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Taking part in the meeting were Prime Minister Dmitry Medvedev, State Duma Speaker Sergei Naryshkin, heads of State Duma political party groups and heads of federal ministries.

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Excerpts from transcript of meeting with members of political parties represented in the State Duma

President of Russia Vladimir Putin: Good afternoon, colleagues, friends,

We are meeting today in Crimea. It was a conscious choice to meet with you here. I want to start by thanking you all for the ceaseless attention you have been paying to developing our two new regions, and of course for the consolidation, unity and solidarity that all parties in the State Duma and indeed all of our country’s political forces showed during those days that were of such decisive importance for the fate of Crimea and Sevastopol and for our entire country.

Let me take this opportunity to note the productive and substantial work the State Duma accomplished during the spring session. You approved amendments to our country’s Constitution and passed important laws concerning the economy and social sector. In just a short timeframe you examined the so-called ‘Crimean package’ of laws, which were passed in order to regulate key areas of life in Crimea and Sevastopol during the transition period. This was extremely important and concerns the operation of the banking and financial systems and pension payments. You took a number of important decisions that directly concern people’s interests. I remind you that 12 federal constitutional laws and 283 federal laws were passed in all. 

Finally, during the spring session, you began work on improving the local self-government system and took a decision that significantly increases the role and responsibilities of municipalities and regions. Overall, you have accomplished a lot, done a lot of hard work, and we all deserve to meet now in Crimea at this time. 

Looking at the decisions taken to develop municipal and regional government, we see that they are based on a flexible approach, and this kind of flexible approach and logic is especially important for our two new regions, Crimea and Sevastopol, where so much has to be done from scratch.

Regional and local elections will take place here in September, as in many other Russian regions. It is important that regional and local government work be organised effectively and that powers and responsibilities be clearly delineated.

But I say again, we must at the same time take into account the regions’ particular circumstances and traditions and best practice in local and regional government. First and foremost of course are the interests of the people living in these regions.

I know that many deputies arrived in Crimea on the eve of our meeting – probably not only to enjoy the summer sun and the southern coast, but because I know you also met with people, and this is extremely important. Indeed, it is important and highly useful. After all, State Duma deputies are constantly doing this work in other territories. It is very important, of course, to visit this place as well and talk to local people.

A serious expert discussion also occurred within the framework of the special seminars on economic issues that were held yesterday, as well as on the history of Crimea. I hope that today, we will discuss many of the suggestions made within the framework of the seminars. I generally suggest that we not only conduct today’s meeting as an evening or day of questions and answers, but count on us to exchange ideas and suggestions. It will be a pleasure for me and Mr Medvedev to hear the suggestions you may have for developing these territories.

We have a great deal to do here. We have accumulated an enormous heap of problems that have essentially been unresolved for decades. Sometimes, one gets the sense that Crimea lived likea poor relation. The previous authorities pumped a lot out of it and gave little or nearly nothing back. My sincere discussions with certain leaders speak to this directly. Indeed, they do not even try to hide it.

Yes, there were many problems, and now there are even more in that nation. And, of course, they should have supported other territories. They took a lot from Crimea and gave little back. That is the cause for the neglect of infrastructure, the economy, the social sector, and the low incomes of the majority of citizens. Now, within the framework of the transition period, we are taking the most pressing, priority measures to remedy the situation.

First of all, we are working to improve the reliability of Crimea’s energy supply. Reserve capacities have been created for key social facilities.

The next step is integrating Crimea’s energy systems with all of southern Russia, which will allow us to solve the energy deficit problem. A great deal of work is also underway to set up water supplies and create new communication and telecommunication systems.

Second is infrastructure and removing transport limitations. Despite the increased amount of flights and ferries in the Kerch Strait, we still have problems. And here, we will need the Cabinet and the regional authorities to do some extra work. Corresponding instructions have already been set forth and issued.

I want to point out that this year we allocated over 5.6 billion rubles [about $156 million] from the federal budget on fixing roads and railways in Crimea. We are about to set off on a project to build the Kerch Bridge. Works on the site will begin in the next few weeks. The bridge must be opened by the end of 2018.

