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President of Russia Dmitry Medvedev: Colleagues,

I have come here to wish you a Happy New Year. This is always a pleasant thing to do. Sometimes, we need to say nice things to one another, especially since life is filled with various surprises.

The Government Cabinet is a body in our nation that works non-stop. Perhaps someday, we will see a time when it will deal with strategic issues only, but unfortunately, due to various reasons, at the moment it handles all operational issues, and sometimes even those that should be dealt with by regional authorities. Unfavourable weather conditions have caused many problems at our major transportation hubs, and the Cabinet has to deal with it, even though this is in fact the responsibility of our regional heads.

It seems to me that this year has been quite favourable for our economy. In spite of the large number of nuances, this year we began our way out of the crisis. I feel that the Cabinet – which has truly been engaged in day-to-day management of the national economy – contributed directly to this positive trend.

Given this year-end tendency, it is very important not to let our achievements slip through our fingers. I believe the reduction in the total number of unemployed in our nation by nearly two million is a very good result. It affects the life of a very large number of people. Frankly speaking, when I discussed so-called exit strategies with other heads of state, all of us assumed that the exit would be long and would involve growing unemployment. Nevertheless, in our nation, we have been able to break these trends and achieve good results. I feel that this is truly very important.

We were able to post good GDP growth results. Yesterday, I also spoke with colleagues on this topic. True, it is somewhat lower than we had planned on, but unfortunately, an abnormally hot summer and the terrible crop failure negatively affected our economy, as well as our inflation figures. Sadly, inflation is higher than we had anticipated, but it is nevertheless in the single digits, and is entirely comparable to what we have had before. As for the key indicators, such as functioning of the banking system, they have absolutely become stable and we have never had such a refinancing rate in Russia’s modern history. These may seem like dull issues, but they are very important ones.

There are some things that may be more significant for most people, but they depend on the financial situation and economic health – I am referring to social well-being. And here, we were able to hold to our plans: namely, to keep all our social programmes, even though it was very difficult for us. Such decisions were made at the very beginning of the crisis. You and I have discussed them many times, and it seems to me that everything in this area is successful. We are not ashamed to look people in the eye because the social commitments that I made as President and the social commitments made by the Government have been fulfilled.

But this does not mean that we have no more problems. There are many problems. You and I have discussed what to do next year. The year will certainly be a fairly difficult one as well. It is imperative to address a wide range of issues, beginning with stabilisation on the food market and development of agricultural projects, and ending with macroeconomic proportions.

The investment climate remains a very important topic. Unfortunately, we have had few favourable changes in this area, in spite of the fact that we tried to work on it. So I suppose we will need to work on this as the utmost priority.

I just held a meeting of the Council for Financial Development with a number of Cabinet members. It was devoted to the creation of a financial centre in Moscow, in Russia. I feel that this is also an exceptionally important task. Indeed, it has important not only for bankers, and not only for those who earn their living through finance, but for the economic life of our nation overall, and therefore, for our ability to meet our social obligations.

We need to finally get past the economic crisis and develop the non-financial sector. Economic modernisation remains a crucial area of work. We cannot continue developing as a raw materials-based economy; all of us understand that, even if oil and gas make up a very significant part of our budget income. Thus, the five areas of modernisation we are working on with the Government are a highly important, very serious priority of the Cabinet’s work.

We must give attention to defence and security. Some fundamental decisions have been made with the aim of developing the defence industry and giving our Armed Forces new features, as well as reforming our law enforcement. All of this work will require adequate financial support and daily monitoring. This is a challenge for the entire Government, not just the heads of law enforcement agencies.

And naturally, we will need to work on improving all aspects of our foreign policy.

Colleagues, friends, I would like to sincerely thank you for the enormous amount of work you have done this year. I would like to thank the Prime Minister, all the ministers, and Deputy Prime Ministers for all the accomplishments.

I want to repeat again that I feel this year – in spite of a large number of problems and difficulties – turned out to be a fairly good one in socioeconomic terms. I hope that next year will be even more successful.

Happy New Year! I wish all of you all the best!