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Visit to Avtodizel plant

November 12, 2016, Yaroslavl

During his trip to Yaroslavl, Vladimir Putin visited the Avtodizel Yaroslavl Motor Plant, part of the GAZ Group, which produces goods under the YaMZ brand. The President saw the production process and met with the workers.

Vladimir Putin examined the information stands devoted to the 100th anniversary of Yaroslavl Motor Plant, viewed YaMZ engines, and toured the exposition of YaMZ-530 engine components. The President also examined minibuses for transporting children and a mobile intensive care unit manufactured at the plant.

The President also took part in the launch of serial production of the new YaMZ-530 CNG gas engines, which comply with the Euro 5 standard. The first engine to roll off the production line was shown to the President and the plant’s employees during the ceremony.

Avtodizel is one of Russia’s largest enterprises producing multi-purpose diesel engines, clutches, transmissions, spare parts to them, and stationary units based on them.

* * *

Meeting with Avtodizel workers

Pavel Nikitin: Mr President, I have a question. My name is Pavel Nikitin, and I am a senior specialist at the Yaroslavl Motor Plant main process-engineering department.

President of Russia Vladimir Putin: Senior specialist, a big boss.

Pavel Nikitin: I started working at Yaroslavl Motor Plant in 2007 and almost immediately got into a project team that was involved in building this new site. However, there was a crisis in 2008 and construction work was frozen. We worked part time for almost a year, they wanted to move us to other projects, so the situation was pretty bad. But then you paid a visit to Yaroslavl Motor Plant, believed in the YaMZ-530 project and instructed Vnesheconombank to provide financing for the project.

On behalf of all young people working at the enterprise, I would like to thank you for giving us the opportunity to work at one of the most up-to-date plants not only in Russia but also in Europe.

I have the following question: now that you have seen our production, what is your impression?

Vladimir Putin: You know, I would like to start by congratulating all of you and all of us, the entire industry and the whole country on the 100th anniversary of this very large and very old enterprise. The motor vehicle plant was set up in 1916, pursuant to the decision of Nicholas II. Later, during the first five-year plan, the enterprise shifted to manufacturing cargo-carrying vehicles and buses. Even the first double-decker trolleybus, which has just been shown to me, was manufactured here. There were many changes during that time, and the plant started specialising in producing engines.

It is no use crying over spilled milk. Truth be told, there were a lot of problems, especially in the 1990s. The main assets had become obsolete by then. They were inefficient since the resources had not been invested in time. The market opened up to inexpensive foreign and, let us be honest, high-quality equipment and our own enterprises started literally fading away quite quickly. And this was the state of the plant when I saw it for the first time.

But really, a lot was done in this period, and today’s site, where we are now, you were absolutely right to say – it is one of the best, if not the best plant in Europe. The newest inventions, the most up-to-date technologies have been integrated here and we have been carrying out this work purposefully.

The year 2008 was difficult, it is true, and if you remember – and if you don’t I will remind you – this was not connected with our internal problems, the crisis came from the outside. First it was a financial and then, in fact, a global economic crisis which affected our economy.

But I would like to remind you what we spoke about then. During a public event I said, if you remember: “I do not know for sure how the situation will unfold, but one thing I can promise: we will not repeat the sad experience of 1998.” And, thank God, we managed to do this, although what I said then was a big risk because there were a lot of so-called uncertainty factors.

We could not be 100% sure. But we needed to believe in ourselves, we needed to get moving and solve specific tasks, including in industrial production.

One of the projects, whose results we see here now, had been born even earlier. You said that you started thinking about this in 2007. In fact, everything was frozen, not for a year but for a year and a half, it was 2009 when the actual work started.

We have just recalled how we invested approximately 4.5 billion rubles via Vnesheconombank’s system, rendered other support that was not financial in nature, but what is important is that there were such people like you. This is essential, this is most important, probably, because our foreign specialists, and, let’s give credit, the company’s shareholders, the GAZ company, in general, and those who had been working on this project initially did a great job and all of you together achieved such a remarkable result. So what are my impressions? The very best. Congratulations!

Pavel Voloshchenko: When I was doing my post-graduate studies, I brought students to our plant for work experience, and it was obvious that they lacked knowledge of modern high-tech production like this. And the GAZ Group has positive experience. For instance, a department for production systems, where the enterprise’s employees teach, was opened at a university in Nizhny Novgorod.

Vladimir Putin: GAZ opened in Nizhny Novgorod?

Pavel Voloshchenko: There are plans to open [such a department] in Yaroslavl. The enterprise’s employees give lectures, then bring students to the plant and give them a real assignment to work on. So, the managers can already see who is interested, who will come to them, and the students can make their choice. For example, this is how I came to work at my plant. And, therefore, I would like to propose spreading such experience all over the country. I also have a question: will the Government support the training of engineers for large plants?