We just discussed this issue yesterday and came to the conclusion that even if it is not effectively used up to its maximum capacity at first, we still need to complete this project with a certain potential, in the sense that it will certainly reach its full capacity, because we will need to develop the port infrastructure as well.

Third is the social sector. I have already said that it has been neglected. This concerns both healthcare and education. This year, we will direct about two billion rubles from the federal budget alone for modernising hospitals and clinics in Crimea and Sevastopol. People who need high-tech medical assistance can get it at leading clinics in Russia. We have already allocated the funds for this – half a billion rubles for Crimea and Sevastopol for 2014.

In the future, healthcare sector in Crimea and Sevastopol will operate within Russia’s compulsory medical insurance system. We will renovate and reequip the entire network of medical facilities.

We will also bring the educational system in order, from universities to preschools and children’s vacation facilities. This is a lot of work and it is impossible or very difficult to do it all overnight, but we will certainly work consistently in this direction and do everything over time.

Yesterday, I met with regional leaders in Sevastopol; there is a natural population decline. It is surprising. The birth rate is lower than Russia’s average. And where do we see it? In Crimea, on the Black Sea coast. It seems unbelievable! So we will have to do a great deal.

I will note that children’s health camps in Crimea were at 100% capacity during the first session of this summer. And right now, the Taurida international youth forum is currently underway here in Crimea.

The potential for organising children’s and youth recreation in Crimea is great, enormous, and naturally, it is not fully realised, but should be. In this regard, of course, I support the suggestion by leader of the Communist Party faction in the State Duma Mr Zyuganov to create a presidential international children’s centre on the basis of the legendary Artek.

Moreover, we need to prioritise resolving the issue of increasing pensions and salaries for public employees. They were significantly lower than in Russia. We gradually increased pensions and salaries. Thus, the pensions in Crimea have already grown nearly two-fold, nearing the average Russian indicator. From January 1, 2015, public employees’ pensions and salaries will be paid in full accordance with Russian legislation.

Colleagues, friends, right now, the long-term economic and social development challenges in Crimea and Sevastopol have particular significance. A corresponding federal programme has been drafted. The Cabinet and Prime Minister Medvedev are giving this a great deal of attention. The total amount of funds for the programme through 2020 is over 700 billion rubles.

Its main goal is to ensure dynamic growth in Crimea and Sevastopol, to make them economically self-sufficient and successful, to create new jobs, upgrade the infrastructure, industry, agro-industrial complex, social sector and tourist sector. I count on the State Duma deputies and the regions you represent to get actively involved in implementing these objectives and providing support to Crimea and Sevastopol.

The most important condition for success is maintaining stability, interethnic and interfaith harmony in the region. I already spoke about this yesterday at the Security Council meeting in Sevastopol. It is important to fully rehabilitate the repressed peoples and, what I feel is extremely important, to ensure real equality for three languages: Russian, Ukrainian, and Crimean Tatar. Preserving and developing ethnic cultures and traditions of all peoples living here is an extremely important challenge.

Looking at history, I want to note the following. Crimea truly does hold a special place in the history of our nation, our Fatherland. The Crimean land also remembers our triumphs and our victories, but it also recalls the tragedy of the fratricidal Civil War and other woes. Here in Perekop, Russians killed other Russians while blinded by mutual hate, and over 150,000 compatriots were forced to leave their Fatherland at the end of 1920.

But Crimea’s legacy also includes the poet Maximilian Voloshin, who called for reconciliation during the years of the Civil War and provided shelter in his home to people from both sides of the conflict. In the last several months, I have received many letters from the descendants of those who left Russia after the revolution and the Civil War. They now live all around the world – in the US, Europe and Australia. They are everywhere!

But I must note – and I say this with respect and love for these people – their letters include words of support, belief in Russia, concern for the future of our nation and, of course, Crimea and Sevastopol. And these people have carried their love for the Fatherland over generations. This certainly calls for respect.

