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The President announced the Council’s creation at the St Petersburg International Economic Forum and said that it would oversee implementation of key projects for structural transformation in economic and social sectors and accelerated economic growth.

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Excerpts from transcript of meeting of the Presidential Council for Strategic Development and Priority Projects

President of Russia Vladimir Putin: Good afternoon colleagues.

Today, we are holding the first meeting of the Council for Strategic Development and Priority Projects. This Council will become a centre for finding solutions for structural transformation in the economy and the social sphere. It will set the main directions for accelerating economic growth and raising our people’s quality of life and wellbeing. At the same time, it is crucial to continue our work to reach the objectives set out in the May 2012 presidential executive orders.

We must draw up and launch priority projects in all the main areas. The Council’s job is to set tasks, identify solutions, and oversee project implementation.

This work should be nationwide in scope. Experts, businesspeople, and civil society activists should all be involved. This is why I have brought you all together today, to discuss this work. I asked my colleagues earlier to draw up the Council’s composition and ensure that it includes representatives of business associations and the Public Chamber.

The Council will have the support of its board, which will serve as the headquarters for project work, play the main role in selecting projects, and coordinate work between the ministries and agencies and the country’s regions. Prime Minister Dmitry Medvedev will head the Council’s board.

Let me note that this project work is not starting from scratch. We have already implemented the national projects, and this work produced substantial results in education, healthcare, agriculture and the housing sector. Remember how we worked back then on those projects’ implementation. We used the same approach in the Council for Economic Modernisation. This experience and the good practice it produced should most certainly be put to use again now as we set about resolving systemic tasks on our national development agenda.

However, as we all know, we need to be aware that today’s tasks are a lot more complicated than previously. Today’s situation is very different to what it was in the mid-2000s, when we launched the national projects. Back then, the external situation, both economic and political, was much more favourable.

Now, we need to work in an environment that places serious restrictions on us. However, there is no doubt that we need to take this project-based approach to resolve the tasks before us, and we need to draw on our earlier achievements as well. We must take into account today’s circumstances, and we also need to make use of the best practices in organising work in the economy in order to resolve the tasks ahead.

We must achieve maximum concentration of financial, administrative and management resources, raise responsibility for achieving the set objectives, and enhance the efficiency of the financial resources used.

Let me stress that we cannot consider these projects as simply another item for budget spending. What we need are practical results. We need to spend our money far more effectively. At the same time, if there are objective reasons for making additional financing available for projects, this should be done in accordance with the chosen priorities.

No matter what the tasks before us, whether road safety, supplying the market with medicines or developing exports, especially high-tech exports, every project needs clear coordination between the different ministries.

We must organise good coordination not only between ministry heads, but also between the teams in the ministries, agencies and the regions. We need to get rid of red tape that only wears people out and to ensure swift decision-making and implementation.

At the same time, interaction between the ministries must not dilute personal responsibility. The relevant heads and project directors must bear full responsibility for the results. I would like this to be clearly documented.

Finally, one other important point. Taking a project-based approach does not mean that we should immediately change the whole management system from top to bottom. We do not need any revolutions here. We need to do everything in calm and thorough fashion, planning and calculating each step to ensure that we do not cause any harm.

In our work on specific tasks, we need to make use of the latest management technology and, as I said, spread best practice, develop human resources training and bring in people with project-based thinking.

In short, we need thorough, creative and enthusiastic work. Only then will project implementation contribute to raising the overall quality of government.

Colleagues, let me outline the main approaches for setting our priority projects.

First, we must not dissipate our efforts and try to tackle every local problem, even if they are important. Each project should focus on a limited number of the most topical, serious and complex tasks, the resolution of which would have a positive systemic effect for the country’s development and would raise our people’s quality of life. Most important of all is that these projects should reflect people’s hopes, needs and expectations. Only then will their implementation genuinely be a national task.

Second, I ask the Government to take a thorough and substantive approach to formulating the final results. It is no exaggeration to say that this is crucial for the success of all subsequent work. We must tell the public as clearly as possible exactly what we want to achieve, and not heap detailed lists of laws, measures and instructions on people’s heads, because this is not what they want to hear.

Results should be measured in positive and comprehensible terms, for example, shorter queues at medical centres, faster provision of medical aid for people living in hard-to-access parts of the country, better mortgage conditions and so forth, or the possibility for every person to check and understand just how their housing and utilities payments are formed.

Of course, as I discussed all of this recently with the Government members, we said it was not possible to formulate all the results in terms of numbers. The main thing is that this work must be as transparent and comprehensible as possible for the ordinary person.

Third, we need to put into clear words what we plan to achieve in every project by 2018. At the same time, we must set the onward track for the medium term and outline the tasks for 2020 and 2025. This in no way means that we should cancel out and forget the earlier objectives set for this same timeframe, through 2025. Of course, if needed, we will have to make adjustments depending on the circumstances.