Vladimir Putin: I think that if we set up a plant similar to yours, then people would be happy to go to work. And the level of wages is important and here it is not the highest, I understand, I know approximately the average wage here, but conditions in which people work are also important, it is very important to feel that you are involved in something serious, important, something promising and interesting. In this regard, such plants create conditions that attract young and talented specialists.

As for the experience of the GAZ Group, of course, it needs to be spread. Although I believe there have been rules in effect from 2013, stipulated by law, which have been working in the other direction, meaning that higher education institutions were granted the right to set up education departments at plants. A higher education institutions can set up departments at a production facility. I do not know whether they exist or not, I believe they do somewhere. There were institutions of higher education in the Soviet era called VTUZs [technical colleges], set up at specific enterprises and groups of companies. So this is a two-way road with very good practices, of course.

You might not have noticed but, in recent years, we have constantly addressed this. We’ve been in very active dialogue with the business community so that employers would join the process and develop professional standards together with the Government and prepare specialists in accordance with these standards.

The state allocates the necessary resources for this. You can agree or disagree that it’s the necessary amount, since there is never enough money, but it is allocated and we will continue to do so. So, of course, this is a very good experience, we need to see what specifically the GAZ Group does, and we will work together, of course.

Yuri Shudin: My name is Yuri Shudin, I am a construction engineer at the Unified Engineering Centre. As a student I participated in the Robotics programme of Oleg Deripaska’s Volnoe Delo foundation. Actually, this helped me decide on a profession, so now I am working here.

It is no secret that the issue of driverless vehicles is gaining momentum in the world. Europe, America have been involved in this a lot, we have started getting involved in this as well recently. As of today we have developed a GAZel-based electric vehicle called the Gazelle-Electro, and a driverless vehicle will be based on that.

I would like to know, do you think that this will become widespread in Russia? Will it take root here?

Vladimir Putin: How did you say you got your start?

Yuri Shudin: I was a participant in Robotics.

Vladimir Putin: A participant in Robotics?

Yuri Shudin: Robotics was the name of the project by the Volnoe Delo foundation — either after finishing school or, in my case, after university.

Vladimir Putin: This follows up on the the answer to your question.

Yuri Shudin: So I was lucky, but unfortunately, not everyone is as lucky.

Vladimir Putin: I understood. But now we will gradually move from your question to the question which your colleague asked. Apart from the practice of modern training for employees of production facilities, large enterprises, we have a movement developing known as WorldSkills – preparing blue-collar workers in the high-tech production sphere. By the way, we are preparing for a world championship, holding national contests, and I believe a team of six people from Yaroslavl took part in the last championship as well. I think two of them won gold medals, and two – silver medals. So, Yaroslavl is a good platform for preparing young specialists.

As for remote-piloted vehicle technology, this is of course very promising. And as part of a technological initiative you might have heard of, we have drafted measures to support the development of unmanned vehicles as well. At the first stage we plan to make several pilot projects so that these remote-piloted vehicles could be used in closed areas.

Remark: <…>

Vladimir Putin: These are, let’s call them closed commercial areas, production areas where security can be ensured, you know. But moving forward, we assume that this could be used in public transport, though this has to be fully worked out.

As of today, the most important goals are to prepare the corresponding technical components, technology and remote servers which will be involved in ensuring the safety of traffic itself, we need to create the corresponding software and remote control centres.

And gradually, we will be moving toward this, we must be part of the trend of world progress or, even better, be one step ahead of it. We need to be ahead. If we want to remain competitive we always need to be one step ahead. But of course we have to be a part of the international development process and still aspire to be one step ahead. This is possible, we have achieved such results in many areas today.

Remark: Mr President, as a young specialist in technical cybernetics, I am mostly interested in the development of our high-tech production facilities. In particular, the rocket and space industry. And I have the following question for you. Do you believe there are long-term prospects for the Russian space programme in connection with the successful opening of the Vostochny cosmodrome, and what means and methods does our government have as of today to support private initiatives in developing this area today? For example, a project like KosmoKurs as part of the Skolkovo fund. Thank you.

Vladimir Putin: We have always been proud of the achievements of the Soviet Union, then Russia, in rocket production and space exploration. We have remained a leading power in this sphere. As you know, in percentage terms, we have carried out the most launches in the world of both our own units and in cooperation with others, and as business. There are areas of this field which not only need to be monitored carefully, but also in some places we need to catch up, unfortunately.

We well remember the experience of the Soviet Buran, we have such developments as well, we even have corresponding projects. In a couple of days, literally, we will be discussing the strategy for developing the space industry to 2030, and I think that a meeting on this issue was set to be held in five days. We will be closely considering this.

As for the eastern part of the programme and construction of the Vostochny cosmodrome, I can proudly say that this was really my idea. First of all, Russia must have a cosmodrome of its own, a civil, national one. We will in Kazakhstan and not simply work. Incidentally, I can tell you that we are in talks on helping them create an industry. And this is right, as these are our close allies, partners, and they have such a huge legacy as Baikonur. Of course, they want to have the right and it will be beneficial for us to create corresponding competences in their country.

