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Meeting with Government members

March 31, 2021, Novo-Ogaryovo, Moscow Region

The President held a meeting with Government members via videoconference. The main item on the agenda was funding programmes for the development of the regions.

The meeting was attended by Prime Minister Mikhail Mishustin, Chief of the Presidential Executive Office Anton Vaino, First Deputy Prime Minister Andrei Belousov, First Deputy Chief of the Presidential Executive Office Sergei Kiriyenko, Deputy Prime Ministers Viktoria Abramchenko, Tatyana Golikova, Alexander Novak, Alexei Overchuk, Marat Khusnullin and Dmitry Chernyshenko, Deputy Prime Minister and Chief of the Government Executive Office Dmitry Grigorenko, Deputy Prime Minister and Plenipotentiary Presidential Representative in the Far Eastern Federal District Yury Trutnev, Presidential Aides Maxim Oreshkin and Igor Levitin, Minister of Economic Development Maxim Reshetnikov, Finance Minister Anton Siluanov, Emergencies Minister Yevgeny Zinichev, Minister of Natural Resources and the Environment Alexander Kozlov, Minister of Industry and Trade Denis Manturov, Minister of Construction, Housing and Utilities Irek Faizullin, Minister of Digital Development, Communications and Mass Media Maksut Shadayev, Plenipotentiary Presidential Representative in the Urals Federal District Vladimir Yakushev, Head of the Federal Customs Service Vladimir Bulavin and a number of regional governors.

* * *

President of Russia Vladimir Putin: Good afternoon, colleagues. I am happy to see you all.

Before we start working, I would like to mention one current issue – I asked you to study the problem of the Bashkir soda company.

As you are aware, in accordance with a court verdict, about 96 percent of its shares have become property of the Russian Federation. It is vital to ensure the long-term, effective operation of this company and the production of competitive products. Needless to say, this is always very important but today even more than ever. This will keep people in paid jobs.

Competent corporate management is one of the things that matters most here. Decisions to this end have been made. I want the Government to transfer 38.3 percent of the shares of the Bashkir Soda Company to the Republic of Bashkortostan. As a matter of fact, this is what Bashkortostan has always owned. In addition, as agreed with the leaders of the republic, among others, I want another 11.7 percent plus one share transferred to trust companies that are fully controlled by the government of the republic meaning that the local authorities will manage this company in full. At the same time, almost 57.7 percent of the shares will remain federally owned, and the controlling stock will, as I said, be owned by the republic.

In addition, I want you to execute a special agreement between the Government of the Russian Federation and the Government of the Republic of Bashkortostan to define specific plans and key performance indicators for the Bashkir Soda Company, including output and investment figures. We will need to watch how the company is managed and provide oversight mechanisms to monitor the use of state property.

Mr Mishustin, we have discussed this subject many times, so please see it through to the end.

Prime Minister Mikhail Mishustin: I will, Mr President.

Vladimir Putin: Thank you. I hope that Bashkortostan’s leaders will do their part with regard to the tasks facing this company.

Let us move on to our main item, unless, of course, the head of the Republic of Bashkortostan wants to say or add something to the above.

Head of the Republic of Bashkortostan Radiy Khabirov: Mr President, just a couple of words, if I may.

Good afternoon, Mr President, colleagues,

I want to thank you for this decision. For many years, soda production privatisation has been a sensitive issue for the people in Bashkortostan, and they feel grateful for this decision.

We understand the level of responsibility and the role and importance of this enterprise for the national and local economies, so we will see to it that the company expands and is upgraded as necessary.

Thank you so much for your trust again.

Vladimir Putin: Look, the controlling stock in the company changed hands not through a fault of the federal authorities, but in connection with the decisions of the republic's leaders. There is nothing wrong with privatisation, but it must be in line with the goals. The company must work effectively and comply with a certain code of conduct.

Therefore, I look forward to these efforts continuing into the future. I also hope that the company will be properly managed. The company’s economic activities must be properly ensured, including resources, this should also be kept in mind.

Radiy Khabirov: I understand, Mr President.

Vladimir Putin: Yes, the resources must be there.

Good. Let us move on to the main item.

However, before that, we need to briefly discuss a number of issues at hand. The level of preparedness for the flooding and wildfire season is among the most important ones.

