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President of Russia Vladimir Putin: Good afternoon, colleagues.

I would like to inform you that after receiving a letter from the Turkish President, we have decided to start work to normalise our relations with our Turkish partners.

I had a telephone conversation with the Turkish President today. I began that conversation by expressing my condolences to the Turkish President and the entire Turkish people following the terrorist attack in Istanbul.

Regarding our bilateral relations, I would like to start with tourism, even though this is coming at a moment when we see an upsurge in terrorist activity… But nonetheless, we will lift the restrictions in this area.

I ask the Russian Federation Government to begin the process of normalising trade and economic ties with Turkey in general. (Addressing Prime Minister Dmitry Medvedev) Mr Medvedev, I would like you to draft proposals for amendments to the legislative base in this area.

Prime Minister Dmitry Medvedev: We will draft and present the proposals.

Vladimir Putin: Thank you.

The Turkish President assured me that the Turkish government would do everything possible to guarantee our citizens’ safety on Turkish soil.

Let us get down to our current business now. We are here to discuss questions concerning the priorities for the Government’s work in 2017. However, before we start on this, there are several issues that are very important right now, and one of them is the organisation of children’s summer holidays.

We were all shocked by the tragedy in Karelia and the death of children on holiday. (Addressing Deputy Prime Minister Olga Golodets) I would like you to make a thorough analysis of the situation in this sector and would like to hear your report, Ms Golodets.

Deputy Prime Minister Olga Golodets: Mr President, Mr Prime Minister, colleagues,

The summer holiday campaign covers a total of 8.5 million children in Russia this year. We see this programme as an alternative to unorganised recreation, which, especially in the summer season, has many latent dangers. Last year, 1,674 children died during unorganised recreation over the three summer months. Organised holidays and recreation means above all guarantees of life, health, and the quality of educational programmes.

A whole swathe of laws regulates organised holiday programmes, just as they regulate school education and other matters related to schools. At the same time, each holiday camp is inspected to ensure that it measures up to the health, fire and construction safety norms. An article in the Labour Code places restrictions on the categories of people allowed to work as camp guides, instructors, and in other jobs directly in contact with children.

In the tragedy in Karelia however, we have a case where all the laws have been broken. The camp was banned from organising tourism activity, as it had neither the proper equipment nor trained instructors. However, the camp went ahead and organised these activities anyway, which led to this terrible tragedy.

(Ms Golodets went on to say that all of the health resorts and holiday camps – 19,953 in all – have been inspected now. Following the inspections, three camps were closed in Karelia, Krasnodar Territory and the Republic of Mari El. The inspections revealed 7 illegal children’s holiday camps. The inspections also found many violations, which have been rectified or will be done so within set deadlines. A programme has been developed to put in place extra control over children’s safety at holiday and health camps).

Everyone in Russia is deeply shocked by what happened. Three children are still in hospital. Their lives are not in danger but they need to go through a rehabilitation programme. The children showed that they are real heroes though. It was thanks to the efforts some of them made that others were saved. We ask you to support our request to award state decorations to the children who saved their comrades.

Vladimir Putin: Yes, of course I will support this.

I have a question: who is responsible for looking after safety in this area at the federal level? Is there a single agency responsible for this at the federal level?

Olga Golodets: No there is no single agency. The task is split between different agencies in the relevant areas. The Emergency Situations Ministry is responsible for fire safety and water safety, the Education Ministry is responsible for educational programmes. We have no specific agency overseeing everything at federal level because the different agencies oversee their own relevant areas.

Vladimir Putin: Each of them oversees their own area, and yet such a serious tragedy happened. There should therefore be a state agency responsible for this, able to systematise this work and settle definitively the question of what is and is not allowed. I ask you to sort this out.

Olga Golodets: Fine.

Vladimir Putin: Second, there is no system for accrediting these camps, and it is not possible to work without such a system.

Olga Golodets: Yes, we sent the instruction out today. We are looking at not simply a system for accrediting but also for licensing children’s camps.

Vladimir Putin: We need to draft a single set of safety standards for children’s holiday facilities.

(Addressing First Deputy Prime Minister Igor Shuvalov) Mr Shuvalov, we have just visited China with our colleagues, where we held very intensive and productive talks and signed documents that create new opportunities for developing our bilateral relations. Please brief our colleagues on the results.

First Deputy Prime Minister Igor Shuvalov: Mr President, you made your official visit to China on June 25. The visit coincided with the time when our countries were marking the 15^th anniversary of the Agreement on Good-Neighbourliness, Friendship and Cooperation between Russia and China. This anniversary was widely celebrated in China and is considered an occasion that we should always remember because the signing of the agreement was a milestone in our bilateral relations.