But Russia, as one of the strongest space powers, must have its own cosmodrome. We did not have one, we were only left with sites of the Defence Ministry, in fact. In the North – it is simply a positioning area of a rocket division, that’s it. And this is a new, modern, technological site which is important for both the industry and the region. Because we need to support interest in Russia’s Far East, first of all among our own citizens. We need it to be promising, interesting, attracting high-class specialists, like you, working in another field. We are building an entire city there called Tsiolkovsky. It will be a small city but very comfortable for living, I hope.

The main elements of the first stage are complete, you know that a launch has been carried out, another two launches are set to be held next year. And the construction stage which we plan deals with the creation of a platform and launchers for heavy rockets which will be used for piloted flights, among other things. In the future we plan to do that from there.

As for the multiple use systems. Incidentally, Vostochny has been proposed to be used for exploring outer space. As for multiple use systems, then the question is only one of price and quality.

Remark: The point is that we already have some inventions in our country.

Vladimir Putin: Yes, specialists know all about them. They have them in the west and we have them here as well. The point is that these inventions need to be effective. Is it possible to attract private investment? It is, of course. And why not? But raising private investment assumes good economic efficiency. We need the market to be sufficiently mature so that a private investor would be interested in such investments.

Remark: Maybe some additional fiscal and tax policy has to be introduced.

Vladimir Putin: Yes, I agree. And this will be necessary and possible to do from the moment we see that there are real investors who see commercial prospects. Such commercial prospects might arise. You know that you can travel from Russia to Washington in 20 minutes. How is that? A spacecraft is in space. How long does it take? Four to five minutes, I don’t remember. And once in space, around 15–16 minutes to Washington, New York, and then the landing. But the right technology is needed for this. If the equipment and vehicles meet market requirements, then I am sure there will be proposals from private investors.

But there are some difficulties. A supersonic plane for instance. We had the Tu-144, and there was France’s Concorde. They are no longer produced. But it’s not about safety. It’s about viability. When Chairman of the Council of Ministers Alexei Kosygin was asked how much a Tu-144 cost, he said: “I am the only one who knows and I won’t tell anyone.” We need everyone to know how much it costs and to use it efficiently.

Alexei Shagalov: Alexei Shagalov, Unified Engineering Centre.

This year, the GAZ Group presented its commercial vehicles for the first time in the European Union. This happened in Hannover. And I had a chance to take part in this exhibition. I saw the opinions of journalists and potential customers. Many of them liked the cars in terms of design, quality, and functionality.

Vladimir Putin: You scared your competitors! I saw the first reaction, including Hannover: “The Russians are coming!”

Alexei Shagalov: Yes, I would like to stress that we used to go to foreign exhibitions, take pictures of competitors and try to create something similar. I mean we took detailed pictures of the units, systems. And in Hannover it was just the opposite: engineers of competing companies came to take pictures of GAZelle, GAZon, Ural, practically down to each bolt. Of course there are certain difficulties. No one is waiting for us in Europe, and the level of technical regulation is quite different there: there are tougher environmental standards, compliance with Euro 6 standards is required there. And we have Euro 4 and Euro 5. We are working on Euro 6, but this requires investments. We already supply our commercial vehicles to 40 countries of the world, but the European Union is a very promising market.

I have a related question: will there be any export support programme from the Government? And how do you think the, the periodic use of sanctions will interfere with our entering?

Vladimir Putin: To take the last part first, in terms of sanctions, all these restrictions are not formulated by big thinkers, these are not great intellectuals who propose this form of cooperation in the international economy, although they are not total idiots either. So if we go on producing, if you go on producing a high-tech, competitive product for the international market, European, Asian, Latin American or North American, restrictions won’t help anybody. And restrictions, at least, attempted restrictions deal with what mostly? They are restrictions on access to financing for us, investments and technologies for our market.

Your enterprise proves that it is practically impossible to initiate this. But if you manufacture hi-tech competitive products for the global market on the basis of this technology, it will be possible to do this. There are attempts to put these restrictions on entering a domestic national market, and unfortunately, they are made all around the world despite all decisions adopted within the World Trade Organisation. Yet, a quality product will always make its way to the market and find its niche. You have to compete on quality and efficiency. But the issues related to entering the market are costly, and we are aware of that. This is related primarily to transport, the certification process and some other formal issues. We have a programme for support, but it's not large-scale. How much is it, about 6.3 billion?

Minister of Industry and Trade Denis Manturov: For the next year, 26 billion rubles is planned.

Vladimir Putin: 26 billion is planned for the next year to address these issues – logistics, that is, mainly transport, certification, and some other formalities of this kind. This is what businesses expect from us, and we will continue to do this.