I feel that Crimea can serve as a unique bench mark even today; it can play a unique, unifying role for Russia, becoming its own sort of historical, spiritual source, another way of reconciliation, to finally cure the wound inflicted upon our people as a result of the dramatic split of the 20^th century, to restore the link of times and eras, the unity of Russia’s historical path, our national consciousness, conduct our own kind of cultural and historical therapy. And let’s think about how to meet this objective together with participation by deputies, representatives of political party, public and religious organisations and cultural workers.

Colleagues, unfortunately, today we see how fraught the national and civil divide, radicalism and intolerance is in Ukraine. The situation becomes more dramatic with each passing day; the nation has plunged into bloody chaos and a fratricidal conflict. The southeast is suffering from a large-scale humanitarian crisis; thousands of people have already been killed and hundreds of thousands have become refugees, literally losing everything. It is a great tragedy.

We are carefully monitoring what is happening there, putting these questions before Ukraine’s leadership and the international community, as well as key international organisations, and we will do everything we can in order for this conflict to end as quickly as possible, so that the bloodshed in Ukraine comes to an end.

As you know, the Government of Russia has made the decision to limit imports from many nations that imposed entirely unfounded and unlawful sanctions on Russia. But I want to note that this is not just a retaliatory measure. This is, first and foremost, a measure for supporting Russian manufacturers as well as opening our markets to the nations and manufacturers that want to cooperate with Russia and are prepared for that kind of cooperation.

At the same time, regardless of the external political and economic situation, the most important thing for us right now, as always, are our internal affairs, our goals, concerns and objectives that are set before us by the people of Russia, the citizens of Russia. We must focus on resolving our national problems and challenges. Our future is only in your hands. We must ensure high-quality governance and work by political and civil institutions. And most importantly, we must provide high living standards for Russian citizens.

We must strengthen traditional values. Incidentally, many people support Russia in this choice – not only citizens of our nation, but many other nations around the world as well, including western countries where these values are deteriorating in the current political environment.

We must ensure the successful development of our nation, using our wealth of internal reserves. We must create additional incentives for industrial and agricultural development, conditions for developing the creative potential of Russian producers, entrepreneurs, scientists, engineers and workers.

This is what builds Russia’s competitiveness and its appeal. I repeat: we must calmly, commendably and effectively build our nation, not fencing it off from the outer world, not breaking ties with partners, but also not allowing them to treat us with disparagement or boss us around.

We must consolidate and mobilise. But not for wars or conflicts, not for countering anyone – rather, for hard work in the name of Russia and for Russia.

It is very important to strengthen the unity of Russian society. A great deal depends on you, colleagues, on the deputies, politicians and public leaders. It depends on how persuasive we are in conversations with our voters, our citizens, how decisive and insistent we are in implementing initiatives and projects that we announce. The citizens’ trust in public authorities is the key, the most important and most critical factor in our movement forward.

I want to thank you for our joint work during the previous period and wish you success. Thank you very much.

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Vladimir Putin: We are approaching a very important moment (I mean in our activities in general) – in autumn, we will have to approve the budget. This is a complicated procedure, and usually results in a compromise between industries, between various spheres of life. Certain priority areas were mentioned here, and I share them overall, without any extreme views, but still. We also spoke of the need to further develop agriculture. The Prime Minister already said that, given the decisions to limit imports, we are not only creating preferential conditions for our agricultural producers and clearing out the market for them. I have to tell you, and there are people here who deal with this professionally, that as you may know we have been regularly hearing requests of late from our agricultural producers regarding the market: they are asking for a possibility to develop their own market on an adequate comprehensive basis. Now this opportunity is being given. Naturally, this is followed by yet another request – for financial help. This is a fair and proper question. I would like to repeat that we spoke about this with our colleagues in the Government, and they are working on an additional programme of support for agriculture.

Now regarding the militarisation of our economy. As you may know, in the Soviet Union, we had complete militarisation. We need competent, modern, efficient and compact Armed Forces. This is the target of the programme until 2020. We are developing it in segments, but this is overall an ambitious goal and huge money – 20 trillion rubles [over $550 billion]. We need to properly spend the money, and I assure you that we are talking about the most sophisticated arms, such offensive and defensive systems that are as yet unavailable to other armies of the world. We are yet to cheer up our partners with ideas and their implementation – in terms of the systems I have just mentioned.