The foreign ministers, deputy prime ministers, federal ministers and heads of public-owned companies did a lot of work to prepare this summit meeting. The result was the singing of more than 30 agreements during the official visit.

The foreign ministers signed a declaration calling for a more serious attitude towards developing international law, because today, many countries, including members of the UN Security Council, ignore the provisions of international and public law, and the declaration noted the need to put particular effort into developing this subject.

Let me brief you in more detail on the visit’s economic results. You and President of China Xi Jinping held a wide-ranging and detailed exchange of views on the need to expand our work to prepare and execute an agreement on a comprehensive Eurasian economic partnership. We and China both give much attention to developing integration processes.

As the leading economy in the Eurasian Economic Union and the Eurasian Economic Committee, Russia signed a memorandum with China’s Commerce Ministry on the start of talks and the possibility of concluding an agreement between the Eurasian Economic Union and China.

We are also following closely what is happening with the development of the Trans-Pacific and Trans-Atlantic economic partnerships, and this was discussed in detail during your talks with Xi Jinping.

China and Russia are both members of the Shanghai Cooperation Organisation, and we think (as was said at the talks you held during the Russia-ASEAN summit in Sochi) that the time has come to make a serious study of the prospects and possibilities for a comprehensive Eurasian economic partnership that, unlike the two US-led projects I just mentioned, would be completely open in membership and would affirm the World Trade Organisation’s basic principles. In other words, this partnership would not dilute the WTO in any way, but would, on the contrary, support all of what the WTO has built up over these decades.

We therefore agreed that our research centres at Moscow State University, Moscow State Institute of International Relations (MGIMO) and the Russian Academy of Sciences’ institutes will cooperate actively with Chinese research organisations. Together with the Eurasian Economic Commission, the Ministry of Economic Development, and China’s Commerce Ministry, we will carry out large-scale preparatory work to ensure that a concrete base is drafted and ready for discussion by the next meeting between our prime ministers in November.

We need to understand which main sections of this agreement we can start drafting now, so we could prepare some basic provisions (in areas where Russia has not transferred powers to the Eurasian Union) for an agreement between Russia and China. Mr Xi Jinping said that Russia and China could start by initiating work on developing a comprehensive economic partnership at the level of their national authority for now. This is a very important part of our cooperation and agreements.

Moving on, we have been working actively with our Chinese partners since 2014 on developing financial relations. Our central banks and finance ministries did not have such a broad range of issues of mutual interest. It was usually state-owned companies in the commodities sectors that were working together. This work continues to develop and companies such as Gazprom and Rosneft signed agreements during your visit and will continue developing their ties.

But what is important is that the regulators (the Central Bank as Russia’s main regulator and the Bank of China and the Securities Commission on the Chinese side) have now signed binding agreements on building a clearing centre for working with offshore yuan in Russia and on letting Russian investors into the Chinese market and vice versa.

We have also agreed on our plans for organising work in the insurance sector over the next three years. You raised this matter with our Chinese partners a year ago, and we have now settled the issue, including reinsurance. This is not an easy task and we need to actually carry it all out now, which will take around three years, but now we have the agreements.

Regarding individual projects, you witnessed the signing of agreements on starting work on a wide-bodied long-haul passenger aircraft, and on a heavy helicopter. Deputy Prime Minister Dmitry Rogozin oversaw this work. A partial agreement was also signed during your visit on another important project – high-speed railways. We will continue our work on the agreement between Russian Railways and Chinese railways to have the document ready for signing by November. There are still a few details to sort out with our Chinese partners. Among other things, we have been informed that our European colleagues, seeing our agreements with China, are asking to be involved in a project like this one too, and Deputy Prime Minister Arkady Dvorkovich is at work on this now.

We are working very actively with the Chinese government on humanitarian issues too, and this is an area of particular interest to us.

On the Yamal LNG project, the agreements have already been signed, Russia has already drawn up the necessary documents, and a memorandum has been signed so that Russia can start spending the $12 million. A memorandum was signed on the disbursement of the funds and this work will go ahead.

A memorandum was also signed with our Chinese colleagues that is not binding in nature but will ensure greater coverage for many projects and closer relations with our biggest media companies, including Russia Today, Channel One, and TASS.

Projects were presented in practically all areas. These projects have already been thoroughly examined, some of them already have the needed funding from Chinese financial organisations, and Russian banks are involved in some of them too. We are working on 66 investment projects within the intergovernmental commission’s work, as we have briefed you. Not all of these projects have specific investors yet, and investors’ obligations have not been defined for all of them, but agreements on four projects have already been signed and work is underway, work is in progress on 12 other projects.

