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President of Russia Dmitry Medvedev: To sum up, I also liked what I have just heard, it all signals a systemic approach, although we are all aware that, speaking frankly, the region faces a very difficult situation at the moment. Despite the rich natural resources here, the region nonetheless has fewer resources than some of the other regions in this part of the country that have a greater range of economic options open to them. Here the focus is essentially all on one area.

What did I note in particular? Something that is often the case, unfortunately, and that was reflected again here is that no one listens to each other. Those responsible for addressing the issues in question need to listen.

This is not a meeting held at federal district level but at regional level (not very economical in terms of the resources it uses, that is, having not only the President but also the key ministers present) and the objective of such meetings is not just to react to what we hear here, say you can’t do this, you should do that, this won’t work, you’ve already received everything you going to get and so on…

Why come so far in this case? This is not what we are here for. Let’s make a serious analysis of the zone’s future and all the proposals made. I am not saying that we need to agree on everything, but a purely bookkeeping approach will not do here. This is the Far East and not the Moscow Region, and business too should be more attentive.

I have listened to you and I realise that there are many difficulties. Our bureaucracy is complicated and sends matters around and around in circles. But if there are so many difficulties that work is impossible, abandon the project and we will take the license from you. Or get down to work and don’t complain. If you took on commitments you need to fulfil them. This is gold we are talking about, not livestock rearing in high risk zones. You know what is happening on the financial markets at the moment, and you know what is happening with gold prices. Everything has to be done faster.

To be frank, I did not like very much all I heard from business representatives, and from a number of our government agencies. You need to find a common language and not pass the buck back and forth saying: this is not in our interest, this is difficult, we don’t have any economy here, profits would be marginal… If profits are marginal, abandon the project and we will look for others. And the state agencies also need to be more attentive in their work.

A decision needs to be taken on the energy supply route. Igor Ivanovich [First Deputy Prime Minister Shuvalov], you decide who will do this: Energy Minister Sergei Shmatko or Igor Sechin [Deputy Prime Minister]. Issue the instruction and make sure that there is no talk later that this issue was not settled. I understand that there is a real of making a decision. Meet with the business representatives and discuss the matter.

Regarding a few more points from among those raised, on the question of the zone, given the specific nature of this issue I have already given an instruction on the Governor’s letter and we will come back to this issue. I am not pushing you into anything right now and I understand the Economic Development and Finance Ministries’ worries. At the same time, look at the idea in a broader context, in the context of these four regions. The final decision will ultimately probably be taken by the commission headed by Igor Shuvalov. Report to me about the decision you propose. Of course, you will need to ensure all the participants attend the commission’s meeting, including the governors from the four regions.

The idea was raised of transferring money from the federal targeted programme into the Investment Fund. I don’t know if we can find a mechanism for doing this, but maybe it would be possible. I am not sure how easy it would be.

Remark: It would present no real difficulty.

Dmitry Medvedev: Then a decision needs to be made and it should go ahead. If in one case the mechanism is not working within the federal targeted programme but the Investment Fund could be used, let’s do this, because the money comes from the same place all the same.

I think we are right overall to hold separate meetings in each of the regions we are visiting now in the Far East because despite the similar problems they all face each also has its own specific situation and these separate meetings allow us to concentrate on more specific issues and projects.

What’s more, this has given everyone here, the government ministers and heads, the chance to see things for themselves. Igor Ivanovich Shuvalov said just before that he came here with one view but that his view has now changed. This is nothing to be shy about because all of us can see our views transformed. If we have seen something with our own eyes and realised that our plans do not fit with the reality, we need to change our plans, if, of course, the reality we see is rationally organised. Sometimes the opposite is possible.

We will continue our discussions in Moscow and other regions, and will continue looking at all the issues raised here. We will continue ongoing work on all of the problems, including those that were not raised during today’s discussion. I think the labour market issue and demographic problem in general is very complicated and it has reached a critical point in these regions.

Now we are talking about how to speed up all of these projects, looking for the right tax schemes and trying to get the state ministries and business more active. But there is another problem we are aware of. If we achieve some growth, build a railway line say, who will work there? There are 170,000 people out here and they will not be able to handle it all. I do not know how many more people are needed, probably another 100,000 at least for all of these big projects to be successful. I am not even talking about getting the population level back up to what it was in the Soviet period. This is a separate issue that requires our most thorough analysis.

In conclusion, we visited the regional history museum today. There is an exhibition there on a tragic page in our country’s history directly linked to Magadan Region’s development. We know that all of this region’s economic potential was built through the sweat and blood of our compatriots, and during a very difficult time in our history. This places an even greater responsibility on us for ensuring that we preserve what was achieved at such a cost.

I conclude therefore with the same words I said yesterday. We need to work daily on the problems in the Far East, in Magadan Region in this case, to find the solutions that will help us preserve and develop the region’s potential, find new human resources and ultimately prove that we can build modern life in quite difficult conditions.