Some things have already been disclosed; say in the area of strategic offensive arms, I mean nuclear deterrence forces. Some information remains secret, but we will disclose it when the time comes. We are working hard, and our engineers, researchers and workers are putting a lot of effort into it. Overall, I have to say that we need to create it all first. This is not militarisation, but, as you understand, this is a very significant extra impulse for the development of the defence industry. This means orders and extra funding for modernisation – the 3 trillion you all know about.

Now regarding our foreign policy principles. It should remain peaceful. Mr Zhirinovsky [Deputy Speaker of the State Duma, leader of the Liberal Democratic Party of Russia] said that the czar, instead of sending humanitarian aid to the Serbs, sent his army, though he quickly added that that was a mistake. You know, we should learn from others’ mistakes, not from our own. We have already made a lot of mistakes, and will make more, therefore let us at least try to avoid making the obvious mistakes. Though I have to agree with some of the speakers that all our partners in the world should see that Russia, just as any other large, powerful, sovereign state, has different tools for ensuring its national interests, and these include the Armed Forces and military equipment. However, this is not a cure-all and we do not intend to run around the world waving a razor blade, as some people do. Nevertheless, everyone should know that we have such means available.

Now about whether we will give it [Crimea] up. Mr Vasilyev [Deputy Speaker of the State Duma, leader of the United Russia faction] spoke here. How can we do that? This would be the same as giving ourselves up. This is impossible. The decision was made, and it is irrevocable.

I think it was Mr Mironov [leader of A Just Russia party faction] who spoke here of the military component in Crimea. I would like to inform you: the Defence Ministry has drafted both addenda to the arms programme and a separate programme for the creation and development of a military grouping in Crimea, and I have already approved this programme. It will not be excessive, it will not be costly. We will not have excessive personnel or arms here. However, this programme is an integral part of the overall development plan of our Armed Forces, including its territorial component.

<…>

Vladimir Putin (responding to a statement by State Duma deputy from A Just Russia party Yelena Mizulina regarding certain amendments to the Constitution, possible withdrawal of Russia from the jurisdiction of the European Court of Human Rights and possible denunciation of international treaties): Regarding amendments to the Constitution, you know what I think of this document, it holds together the entire country and all our lives. I think we should be very careful in our approach. We need to get a very detailed expert opinion in every case, and discuss all these issues with the public, but with great care.

We have a well-balanced document. It is like a living organism: if something is removed, something else might grow where we do not need it. Therefore, we need to show great care. This does not mean we have the text for all times and we should not consider ways to improve our Constitution. Of course, we can and should consider this. I am only calling on you to be very careful here.

Regarding the European Court of Human Rights. I agree that some of its resolutions are politicised and far from its initial purpose: it does not regulate legal relations and does not protect any rights; it simply executes some political functions.

A good example is when Russia was awarded some penalty regarding Transnistria. We had nothing to do with it, a person was held in prison in Transnistria and Russia was awarded a penalty. This is total nonsense, an unlawful decision, but this is the way it was. Generally, this is possible, but for now, we have all sorts of discussions with them and maintain dialog. However, if this practice continues, this is possible, but it is not on our agenda now.

Now regarding a mechanism for denouncing agreements and treaties. I am not sure we need any special mechanism. The United States simply unilaterally withdrew from the Strategic Arms Limitation Agreement, and that was it, no matter how hard we tried to convince them. They proceeded from what they considered their national security interests. We will do the same when we find it right and important for the maintenance of our interests.

<…>

Vladimir Putin (responding to a statement by State Duma deputy Leonid Kalashnikov of the Communist Party of the Russian Federation): You have briefly mentioned the problem. Naturally, since we are here, in Crimea, this is what I can say. I actually said this many times before, but I will use this opportunity to repeat that we never annexed Crimea. We did use our Armed Forces, but only to give the people living here the opportunity to express their views regarding their future. This may have been the first time such a comprehensive plebiscite was ever held here, a comprehensive referendum on issues vital for the people living here. Therefore, any mention of illegal action is nonsense. We simply asked the people what they wanted. What is this if not democracy? What is democracy if not the power and the opinion of the people? Therefore, all these accusations are groundless. But this is so.