Fourth, we must monitor and calculate all costs and avoid any ineffective spending. We will need to earmark funding for the national development projects in the 2017 budget and the budget plans for 2018–2019; otherwise, all this effort will be no more than empty talk and good intentions. This is a priority, as I said, but at the same time, we must stay within the bounds of a balanced budget.

Of course, while working on these strategic development tasks and drafting plans for the future, the Government must not lessen its attention to today’s problems and to the everyday effective work and creation of new opportunities for labour, education and healthcare. This is the best guarantee that the public will believe in the priority projects’ success and support them and their implementation at every stage.

Now, I would like to give the floor to Prime Minister Dmitry Medvedev. Mr Medvedev, please tell us which areas you consider priorities after your discussions with your colleagues, and how you plan to organise this work.

You have the floor.

Prime Minister Dmitry Medvedev: Mr President, colleagues,

The President has just explained the idea of project work, this new project-based effort that we will undertake, namely, concentrating financial, management and administrative resources on resolving the most important tasks in the economic and social spheres to achieve tangible and real results.

This work does indeed require a high level of personal responsibility and, of course, clear coordination between the different ministries and agencies and every organisation taking part.

The current economic situation and the objectives set out in the presidential executive orders of May 7, 2012, determine the specific areas for our work. Most important though are the demands of the people and how they see this country’s future. This agenda is beyond the immediate political circumstances and is the basis for any political force in the country.

The bulk of the projects should focus on resolving the most urgent matters related to creating a comfortable environment for everyday life and work. As I already said at the United Russia congress, among our most important tasks are improving the quality and accessibility of healthcare and education and developing these sectors, developing mortgage loans and the rental housing market, the housing and utilities sector and the urban environment, and also working on environmental development and putting in place a network of safe and modern high-quality roads. We also intend to plan efforts to improve the situation in single-industry towns as a priority area.

The second key task to concentrate on in project management is putting in place a more modern and competitive economic structure. While the first area of work involves projects in the different sectors, the second area is the infrastructure effort needed to ensure sustainable economic growth.

This requires the development of a favourable environment for small businesses and individual entrepreneurs (this is one of the possible infrastructure projects), improving oversight and monitoring, raising labour productivity, and encouraging our companies to take part in international cooperation and develop non-raw materials exports. These are all possible areas for project work. The Council meeting today could agree on these areas. Mr President, if all of this has your support, I would like to ask you to approve this list so that the board can begin its practical work straight away.

Today, we propose not simply examining the general issues but actually looking at the four main areas on this list: healthcare, education, housing construction, and issues related to the housing and utilities sector. My colleagues from among the ministers will speak about these specific areas, but I would like to mention several essential points.

I will begin with healthcare, where we have already made considerable effort to develop the healthcare system’s resource and equipment base over these past years. The sector really has transformed and healthcare facilities now have modern equipment. Compared to previous periods, our healthcare has never seen such a level of intensive investment. The real issue is not the numbers though, as the President rightly noted.

The issue is not how much we invest at any given moment, but what results we obtain, and this holds true for all areas of our project work. Our people must see a real improvement in the situation. What does this mean in the healthcare sector, for example? It is about such obvious things as fewer queues in hospitals and out-patient clinics, access to modern medical centres, new medicines and treatment methods for all people, and the use of new technologies, not as something exclusive, but on a widespread basis.

We also want to raise the professional skills of our healthcare sector workers. This is another issue the public raises. Our experience and international practice show that tasks of this sort are resolved more successfully using the project approach. However, it is essential that this project work is organised without negative consequences for the day to day operation of healthcare facilities, including the provision of medicines, construction of perinatal centres and other important areas, as the President said.

Project work does not abolish or replace the ministries’ and agencies’ routine work to carry out their responsibilities. Some areas of this undertaking will be the subject of further reflection of course, and on a related note, it is also clear that we need to develop our pharmaceutical industry. This is not entirely within the scope of the healthcare project and overlaps with industrial development, but it is clear that we will not have the cheap and modern medicines we need if we do not develop this sector.

Second, we must follow the same kind of approach that combines project-based work with the basic agenda in the education sector too. In particular, we will continue the programme to build new schools (this is designed for the medium term), support higher education, including promotion of our universities in the global ratings of the world’s best universities, with a corresponding increase in the general quality of university education that this entails. The project will focus particularly on developing online forms of education at all stages of the education process, at schools and universities, continued education and retraining. This latter area is especially important given the situation on the labour market today.

Developing vocational education is another very important area. In this sector, we need to introduce modern training standards that take into account the new technological cycle, and we must organise comprehensive cooperation between educational institutions and the main businesses and potential employers in different sectors. We started this work some time ago, but it has not yet reached its full and complete form.

Third is housing, an important and complicated area. The essential task today, considering the economic situation, is to keep up the pace of housing construction. This is also important as it helps to bring down the cost per square metre and makes housing more affordable for people. A number of financial mechanisms have been launched to attract private investment into housing construction and they have already proven their effectiveness.

