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President of Russia Vladimir Putin: Good afternoon, colleagues.

I welcome you all to this first meeting of the State Council since the presidential election.

I want to start with a different matter however. You know about the terrible tragedy in the south of Russia. The town of Krymsk was especially hard-hit. It is a small town that has been struck by a great tragedy. There are many victims. Overall, more than 170 people were killed throughout the region, and more than 150 in Krymsk alone.

I am following very closely the events in the flood-affected areas and must say that I do not think the agencies and officials at the various levels have worked satisfactorily in terms of organising aid and minimising the tragedy’s aftermath. We all must analyse the situation thoroughly and draw our conclusions accordingly.

Today, I will sign an executive order on additional support measures for people affected by the floods in Krymsk. Let me stress once more that the authorities at every level – local, regional, and federal – all bear responsibility for ensuring that this tragic situation does not develop further. We are to analyse carefully what has happened and why the consequences were so severe, and do everything possible at every level to ensure no repeat of such tragedies in the future, even though we are aware of all the problems associated with possible natural and manmade accidents and disasters. We will discuss again what must be done in these kinds of situations. 

”The State Council should concentrate in its work on the areas which people perceive as having greatest urgency and importance. People were active in expressing their views and wishes during the recent election campaigns. These views formed the basis of subsequent executive orders which were signed in May. All of the state authorities must now take part in their implementation.“

As for the subject on our agenda today, I want to stress the fact that our citizens, voting in the presidential election, vested their confidence not only in me, but in the policies that we have been carrying out together with the majority of you here over the last years. Our common efforts to further social and economic development play a part in this course’s implementation, and it is this matter that I want to address today, above all.

The State Council is meeting in new expanded format today. In accordance with my order, it now includes the speakers of both houses of parliament and the leaders of the State Duma party factions. I hope that you will propose subjects of discussion for future State Council meetings and that the parliamentary deputies will play an active part in preparing for these meetings in the working groups. This way, we can ensure that our discussions take into account the lawmakers’ and political parties’ views and will make our decisions and their ultimate implementation more effective.

I believe that the State Council should concentrate in its work on the areas which people perceive as having greatest urgency and importance. People were active in expressing their views and wishes during the recent election campaigns. These views formed the basis of my election campaign programme articles and my subsequent executive orders which, as you know, were signed in May. All of the state authorities must now take part in their implementation, and the Russian Federation regions have a huge part to play in this respect.

Today, we will discuss the tasks the regions are to tackle in order to ensure steady economic growth and raise living standards. I will outline what I see as the top priorities here. 

First, the regional development programmes must be adjusted in line with the executive orders I signed in May. The stages and concrete deadlines for objectives must be clearly set out. The regions and municipalities have many social problems to address. The income gap is still unacceptably wide, and we still have 13 percent or approximately 18 million of our people living below the poverty line. True, this number has been coming down steadily over the last years, but it is still too high. The proportion of people on low incomes is 1.5 times higher than the national average in ten regions, and in some regions is double the national average. We must do everything we can to substantially raise people’s incomes.

The second priority is economic development. Of course, this is not second in importance; indeed, it is perhaps the most important area, given that only an effectively growing economy can serve as the base that will let us resolve our social tasks. You all know well that reaching our social objectives is directly linked to growth in labour productivity. We plan to raise labour productivity 1.5-fold through modernising old industrial facilities and launching hi-tech production facilities, and by attracting long-term investment into every region. Of course, this goal is impossible without active participation by the regions themselves.

”The regions and municipalities have many social problems to address. The income gap is still unacceptably wide, and we still have 13 percent or approximately 18 million of our people living below the poverty line. True, this number has been coming down steadily over the last years, but it is still too high. We must do everything we can to substantially raise people’s incomes. ”

We also should give small and medium businesses the development conditions they need. I must say that we have yet to see real progress here. It is still difficult to start a business and work calmly without worrying about unjustified meddling by the authorities. The experts say that two thirds of complaints from businesspeople are related to problems they face at the regional and local levels. Businesspeople face administrative barriers, violations of their property rights, and state agencies trying to overstep their powers. 