Now over to medium and short-range missiles. A reasonable question. Why? We signed this agreement with the United States. Only Russia and the United States limit themselves in the production and possible use of these weapons. However, this does not really make any difference to the United States. They have friendly Canada on one side, Mexico on the other. Our situation is completely different. Only our two states do not develop, do not produce medium-range missiles. Meanwhile, North Korea, the People’s Republic of China, Pakistan, India, Israel, Iran – almost all the countries in the world are working on this type of weapons. So, the development of these missiles in China or India does not cause any concern to us, because these are friendly states and I am certain that the relations we have established with China and India will last, bearing in mind the peculiarities of international relations and prospects for their development. However, the development of this class of missiles, say, in Pakistan cannot but raise our alarm because, frankly speaking, we know that this country has a complicated and so far unstable political regime, unfortunately, and we do not know how the situation will develop and who will have control over these weapons, especially considering that this is a nuclear power. There are many other questions as well regarding other countries. Meanwhile, we have imposed a limit on ourselves. But we are of course considering this and analysing the situation. We are now quite capable of ensuring our own security with the systems we have got and the ones we are working on. However, this was not an idle inquiry.

Regarding the Afghan transit. Should we denounce corresponding agreements with the United States? As you may know, there was a lot of talk about the possible use of the airfield in Ulyanovsk, wasn’t there? I know that your party, the Communist Party was strongly opposed to this. However, nothing happened and it is not used. Zero use. This is one thing.

The other is that we should never follow the principle of harming ourselves simply out of spite. We are interested in stability in Afghanistan. So, if some countries, say the NATO states, or the United States are investing resources, including money into this – it is their choice, but it does not run counter to our interests. So why should we stop them?

Do you want us to get into war there again? No, I do not believe anybody wants this. Therefore, if we see any unlawful actions regarding this country, we consider them and look for ways to respond. However, our response should not harm us; it should only be beneficial for us. The way we are acting now and the way the Government is acting in connection with the limitations of food imports. Exactly!

You see, if this happened four years ago we would not have done so, because our agricultural producers were not ready to supply the required products to our markets. A decade ago, we imported 360,000 tons of poultry from the United States. Last year, as far as I remember, the figure was only 200. This is because we have managed to set up such poultry raising facilities that even Europe does not have – wonderful, modern and efficient.

We have significantly raised the production of so-called ‘red meat’, primarily pork. However, we have not yet reached the required rates of beef production, because the production cycle there is longer. Say, with pork it is about 5–6 years after capital investment, while with beef, the cycle is 8–12 years, and it requires greater investment. Therefore, we only need some time.

Nevertheless, we are ready to supply to the domestic market enough products of adequate quality to meet at least the basic demand. Today we made the move. I cannot say it is catastrophic for our partners, but rather painful. I believe our actions are justified.

First, we did not violate any WTO rules or any of our commitments to the WTO. They are now considering taking us to courts; I am not sure if they have formulated their claims yet, but when we joined the WTO we clearly wrote in our agreement that we have the right to introduce limitations if this has to do with the national security. After western states – the USA, Europe, Australia, Canada, Norway – introduced limitations, including financial limitations on the activity of Rosselkhozbank – now, what does this bank have to do, say, with our disagreements over Ukraine?

They limited this bank’s access to international lending institutions. Thereby they are actually creating more favourable conditions for their products on our domestic market; therefore, our response was absolutely justified. This is not only about Rosselkhozbank; Sberbank, VTB and others are providing significant funds for agriculture.

Therefore, our actions are a) legal, b) justified and c) are not detrimental, but beneficial to our economy and our producers. These are the kind of tools we should look for, the kind of actions we should take – ones that would not do us any harm. We may want to pinch someone hard, but if it can harm us – we should better not. Let us follow this principle.

<…>

Vladimir Putin (responding to a statement by State Duma Deputy from the Liberal Democratic Party of Russia Ilya Drozdov): Regarding selling energy resources for rubles. I believe this would be the right thing to do, and we should work in this direction. The point is that this is not easy.