You know, I would like to mention one thing. We have such programmes, and one of them is active this year. Even now, in the past two-three years, overall machinery and equipment exports have doubled. In 2014, it was over three billion, and now it is already six billion. It’s not much yet, not much at all, but the trend is good, and we have to maintain it.

Question: Good afternoon. I am a purchasing specialist. This year, our engine plant has seen about 20 percent growth, partially through the implementation of state programmes to support purchasing both cargo and passenger vehicles for medium and small businesses and social sector institutions. Are there any programmes planned for the next year to support or upgrade the vehicle fleet? Thank you.

Vladimir Putin: The question is clear. Yesterday, I spoke with Mr Manturov and other members of the Government. This year's finances allocated to support the car industry stand at 65 billion rubles. This support is implemented in a number of different ways, ranging from subsidisation of vehicle purchases to purchasing and upgrading transport – for example, school buses and special-purpose vehicles for the housing and utilities sector. If we didn't provide such support, we would see the market go down by 30–40 percent. But instead we have managed to preserve the segment in car production and even increase the production of trucks and buses a bit. This is our common achievement because it really required all our efforts.

I cannot say yet what will be done next year, we are just working on this. As I have mentioned, yesterday we discussed this, and Mr Manturov came out with a list of demands, proposals and plans. The Ministry of Economic Development, the Ministry of Industry and Trade and the Ministry of Finance will consider this together, and there will be support. I am not yet ready to name specific figures or areas or means of support, but we will provide it.

Remark: Actually, the car scrappage programme is a very serious tool to support the market. We assess it and see how seriously it’s all being done. I wanted to say it's very important for us, because engineering, engine-building and car manufacturing as the end product create a very large chain of added value. As I understand, this issue will be considered soon.

Vladimir Putin: We have this car scrappage programme and it's working.

Remark: Will it be continued?

Vladimir Putin: It will. I see no grounds for stopping it. Are there any? I will mention later who came up with it, with the video cameras off; and we were considering it thoroughly taking into account the restrictions of the World Trade Organisation. But no one prohibits solving environmental issues.

I want to note that we impose requirements on scrapping, and it's related to ecology – the scrapping process should be prompt and correctly organised industrially. First of all, this means solving environmental, nature preservation issues. But proper scrappage is also an industry in its own right. This is the first thing.

Second, support for auto manufacturers that produce new vehicles makes sure that various second-hand cars sold for giveaway prices do not make it to our market.

Third, and this applies to both Russian and foreign manufacturers, there are specific details here, I will elaborate on them later, without journalists present here, but these details are all within the framework of the World Trade Organisation. We will continue working, and I see no reasons to stop our work.

Remark: Can I ask another question? Or rather, it's a suggestion.

Vladimir Putin: You are welcome.

Remark: You have toured our enterprise and seen the large-scale import replacement work we have implemented in the past two years.

Vladimir Putin: Yes, it’s impressive. You know – excuse me for interrupting you – this is actually excellent. I don’t know of many examples of, say, Mercedes-Benz allowing foreign-made engines to be used in their cars. And this is the cooperation you have with them. This is an indicator of very good quality, high quality.

Remark: True, but I would like to get more specific. The car industry in Russia is relatively small. But there are a number of related industries that make many products or technologies, and they are similar to this one. There is a coordinating council for developing diesel engine manufacturing – and maybe we could establish a more expanded council, an inter-industry council that would make it possible to merge work on certain car components. This would allow suppliers to find broader market resources, because it's really difficult for us.

Vladimir Putin: Present here we have the head of the industry, and he has heard what you have said. This is a good idea, and certainly these direct contacts between manufacturers of different components from related industries will only be beneficial. Because car paint and coating manufacturers is one thing, and metal producers are quite another, but they can understand each other's interests when they hear from each other. This is a good idea, and efforts should be made to organise efforts promptly and efficiently.

Sergei Bogachev: Mr President, my name is Sergei Bogachev and I am chief engineer at the Yaroslavl Diesel Fuel Systems Plant.

Vladimir Putin: You are all so young and already senior officials or chief engineers. This is good, I like it.

Sergei Bogachev: First, on behalf of our enterprise I would like to say thank you, Mr President, for the subsidies we receive as support for our new innovation projects from the Ministry of Industry and Trade. Recently, we have received subsidies and have succeeded in manufacturing products of a new class, a new international standard. Our plant is not so large as the engine one, but the diesel components in any engine are the most hi-tech and critical components.

Now, given our success with Avtodizel Yaroslavl Motor Plant and KAMAZ truck manufacturer, we have representatives of other plants coming to us, such as St Petersburg's Zvezda, Kolomna's Diesel, Penzadieselmash, and the Ural Diesel Engine Plant. They ask us to produce common rail fuel systems for their new engines, new prospective developments that would allow them to enter new markets. These markets are dominated by the companies Bosch, Heinzmann and Liebherr, and unfortunately, no Russian-made fuel injection equipment is represented there.

