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President of Russia Vladimir Putin: Mr Medvedev, colleagues, friends,

I would like to begin by thanking the Russian Federation Government, its ministries and agencies and all your employees for the good work. In a frankly complicated situation, you have demonstrated a high level of responsibility and the ability to resolve complicated tasks.

The implementation of our anti-crisis plan made it possible to support the real sector of the economy and increase trust in the banking system. There is obvious proof of this, which is the trust of the people manifested in growing amounts deposited by both legal entities and individuals with the country’s banking system.

We have launched import replacement programmes, which is important in itself. However, what is more important is that this should lead (and we have made our first steps in this direction as well) to a technological upgrade of production and promote exports. Active use is being made of project financing, the Industrial Development Fund and the Russian Export Centre.

At the same time I would like to stress that we have to move faster here; businesses are, of course, counting on all these instruments, therefore, it is important to further enhance their efficiency.

I would like to note the growing potential of our defence industry. We have upgraded the equipment, at least to a large degree, and we are implementing the plans we made earlier, disbursing the allocated funds, introducing modern technologies and increasing labour productivity.

Agriculture is also demonstrating positive dynamics: in the first 11 months of this year, there was an almost 3 percent growth.

Industrial production is growing in the Far East. Priority development areas, the free port mechanism (as you may remember, we decided to expand this practice), infrastructural support for projects and the Far East Development Fund have all shown their worth.

Another important development was the launch of the Crimean energy bridge. I would like to thank all those who took part in this effort.

Another significant achievement I would like to mention was the launch of the Eurasian Economic Union and the further development of integration with our closest partners and allies.

Colleagues,

The most important task facing the Government is to bring Russia’s economy back to stable growth. I dealt with this in detail in my Address to the Federal Assembly, as you may remember, and at our meeting on the practical work to meet our targets.

I would like to repeat that we should be ready for a possible extension of the period of low prices for our main exports and, possibly, of external limitations. We need to make progress using our reserves. The current difficulties should stimulate greater efficiency of the economy and the social sphere.

I would like to name once again the key areas of our future work.

The first one is achieving a balanced budget policy. We have enormous unused reserves in terms of both revenue and spending. You all know the figures, we spoke about them at our meetings and they are quoted by the Accounts Chamber. The total annual amount of inefficient federal budget spending this year only in a number of areas, such as budget investment, state purchases, and financing of state order is about 220 billion rubles.

The debt on mandatory payments to the federal budget is growing, while unfinished construction of infrastructure, social and other facilities has reached almost 2 trillion rubles.

Cash disbursement from the budget remains low. I would like you to analyse all these issues and report on the measures taken at one of our next meetings.

The second is the need to ensure the smooth implementation of our plans to support those sectors of the economy that are at risk, as we have said on numerous occasions: these are the automotive industry, railway machinery, light industry and construction sector.

Third. Special attention should be given to modernisation of the housing and utilities sector, ensuring strict compliance with the resolutions made earlier.

Next. Our main priority in the social sphere is the transition to a fairer system whereby assistance is provided to those who really need it.

And one more thing. Today unreasonable, frankly profiteering price hikes on goods and services are leading to lower living standards. We need to use all market instruments available to hold back the prices and increase the share of low-cost, high quality local goods.

There are of course areas where we simply need to be more efficient, so to speak. We are all aware of the situation with the heavy trucks: we already said that we have to cancel the transport tax in a timely manner. We could have helped people come out into the open and retain their profits to be able to support their families, like the possibility of shifting to a patenting mechanism, as I have said before. There are also other situations where we need to move faster.

However, overall, I would like to stress that the Government was efficient, it has demonstrated the right approaches to the complicated tasks facing the country, and I would like to thank you for this.

A happy New Year to all!

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