Say, crude oil is traded at international stock exchanges for dollars. This is an international practice that took shape decades ago, and it is very difficult to break. Moreover, our companies engaged in this trade are interested in receiving euros or dollars. Oil is traded only in dollars. This is a kind of unilateral dollar monopoly on this trade. In my opinion, it is detrimental to this very sector of the global economy itself. We have to move carefully here. We are already trying to reach agreements wherever it is possible, feasible and meets our interests to trade in commodities, which could include energy resources, in national currencies. Say, we are working on an agreement with the People’s Republic of China to trade in rubles and yuans – not an easy process. This should be done gradually, step by step. We are taking the first steps.

We are discussing the issue of trade in various commodities within Background information BRICS BRICS as well. We have even signed a corresponding agreement on expanding trade in national currencies. I repeat that this is a matter of time and major efforts by experts. We will do this gradually, while it is a fact that we need to shift to trade in national currencies in certain segments of the global market.

Now about the quality of our agricultural produce. Of course, it is better, 100 percent. Unfortunately, mass food production in many industrially developed countries is largely based on the use of chemicals, on medicines that they give to cattle to keep it healthy, and the various growth stimulators: the faster your cattle grows the faster your turnover and the more money you can make. But this is harmful.

Look at the situation with obesity in some countries. It is terrible! This has to do with food. Our produce is of course much better and healthier. The issue is that there should be enough of it. As I already said, the production cycle, say, of beef is longer and requires significant investment. We are already doing this, we already have large facilities and we will develop them.

I already spoke about the development of relations within BRICS. We have just signed two very important documents in Brazil: on setting up a joint bank and on creating a Contingent Reserve Arrangement. This is very important. These are only the first steps. The bank is a financial institution that should be used to develop our economies, and the Contingent Reserve Arrangement is of equal importance.

This means that Russia, China, Brazil, South Africa and India should all allocate part of their contingent reserves to this arrangement. Russia suggested allocating $30 billion. This is done for various reasons, primarily to strengthen macroeconomic stability in these countries, including Russia. Another goal is to maintain our currency reserves intact.

Our colleagues have already spoken of this here. I would like to stress that this is very important. For instance, Mr Zhirinovsky spoke here, among other things, of the huge national debt of the United States, and this is the dollar – the main currency in the world. What will happen to it? I am certain our American partners do not know for sure, to say nothing of the other countries. Our currency reserves are nominated largely in US dollars. Therefore, the creation of a Contingent Reserve Arrangement is a very important measure.

Now over to some products you mentioned: tobacco and alcohol. We should fight alcoholism among the population, and we should limit smoking. However, this should not be done the way it was done back in Soviet times, when in the course of the anti-alcohol campaign they cut down entire vineyards, here in Crimea most probably, and in Krasnodar Territory they destroyed all the vines. Did this help reduce alcoholism? I do not think so.

People started drinking methylated spirits, they distilled their own ‘moonshine’, and so on. There is no simple solution here. This requires a complex effort. We have to promote a healthy lifestyle and develop sports – not only big sports, but mass sports as well. We should always offer people an alternative. And we should be just as careful with fighting smoking.

If we simply raise prices (we often discuss this with the Government, you seem to have supporters there who suggest raising excise duty 5 or 10 times) people will not smoke less if we do it in one click. They will simply switch to all sorts of substitutes, that is all. We need to work towards this goal calmly and steadily, explaining things to people, and if we do raise excise duty, we should do it gradually.

As for foreign investment, I do not agree with you at all here. We have to create such conditions in Russia that both foreign and our own investors get a clear signal: they do not cheat in Russia. If an individual or a company decides to invest, they should be certain that nobody would take their investment away, that it is guaranteed by our state policy.

I call on all of you to take on such an attitude to this issue, because this is the only way we can increase trust in our economy and attract all the investment we need not only into tobacco or alcohol production, but into other sectors of the economy as well. It only takes one wrong signal in a certain sector of the economy to get a negative impact on all the others. However, this does not mean we should not fight smoking. This can be done by means of a tax policy, by means of explanations and certain limitations – all of this is possible. We need to consider it all calmly and professionally.

