Official website of the President of Russia

Transcripts   /

Vladimir Putin: The Urals Federal District has seen many industry conferences, some of which have been devoted to gas production and the metallurgical industry. But of course the problems of individual industries cannot be effectively solved without having an overall picture of economic life. And the social situation in the district presents challenges which must be met by all the levels of government together.

That is particularly important because the regions that form the Urals Federal District differ among themselves in terms of their level of development. There are huge gaps in the incomes in various parts of the district. Consumer spending in the economically weak regions, oddly enough, has been growing much faster than people’s incomes.

The Urals District is the energy powerhouse of Russia, accounting for more than 90% of national gas production and more than 65% of oil production. Let us face it, the country’s economic growth owes much to the fuel and energy industry of the Tyumen Region. One can argue whether being dependent on oil and gas is good or bad. But in the event it is an abstract argument that does not make much sense. At present our main task is to learn to make effective use of the exploitation of natural resources in order to develop other industries. For the Urals it would mean an upsurge of such sectors as engineering and metalworking.

Last year some very positive changes have been achieved in the district in terms of entering the markets of science-intensive and competitive products. Industrial output in the district has grown faster than in Russia as a whole. Average Russian growth has been just 5.2% and in the Urals District, 6%. With a continuing shortage of internal investments in the district ways are being found to ensure domestic capital investment in the manufacturing industries. The increase of internal investments has been accompanied by the growth of foreign investments, a 41% growth during the past year.

However, corresponding conditions must be created for further successful integration of the industries and economic interaction between different regions within the district. Above all a modern infrastructure for the development of the inter-regional market must be put in place. That task has several components. I will mention some of them.

First, of course, comes the development of the transport system which determines the growth of industry and in the longer term of the whole oil and gas complex. The second important condition for the development of the district is market adaptation and competent operation of many engineering enterprises in this new context.

The issue of rehabilitation of the environment, of bringing back into the economy spoiled and polluted lands and water is still relevant. Lands polluted not only today but in previous years. Action is needed on these matters.

Moving on to another topic that is just as important today. In connection with social problems I will say a few words about the housing and utilities sphere. The utilities situation in the Urals District is as critical as in other regions. The wear and tear of the utilities is more than 60%. About a quarter of the basic assets have outlived their lifespan. They are being replaced slowly, substantially behind schedule. As a result, in the last 10 years the number of accidents has grown five fold, and 30% of heat is lost. Obviously, the fact that there are both areas that are short of energy resources and areas with an excess of such resources in the same district again points to the need for a single market for energy resources. The overall situation in the district is such that its infrastructure is capable of ensuring the supply of energy to households regardless of the weather and other factors.

That is all I wanted to say in the beginning. Various opinions on the issues I have touched upon will apparently be expressed. I am ready to react to the complex questions that arise. In short, I look forward to a businesslike conversation.