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President Vladimir Putin: Mr President, I propose to divide our meeting today into two parts.

In the first part I would like to say a few words about what we together, Russia and the World Bank, under your leadership, have done in recent years.

Russia has been a partner in the bank, a shareholder in the bank since 1992. During this time, the quality of our relations has significantly changed. This has happened in connection with the growth of the Russian Federation's economy, and with the change in its quality.

This status was attained not lastly thanks to our cooperation with the financial institution of which you are the head.

The World Bank approved 53 loan projects for Russia with a total sum of $13.4 billion. So far, we have used $8.4 billion. We have quite a large number of resources at our disposal, but this is a question for the expert evaluation of the government – whether or not we need them.

That which has been done with the help of financing from the World Bank has been and continues to constitute extremely important directions in the Government's activity. For example, the restructuring of the coal industry, on which over $1 billion was spent. Or social projects in municipal formations and large cities of the Russian Federation. Or medical projects in a number of Russian cities, and a number of other projects.

But it is not just the volumes of financing that are important. The World Bank, particularly in the first stage of our cooperation, and today also, has provided and continues to provide significant aid to Russia. It was one of the key components in improving the activity of the Russian Government.

We set ourselves the no less important goal on the future in the economy and social sphere. We also count on joint work in the future.

To sum up our activity, I would like to perform the honorary order of the Russian leadership and award you the order of Friendship for our joint work in previous years.

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The preparation of a new stage of reforms is now becoming a top priority in Russia. These transformations will be directed towards significant increase in economic growth, intensifying the war on poverty on this basis, and improving the infrastructure, above all the social infrastructure.

We can see that the main priorities of our economic policy coincide with the main directions of activity of the World Bank. They are a continuation of transformations in the system of education and health, reform of housing and municipal services, and major projects on developing infrastructure that enable the growth of Russia's competitiveness in the world economy.

We intend to continue to improve the tools of our economic policy, including our budget system, financial markets and bank sector, and enable the development of the private sector, and small and middle business. Of course, we will also continue to improve the legal system and state administration.

Many of these problems are being worked on by a group of experts headed by the responsible employee of the bank and the Administration of the President of the Russian Federation. We are grateful to the bank for constantly providing materials and the participation of specialists in this work.

Among the main tasks to optimise our credit cooperation, we see a further increase in the effectiveness of realising projects, and improving management of these projects. Certain corrections to the priorities of bilateral interaction of the Russian Government have been made recently. The joint work group of the Russian Government and the World Bank, which I just mentioned, is also working well. It is important for our experts to work on increasing both the effectiveness and the flexibility of financial tools of cooperation. They should take into account the growing degree of stability of the budget and financial state of Russia.

It is important to search for effective tools of assistance from the bank's side in implementing reforms in the regions of the Russian Federation. The World Bank has this experience, and has worked and continues to work very effectively in the Russian regions. In our view, an interesting option is using loans which would be sent to the budgets of the region on a competitive basis, depending on whether they had fulfilled the agreed programs of reforms.

The current financial and economic situation of Russia makes it possible to take our relations with the World Bank to a fundamentally new level. We intend to play a more active role as a shareholder of the bank in realising the main charter aims of the World Bank. Russia will take an increasing part in the banks efforts in international aid of development, in reforms of international financial architecture, and in opposing money laundering and the financing of terrorism. You know what efforts we have made recently in these directions, and we will continue to increase them. This completely corresponds to the status and role of Russia in international politics and the world economy, including as a permanent member of the UN Security Council and the G-8.

Russia already plays a noticeable role in many of the bank's initiatives. We know what mood you are in, Mr. President, and will continue to work in this spirit. For example, Russia's contribution to the initiative to ease the debt burden of the world's poorest countries has been the largest among all donors in relation to GDP.

As for the figures on absolute debt write-off, Russia occupies the third place after Japan and France. Having written off over $30 billion over the past five years, Russia intends to follow its obligations in reducing the debt burden of the world's poorest countries. And here we intend to work together with you.

Taking into account our chairmanship of the G-8 in 2005, and the close involvement of the World Bank in solving many international economic issues, we propose that it would be useful to increase dialogue with the bank on this problem in the context which is of particular interest to us. And I would note, above all, the intellectual elaborations of experts of your organisation on the main socio-economic problems that are on the agenda.

We are prepared to expand interaction with the bank on regional problems, for example we agreed in November 2002 to exchange opinions regularly on our vision of problems in the Central Asian region. These consultations have begun, and have shown their effectiveness.

We also cannot ignore issues of economic development of Transcaucasia, and the restoration process in Afghanistan and Iraq. It would be interesting to hear of the main conclusions and recommendations of the evaluative missions of the bank, which are preparing a report together with the UN on Iraq's requirements for restoration.

As you know, discussions are underway on easing Iraq's debt burden, and I would like to hear your opinion on this matter. There are also a number of technical issues. I think that we can return to this later, after we have listened to you, Mr. President.