(Minister of Civil Defence, Emergencies and Disaster Relief Yevgeny Zinichev and Minister of Natural Resources and Environment Alexander Kozlov delivered reports on readiness for the flood and wildfire season in the regions.

Deputy Prime Minister Viktoria Abramchenko briefed the President on the work to decriminalise the forestry industry.

Minister of Digital Development, Communications and Mass Media Maksut Shadayev spoke about the preinstallation of popular Russian-made apps on electronic devices sold in Russia starting April 1, 2021).

Vladimir Putin: Let us proceed to the main issue on today’s agenda. I would also like to focus on regional finances. We closely monitor this subject, but we still need to talk about it in detail and discuss the state of regional budgets and what steps are necessary to improve their financial stability. In this regard, I want to emphasise that financial standing is one of the key conditions for the long-term social and economic development of all territories of our big country.

I would like to note that you closely monitor the financial situation in Russian regions. In recent times, as I have already said, a series of measures has been implemented to support the regions and provide them with the necessary assistance. First of all, I am speaking about the decisions made amid the pandemic. Let me remind you that last year, we allocated 280 billion rubles in direct subsidies and another 223 billion rubles in special budgetary loans.

Another thing I would like to mention. The Russian economy is only beginning to recover, as we all know. Not all regions have posted steady growth of business activity; therefore, the revenue base in many regions is still unstable.

In this regard, I want to hear the governors’ analysis of the regions’ financial health and your proposals on what new decisions are required not only to ensure the stability of regional finances, but also to boost the economic growth rate. Our goal is to pave the way for the sustainable development of each Russian region.

Let me remind you that the Government has already been instructed to develop a draft programme of infrastructure development in the regions and ensure its funding.

(Chelyabinsk Region Governor Alexei Teksler, Acting Head of the Republic of Mordovia Artem Zdunov, Nizhny Novgorod Region Governor Gleb Nikitin and Deputy Prime Minister Marat Khusnullin delivered reports on the main issue. Finance Minister Anton Siluanov and Economic Development Minister Maxim Reshetnikov took part in the discussion).

Vladimir Putin: Let us summarise our discussion.

Overall, I support these approaches – I certainly know what this discussion is about and along what parameters the restructuring is to be carried out. I will not talk about it at this point. I understand that 20 percent on the revenue side sounds like the right figure, and I would like to continue working along these lines.

I would like to make several points. First, concerning the balancing of regional budgets in the Russian Federation. Last year, Mr Siluanov was directly involved in this work the whole time. I have just mentioned this in passing: the Finance Ministry has launched additional mechanisms for supporting regional finances and this approach has been successful overall.

I am sure that this year the Finance Ministry will also come up with the necessary instruments and carry out the required measures, as the Minister has just said.

That said, normalising the budget policy in the regions must be carried out step by step, just as we have planned for the federal budget. I would like to ask you to consider this in determining the amounts of additional support. However, the Finance Ministry must continuously monitor the situation to keep people from saying: Oh! What is happening here? And, where have you been looking? I understand it is impossible to control every sneeze and every comma, but after all, you see what is happening and must react promptly. There is a mechanism for this.

Second. As I said, we are consistently working to improve the regional finances, and this is what we are doing today, too. One of the main steps here is restructuring commercial debt, which is what we are discussing today. As a rule, such loans are expensive and short-term – I think our colleague from Mordovia spoke about this – and are fairly burdensome for the regions.

We need to finalise the parameters of such restructuring, make it as fair as possible and do it soon, without putting it off indefinitely.

Third. Now that the economy and the revenue base of the regions is recovering it is very important to give the regions additional opportunities and instruments for developing their infrastructure and help them form a foundation for future economic growth.

Mr Khusnullin told us about the principles of such a national programme. I certainly support them. I would like to emphasise that both the Finance Ministry and the relevant departments must strictly control the implementation of this programme. Loans taken out to develop the infrastructure must not be used to cover current expenses. In the meantime, we are hardly controlling them.

In conclusion, I would like to remind you about the preparations for the Address to the Federal Assembly. Colleagues, in this context I would like to ask you to determine within two weeks the parameters of additional financial support for the regions this year so I can refer to them in the Address. I would also like to ask you to prepare specific proposals on restructuring their commercial debt and launching the programme for regional infrastructure development.

I would like to thank all of you for our joint efforts.

Thank you very much.

March 31, 2021, Novo-Ogaryovo, Moscow Region