So here's my question: will the support policy be continued by the Ministry of Industry and Trade in the next few years and will subsidies be allotted for new innovation projects? It is very difficult for us to compete alone with such giant as Bosch, which is dozens, even hundreds of times larger, but we are doing this all the same.

Vladimir Putin: It will. How much have we earmarked?

Denis Manturov: Overall, in 2014–2016, for the Yaroslavl Diesel Equipment Plant and for GAZ Group overall there's been about one billion rubles for R&D alone. Plus, they are receiving a loan on easy terms from the Industry Development Fund. All these areas will certainly be controlled by the Ministry – in fact, we created all these tools for this goal.

Vladimir Putin: How much is allotted by the Industry Development Fund?

Denis Manturov: Some 300 million.

Vladimir Putin: Thank you. The Fund, which was established at the initiative of your Ministry, has proved to be one of the efficient tools. Now we are considering additional capitalisation and support for the Fund. We will continue all these programmes. But, of course, each specific case should be considered – what kind of programme it is and what support it requires – but overall, hi-tech production facilities should certainly be supported.

We are perfectly aware of this, and we know very well what it means to break into a market, even a domestic one. It is not easy. If it were not for those 'thinkers' who came up with the sanctions, we would not feel confident even about our agriculture market now. Only our response measures were able to relieve the market. Yes, there was a hard period when prices went up, but they will change gradually. By the end of this year, we expect inflation at 6 percent, now it's 4.7 percent. Everything is smoothing out. High-tech production needs support, of course. And we will certainly provide it. I am just not ready to elaborate on the full range of support tools – the Ministry of Industry and Trade will decide which ones will be adopted. But it is certain that we will do this and will allocate funding for this.

Anna Buslayeva: I am Anna Buslayeva, design engineer at Avtodizel Yaroslavl Motor Plant.

There is a mortgage programme for young families in Russia. But it's no secret for you that young specialists are not very keen to work in production upon graduating from an institute.

Vladimir Putin: I think they will gladly join your plant.

Anna Buslayeva: Still, in order to attract young qualified personnel to a production plant, is it possible to provide them with subsidised mortgage loans? Thank you.

Remark: Mr President, excuse me for interrupting you, I would like to add something. When we were launching production, we spoke with foreign specialists, and they said they have mortgages at 3–4 percent interest. Is it possible to try out a programme like this?

Vladimir Putin: This can and must be accomplished, but we can only accomplish this on the basis of economic development. See for yourself, this amounts to 3–4 percent, because refinancing interest rates, the Central Bank rates are almost zero. They have an entirely different economy, along with other problems. We are facing inflation, and many countries are plagued by deflation. Right now, I will not bother you with this, but, in any event, mortgage rates cannot be lower under normal conditions.

I will now answer your question in greater detail, because this is a highly important issue. It is of vital importance to any family, young families, in particular. But, strictly speaking, proceeding from the requirements of economic laws, overall loan interest rates, including mortgage rates, cannot be lower than the Central Bank’s key rate. This interest rate can be reduced and should be reduced for certain categories of people, but this is being done using certain additional tools. For example, these categories include young families, those with young children, persons with disabilities, etc. To the best of my knowledge, our current mortgage rates are around 12.5 percent. But this rate could even drop to 10.5 percent using various tools for supporting certain categories of people, including young families. This is also linked with initial instalment amount. Smaller instalments carry higher mortgage rates, and it is possible to charge 10.5 percent mortgage rate when initial instalment is close to 50 percent.

In addition, many regions are drafting special programmes, with regional budgets stipulating extra privileges for certain categories of citizens, including young families with children. But when lower rates are stipulated, this is being done at the state’s expense, and these rates have nothing to do with free market economy. Some regions (I don’t remember what particular region) are going even farther; regional authorities exempt families with two or three children from any payments and pay everything for them.

We will now strive to spread this practice with regard to certain categories of citizens, and we will also strive to incentivise regions. This can be accomplished by involving the business community and major companies, for example a company like yours can also pay a certain amount for its employees. We will expand the housing-rental system and the corporate housing system. In effect, this can become an entire programme, part of the Housing programme. We will continue to implement this programme, and we will continue to incentivise the business community and regions in every possible way, so that they will take part in this joint work and in co-financing projects.

But on the whole, and I would like to close this theme with this, all of that is possible: the further lowering of the key interest rate for all citizens – given a drop in inflation – by the Central Bank and commercial banks. And inflation, as I said, was around 12 percent last year, while it is only 4.7 percent this year, now. But in annual terms it is likely to be 5–5.5 or 5.7 percent. Close to six percent. The growth of consumer prices has been reduced by half.

Remark: But if certain businesses want to provide preferential mortgage services to their employees, would it be possible to support these businesses through some preferential tax treatment or easy-term loans, for example?

Vladimir Putin: Yes it would, but this would not be fair. Because this would not be their support, but again support on the part of the state: the state will only take from the main pocket and put it in their other pocket.