Regarding the ban on energy drinks. You know, I share your position. Though I do not want it to sound as though we intend to ban them all tomorrow, I would be a bit more proactive in this respect than we have been so far.

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Vladimir Putin(responding to a statement by State Duma deputy from United Russia party Andrei Makarov): Concerning the pressure exerted [on Russia] by the economic measures you mentioned, these measures are indeed very primitive and in my opinion ineffective and harmful. I agree with you that they pursue the goal of ensuring and maintaining US global domination, and perhaps they even seek to consolidate their competitive advantage on global markets by squeezing us out a bit from the European market and pulling Europe a bit closer their way.

As our colleagues have noted already, our bilateral trade with the United States comes to slightly more than $27 billion, but our bilateral trade with Europe comes to $440 billion. You see the difference? Any changes in these relations have an immediate impact on us and on the Europeans, but have practically no impact at all on the United States. In this respect, your analysis of the situation is entirely correct.

I want to point out that the Government is constantly drafting and implementing economic stimulus measures. We can debate about what hasn’t been addressed yet and what still needs to be done, but if you look at all of the Government’s proposals, you will see that practically all of our policies aim to stimulate the economy.

Our recent infrastructure development plans are a good example, including in the east of Russia, the plans to modernise the Baikal-Amur and Trans-Siberian railways and so on, or the new ring road in the Moscow Region. All of these measures aim to free up the bottlenecks in the economy caused by lack of infrastructure. These are also stimulus measures. The entire programme to support the agriculture sector is a stimulus measure too.

Yes, during the 2008–2009 economic crisis we took measures of an even clearer nature, directly supporting, for example, the automotive industry so that it would not collapse like a house of cards. But that was in the middle of a serious crisis. It probably would not be the best course to act in this same way now, because we would risk creating disincentives for building up the base for companies to develop on their own resources. But I do agree that we need to keep reflecting on measures to stimulate growth.

You asked what I think about raising taxes and spending our reserves. I am not in favour of either. I would rather not raise taxes or spend our reserves. But the fact that the Finance Ministry and the Economic Development Ministry are always arguing with each other about the need to either raise taxes or dip into the reserves is just part of normal professional discussion. I do not want to waste everyone’s time here by going deeper into this issue now. But let me assure you that we are giving these matters our constant attention.

Back in the days of ancient Rome there was a senator who declared that Carthage must be destroyed, and he always ended all his speeches that way. We are exactly the same in that we always end up arguing about whether or not to spend our reserves, whether or not to raise taxes, and what exactly the tax manoeuvre is about: just idle talk, or would they lead to a real increase in the tax burden on the economy?

I would rather not raise the tax burden or eat into the reserves, but it would be wrong to just sit on a sack of money and do nothing at all. No one can accuse us of doing nothing, however. I already mentioned the big infrastructure projects to develop the eastern regions, for example. We will finance these projects with money from the Reserve Fund. The Reserve Fund is our safety cushion, but we also need to keep it at a certain level. It would be the wrong course, however, to keep these funds in foreign securities alone. We have heard criticism on this point, and if anyone thinks that we do not pay attention to this criticism, they are wrong. We are taking appropriate steps in response.

On the subject of a tax amnesty, the idea looks quite attractive in principle. We did carry out such an amnesty a few years ago. But the effect was not what we had hoped for, and that is the whole problem. We have to be very cautious when it comes to tax amnesties or any other kind of amnesty, otherwise someone commits a crime, serves half their sentence, and then there’s an amnesty, and a year later there’s another amnesty, and then another. Taking this road would only cancel out the state authorities’ efforts to combat crime. It is the same when it comes to tax amnesties.

People happily evade taxes and then along comes an amnesty, and three years’ later there’s another amnesty. I am not saying an amnesty is impossible. In principle, if the issue is analysed at the expert level, and if the State Duma examines it and ultimately takes a legislative decision, I would sign the law. But we need to think about the expediency of such a measure too. We need to look at its effectiveness, examine things from this angle. That is what I am trying to say. 