On some projects where difficulties have come up, we have settled the issues. In particular, the Chinese side drew our attention to the fact that we were not complying with our commitments on a bridge across the Amur River. We were told that our Chinese partners have nearly finished their part of the work. However, we confirmed that the Russian Direct Investment Fund has already signed the necessary agreement with the subcontractor and we will complete our part of the work over the next 18–24 months. Yury Trutnev is overseeing this work.

Vladimir Putin: There is also the road across Kazakhstan.

Igor Shuvalov: Yes, the President of Kazakhstan is always raising the issue of this road, and now the Chinese President raised it too. There is a project that we think Meridian Company could carry out with success if the project gets the necessary backing from the Asian Infrastructure Investment Bank. An exchange of views on this matter took place between the Bank’s president and Minister of Economic Development Alexei Ulyukayev.

We agreed that we will provide the necessary documents confirming the project’s status and the need for financing so that in the current situation we could direct budget funds into building other federal roads, given that this particular project could go ahead as a private one.

Vladimir Putin: Good, thank you.

(Next Minister of Construction and Housing and Utilities Mikhail Men spoke about additional measures to protect the rights of people taking part in shared-cost construction projects, in particular, amendments to the law setting additional demands on builders and other actors in this market and the creation of a new institution of state guarantees, a compensation fund for construction projects of this type).

Finance Minister Anton Siluanov spoke about a considerable drop in the illegal alcohol market and a substantial increase in excise duties since the Federal Service for Alcohol Market Regulation was transferred to the Finance Ministry).

Vladimir Putin: The harvest campaign is underway now. Six regions have already begun harvesting. Mr Tkachev, how is the work proceeding?

Agriculture Minister Alexander Tkachev: Thank you, Mr President.

Yes, I would like to say that farmers have indeed started gathering their harvests. This work is underway in only six regions so far, traditionally the first to begin the harvest: Adygeya, Crimea, Kalmykia, Karachayevo-Cherkessia, Stavropol Territory and Krasnodar Territory. Two million tonnes have been harvested so far.

So far, the weather is on our side and the work is proceeding twice faster than usual. If we carry on this way, we can expect a genuinely good harvest and we predict 106 million tonnes of grain. I would like to remind you that last year’s harvest was 105 million tonnes. If the weather holds out throughout the harvest period (and we know there are natural calamities, sadly, heavy rains, and then we lose a lot of grain during the harvest) and if all goes well, the harvest will be a good one and we could even hope for as much as 110 million tonnes.

The farmers have the necessary equipment and fuel for the harvest. Equipment supply rates are three percent higher on average around the country and diesel fuel and petrol supply rates are 25 and 15 percent higher. Lending to finance seasonal farming work is proceeding according to plan and without problems. We are monitoring the situation in the regions on a weekly basis. A total of more than 130 billion rubles have been accorded in short-term loans so far, which represents an increase of 30 percent.

Rosselkhozbank has accorded a total of 88 billion rubles worth of loans, which is up 33 percent on last year. Sberbank’s loans come to 43 billion – up 21 percent. The predicted big harvest this year will give Russia all the chances it needs to hold onto its place as one of the world’s main wheat exporters. We should reach the figure of 30 million tonnes of grain exports this year. We exported 30 million tonnes in 2014, including 25 million tonnes of wheat.

Along with Russia’s traditional wheat export markets in the Middle East and North Africa, we expect to increase exports to China, countries in the Asia-Pacific region, South Asia, Central and Southern Africa, and Latin America. After hearing your latest news, I think that we could also resume exports of wheat, rice and other products to Turkey as well.

Vladimir Putin: As we and agreed, and Mr Shuvalov reported, one of the issues we discussed was work to sell our agricultural goods, including meat, on the Chinese market. I am pleased to say that we have a good export potential in the poultry and pork sectors, and we could sell on the Chinese market, but we would need to put in a good competitive effort here. I hope that you will take an active part in this work with our partners not just in China but in other countries too.

Alexander Tkachev: Let me take the opportunity to thank you. The talks in China were quite successful and we are close to finding an opening on the globally promising Chinese market. Everyone wants to get into this market and the competition is fierce. We can export hundreds of thousands of tonnes of meat to China. This is not taking anything away from our own market, it is surplus production, and it will be the same with wheat and beef.

Vladimir Putin: With beef, we first need to cover our own market’s demand. I hope the situation will be the same here too.

Alexander Tkachev: I believe this will all be possible in 2–3 years’ time, and the same goes for vegetables too.

Vladimir Putin: We still need to work on covering domestic demand as far as vegetables go.

We need to open the market wider to the Asian countries, to our neighbours in Central Asia. We need to work on logistics, create companies, and help them to open up their offices here. We need to do this for our people, to bring prices down. This would be of great help in bringing down inflation. In short, it is clear what we need to do. I hope for your active involvement.

Let us now move on to the main issues on our agenda today.

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