Remark: Mr President, seeing that we are talking about an important matter, housing… I have a family, two little children… We have joined the Young Family federal programme that subsidises home purchases. It has been about three years. The queue under this programme is very long: we have calculated that we will no longer be a young family when it is our turn [to buy housing], and we will have to withdraw from the programme. Will the state help to reduce the queue in the short term?

Vladimir Putin: This is linked to budget restrictions alone. Thank God, we have more and more young families with children and we need more and more money – purely budget funding – to support these programmes. There are two ways: either we provide extra funds from the budget or we help to raise pay levels. We will seek to follow both these paths to reach the needed result. The target for the Housing programme – and Young Family is part of the overall Housing programme – was, if I am not mistaken, to improve housing conditions for more than 400,000 families by 2018. This target is based on budget capabilities.

Of course, we would like to accommodate young families first and foremost. But we have categories such as veterans, people with disabilities and so on. The state wants to support everyone, but it is difficult to do so for all at once. But anyway the state, proceeding from the principle of social justice, has been working to support all these privileged categories. Of course, we want to help the young. We will work hard and see what comes out of it. Plainly speaking, it simply requires pouring in more budget funds.

Yulia Shcherbakova: Yulia Shcherbakova, service technician at the industrial electronics department, Yaroslavl Motor Plant.

I am the mother of two kids. We have received maternity capital and plan to use it very soon. But there are large families that not only need housing but cars, too.

Vladimir Putin: Well done. This is what I call lobbying the industry through government social programmes.

Yulia Shcherbakova: Do you think the state could help these families purchase minivans?

Vladimir Putin: You know, when I meet with large families and ask how we can help them, in a semi-private manner, what they usually ask for is minivans. Especially really large families, with five or six kids or more. We do not have a programme for this yet, although the maternity capital programme still exists and is developing. It was supposed to end in 2016 but we decided to extend it through 2018.

Speaking of which, I would like to remind those who do not have children yet – and I see there are many young people here – that the maternity capital programme is running through 2018. The support amounts to 450,000 rubles. Next year, we will maintain maternity capital at the current level. There are already 7.5 million people like Yulia who have received maternity capital. Just this year, the number of recipients has increased to 600,000 families.

Why am I talking about this? These are significant expenses for the government. It is a unique programme in the history of Russia and the Soviet Union. Moreover, this has never been done anywhere before. We invented this programme and are implementing it, which requires huge funding. Yulia perhaps knows and has used, speaking the language of bureaucracy, other instruments of maternity and child support like provision of medicines, vitamins and other things, a whole range of what is available. We started this support and it is helping.

Fortunately, the demographics are improving. Let me remind you that in the 1990s, Russia, sadly, was dying out, because every year, our population would drop by almost a million. The natural decline was over 900,000 people, almost a million. It was a disaster. Demographers from everywhere in the world and UN experts even predicted how the Russian population would fall in the coming decade. This creates system-wide problems for everything, down to retaining our huge territory, the largest country in the world, and to our defence capacity, the quality of production, everything. Fortunately (touch wood), we managed to overcome this situation, which is partly due to maternity capital, I think, and the entire maternity and child support system.

If I am not mistaken, back in 2012 we had a birth rate, which is the average number of children per woman, of 1.69. Now it is 1.777. It may seem like an insignificant difference between 1.69 and 1.777, but it is significant because it is right on the dividing line and indicates the start of population growth.

Unfortunately, the number of births between January and September was slightly lower, but the natural increase continues, because life expectancy is growing as well. We all can see these trends and we are really glad to see them and will try to maintain the most successful strategies. I wish we could also distribute minivans.

Remark: Perhaps, there will be a stimulus programme.

Vladimir Putin: I really hope so, it would support both large families and the car industry. But for now, there is no such programme. We will think about it, all right?

Remark: Mr President, I have a question which mostly troubles the male audience here.

Vladimir Putin: Should the women here cover their ears?

Remark: No, they can listen. The World Cup is coming up.

Vladimir Putin: Why would you offend women? Women play football these days and support teams, too.

Remark: Will the stadiums be ready?

Vladimir Putin: Of course they will.

Remark: I have one more question. I’m interested to know, which ice hockey and football teams are you a fan of?

Vladimir Putin: As I’m sure you understand, I have no right to root for any particular team. I root for the national teams, although I like to watch a beautiful game. To be honest, we have not seen a beautiful game involving our national [football] team for a long time. Our ice hockey players are making us happy, and they are certainly improving their performance. Although we still have a lot to accomplish in the area of football and ice hockey. And above all, it is necessary to work with young athletes who are starting out, and who show promise. We need to create a favourable environment, so that they will be able to realise their potential here, just like in any other area. We have a very good athlete-training school that turns out a lot of talented and promising young players. And, of course, they are highly popular on the labour market, and they are being invited everywhere. We need to create conditions that would dissuade them from leaving. In principle, we are working on this.