Yesterday, as you know, I met in Magnitogorsk with the CEOs of the country’s biggest steelworks. Even they are still full of complaints, and so just think what the situation must be like for SMEs! This means only one thing, namely, that we must take real steps to change the way we treat people who take on the responsibility for raising their prosperity and creating new jobs. We have to cultivate respect in society for their work and establish an atmosphere of fair and open competition in the regions. The common rules for support for businesspeople, drawn up by the Agency for Strategic Initiatives, will help you in this respect. I ask you to implement these standards and use them. They aim to improve the investment climate, and we have said on so many occasions that one of the biggest goals of our economic policy is to offer a good investment climate. Get experienced businesspeople involved in this effort. I am sure that regional governors and their personal efforts are crucial for achieving positive change in this area and developing business in general around the country.

This gives rise to a third task: We need to review the criteria for assessing the performance of the regional executive authorities themselves. The current system works of course, but not as effectively as we would like. It frequently happens that a region looks exemplary in terms of most of the formal criteria, but the public gives it a very low rating indeed, and ultimately, it is the public perception that gives the most accurate assessment.

There should not be this kind of gap between a region’s performance on paper and the perceptions of the people living there. This is all the more important now that regional governors will be directly elected. The results of these elections will certainly provide the most objective assessment. This does not mean that we will abolish the evaluation system for regional performance, however. The Government has already drafted an executive order setting out 11 criteria. It is important for everyone to be able to see the situation in the region.

The next matter I want to bring to your attention is insufficiently effective land use. We are fortunate to have plenty of land, being the world’s biggest country in terms of area. There are plenty of people wanting to develop this land, too, but when it comes to doing the paperwork required to register land ownership or rental rights all kinds of insurmountable barriers and obstacles arise. 

”We have introduced direct gubernatorial elections in order to make the governors closer to the voters, closer to the people. The governors will have to be more sensitive to local needs and desires, but at the same time, must not forget that they are intrinsically linked to the national interests and goals too.“

We have two big problems with land allocation and registration today. One concerns land for housing construction, and the other concerns land for farming. We have a historic opportunity to resolve Russia’s housing problem. We have been facing this problem for more than a century, but it remains unresolved. Back in the tsarist times, and then in the Soviet era, and now in Russia today, the housing shortage remains one of the biggest challenges facing us. But we have a real chance to finally resolve this problem now that we have the technology, financial and land resources in our hands. In order to guarantee that 60 percent of families get their own homes over the next 8 years we first need to settle one of the biggest problems in the way – land allocation.

Finally, I want to mention a few issues regarding the effectiveness of our government system, above all, openness of the authorities, keeping the public informed and getting them involved in decision-making and monitoring decisions’ implementation. The people in the regions must know that their views are important for the authorities and that their wishes and proposals are taken into account in our practical work. 

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When people go to the polls and decide who to vote for, there are many factors that come into play, including purely psychological factors – likes, dislikes, assessment of a candidate’s previous record. But no less important is the assessment voters give to the programmes candidates propose. 

My programme is set out in the executive orders that I signed in May. It is set out in these orders in summarised form for the medium-term. Our more global objectives are set out in the national development programme through to 2020. Our plans have been set out in these orders for the upcoming period, not such a long timeframe, and are very concrete in nature. These orders must be implemented and the people who voted for this programme must see that we are working effectively towards the goals that we set. 

”The governors as a group are responsible and capable people with a sense of initiative. If we unite our efforts in our people’s interests then we will certainly achieve the goals and objectives we have set. Our success in this case will be guaranteed.“

If anyone thinks they do not have the strength or capability for doing this, or does not agree with the proposed programme, do not pretend to be working, but if you do agree and stay in your posts and work, then we must see results. The Presidential Executive Office and the Government have set up a group specifically to monitor this work. I recommend that the regional administrations also set up similar expert groups to monitor the work underway to resolve each region’s tasks.

There has been considerable renewal among the regional governors of late. We have introduced direct gubernatorial elections in order to make the governors closer to the voters, closer to the people. The governors will have to be more sensitive to local needs and desires, but at the same time, must not forget that they are intrinsically linked to the national interests and goals too.

As I said, there has been a lot of renewal among the governors and we now have new procedures for forming the regional authorities. But you all realise that the president always has at his disposal ample instruments for resolving any personnel matters, especially when it comes to dealing with those who do not carry out the duties of their office in due and proper fashion.

I hope that there will be no need to employ these instruments, because I know that the governors as a group are responsible and capable people with a sense of initiative. If we unite our efforts in our people’s interests then we will certainly achieve the goals and objectives we have set. Our success in this case will be guaranteed.

I look forward to our effective and committed joint work.

Thank you for this meeting today.