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The meeting participants discussed a draft of the state defence order for 2000, the payment of compensation to the people of Volgodonsk, and the situation on the grain market.

Mr Putin said that this year the size of the state defence order would be increased by 50%. He said this was a deliberate measure resulting from the fact that the army had been underfunded for many years, and this had weakened the country’s defence capability, calling into question whether Russia could have a modern army equipped with the latest weapons.

Mr Putin also pointed out the importance of the socio-economic aspect of the defence industry’s performance. He said that the defence sector made up a considerable part of the country’s economy, used high technologies, and should serve as the growth engine of the economy. He praised the military industry for holding on to a large part of its research and personnel potential. This, he said, gave reason to hope that its objectives would be achieved.

The cabinet made a decision to pay compensation amounting to 258 million roubles to the people of Volgodonsk who suffered from terrorist attacks last autumn. Earlier allocations had totalled 50 million roubles. Commenting on the decision, Mr Putin said there was no place for red tape in determining the amount of compensation to victims of terrorist acts. He instructed the Finance Ministry to make compensation payments to Volgodonsk victims as soon as possible.

The meeting also discussed measures to improve state regulation of the grain market. The acting president expressed hope that recent economic successes would soon allow the country to dispense with grain imports altogether. Mr Putin stressed that this was a crucial factor for the country’s economic and food security.