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President of Russia Vladimir Putin: Mr Sobyanin,

You have been the mayor of our country’s capital city for five years now. Moscow is more than just a city, more than just a metropolis. We often repeat this phrase, but Moscow really is Russia’s heart. It is the country’s heart in all senses of the word, the political heart, and the economic heart. The situation in Moscow is crucial for the rest of the country’s wellbeing.

In this respect, I want to thank you, first of all, for your work over these last five years. As always in such cases, there are many questions, of course. Let’s discuss the different aspects of what is happening in Moscow now, what issues you have resolved and what tasks you still have ahead.

Of course, we also need to talk about the most sensitive areas of this complex city’s life and the impact your and your team’s efforts are having on Muscovites’ quality of life. We need to look at what you are doing to resolve the big and complicated problems of transport, healthcare, employment, balancing the city’s budget, attracting investment and developing infrastructure in the broad sense. What are you doing on the issue of kindergartens, where the situation was still serious only recently and in many regions has still not been resolved? What is the situation with schools and the education they provide? And what are you doing to address the demographic situation?

As you can see, there are plenty of questions, and each of them is particularly important. Let’s discuss all of these issues now.

Moscow Mayor Sergei Sobyanin: Mr President, it is true that the transport issue is probably one of Moscow’s biggest problems, what with the kilometres-long traffic jams and all the discomforts of public transport. We have worked hard to improve the public transport situation over these last five years. Dozens of kilometres have been added to the metro lines, we have built around 400 kilometres of new roads, flyovers and exchanges, and have developed a civilised parking environment and a smart transport system. The transport situation had been worsening over the last two decades, but we have turned this trend around and things are improving now. Traffic on Moscow’s roads is moving 12 percent faster than it was before, and we have more frequent public transport services in place.

These are just the first positive results, but they demonstrate that we can change for the better what had seemed to be a transport situation that was doomed only to get worse, with ever-bigger traffic jams. Some international experts had ranked Moscow the worst city in the world for traffic jams, but we have gone down to fourth or fifth place now. We will do our best to make sure that we do not rise any higher again and will continue in this positive direction.

Let me say again that this is not the end of a job completed, but only the start of a difficult road. We must continue our consistent efforts to extend the metro system and develop commuter services to the suburbs, an issue you have raised on many occasions. We need to continue building traffic exchanges and monitor the traffic situation on the roads.

By the way, I want to thank you for your instructions on developing Moscow’s transport hub, because the city cannot resolve this issue all on its own. It is essential to have just as active development in the Moscow Region, develop the suburban railway lines and the airports around Moscow. In accordance with your instruction, we worked together with the Transport Ministry, Background information Russian Railways Russian Railways, and our colleagues in the Moscow Region to bring a new railway line from Zelenograd into operation. This cuts the travel time by nearly half, and another new line cuts the time it takes to get to Tver by nearly a third.

Now, we are working on bringing the Moscow ring railway line into operation. This will essentially link the different suburbs. When it comes to this suburban transport, many projects have not been settled yet, but traffic volumes have already increased 1.5-fold. The suburban transport system is carrying more than 2 million people a day now. This is already comparable to the Moscow metro. This is therefore the first big comprehensive task that we are tackling together with our colleagues in the federal Government, Russian Railways, and Moscow Region authorities.

The second big task is to attract investment into the city’s economy. After all, our spending, our prospects and our budget and social capabilities are all dependent on the real economy and on attracting investment.

We do have some results in this area. Investment in Moscow’s basic capital has increased 1.5-fold over the last five years. These are the nominal figures, but even when put into comparative terms, there is still clear progress. We feared that investment would start a rapid decline last year, but this has not happened and the latest results for the first nine months of 2015 show that overall investment volumes are not dropping. The figures are roughly the same as what they were last year. Last year’s figure, as I said, was around 1.5 times higher than in 2010. In other words, the investment and project dynamic continues and I think that we will not see any sudden drop in the coming years.

To simplify investors’ work and attract people not only into developer projects but also into the real economy, we just recently passed a new law offering a 10 to 25 percent tax burden reduction to businesses, industrial companies and innovation ventures that are working steadily, putting land and basic capital to effective use and paying decent wages.

Many investors, including foreign investors, have some jitters and say, “Your economy is unstable and we fear that you might suddenly make decisions that are not in our favour or take our assets from us.” There is nothing to justify such fears, but nonetheless, seeking to reassure investors, we passed a law guaranteeing that if the state authorities change the rules in a way that harms investors’ interests, we will compensate them from our budget funds for lost income. I think we will be able to hold onto the potential that we built up over this time and the moment will come when we begin to grow again.

Regarding the social sector, despite the budget constraints we face, we continue to fulfil all obligations to senior citizens, people with disabilities, and low-income families. Furthermore, this year, we plan a decision that will mean that after pensions are raised at the federal level in February-March next year, we will index social benefits, not by much perhaps, but by some way at least, so that people receive a more substantial addition to their pensions and social benefits.

Complicated processes have been underway in the healthcare and education sectors over the last year or two, and this has often earned us some fierce criticism, but I think that the most painful stage of the changes is behind us now, and today, we are starting to see the first fruits of the work accomplished.

In the education sector, for example, teachers’ wages have increased substantially and the average wage is now more than 70,000 rubles. This is a good wage, quite a bit higher than the average. The quality indicators are also quite good. The number of winners of not even citywide but national educational competitions has doubled. This shows that the reforms and consolidation of schools we carried out has not eroded the quality of education and continues to work for the good of talented students. This is one important aspect, and another is that results in the National Final School Exam have also improved considerably. We see this by the exam results. The Government and the Education Ministry have toughened monitoring of the exam, and we think this is legitimate and help them in carrying this out, but we see even so that the overall exam results are a lot higher and give students the chance to get into a good university. This is very important.

Vladimir Putin: What is the situation with implementation of executive orders in the social sector?

Sergei Sobyanin: As far as the executive orders’ implementation goes, we are on target for wages, and we have fulfilled practically all of the orders’ demands regarding quality indicators in the healthcare sector, for example, in areas such as infant mortality, women’s childbirth-related deaths, and deaths due to heart disease. Cancer rates is the only indicator where we are seriously behind, but there are objective reasons for this, as Moscow, being the federal centre, is the place where cancer patients from all around the country come for treatment.

Vladimir Putin: You’ve had an increase?

Sergei Sobyanin: Yes, but if we take Moscow residents alone, the situation is not bad overall.

Vladimir Putin: And the demographic situation?

Sergei Sobyanin: The demographic results are stable. People were fearing last year that the birth rate would start to fall, mortality would rise, and our indicators would worsen, but nothing of this sort has happened so far. We have positive demographic indicators, in other words, there are more births than deaths. We had 120,000 children start their first year of school this year. This all places a big burden on the preschool education system, but it is a welcome burden. All children from the age of three and upwards can attend preschool facilities, and now we have lowered the age to two years and eight months and will gradually lower it further so that more children can attend preschool.

Vladimir Putin: Mr Sobyanin, the results are good on the whole, and I ask you to keep up the pace and continue this hard work over the coming period, in the interests of everyone who lives in Moscow, loves this city, and hopes to see effective work from you and your team.

Sergei Sobyanin: Thank you. The post of mayor of Moscow and this capital city status in general are a great honour of course, but come with great responsibility.

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