they have no employment opportunities. This is certainly not a task for the Defence Ministry; it is a challenge for integrated planning, including comprehensive regional planning to create new jobs. And of course, this applies to the reserve military personnel as well.

In general, we must pay closer attention to people’s needs and create a system that will adapt to rapidly changing conditions, a system that will generate mechanisms for effective assistance, in support of both society and the state. But we must remember that such assistance and support should be provided to those who want to help themselves. It should not be just handouts for everyone who asks. The support should go to those who are ready to work hard, regardless of the social status, the people who are ready to train and retrain, to get a new profession if necessary and even to relocate to a different part of the country. 

Third. Regional crisis management programmes aimed at reducing tensions on the labour market have a special place among state policy instruments. As you know, they allowed us to maintain social stability in difficult times, and we must appreciate what has been done in this regard. They allowed us to pass through the acute stage of the economic crisis. Today it is very important to boost their effectiveness and make them more result-oriented, including through integration with other programmes that are aimed at encouraging business initiative, for example, by supporting small and medium-sized businesses, promoting the establishment of small innovation companies, businesses based at universities, in accordance with the relevant law. This work will also be coordinated by the Russian Government. 

There was real demand for state support mechanisms, particularly in rural areas. At relatively low cost, this measure gives a good economic and social effect, and importantly, it helps to change people’s attitude. It is one thing to just pay unemployment benefits, when a person collects the money and somehow make ends meet, and it is quite another when people use the funds to set up their own businesses, at their own risk, for which they are responsible, which provide jobs for them and those around them. This, of course, is much more valuable, and the money is clearly not wasted. 

Therefore, it is necessary to continue such programmes. I have just spoken with the head of the republic, and these programmes will have to be extended to the regions sooner or later. Yes, we will support them, and I will make that decision. They will continue. In fact, these programmes should already be implemented on the regional level, which would be only fair and right.

But they have to be comprehensive. They should, in any case, include three components. The federal component, the part we are already implementing, the regional component (regional leaders should definitely pay attention to this, be sure to create their own designated funds, even if they remain relatively small for the time being) and, of course, the business component, namely, bank lending and the use of development institutions to achieve these goals. Therefore, we should increase the availability of these institutions and financial resources and loans, to create favourable conditions for leasing premises, land and equipment and to render consultancy services. That is a job for the regions, which can use preferential rates for the relevant lease or rent agreements, encouraging people to stay in their native country and work here. 

And finally, the fourth issue. One of the most important subjects we have discussed is the situation in single-industry towns. I issued instructions to draft a comprehensive investment plan, and as far as I know that work is in the process at present. I checked yesterday after a meeting with members of the Government and we have not passed the deadline yet. I was already planning to discuss the results and reprimand those who haven’t done the work, but it turned out that they still have time. So they have a few more days. We must examine these documents. I understand that they are pretty crude and will need a lot of afterwork, because once a directive is issued, people start writing frantically but that kind of work does not result in quality documents. In any case it is already done, so let them finalise the documents they presented. 

Mr Zhukov [Deputy Prime Minister], I would like you to keep that under your personal control and report to me later who has done everything and who hasn’t managed. Then it will become a punishment issue.

That should be enough to start a discussion. 


March 1, 2011, Elista