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Vladimir Putin: Dear colleagues,

First of all, I would like to thank you for the invitation and for a well-designed agenda.

Let us begin with the social issues, which are our greatest priority. The national social policy is the number one challenge. It is an ever relevant problem for any country, especially for Russia. We know the plight of our population, the level of their incomes and so on and so forth.

Social policy has to do with the stability of the state. A great deal, perhaps everything, hinges on how skilful and effective that policy is.

Successful social programmes, without exaggeration, are important not only socially but above all politically. They can cement society and unite the state and all the regions, and not only the Black Soil region. The main thing of course is to shield people from poverty and to give them hope. To help people is not a manifestation of generosity by the Government, it is its direct duty.

Today, a huge number of people in Russia suffer from poverty. Their incomes are less than modest. Let us face it, poverty is our main problem. It can only be overcome by ensuring sustained economic growth. There are no other ways of solving this problem. No promises will be kept unless we ensure economic growth. Social security expenditure depends on the rate of growth.

Today, we are doing everything to channel a maximum of the country’s resources to address social issues. You know that pensions have been raised substantially. Minimum pensions have been raised by 75%. The average size of pension is 95% of the living wage.

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The Federal Government has fully met its commitment to finance the wages paid out by public sector organisations. But the regions still have 5 billion roubles of wage arrears. An agreement has been reached on this issue with the Government. The governors know about it, we have discussed the topic many times: they have to deduce 40% of their revenues to pay wages. Regrettably, most regions have not yet met that commitment. We held conferences and discussed the matter and gave promises to each other. Something has been done, and progress is noticeable. But many have yet to meet their commitments.

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Payment of child allowances is another immediate challenge. I must note that in your region, in spite of some measures taken by the central and regional governments, allowance arrears are increasing.

Respecting people’s social rights does not mean subsidising them. The Government cannot be a charity and it must think about the right to work and to earn.

Last year, the country for the first time felt the need for more working hands, for creating new jobs. The number of registered unemployed dropped by 32% nationwide. This would seem to be a good indicator, but it does not show a fundamental change of the employment policy.

Our attempts to change the structure of the labour market are few and half-hearted. We have just had a meeting with the heads of small and medium-size businesses. It turns out that the number of such companies is not increasing.

We have to admit honestly that we have strangled them with taxes and levies, both at the federal and regional levels. We harass them by interminable inspections and so on. I have already cited this figure. One medium-sized company had 300 visits by inspectors last year. It was audited 300 times in one year. Nobody can work in this environment. As soon as one inspector leaves, another comes in his place.

One of the main problems in your region is unemployment. When I talked with people in the streets today, a woman touched my arm and said: “Mr Putin, our main problem is unemployment. Give us jobs.” And I must say that we won’t be able to solve that problem, especially in small towns and in rural areas, without developing small and medium-size businesses. I invite you to put our heads together on this problem. We have developed a whole programme at the federal level. We will implement it. I count on your support in this area.

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Another problem on the agenda is gasification, which especially in rural areas, has always been the key to many economic and social problems. Unfortunately, in the past our propensity for giant projects let us down. I understand the people who are wondering why we are building long-distance gas pipelines to foreign countries while our own regions nearby are unable to tap into that bounty. This is a real problem.

Of course, it is not easy or cheap to build a gas pipeline to every rural community, to build a station and a distribution network. Yet it is a task that has to be addressed. We cannot get away from it. I think it is more an economic than a technical problem…

…We should understand that the problem of gasification should not be tackled by bringing pressure on Gazprom. We must put our economy on an even keel, and then Gazprom won’t have to build pipelines to foreign countries. But until that has been done we will have to devise a special way to deal with Gazprom and these problems.

There is a national gasification programme, and part of it concerns the Central Black Soil region. Before coming here we looked at some figures. We found that the level of gasification in the Black Soil region is much higher than the national average…

…Nevertheless it is a pressing problem even in the Black Soil region. The crux of the problem is funding. The implementation of the programme is hampered by limited resources in the budgets of all levels. That factor accounts for 40% of underfinancing.

But there are other factors as well, including the chronic failure of gas consumers to pay for gas supplies. These defaults in the Black Soil region stood at almost 6.5 billion roubles as of January 1, 2000. Obviously, you have no other option. We understand it well. But you can’t expect to be supplied with fuel for free.

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In conclusion, I would like to touch upon the problems of agriculture. These problems are universally known. They include financial issues, the problem of leasing agricultural machinery and, more broadly, of agricultural machine building.

I would like to draw the attention of the Agriculture Minister to the need to protect the Russian farmer. Of course, we are not going to close our market. Competition is needed and we have certain commitments. But the Government must have a more coherent policy to protect the domestic producer. This affects many of the staple products. The influx of agricultural produce to the internal market at dumping prices is unacceptable. This is true of many types of goods. In this region there are several such goods, including sugar.

Let us make this clear: in the future there should be no sweetheart agreements with our suppliers from abroad, or they should be minimised and concluded only to fill the gaps that we may have. The head of the Association has named some importing countries.

In fact, we can give up nearly 100% of some imported of foodstuffs, including sugar, otherwise we are undercutting our own industry. Why should we do it? Why should we feed others? It is a matter of principle. Let us get this matter straight. This is an order to the Agriculture Ministry: not to sign any more such documents without the approval of the Prime Minister.

That is all I wanted to say. Thank you.