First, there is housing mortgage loans. We agreed not to put the emphasis on numbers today, but nonetheless, let me name one number. A total 322,000 mortgage loans were accorded over the first five months of this year. Essentially, this represents 322,000 apartments or houses. These numbers represent real homes. This is up nearly 50 percent on the same period last year, when we saw something of a slump in the figures. It is important now to maintain this trend, and I hope project work will help with this.

My fourth point is that in the housing and utilities sector our main aim is to make the utilities services market genuinely competitive. Our goal is to have responsible and efficient companies working on this market, modern and transparent, with transparent price formation mechanisms for consumers and for service providers. Information should be collected in a unified housing and utilities sector information system, because people often complain that it is very hard to figure out the information because it is either too complicated or is hidden away in such a way that you cannot work out what results from what. Only if we develop such a system can we avoid unjustified inflation of housing and utilities costs. This is an issue of great concern to the public of course.

In conclusion, let me say a few words on how the work to implement the President’s instructions will be organised. Our next stage will be to set the priorities in each area, taking into account what the President said, the considerations I have just set out, and any other considerations that might come up. As I see it, our basic position is that we will take a flexible approach to these issues.

I think we should focus on a limited set of indicators that are comprehensible and structured in terms of responsibility levels and therefore easily monitored. The more indicators we have, the easier it is to create confusion and use them to obscure the situation so that you can say, “Look, we’ve worked well, see, we’ve made progress, and so on”. Indicators should be merged to have a fewer number of them, so that everyone can get a clear picture of exactly what resources they have at their disposal and what results are expected of them. The President has just spoken of this in his remarks.

By the end of the year, we are to not only select the specific projects and start their implementation, but also get the first results that we need to set for this time. The selection process will be based on the criteria the President has mentioned. All of this work will be incorporated into the budgeting process, of course. We will make adjustments to a number of state programmes and ensure that these adjustments are taken into account in the draft budget that will be sent to the State Duma in autumn.

I would like to reiterate what the President said before. The priority projects are not an excuse to demand additional budget funds. At the same time, we will find money in the current financial situation for effective projects that will use these funds with maximum return. This project work is in many respects a test of our ability to meet our goals, identify the biggest priorities and the less important issues, find original solutions, select the most effective mechanisms and, of course, make competent and flexible use of the finances at our disposal and use modern information and management technologies that can save us considerable time and money.

We undertook similar work a while back during the implementation of the national priority projects. We understand that optimum accumulation of resources is a complicated but resolvable management task. We will identify priorities in each of the main areas that will meet the strict demands we have set. We will draft and approve the project management infrastructure.

This is the Council’s first meeting. I will shortly hold the first meeting of the Council’s board. From there, it will meet regularly, once a month, for example. If needed, the Government will meet on particular areas of work on a weekly basis. There will also be a lot of work to establish the needed project offices in the ministries and agencies and to prepare the human resources and information resources necessary to monitor project implementation in the regions. The relevant department has already been set up in the Government staff on my instructions.

This is the agenda for the upcoming period. We will report on the first results at the next Council meeting chaired by the President.

Vladimir Putin: Thank you very much, Mr Medvedev.

I have a request for the Presidential Executive Office. I had a look and I saw that there are no trade union representatives among the Council’s members. You need to talk to the Federation of Independent Trade Unions and see if their leaders have an interest in being represented on the Council. We will be dealing with issues that directly affect people’s lives, after all, and the trade unions should have representation on the Council as well.

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Vladimir Putin: Colleagues, would anyone else like to speak?

Let us consider this first meeting concluded. There are a few points I would like to draw your attention to once more.

We spoke today about limited budget possibilities and resources. Let us be frank: even during the fattest years we always said that our budget possibilities were limited. This is the case always and everywhere. Why is this so? To be honest, it is because the greater the revenues, the greater the appetites to gobble them up, and this is why we have not always worked effectively.

What then is the point of the work that has brought us together today? First, the point is to concentrate our resources in the most important development areas. This requires us to formulate our development objectives in specific terms.

Second, we must pay attention to optimising spending. The task is to single out the biggest priorities and understand how best to concentrate our available resources on resolving these tasks. Most important is to make management more effective in the different sectors and in the economy as a whole, to make resource management more effective. This is the key task.

It is for this purpose that we have established this Council and its board, which will be headed by the Prime Minister. The idea is to draw on best management practice in the sectors, in the economy as a whole, and in the social sector. This is our most important task.

We do not need murky development criteria that even specialists find it hard to understand, but a clear and precise understanding of what we need to do, what results we want to achieve, and what tasks we must resolve, and we need full and personal responsibility for achieving these results or for failure to reach the set objectives. This is extremely important.

I ask you to concentrate your work over the upcoming period, including in the board, on these areas.

Thank you.