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Vladimir Putin(responding to a statement by State Duma deputy from A Just Russia party Svetlana Goryacheva): Regarding the idea of studying and applying other countries’ experience, including in work with young people, we most certainly should and will do this. But there is a lot of negative experience abroad too, a lot of problems with drug addiction, often xenophobia flourishing, and various other things, not so traditional things… You know the sort of thing I have in mind. We don’t need that kind of experience. But they have positive experience too of course. We need to analyse the overall situation and take the best of what they can offer, that is without question. We also need to take the best of what our own history offers, draw on our own culture, and at the same time look at what other countries are doing too.

When it comes to foreign experience with migrants, say, there is nothing worth borrowing abroad. They have nothing but problems and even worse than our own. They have already publicly declared the failure of the policies they have been following so far, publicly said that they don’t work. This is a unique situation for the Western establishment. Just five or so years ago, no one could have imagined anyone would be so bold as to say such a thing. Now they are not just talking about it but are trying to address the problem. Their attempts have been very clumsy so far.

We have more positive experience to draw on here because Russia developed right from the start as a country of many ethnicities and faiths. We have a tradition not just of coexistence but also of interpenetration of cultures and religions. This is a very important historical background that we certainly should put to good use. Nearly 10 percent of Russia’s population are Muslims, for example, but these are not migrants, these are our citizens, they have no other homeland and most of them see Russia as their greater motherland. They have their own local native land, and then there is their big home, Russia. We must not allow discrimination of any sort. But at the same time, we also need to learn how to regulate local employment markets using modern methods.

You noted the sectors in which immigrants or migrants are particularly prominent: the construction sector, produce markets and so on. Of course, we need to open schools of different levels, and vocational colleges, and we must give young people the opportunity to get an education. This is all needed. But we also require other measures, too, to regulate the labour markets. In the construction sector, for example, if business finds it more profitable to hire a migrant for a cheap wage, you won’t get anywhere even if you send a policeman to watch over every company. They will still keep hiring migrants, you see? This is why we need to take rational economic measures, but coming up with the right policies is not so easy.

Moscow Mayor Sergei Sobyanin proposed extending the permit system and making it more flexible, adapting it to each of the country’s regions so as to give us economic means and levers for influencing the business community’s hiring practices. The permit would have one cost in Moscow, for example, and a different cost in Ryazan, say. We would need to give the regions the right to be flexible in regulating and using this system.

Let’s try introducing this system and see if it brings some results. But let me appeal to you, colleagues, and say that if you have your own ideas, we would be happy to hear your proposals on the modern and civilised methods we could use to better regulate this very sensitive area. I do agree with you here. 

Colleagues, I want to thank you once more for the work together over the first six months of the year, and for today’s meeting. I wanted very much for us to have the chance to meet in an informal setting here in Crimea. Your colleagues from Crimea’s parliament and Sevastopol’s legislative assembly came to Moscow during those decisive days that I already mentioned. I imagine that many of you have already been to Crimea, but probably not all, and I wanted all of you to come here, spend some time looking around, talk with people, get a feel of the atmosphere, breathe the air, and have an opportunity to see Crimea and Sevastopol.

Everything becomes a lot clearer, a lot fresher and more vivid, when you see and hear it for yourself, and this first hand impression of these regions will help us to respond better to the problems that have built up here and take more considered decisions on issues in areas such as transport, energy, water supply and any other problems.

One other thought that I want to mention with respect to Crimea, something that we have already heard here. We hear some people say that it is an expensive undertaking [to support Crimea], and people ask how does public opinion in Russia feel about this?

Crimea and Sevastopol are part of Russia, and so it is therefore absolutely natural to develop our country and develop its individual regions. We do this for the people living in these regions, and also for the entire country. This is not some kind of gift, but our duty, our obligation to develop all of Russia’s regions.

If a particular region is lagging behind, we must give it more attention. We do this for the Far East, for example, and we have not changed our plans in this respect. We do this for some of the regions in the south of Russia, and here too our plans remain unchanged.

We need to take this same special approach now to Crimea and Sevastopol because they lag behind the Russian Federation average in terms of their socioeconomic development. But we are doing this in the interest of the entire nation.

Thank you very much.