Remark: We need to create the right conditions.

Vladimir Putin: We need to create conditions for financing and training. Certain requirements should be stipulated. An athlete who has played here for a certain time period would be free to go elsewhere. We need certain legislative provisions, so as to interest young people, so that our clubs would not lose their athletes and so that Russia would be part of the global sport movement, including in the area of football and ice hockey.

Regarding stadiums, I would like to assure you and all other football fans that everything will be done on time, and that this will be high-quality work. I would like to recall that we are to host competitions at 12 stadiums in 11 cities. Everything is proceeding as planned. In some cases, we are behind schedule, but these are temporary technological delays. Everything will be ready.

Alexander Bagrov: My name is Alexander Bagrov, I’m a production supervisor. I play in the Night Hockey League, just like you. It’s nice that many young people have resumed playing hockey. It’s clear that they really like it.

I would like to say a few words about children’s sport, which has become too commercialised. Taking up tennis or some other sport is too expensive, and parents are unable to pay for them. They can pay for a year or two, until they have to pay for team travels and also training sessions. You know that this is very expensive. So my question is about sport: will you support the development of children’s and amateur sport?

Vladimir Putin: Yes, of course. What did you say your name is?

Alexander Bagrov: Alexander.

Vladimir Putin: Alex said he is a production supervisor, and I immediately thought about my father. He was a production supervisor at a plant, and he was proud of his job. Anyway.

As for children’s and teenagers’ sport, it is certainly an area that should be supported by the state, as I have told your neighbour on your right. But support should come above all from the regions. And big clubs should create a network of smaller clubs for children and teens.

Alexander Bagrov: Yes, our hockey club is working with children very well, and we also have many branches of children’s hockey schools.

Vladimir Putin: Yes, I know, because your acting governor has told me about this just recently.

Remark: It is one of the best sport schools in Russia.

Vladimir Putin: Yes, he spoke about this in detail, including the prospects and what should be done to keep up and develop this area. This is very good.

However, so-called amateur sport should be supported by the regional and municipal authorities. We will do our best to promote and encourage this as the foundation for high performance sport.

Remark: Are you planning to create leagues in other sports, like people come to Sochi for?

Vladimir Putin: Yes, we have an idea of this sort – to create a similar league. Do you mean something like the Night Sports League? Amateur ones?

Remark: A football league, a volleyball league…

Vladimir Putin: A football league – yes. I think they should have created it last year. If not, this should be done soon. Football, yes.

Why ice hockey? Why football? Because these are mass sports.

Remark: Yes, mass sports. We have a lot of ice hockey; we have 20 teams playing in just one league. I mean, a lot.

Vladimir Putin: I know. Yaroslavl is fond of ice hockey, I know.

Remark: Mr President, we have a new Governor in the Yaroslavl Region, Dmitry Mironov. The first thing he did was to visit our plant. We really appreciated this, because the plant is the city’s main employer.

Vladimir Putin: Did he come with me only, or did he come earlier?

Remark: No, he came earlier. He came right away. The new governor’s young team is doing a lot for our city. They got to work quickly and very well.

Vladimir Putin: Are you asking a question or did you just want to praise him – just in case he might do you some favour?

Remark: We didn’t prepare this.

Remark: Oh no, it’s very good, honestly.

Remark: I am a father and I know that no maintenance had been done on our children’s playgrounds for years. But now people come and check the state of playgrounds and they have begun cleaning the streets.

Vladimir Putin: I just wanted to ask if they clean the streets.

Remark: Yes, they do.

Remark: Can I add something? They’ve put in order the city’s historic centre. Banners have been removed and in fact the city has become nicer. Thank you very much, Mr Mironov. We should have more governors like you.

Remark: The Snow Ticket operation was undertaken not so long ago and it has dealt with the collapse on city streets.

We have a question: what are your criteria for choosing a governor?

Vladimir Putin: The criteria are typical, there is nothing secret about this: professional aptitude and [human] decency. I have known Mr Mironov for very many years. He rose through the ranks to Deputy Interior Minister, and he was dealing with economic matters at the ministry as well. He is a very active, energetic and able person; otherwise I would not have offered him this job. And he is very decent; this is one of the main criteria. I hope that he will display his best qualities on this job. Well, this is about all. I wish him success.

Yelena Vasilyeva: While we’re on the subject of leisure, I would just like to add that the guys are into hockey and football, but me, I like to travel too, I love our country.

Vladimir Putin: Me too, I’m always travelling.

Yelena Vasilyeva: I love travelling around Russia’s towns, especially the Golden Ring towns, which include our city, Yaroslavl.

Vladimir Putin: You have three towns within the Golden Ring.

Yelena Vasilyeva: That’s right, including Yaroslavl itself.

Vladimir Putin: Pereslavl Zalessky, Rostov Veliky, and Yaroslavl. What’s the problem?

