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Vladimir Putin: Good afternoon, dear friends,

The Minister has told you that a conference is due to be held tomorrow, quite a representative conference – more than 800 people from practically all the country’s regions, from Vladivostok to Kaliningrad. That of course attests to an awareness of corporate interests and an attempt to determine and formulate a common position, especially in the relations with the state. I sincerely wish you success in your work.

For many years the media industry has been mainly about politics and the clash of interests, and this is not at all surprising. I would say that it is commonplace in all countries. In this country the situation was somewhat peculiar in that the media was not an independent business, a profitable business in the full sense of that word, but was used as a weapon to gain political advantages in the course of competition in other, far more profitable sectors of the economy. I am absolutely convinced that you agree with me, I don’t know what you will say out loud, but it is so.

Today the information business is entering a qualitatively new stage of its development. One can see it even by looking at the issues that, as Mikhail Yuryevich Lesin has told me, will be raised at the conference tomorrow. We are talking about turning the media industry into a modern market sector of the national economy — a sector that does not only have its own potential for growth but can drive advanced technologies and production in other spheres. Of course as I have said publicly more than once, it is impossible for the citizens to exercise their constitutional right to obtain truthful information without an economically independent media.

I think few of your colleagues, including those present here, have managed in recent years to make their work truly profitable, self-sufficient and independent – with rare exceptions. And yet the development of business in this sphere faces the same systemic problems as that in other sectors. Business activity is impeded by an inadequate legal framework, administrative barriers and backward technologies. I would like to discuss with you those areas of work in which the actions and the position of the Government go a long way to determine the development of a civilized media business. Above all, the creation of a coherent legal framework. Today many provisions of the law on the media and other relevant legislation contradict the provisions of civil, labour and administrative law. Discrepancies in legislation make it more difficult to bring honest strategic investors into that sector of the economy. Besides, it is a frequent cause of internal corporate conflicts, which are sometimes hidden from the public but sometimes spill out on audiences. That is fertile soil for bureaucratic arbitrariness. The issue frequently raised is of legislation governing foreign capital in the domestic media market. I am sure the topic is discussed in the profession. I would be glad to hear your opinion on it.

You know that many countries have certain restrictions on the activities of foreign capital in certain sectors to which the national audience is particularly sensitive, and that of course applies to the information policy of the state. But it is a very delicate matter. It should be pursued in such a way as not to impede the development of business itself. I repeat, I would be happy to hear your opinion on the issue.

I think we should sort out the current imbalances in tax and customs regimes. I am sure many questions about it will be raised. The practice of selectively granting privileges has led to the degradation of entire segments of the media industry. Today our publishers place hundreds of millions of dollars worth of orders abroad every year while the domestic printing industry is starved of market revenue needed for its development and modernisation. The development of the technological infrastructure is a serious challenge because in fact we are talking about creating conditions in which market participants would be free to use the means of transmission and diffusion of information. Of course many issues are connected with the generally underdeveloped state of the communications means and postal services, the systems of television and radio communications. These problems result in monopoly and price disparities and generally downgrade the quality and diversity of information services. It would be interesting to discuss that topic with you too. Much of that sphere has been inherited from the past, but it is developing vigorously. Let us discuss how you see the priorities for the development of the sector.

The situation in the advertising market. Many years have passed, but it is still monopolised and poorly diversified. The participation of the regional media outlets in the advertising market is clearly not proportional to its place, the size of its audience and the role of the regional media in the country’s life. In the current situation the local media are heavily dependent on local and federal subsidies or other corporate interests not directly related to the media business. Advertising incomes are an important source of the country’s prosperity. We know it well. Access to that market must be totally transparent and free of administrative barriers. That sphere must be put in order, and clear-cut and reasonable legislation must be created. It is a challenge to be confronted jointly by the legislators, antimonopoly bodies, the Ministry of the Press, and the professional media organisations. I am aware that the Russian media business pays serious attention to work in the international markets. Let me stress, and it is the official position of our country, that in view of our foreign policy priorities, our prime interest is in the information markets of the former USSR countries. I think that the state and business must cooperate closely on that issue. As I have said, it is not only a question of economics, but a question of Russian information policy and our relations with our fellow countrymen in the near abroad.

In conclusion I would like to say a few words about the mechanisms of self-regulation in the industry. As far as I know, the question will also be discussed tomorrow. The principles of professional ethics can and must be worked out by professional associations. Unfortunately, so far that area has been found wanting. I try not to react to it in order to avoid stirring up unnecessary emotions. I very much hope that the corporate associations, especially in the media, will work out a code of honour and behaviour. I expect that today’s meeting and the conference as a whole will mark a new departure.

Thank you.