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Before the meeting, the President visited Kalevala timber mill in Petrozavodsk. The mill produces modern materials used in the construction and furniture-making sectors and was designed to meet the latest standards in economical operation and energy efficiency.

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President of Russia Vladimir Putin: Good afternoon, colleagues.

We have a very important and sensitive topic to discuss today, which is well known and, I would even say, painful: single-industry towns. We will re-address the critical issues that concern the residents of these towns and we will talk about measures for strengthening economic and social trends to support the people living there, as well as companies that are based there.

I will state immediately that the scale of the problem is not regional; it is national. For example, in Karelia alone there are ten such towns, which have many residents and produce a large share of regional output. Overall, we have more than 300 such towns in Russia, which are home to over 15 million people.

We fully understand that it would be very dangerous to maintain this situation, where the wellbeing of many individuals essentially depends on one or two local companies. As you know, the Government has supported single-industry towns that found themselves in difficult circumstances, and provided funding for the development of infrastructure and the creation of new factories for supporting employment, including at small and midsize businesses, within the framework of anti-crisis measures.

At the same time, it would be wrong to rely only on federal support to resolve the problems of single-industry towns. We need to get regional leaders personally involved in this process, as well as the heads of municipal organisations and, of course, the owners of the local companies and potential investors.

I will note that the funding we allocated achieved results and certainly served to generate private investments in the regions where cohesive, professional teams were created, which demonstrated a responsible approach and commitment to tackling the problems that had accumulated.

Unfortunately, this has not been the case everywhere. At the beginning of this year, the unemployment level in about half of all single-industry towns was higher than the national average. Of course, unemployment in our country overall is at a historically low level and there is nothing unexpected about this; but nevertheless, it is something we must always keep in mind.

I want to once again remind employers about their social responsibility. When restructuring production in single-industry towns, they must always think about the people, taking into account whether the city or district has alternative jobs. But I will say this, and address the heads of Russia’s regions and municipalities: sometimes, the heads of the enterprise cannot tackle this challenge alone, and they need support from the regions. This work should be comprehensive and carried out at all levels. I want to say this one more time and stress this fact.

Today, I expect to hear suggestions on a real, concrete model of social responsibility for all its participants: business representatives and, I repeat, heads of municipalities and regional governors.

We have discussed this topic extensively, and many instructions have been given, conceived, and put on paper. We have appointed specific authorities to be responsible for single-industry town-related issues (the Economic Development Ministry instead of the Regional Development Ministry), but things are unfortunately progressing quite slowly. A set of instructions on single-industry towns was signed in October and December 2013. We must see what has been done in this respect, how the work is progressing.

We have not updated our list of single-industry towns since July 2013. We do not have a list of investment projects in single-industry municipalities. Moreover, we have not even taken basic administrative and organisational decisions. We still do not have a system to monitor the situation in single-industry towns, and not every region has appointed individuals to be personally responsible for developing single-industry towns. Today, I expect to hear a detailed report, and I would very much like to hear from our colleagues in the Cabinet as well – how they assess the situation.

I want to repeat again, our objective is to diversify the economy of single-industry towns, to make it more sustainable, to create conditions for attracting investments, developing businesses and creating new jobs. I am fully aware that this is a difficult challenge, but it needs to be resolved one way or another.

We need a more active policy in the labour market, targeted support to people employed by such towns’ main employers, including additional opportunities to retrain and recruit people in other regions of the Russian Federation. This is the well-known problem of the movement of labour.

I want to stress again, we need thoughtful, constant work to improve the situation in single-industry towns, as well as a system for quickly reacting to emerging risks.

Let’s discuss all this in more detail.

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