Yelena Vasilyeva: The problem is that as a tourist, I sometimes encounter our tourism industry’s shortcomings. For example, I really want to stay in good, modern hotels, but at a reasonable price. I would also very much like to see a more developed road and transport network. We all know that tourism is developing rapidly now in Crimea, Krasnodar Territory, and Altai Territory. Could the Government take measures to develop the tourism industry and infrastructure just as rapidly in Russia’s central regions?

Vladimir Putin: You are a very tactful person, putting things like this, “sometimes I encounter…”. Unfortunately, it is not sometimes but very often that we see a lack of organisation and regulation on the domestic tourism market. We do have a programme for developing domestic tourism though. Last year, we had 70 million tourists holidaying in Russia, of which 50 million were our own country’s citizens. We thus had 20 million tourists from abroad. That is quite a few, though there could be more.

It is not a lot if you consider that our country is the biggest in the world in terms of territory, and there is no way that it can be anything but interesting. Just look at Kamchatka alone. We should start allowing cruise ships to come in there and visit various beauty spots. The Far East in general is a magnificent region and very unique. Then there are Siberia, Altai Territory and Republic of Altai, Krasnodar Territory and now Crimea too.

Krasnodar Territory posted the biggest increase in domestic tourism. Sochi has become a year-round resort centre, working winter and summer, just as we hoped. People go skiing in winter, and in summer there is the sea. The two complement each other well. High-speed trains are in operation there now. Two roads run from the lower part of the resort hub up the mountain area, and there are high-speed trains too that take just 20–25 minutes, I think, to reach the mountains. Crimea has shown strong tourism growth since 2014, and Tatarstan is also doing well.

Of course, central Russia and the Golden Ring have great potential. I fully agree with you here. As you noted, the Yaroslavl Region has three towns within the Golden Ring, including Yaroslavl itself. The city’s historic centre is on the UNESCO world cultural heritage list. I certainly hope that the new regional and city authorities will do everything possible to make the region more attractive. The federal domestic tourism development programme is being implemented and this work will continue. I fully share your view that action is needed here.

It is needed because the tourism sector accounts for only 1.6 percent of total GDP. In countries with a developed tourism sector, tourism accounts for 10 percent of GDP, and here, the figure is only 1.6 percent.

Dmitry Vorobyov: I have a question about the armed forces. Our armed forces are developing fast now. They have new arms, a good-looking new uniform, and young people are showing interest in a military career. What else will you do to keep our armed forces strong, if it’s not a military secret, of course?

Vladimir Putin: I will tell you, but you must promise not to tell anyone, OK?

We have a comprehensive programme for developing state defence procurement. As we have said on many occasions, this programme must be compact but effective. We will continue structural reforms and changes and will continue to optimise numbers. This will not require mass cuts to service personnel; we will simply look at the types of forces and different branches and see what needs to be done and how to go about it. We will give particular attention to defence areas such as information technology, intelligence in the broad sense (not just agent-based intelligence but also technical intelligence), communications systems, and, of course, modern high-precision, high-tech weapons.

You have probably noted the regular meetings I have started holding in Sochi every year, in May and in November. During a whole week, I bring together people from the defence industry, the chief designers, directors of the big defence enterprises, the Defence Ministry heads, and the heads of the different armed forces branches. We review the work over the last half-year, look at what has not been done for whatever reason, and settle the steps needed to ensure the state defence procurement programme is carried out as planned.

Our armed forces are not out to threaten anyone. I want to stress this point once more so that everyone hears it, not only those present here today. Our army is not a threat, but it is combat-capable and has become modern and highly effective. We have dramatically increased the number of exercises and training manoeuvres, including the spot inspections that sometimes cause our partners some concern. We do not get alarmed when they hold military exercises, but they immediately start getting nervous when we do so. They must be the nervous types.

Let me say again that we are not a threat to anyone and have no intention of threatening anyone. Why should we want to? We have the biggest country in the world, as I already said, and everyone knows this. Our task is to ensure our own country and people’s reliable security. Our armed forces have what they need to do this and we will continue to develop them.

Perhaps we should start rounding up now?

Remark: One final question?

Vladimir Putin: Yes, the last one.

Question: My question is purely on the human dimension. How difficult is your job? Could you tell us the pluses and minuses of your job?

Vladimir Putin: Speaking seriously, the biggest positive thing of my job is no different from your own. When you see that your job gives satisfaction, see that you are achieving your goals and objectives and doing important work that benefits yourself and all those for whom you work, this is the greatest satisfaction. We always gain this greatest satisfaction from results obtained.

As for the minuses, yes, there are many negative emotions, there’s no getting away from that fact, but in your job too, you no doubt have the same situation when things don’t go as hoped, when someone lets you down, or when other unforeseen circumstances come up. But this is also the charm of our jobs in a way, this ability to overcome difficulties and achieve the needed results. I wish you just this.

Response: Thank you very much.

November 12, 2016, Yaroslavl